Since 1971, Gold hasn't been "Valued" officially...it has been and is still today, being "priced" ! What's the difference between Gold being or ? Answer : The US$ was able to expand, outside the US, all over the globe, as the numeraire for trade settlement, because "Valuable" Gold was "exchangable" for this generally accepted dollar.

But you know what happened with this principle/system : The Valuable Gold got a fixed "price" and the dollar-numeraire expanded cosmically.

These exponentional growing stashes of dollar-confetti have expanded so exhuberantly, in and outside the US, that the total amount of dollars is dis-proportionate to the expanded global trade that it (the $) is settling.

This could only happen because the dollar-paper was/is *pricing* the once so Valued Gold. Keep on supplying dollar-paper and just check that Gold's price remains "contained" !!!

We are on the "dollar-standard", Sir Kilo !!! Not on the Gold-Standard.

The planet is still turning around with the acceptance that this dollar-unit is to be used for 3/4 of all trade settlements (credits and debets). The sole intrinsic value of that dollar-unit is its general "use".

We all agree to "use" the dollar-unit for trade settlements AND as a "reserve". We don't "exchange" Valuable Gold anymore in the dollar-unit's background. The dollar-unit has become a PURE political unit !

The globe is settling all its trade with a unit that is more and more, "exclusively", managed by the US and less and less in concertation with all those that are involved into this ever expanding/globalizing trade.

This to illustrate how "relative" all those currencies (paper-units) and consequently the "price" of Gold are against the background of an ever increasing political background of arbitrary standards.

What is the political content of exchange rates, IRs, goldprice-oilprice, purchasing power, fiscality,...etc !? Has it already reached 100% and can we speak about a global "political economy". I personally guess w've landed in such a type of economy.

I'm answering your question with...exchange rates and the goldprice are "political" events, rather than economical ones. FreeGold will be the result of a political decision that will/shall be taken under growing pressures. Pressures that arise from the mess we made (are making) out of the dollar-standard.

IMO, there are no "markets" anymore. What is still percepted as has in fact become a giant politico/economical collusion...sentiment � la carte producers, who make you walk in lockstep. Rethink, why GOLD cannot be cornered by "markets" !!!

See how we, systematically, managed a 24 years of political decline in IRs from the 1980 ATHs !!! Who decides on the Trillions of money-supplies ?...the markets ??? How is it possible that the, so called, can live for so long with obscenely overvalued enterprises ??? And what makes us devalue the dollar-standard and global reserve so suddenly and unanimously ???

*WHY* are some selling GOLD and others buying it ??? What is the global, *net* trust-content of the dollar-standard, and its use, at any given moment/place and how is it evolving ? These are pure political affairs...altering political wills !!! The more the dollar is expanding (supplied), the more the question of its use-value will come in the forefront. Or in much simplier words...FOR HOW LONG CAN THE DOLLAR STANDARD KEEP THIS GLOBE HAPPY ??? For how long is the new Eastern world going to remain happy with being/remaining a dollar-standard-derivative ?

Those who feel unhappy with their status of dollar-derivative, always threath with the replacement of Gold as becoming the standard (cfr. Japan).

With or on the dollar-standard for as long as it takes...and in the mean time we build on Gold for the moment of the final dollar-standard-reckoning. That's the moment that Gold will not be priced in dollars anymore but valued in another numeraire that is associated with Gold.

The present, temporary decline in dollar-supply is NOT a sign that the dollar-standard has gained on responsibility.
Later more reflexions on this.

Great essay from K.R. as usual. I do like the opening alinea in particular : The "unlimited" (dollar) credit-machine serves only two purposes >>> 1/ consumption (2/3 of GDP) and 2/ speculation (better call it gambling) !!!

Yes, we are talking about THE dollar...THE global dollar-standard...THE global unit for trade settlement...THE global reserve unit !!! >>> Dollar creation by an UNLIMITED CREDIT MACHINE !!! Not only locally (in the US) but for global purposes !

And,...NOT a tiny fraction of those mounting dollar-bergs is able to corner Gold !!! Evidence of how strong the global consensus on political Gold (goldprice containment)is.

R. Prechter is the only one that is betting on the outcome of a Deflationary Depression instead of hyper-price-inflation. That's because Prechter still believes that the dollar-standard (system) will survive (through price deflation). Thing he has it completely wrong : A price deflationary depression must inevitably lead to massive defaults, due to the enormous debt-loads ! Impossible alternative for any political economy. The declining money-supplies (homeopatic) are only very temporary. More defaults, unemployment, economic contraction,...etc, will very soon make that the money supply (credit creation) will be on the increase again. We must and shall hyper-inflate us out of this mess in an exponentional fashion.

It is for the above reason that IRs + dollar exchange rate-movements, MUST remain contained at any cost. NOT so for economical reasons but for dollar-political reasons.

As soon as we see IRs and dollar exchange rate "move" substantionally, we might see the $-POG explode. Because the situation has become a matter of dollar(system)-trust.
The longer the dollar manages to remain used, the worse the irrational dollar-supply will become. Who wants to keep on accumulating the dollar-reserve that buys its lifetime on a growing volume of supporting derivatives ? Knowing that one's dollar-reserves should be the expresson of one's accumulated wealth, earned by hard working.

Who is blindly believing that a political-dollar, corresponds with the definition of wealth-reserve !? The ECB isn't and has made this sufficiently clear with its (discrete) marking to market principle as to compensate for its dollar-reserve losses at the final day of reckoning !!!

Why should the ECB raise IRs and give the dollar a much harder time !? All those that have and are accumulating gold-reserves, next to the existing (growing) dollar-reserves, are simply preparing for the inevitable final dollar collapse. The timing of this event is totally irrelevant for those who are already ready.

Socrates launched the idea (possibility) of a yuan/renmimbi collapse instead of a strengthening. What does a currency's *** relative *** strength or weakness matter as long as its main purchasing power remains stable ? Chinese and Indians/Russians are increasingly going to hold Physical Gold, even mined on their own territories. The EU (and the ME) have already enough Gold within their borders. Does the dollar-block have enough/sufficient of the shiny precious or is dollar-gold already shipped/used/depleted in exchange for some more dollar-use-survival (US goldmine forward sales-?) ?

Can one really,...REALLY afford to stay without,...WITHOUT, Physical Gold in possession, at this global dollar-juncture ???

In response to the recent physical gold price weakness,
including the almost $17.00 per ounce one day recent price drop, by comparison, the HUI stock index has held up relatively well. Accepting as true, precious metals price manipulation, long and short term as set forth by GATA, Ted Butler, et al, the following point comes to mind. There has been much discussion on several major forums as to the possibility of a major short squeeze on the March Comex Silver contracts due to unusual delivery requests. Assuming there is a real shortage of deliverable physical silver (hence the squeeze), and the aim of the shorts was (is) to reduce the delivery demand for the silver contracts by causing a lower silver price, and not having the silver, but having access to physical gold to sell, why would they not sell the physical gold to control the physical silver price sufficient to avoid the March silver squeeze? The foregoing is obviously speculation, but comments as to the validity of the foregoing analysis are strongly encouraged.

http://www.gold-eagle.com/editorials_04/chuhran020204.htmlSnip..

Industrial Production (+49%) roughly matched GDP growth (+45%) over the same period from 1992-2003 as shown in the charts above. The difference occurred from 1999 through present, where Industrial Production suffered a distinct flattening. I went back to look at GDP for that period and found that it grew 16.3% from 1999 to present while Industrial Production only grew 6.5% (relative to a 1992 baseline). I also noticed the Trade Imbalance accelerated at the same time with 65% of the -$3.458 trillion occurring in the last 5 years.

I had to stop here, because it's obvious. -$3.458 trillion in 12 years! We imported our growth!

What were we thinking? And, who's going to pay for this?

@ BELGIANGreat post #116375Your post: "IMO, there are no "markets" anymore. What is still percepted as has in fact become a giant politico/economical collusion. . ."anaswers an interesting question. Many US folks ask why the FEDs haven't instituted a revenue "lottery" like the US states have. The answer is "they have", but with much tighter control over the outcome. Who needs "bouncing balls" when they have CNBC, GS, and Snow? People would scream "Fix" if JPM et al won a "lottery" every week, but no complaints when they continually win in controlled markets.

I saw a report on the BBC yesterday, where construction workers in China are working on spec., ie, they work and are not paid on a regular basis. They take IOUs from their employers.

I remember seeing a program on China last year, which showed that the lowest paid workers in China make as little as $1 per day. Annual wages of about $360.

Can you imagine what ownership of 1 once of gold would mean to that person? Can you imagine that person looking at a stack of 40 gold coins on a table, and realizing that value represents more this his whole lifetime of labor?

What would 10 gold coins mean to someone in those circumstances? I think that someday, here in America, every Joe and Jane will understand. Now unfourtanetly, they do not understand gold's true measure. A lost opportunity of a lifetime.

@ Belgian"Does the dollar-block have enough/ sufficient of the shiny precious or is dollar-gold already shipped/used/depleted in exchange for some more dollar-use-survival (US goldmine forward sales-?) ?"The "golden rule" i.e., "them that have the gold makes the rules" is often rewritten "them that has the guns makes the rules". It seems the "neo-con" game has more routes available than just COMEX when accumulation is necessary.

"IMO, there are no "markets" anymore. What is still percepted as has in fact become a giant politico/economical collusion...sentiment � la carte producers, who make you walk in lockstep. Rethink, why GOLD cannot be cornered by "markets" !!!

See how we, systematically, managed a 24 years of political decline in IRs from the 1980 ATHs !!! Who decides on the Trillions of money-supplies ?...the markets ??? How is it possible that the, so called, can live for so long with obscenely overvalued enterprises ??? And what makes us devalue the dollar-standard and global reserve so suddenly and unanimously ???

*WHY* are some selling GOLD and others buying it ??? What is the global, *net* trust-content of the dollar-standard, and its use, at any given moment/place and how is it evolving ? These are pure political affairs...altering political wills !!! The more the dollar is expanding (supplied), the more the question of its use-value will come in the forefront. Or in much simplier words...FOR HOW LONG CAN THE DOLLAR STANDARD KEEP THIS GLOBE HAPPY ??? For how long is the new Eastern world going to remain happy with being/remaining a dollar-standard-derivative ?

Those who feel unhappy with their status of dollar-derivative, always threath with the replacement of Gold as becoming the standard (cfr. Japan).

With or on the dollar-standard for as long as it takes...and in the mean time we build on Gold for the moment of the final dollar-standard-reckoning. That's the moment that Gold will not be priced in dollars anymore but valued in another numeraire that is associated with Gold.

The present, temporary decline in dollar-supply is NOT a sign that the dollar-standard has gained on responsibility.
Later more reflexions on this."


Druid: Priceless

@ knotacare Adopting the reverse view, imagine what the US laborer will feel when his wages are "equalized" by globalization and he finds himself competing with the $1 per day Chinese.

It is often surmised that opening the Chinese gold market to their public will induce a radical demand shift to the world gold markets.

If the Chinese laborer is making $1 per day, after living expenses are settled, just how liquid is his entry into gold markets?

How big is the alleged Chinese middle class, anyway?

Is gold ownership really viable to very many Chinese?

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http://www.grantspub.com/articles/four.php..."Anyway, to rebalance its lopsided portfolio, Fannie could be forced to buy immense quantities of Treasurys--James A. Bianco, founding light of Bianco Research L.L.C., cites "estimates/Street rumors" of as much as $100 billion. And if it did buy massively, Fannie might single-handedly drive down yields and trigger a new round of mortgage refinancings. More refinancings could precipitate new dislocations to Fannie's own portfolio, forcing another round of government-securities purchases, and on and on. (See Grant's, January 18, "Risk in a cheap stock.")

Needless to say, for every interest-rate oscillation, there are both winners and losers. Lower rates lighten the debtors' burden. However, outside the classical gold standard, very low rates are not usually a sign of good health"

Within this enormous mass of 1,2 Billion chinese, there are tens of millions extremely wealthy families/dynasties, living in, and/or, outside China !!! These people don't count in grams or ounces but in kilo's and bars (12 Kg). But indeed, they are very low profile or totally unknown to us, Westerners.
The neocon tentacles are well known and will contribute (add) to the dollar's demise, through the weaponary (and other) things !

Chuhran : Finally,...at last,... somebody who dares de-mystefying the "productivity" miraculous myth.
Note that Euroland with its euro has a ZERO trade balance deficit ! The presented charts say more than a million words on the whole (global) matters and the dollar-standard management. It is only politicians who can mis-interprete those graphs whilst presenting this to the general public through global hero, Sir Alan. What a farce !

Amid all the election/super bowl hoopla, I pause to reflect upon the loss of our brave astronauts one year ago. It was the sadest I ever felt over the loss of someone not directly known. They shall always be remembered.

@Belgian: Thanks for the inflation/deflation piece. Believe you are correct, but it is going to be one heckuva battle. Our approach stands the best chance, which ever side (wins?).

@Chinese workers: ... wages must rise. Until then, they may purchase 1/10 oz au, or some form of silver. But, buy they will--in large numbers--and I am betting they will impact the market in a large way. Remember, there are also some very wealthy Chinese who got that way by being very smart.....enough so to see through the paper snowstorm we must now endure.

'Tis a beautiful day--looking up, one can almost see....

Greenspam talked about the need to "retrain" the work force. I seem to remember that line in the 1990's when literally millions of factory workers spent a few thousand $ to become web artists and saturated the market.Now that those skills are being exported as well, what is his next "bubble" occupation?Professional derivative gamblers, or maybe Hup, two, three four . . ."You had a good job and it left, you're right!"

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLTB[PA][DA][F!3!!]⪯f=GThe P&F Chart does NOT tell one the timeframe of the move ---- BUT the "Objective" is NOW projected as = $484.0 !!!
SPOT and SPIKE will be JUMPING next week !
<;-)

http://www.zealllc.com/commentary/realgold.htmGoldendome, you say that I am the only one concerned about apparent effect interest rates can have on POG. Surely you are not that naive? The REASON price of gold tanked a few days ago was BECAUSE I am not the only one understanding the correlation between interest rates and POG. Did you really believe it was just coincidence that POG tanked at the same time Mr. Greenspan made his subtle comment? Perhaps you can share with me the real reason for the price drop if it wasn't due to the hint of rate increase?

Please forgive my persistence regarding my apparent obsession with interest rates and their affect on POG but I believe it is a historically proven fact that the price of gold has always been affected by (real) interest rates. Up to this very day this is a proven statement easily verified by historic charts. Any goldbug such as myself would gladly point to the present low real interest rates as a very positive stimulus to high POG yet it seems we don't like or want to look at the other side of the interest rate double edged sword. What happens if the FED raises rates? I point out that just a subtle hint of a slight raise in rates by Mr. Greenspan took the wind out of gold's sails and a substantial $16.00 drop in POG. My observation of the $16 drop was not to whine about the drop in POG. I expect much volatility in gold prices. My concern is that history is proven true and that the FED can use the same thing that the FED used to kill the last gold bull in the late seventies again.


Adam Hamilton had the following to say in his fine commentary on real rates and gold a couple years ago. The link to the whole article is posted above.
"Real interest rates are tremendously important and have vast and far-reaching effects that cascade through virtually all of the major global capital markets. Changes in real interest rates are one of the most effective stimuli to spur investors to execute epic strategic portfolio changes and move extremely large amounts of capital into other investment types. Understanding real interest rates and the potential impact of changes in these rates is incredibly important for all investors, whether their capital is deployed in stocks, bonds, or hard assets. In this essay, we will drill down on real interest rates and their potential effects on gold"�..

"Although there were no subsequent episodes of negative real rates in the 1980s, it is very instructive to note the inherent symmetry between gold and real interest rates. The top arrow above marks the beginning of a period of many years where gold traded almost exactly opposed to real interest rate moves. When real interest rates trended up, gold would fall. When real interest rates trended down, gold would rally. The general inverted relationship between gold and real rates that was well established in the 1970s continued through the 1980s."

As most advisers are still warning of a steeper down-slope ... but the chess game of the FX (not to say fix) in relative (de-)value of currencies floating around - anchorless, except the hedonics of government economic statistics(x)- goes on. In particular this week, as the con-de-and whatever fenders are gearing up to the G7 Boca Raton, Fl., I believe meeting (out) of minds!

Having had busy weekend, I've just now skimmed through the posts, while listening to Jim Puplava's interview with Donald Coxe on FSN. What a great talk show - that's what I'd understand as a reality show - or better it showed reality. I guess you all know where to find it - and it was again superb.

Belgian's posts today, and especially his mentioning of Kurt Richeb�cher's essay hit the nail right on the head.

To repeat what frr (on a nearby venue) had to say about silver leaving Zurich in massive quantities for the US - just in case Rich Powell has missed it - bodes well for a much alleged short squeeze on March futures...

Also - I see a number of new handles. Wellcome all to the last reality show and please don't ever hesitate to add to the friendly debate.

...and finally, Gandy sees POG and POS next next week. I wouldn't ever argue with the wizard!

Best of luck - cb2 - to all of you ...

Patriots - do your best to go against the Patriot Act - fwiw
cb2 ... Have fun, friends!

I'm behind in the discussion - been off-line for a couple of days.

@ Sir Aristotle: Kudos for your brilliant post 116329 (1-30-04). The payment of "interest" is nothing more or less than paying the rent on an asset that is needed temporarily. The downfall comes when the payment of interest is applied to the maintenance of an ongoing standard of living that is beyond the means of the borrower.

- Survivor

Houston , We have a problem.......

Gold and Silver have been in a bull market for a couple if not three years.......

Silver and Gold Metal always speak to us when something in the economy is sick whether it is banking business or too much paper being printed , or an oil embargo (oil runs economy:price of oil - economic vitality or viability) and today we have twin deficits , off balance sheet accounting in private and public sector accounting (scams) and a huge unregulated mini financial industry of DERIVITIVES.....

(Perhaps we should begin using abacusses in Grade School again to teach our kids math to anchor in their souls the three dimensional and logic in their perception of numbers)

The question of the relationship between interest rates and the price of gold is a good question......which makes me want to say something that I read in Tim Woods FEB newsletter...today.

He said that if the Stock Market goes up from here , it will be the first time in history that a Bear Market has concluded after only the first phase of three phases was complete (that relates to DOW THEORY) .....He also said the if this happens and the test will be in the next couple of months.....it will be the first time in history that the Kondratieff Wave in the economic cycle(one of the strongest cycles dating back into BIBLICAL TIMES and more recently into the 1700's in the history of the US Economy ) has been turned back or headed off by the Fed...

We are talking Macro and Micro economic cycles here to overthrow in a quest to defer or deter......forces of Supply and Demand..... THE FED HASN'T THE POWER TO DO THAT.

THere were many things in the last GOLD Boom that you should be aware of ......

Govt was printing dollars escalating the War in Viet Nam for some years and then that ended But we were also embarking on a new Domestic Welfare and Social Programs objective in Gov't at the time......The country was in a recession....between 74-82....Nixon closed the GOLD WINDOW during the 70's era.....(Money for Nothing and your kicks for free if you are a politician/ No backing of the currency with GOld ). GOLD was money then and GOLD is money now ......and the reaction in the Opec States was that they were damned well not going to take this sitting down .....cause their oil was worth more than American Paper dollars to them .......so they trippled the price of
OIL(I think I looked at at chart recently that showed oil peaked in the low 40s during the embargo).....They started trading their paper dollars for Gold and many other factions around the globe (France and European Bankers) followed suit...
Inflation happened over night because the cost of manufacture and transportation on much of the worlds goods became more expensive as the increased cost of oil was factored into everything....Percieved and Apparent inflation was in the system long before it showed up in INTEREST RATES.....this lack of gold backing for the dollar had caused a trickle through affect on account of the various reactions it caused and the ramifications that followed.... So Reagan in 1980 appointed Paul Volcker to head up the fed and he ratcheted interest rates through the roof.....to stem the tide on the run on the dollar....and in effect the surge in gold.....I remember rates being very high teens ......because of the FED. I think GOLD topped out in January or February of 1980 ......Perhaps this was a very timely exit on the part of smart money anticipating what would happen next (after the election of Reagan) .
THIS ratcheting of interest rates happened quickly....and brought back into balance the relationshp between gold and the dollar........I had 12% note on my first mortgage in 1984....Prior to that rates were higher , I assure you ..much higher.....I don't know what the Rates were prior to Volcker coming on the scene.....would you like to assume 6% ...then he raised them 9-10 points....from there to stop the onslaught........

Alan Greenspan cannot use the same tool with the same affect and effectiveness that Paul Volcker did in the 80's!
WHy ?

1. Derivitives on interst rate bets.....

2. Because of the massive amount of Mortgage backed securities.....banks own .....Mutual fUnds own....
Goverments own........all across the country piled higher and deeper than you can imagine....Someone was braggin on MSNBC the other day about the big rally which represents 3 trillion dollars ......most of it derived from the REFImarket .....securitized and packaged back in the Stock Market indices through your mutual fund company buying them from FANNIE MAE AND FREDDIE MAC....All interest rate sensitive....

If Alan Greenspan raises interst rates ; it won't stop gold because if he raises the rate high enough to even put a dent in GOld demand , he collpses the economy of the U S .
and the Banking System .....So GOLD RUNS WILD AND FREE along with SILVER....REAL MONEY FOR REAL PEOPLE. GET YOU A PEICE OF THE ROCK TODAY .....SIlver and GOLD are in the Physical / Financial realm today what JESUS is in the Spiritual realm and you can quote me on that.

Here's another flash for you ....by the time summer rolls around and the truth about the economy becomes known...and that there are not teeth in this recovery .....Alan Greenspan may have to lower interest rates.....because of deflation....

If he raises interst rates , he'll be repeating what the hacks did in 1930 at precisely the same time in the Economic Cycle that they did it ... causing a liquidity vaccuum when the economy is contracting.....

What else did Tim WOOD say....

10 367 on the Dow continues confirmation of the THREE PEAKS and a Domed House configuration we are now in in the market.....especially verified now by the Transport averages that just took a nice beating and are diverging quite respectfully which is also apparent in the Nasdaq. (George Shaeffer) He thinks that the Stock INdices , CRB, and Bond market are in contratrend rallies.
Says we might see a peek in the commodities at the same time we see Bonds peak and the Stock market bottom and dollar bottom in April ..short term.....he thinks the Dollar is fishing to find a bottom around the same time.

If after reaching 10367 on a close , the Dow does not exceed current highs......he expects to see 9600 confirming the second phase of the bear market is on....

Because of the Kondratieff cycle, he thinks Commodities will fall long term and the Bond Market will fall . That may be true for commodities in general ....but I have a clue that when the paper house burns ,that the silver and the gold are gonna shine....
like they did during the GREAT DEPRESSIOn.....
Study History for find out what happened to Homestake mining during the depression.....in a market where the price of gold was capped....WHY IS Japan , CHINA and RUSSIA Stocking up on GOLD....and by all means don't leave out the MOSLEM WORLD and INDIA....and the OIL RICH OPEC NATIONS...who still want value for their OIL RESERVES in exchange.......looks like they have a little more help ...this time around.... MAYBE EVENTUALLY ALL THESE pro GOLD Advocates will be labeled terrorist because of their affinity for GOLD>......

There is no doubt in my mind that today's international monetary system is a giant Ponzi scheme, the magnitude of which the world has never seen. And it will end badly as such things always do.

But will it end in runaway inflation? Or in deflationary depression? That's the $64 question. ($64? Even by the time of the scandal in the 50's it was $64,000. Sort of dates me, doesn't it . . .)

I'm going to take the minority view here, and say it will end in deflationary depression. I'm probably not the best spokesman, and certainly not the most articulate at this forum, but I'm going to give it a shot. Sitting around and agreeing with each other and pumping each other up is simply groupthink. It's how massive errors in strategy occur. Why do you think the U.S. went to Iraq?

First, the mechanics of HOW it could end in depression. After all, the government has a printing press. Just crank up the press and flood the world with money. How can
depression possibly occur?

To answer that, we must understand that money is created when a bank makes a loan (for clarification, see post #115691). Probably 99% of our money supply is in the form of bank checking accounts, jumbo CD's between banks, and other financial instruments -- NOT printed currency.

Saying that money is created when a bank makes a loan is the same as saying money is created when a borrower borrows. The bank must be willing to lend. But the borrower must be willing to borrow. The Fed can control a bank's willingness to lend but it cannot control the borrower's willingness to borrow.

Borrowers spooked? No borrowing. Instead, they pay down debt. No borrowing? No increase in money supply. They pay down debt? Shrinkage in money supply. Shrinkage in money supply? Depression (by definition).

This is where the phrase "pushing on a string" comes from. Paul Samuelson is a Nobel -- prize-winning economist whose book "Economics" has been the standard college text for
a zillion years. The germane quote from his book is, "This is summarized by the aphorism 'the central bank can pull on a string (to curb booms), but it can't PUSH ON A STRING (to reverse deep slumps).' "

Raising interest rates will pull on a string and discourage borrowing (and the creation of money). But lowering interest rates (pushing on a string) will not allay borrowers fears, past a certain threshold, and necessarily result in more borrowing (and an increase in the money supply).

So that's HOW a depression could occur. Our money supply is not just printed currency. And if no-one borrows, our money supply will not increase. WHY this is more likely
than runaway inflation is purely psychological and was given in this very forum some time ago (though unfortunately I do not remember by whom so as to give credit).

But the gist of it is this. Runaway inflation always has a bloody end to it. Not only would it be repugnant to America to think of itself as one more banana republic, history shows that runaway inflation ends in bloodshed; with bullets being fired; with the guillotine being dusted off and heads of the once-powerful rolling in the gutter. And to the younger set, let me be clear. This is blood we're talking about; not a video game.

This is how the end game always plays out with runaway inflation. The folks in
Washington know this. They may be crazed-mad-power-hungry but they are not stupid. They have been responsible for enough bloodshed to deceive themselves on this score.

Depression ends with everyone going to church and holding hands like the folks on the The Waltons and praying for better times. The folks in Washington know this, too.

RUNAWAY INFLATION ends with a change in government. Not Democrats instead of Republicans. A change in GOVERNMENT. A dictatorship or monarchy instead of democracy. And the new leader is invariably a hitherto unknown. Somebody who
clambers to the top of the heap and stands on the crowd's shoulders and grabs the microphone. The people in Washington know this.

DEPRESSION ends with neighbors going to Wednesday-night prayer meeting and organizing food pantries. The people in Washington know this. They may be crazed-mad-power-hungry but they are not stupid.

It is said that, "If the hearer fails to understand, the communicator failed to communicate." I'm sure that somebody here will be so kind as to let me know where I failed to communicate.

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place your jewelry order for timely hugs and kisses

Have you factored into your equation "the borrower of last resort", the US government? Recent events have clearly demonstrated that, a very expensive war can rapidly consume billions of borrowed dollars. In my view it shall be continuing (and at an increasing rate) inflation. The purchasing power of the US dollar has lost 95+% since 1913 and 90+% in the last 60 years, without revolution.

http://www.gold-eagle.com/editorials_04/images/hra020204.jpgAll those small/medium/big, uptakers of *** PHYSICAL *** Gold, have no message from the relationship/correlation, between POG and real IRs. The fluctuations in real $-IRs are played by those (financial/monetary colluders) who's official given responsibility lies in Gold's paper-price management (containment).

In fact, I would rather turn things upside down and conclude that it is the POG that is saying if real IRs/POO/$-exch.rate, are going to fluctuate, out of control !?
Control the POG and you hold the $-world in your hand !

When one succeeds in keeping Gold, pricewise, as un-valuable, one has room to let other financial/monetary parameters fluctuate in a contained range.

Just imagine you had to manage oil-wealth or big profit generating enterprises and you must consolidate all those confetti excesses in something tangible that will/can last for ever !? Big/huge, Physical Gold-Accumulators desire to accumulate scarce Physical, as much as possible, whilst remaining able to generate more $-confetti, in a $-standard-system, for exchange against the precious.

2,500 tonnes of yearly mined fresh Gold leaves only an homeopatic amount of Physical Gold available for the real big money-makers who continue to accumulate (net uptake) !!!

We, the lilliputans, lack the needed imagination, as to conceive the scale of many fortunes that do exist on this planet. We are bean counters and do think that way in our considerations about Gold. There is definitely something else,...much bigger, out there.

Note that in the extreme runup of POG during the '70-'80 decade, real IRs remained negative but the trade weighted exchange index of the US$ remained relatively flat (zone 90)! The next 2 decades ('80-'04) the *contained* POG fluctuated horizontally whilst the dollar-index made huge swings !!!

The '70-'80 POG explosion (x25) made it clear that GOLD's real valuation, stood in the middle of everything, as never before during the fixed POG period pr� '71. The message was clear : Contain Gold so it can't run to its proper value !

Why is it that Saudi Arabia is left alone even when the 9/11 attackers were Saudi !? Was it Arabian oil (6,000 tonnes of Gold) that forced the POG up during the '71-'80 decade !? Are we trying to contain the forces of Arabian oil as to give the ordinarry Gold containment a hand in these Gold scarce times !?

Were these high real IRs of the past two decades a tool in the POG containment or the other way around ? High real IRs made the world accepting the relentless w.w. dollar supply and diverted the attention from dull Gold that was price- contained with the paper-machine.

The *** systemic *** (linear) decline of real IRs + dollar-index decline + horizontal $-POG, for more than 2 decades now, is NOT economically related !!! This is, imo, nothing else than full 20 years of dollar-Gold management on a systemic basis. Put all those 30 yrs charts (Hamilton + link) together and let the bells ring if this reasoning doesn't make sense. TIA, Brand X.

x

Imho, there's nothing, whatsoever, wrong with your communication skills. Well spoken!

I believe I understood you well enough to ask, "What event or occurance (exogenous or not) do you foresee that will turn consumer psychology into no longer accepting (and utilizing) more credit?
Also, while I agree that the government can create monetary liquidity but can NOT force borrowers to borrow or lenders to lend, can it not use other means to pump money into the economy (tax cuts, government spending, creating wars, entitlement increases)?
I sense that this Ponzi game has to have a limit but...I just can't seem to see it yet or any trigger to end it.... unless it will just be an unexplained change in consumption habits. I've certainly changed my thinking of credit but I've been listening to BB and all you guys here for some years now. What will prompt such a behavioral change among the masses? I still see the unemployed spending their unemployment benefits on lottery tickets. I know the madness will end. Questions are what will trigger the end or change consumer psychology??
GO PATS !!!!!
Rich

Two posters poles apart. Belgian nailed it. Forget about the correlation of "real" IR's and POG. We're beyond that point.

While it's true that the 95% $ decline took place since 1913 with no revolution, the reason is simple. Fat and happy constituents do not revolt, even when their "rights" are sacrificed. As long as TPTB keep feeding the lumpeninvestorate, they are probably safe from internal strife. The massive domestic unemployment is by far the most dangerous concern on the home front - not terrorism.

The masses throughout history have often risen in defense of their leaders as long as they can be convinced that it is in their interest to do so. Can the "spin" continue? It would be a lot easier with rising employment, but it is all in the "spin" and the belly.

If US labor can be convinced that the loss of jobs is the fault of some perceived enemy, they will happily bear arms.

To add much more to the previous responses will be tantamount to "Piling On", but since you did address me specifically: Just a short reply.

During the '80's and '90's interest rates (at least in nominal terms) AND, and, the price of Gold both declined-- generally over those years...Now, if that was possible, it is not to much of a stretch to think that both interest rates and the price of Gold can also rise together.

As I did yesterday, and many others are pointing out here, even today--There are SOooo many other financial factors that will come into play when/if U.S. interest rates rise, that it is impossible to say exactly how things will playout, be affected, and interact with each other.

Yes, the precious metals markets may react short term negative, to the words or interpretations made by Fed. bankers, etc. However, longer term, those words will not serve to correct the VAST volumes of dollars in creation and the even VASTER levels of debt that have been accumulated here and around the world over the past, say 30 years, and the Vast volumes of unfunded liabilities both private and public now facing these United States in now, the not too distant future. Skepticism is fine and sometimes healthy, but playing the devil's advocate at this date may cause someone to miss the "pitch". Fine regards, Gdome

I laugh when I read the "pushing on a string" argument. The depression occurred when economics was not as well understood as it is today. The gold standard had been in place and people were used to prices being stable over 100 year periods.

If the fed and the treasury really want to stimulate the economy, the treasury can issue a 100 billion dollar note. The fed would buy it, and the treasury can now issue everyone in the country a check. Sure, some people would save it, but many would spend some or all of it. End of Deflation.

You suggest that I, "Study History for find out what happened to Homestake mining during the depression.....in a market where the price of gold was capped."

Interesting that you should suggest I look into that history just as I am in the middle of reading a book authored by Robert Prechter Jr. titled, "Conquer The Crash." "You Can Survive And Prosper in a Deflationary Depression."

In it he states: "It is probably not as good an idea to invest in gold stocks, either. In common stock bear markets, stocks of gold mining companies have more often gone down than up except in relatively rare five to ten-year periods of accelerating inflation. Few people know that from the top day in the Dow in 1929 to the bottom day in 1932, gold mining shares rose only slightly even though the US government propped up the companies� product by fixing the price. Mining shares did not explode in value until the stock market as a whole turned up. Today the government does not fix the price of gold, so in the deflation we currently face, gold mines will enjoy no false advantage over any other companies. Their stocks will probably rally when the overall stock market rallies (as they are doing now), but they will have no built in support as they did in the 1930s, so they are likely to disappoint those who invest in them."

Before any of you burn me at the stake for posting the above I must tell you that Mr. Prechter is not anti-gold. Far from it! In his book he advocates holding a healthy amount of gold and silver. His choice is the real thing. He does not suggest buying it in paper forms.

Cometose. Thank you for your very well written reply to me earlier. I wish that I was even half as knowlegeable as most of you here. There is so much for me to learn and all your wise opinions here have given me much to consider.

thanks,
Brand X

Last Sunday while attending the Gold Conference here in Vancouver, BC. I listened to a panel of five discuss gold, silver and the economy in general. One of the men, in response to a question regarding who the next US President could be replied, "Bush could be the last President." Everyone in the audience laughed but I don't think he was joking. He went on to say he believed Bush would put martial law into effect. Unfortunately, he didn't really expound on his comment because of the lack of time to speak. I wonder if he foresees depression or runaway inflation in the cards for USA. Another on the panel said he sees double-digit interest rates coming up. (higher than 1980 rates) This fellow was the only one on the panel who suggested that rates would start to rise even prior to the election. His guess was rates would start to increase by August. A few days later Mr. Greenspan made his comment about possible rate increase. Since then I have been trying to figure out how POG could be affected by such things. All the replies to my question here have been excellent and have given me much food for thought.

Take care,

Brand X

You said, "To add much more to the previous responses will be tantamount to "Piling On", but since you did address me specifically: Just a short reply."

J The "piling on" is deserved and appreciated. At first I was disappointed because it took awhile before anyone responded. But because of the many replies I have spent much of my day reading and considering these many excellent replies.

"Skepticism is fine and sometimes healthy, but playing the devil's advocate at this date may cause someone to miss the "pitch".

Actually I am not really playing the devils advocate here. I am cautiously over exuberant about gold. I have a large part of my portfolio invested in gold and other precious metals. I tell all my friends that they should invest in gold and silver even if they could only afford enough for insurance sake. Even so, I always want to be open-minded in all things and to be as prepared as I can for whatever events that can change my economic health for the good or bad.

Regards,
Brand X

Those who are expecting the US dollar to gain purchasing power, during what they think will be a deflationary depression, have to answer the question, what will become of the trillions of dollars worth of purchasing power held by the rest of the world? To begin with, everything could start to deflate but the debt. However,the moment there is a loss of confidence in US Bonds and the Dollar,those trillions of dollars will travel with the speed of computers,buying up everthing of intrinsic value in the US. Gold and silver mine acquisitions would probably be high on the list of major financialinstituions,loaded with unwanted dollars.

However, the above scenario is the reason why the moment world goverments see that the fiat system has run its course, action (probably during a monetary crises) most likely, will be taken to form a new monetary system. There is no doubt in my mind that in order to gain trust in a new monetary system, that system must include a gold backed currency.

Those who believe the US will just default on the debt, need to face the realisation, action of that kind would leave us with a total loss of credit and completely dependent on the printing press. You only have to look at the history of the countries that went that route for the results. In the US,for politicians, that route is politically unacceptable, even if it means going to the most hated of all metals, gold.

The one thing I fear, is that in a worse case scenario, countries with gold producing enterprises may take the protective step of nationalizing their mines. Their real money.

That is why one should have a good part of their assets in the real thing...Gold.

I agree with Spotlight....and I believe the masses of the global populace are already voting with their dollars on Golden Stability .....

It was Martin Wiess's father who told him of Homestake going up ten times during the depressionary years until it peaked.....When it peaked.....the yearly dividend payout was paying for the purchase price of the stock when bought in 30, 31.....That's in print in Martin's version of Conquor the Crash ....which came out about 3 years ago...

BARRONS SAYS SILVER TO 25.00 !!!!

The current issue of Barrons contains a desciption of the demand/supply situation for silver .

FELIX ZULAUF:
[The most important point is that inventories have disappeared. Silver is trading for around $6.20 an ounce. Historically it has traded for about 1/15th the price of gold, which would be $25 or so. Silver is a long-term option without expiration on the structural bull market in natural resources.]

FELIX ZULAUF.............. Last year I talked about why investors should put part of their money in gold and gold-mining stocks. The value of paper currencies eventually will go down, though gold will have a correction at some point. Silver is a cheap commodity that has lagged the whole commodities complex in recent years.

Q: Isn't that because sales of conventional film are down?
Zulauf: People always bring that up, and I will go into it. But first, the demand-supply picture in silver is tight. Mine production is about 585 million ounces a year. Governments sold 70 million ounces in '02, which eventually will go to zero, because governments do not own much silver any more. Old silver scrap is 185 million ounces. Silver inventories hit a high of 2.3 billion ounces in the late 1980s and have now declined to an estimated 200 million ounces, the lowest level on record since World War II. Total demand for silver is 863 million ounces a year, so silver has a production deficit of about 200 million ounces per year. So far, we've just seen inventory draw-downs. At some point the price will react and inventories will disappear.Silver used to be a monetary metal, though it was replaced by gold. It has lots of interesting abilities, such as strength, ductability, electrical and thermal conductivity, sensitivity to and high reflectiveness of light. Some think demand rests completely on the photography market and that it has been hurt by the growth of digital photography. But if you print a digital photo, you still need silver. It is used in batteries, bearings, soldering, electronic and electrical work, medical applications, mirrors and coatings, solar energy, you name it.

"This is where the phrase "pushing on a string" comes from. Paul Samuelson is a Nobel -- prize-winning economist whose book "Economics" has been the standard college text for
a zillion years. The germane quote from his book is, "This is summarized by the aphorism 'the central bank can pull on a string (to curb booms), but it can't PUSH ON A STRING (to reverse deep slumps).' "

Raising interest rates will pull on a string and discourage borrowing (and the creation of money). But lowering interest rates (pushing on a string) will not allay borrowers fears, past a certain threshold, and necessarily result in more borrowing (and an increase in the money supply)."

Druid: Sure you can push on a string. Starch it or do what ever you need to too get it to work for you. The fed's been pushing on a string for a very long time and is running out of starch. And this from a Nobel Prize winner no doubt. You can also get a horse to drink by feeding it enough salt tablets.

Thanks Rich. I have followed your posts for some time. You are one of the level heads hereabouts. I'm always especially interested in what you have to say about silver. In regard to inflation/deflation it appears you catch my drift exactly.

What's the end of this Ponzi game we find ourselves in? What's the trigger event? I wish I knew.

How about an earthquake that hits Tokyo and bankrupts all the big insurance companies? Or a terrorist attack to rival 911? A disease from the Hot Zone? China invades Taiwan while we're not looking? A bigger-and-better Enron scandal? North Korea lobs an A-bomb at somebody? A tsunami hits Los Angeles? The mother of all El Ninos marries the mother of all sunspots? Greenspan develops a heart murmur? Somebody assassinates somebody in the Middle East? Saudi Arabia kicks us out? India goes on strike and there is no technical support for anyone's personal computer in the entire United States? Take your pick.

The best I can do is a John Hathaway quote I copied from this very forum: "The sceptic is powerless to predict the turning point but quite capable of identifying what is unsustainable."

So . . . Hope you don't think it's a cop-out but I'm not going to make any predictions, sorry. (I'm really not as dumb as I look.) AND --- Patriots 32 Panthers 29 --- Enjoy your day.

R Powell, TPTB,
What will trigger the change? Having housing prices start dropping widely will unnerve folks.
But, a refinancing wave seems imminent, and mortgage durations could be extended, will be extended.
TPTB is right that the govt would prefer depression over hyperinflation. But, there is a lot of room in between those two and I guess we will discover whole new financial behaviours and stop gap measures that will show us how both those things can go on at once.
Well, since there is a god, I suppose the question is, does he want a one world govt like we are headed to? A global economy where local agriculture, local economies, local rule diminish and we find ourselves way out on a limb when that global system tanks for whatever reason.
Imagine the difference between the depression of then and if one happens now.
No local agriculture or family farms everywhere to occupy and feed the local families, no local retail options as the mega corps are taking that over, Houseing built with no thought of gardens for food, and everthing is at a great distance. Having had a nice long depression, I would have thought the greatest generation would have made sure to build the country in such a way as to be well set for the next one.
Didnt happen, how can it not be ugly? Plus, the people....
hate to have a dour outlook, but how do spoiled people transition? cheerfully?

TPTB, good quote from Hathaway. I always look for his opinions as he is one of the most astute observers of the gold market. I also enjoy that he doesn't write unless he has something to say (and he writes very well!) that's worth reading. But, I guess he doesn't have to publish something as often as some others. As much as I respect a man of R. Russell's stature, his offerings are getting repetitive. BTW, I didn't really expect you to answer my question. I'd place the answer to it in the unknowable category (as opposed to presently unanswered).

Richard 640, it's good to see you here again. Visit more often. Your enthusiasm always brings a smile! I've always thought that physical silver would eventually fall short of demand and this would shock the market which is oblivious to the fact. However, the perception of a shortage may be enough to set off some fireworks. It seems logical that the perception will preceed the reality, no? I'm ready (grin).

Patriots...WOW...I'm exhausted from just watching!
A very happy Rich

There seems to be some possibility that the turning point
has already begun. A decline in consumer spending might be
the first event. And this may have started.

anytime soon. As a tool of monetary policy, interest rates have been raised in the past to quell rising inflation. Inflation related to shortages of labor and capital. These two conditions of inflation do not exist at this time. Raising rates now will only start the selling in the stock and bond markets. Japan is a good example, where when you have major, structural imbalances in your economy, interst rates may go down to absurdely low levels, and can stay that way for years. As I believe Keynes has been quoted as saying, "markets can remain irrational longer than you can remain solvent".

Japan has shifted bubbles in their real estate and stock markets, that peaked in the late 1980's, into insolvent bank's balance sheets. We are in a similar situation here in the US, but now our money center banks have large derivative positions, which can distort the natural mechanisms that normally function in capital markets.

Sinclair is now saying that the large currency traders are going to make a fortune being long the Yen. It may be that these speculative opportunities, are what is taking the pressure off the US bond and stock markets. They can hold their Treasury positions, because there are trading opportunities elsewhere. These Treasury positions are so large, and are butressed by such complex derivative positions, that getting out is not an option. As long as the Dollar doesn't Crash outright, Sir Allan may keep interest rates low, and the international community accepts the fact that the US currency reserves (that are held by their central banks) are a wasting asset. Can our Accounting experts derive a suitable depreciation schedule for the US Dollar.

As Belgian has explained so clearly, our markets no longer function in direct response to carefully constructed monetary and fiscal policy. Voelker was able to jack up interest rates at the beginning of the 1980's to bolster the Dollar without totally destroying the economy. Sir Allan doesn't have that luxury at this point in History, largely because the Rubin/Clinton strong dollar fiasco, has foeclosed any hope of saving the Dollar. Once an historic Bubble bursts, as we are seeing in the Dollar, any hope for a resurection is probably not realistic.

What we see in the World's capital markets today is incredible Speculation. Speculation that will only benefit the insiders. It is well past time for us little fish, to buy our gold coins, and retire to the backyard swimming hole.

Great Albino Bat, I regretted chimeing in on the interest issue after your post. Certainly your points were valid. Not in all cases of course, but you are smart enough to know that. While the ancients tried to minimize the ways human nature troubles man, thier attempts and suggestions are not for all times and situations. Those guys that are sure they know what god wants beyond issues of the heart, cause the most wars.

"What would belly this up? A revelation that a prime players paper is not good. My sense is there is plenty of players that hold questional paper. The stuff is everywhere and once word gets out there is some bad paper floating around, the question will shift from what do I buy to where do I hide.

The problem in Japan is there banks were allowed to exist totally insolvent and the credit mechanism was broken. Back in the 1980's, the Japanese banks were the financial kingpins of the world, seemingly invincible. Who are the chiefs, cooks and bottlewashers of that game now? Well, we could start with JPM, Bank of America and Citicorp. You might include the GSE's, but these are intermediaries and not credit creators as the banks are. They are all acting as if they are invincible and like a bunch of international gambling gunslingers. As I mentioned about Parmalat, Citigroup has been accused of running some financing scheme called something like black hole. Now when the credit mechanism breaks down, it acts the same way, like a black hole.
this phrase that appears on the front of every Federal Reserve Note. THIS NOTE IS LEGAL TENDER FOR DEBTS, PUBLIC AND PRIVATE. Now, what does that mean? Number one, it means the stuff isn't worth the ink on it if there are no debts. If it is worthless without any debts, then the more debts there are, the more value it must have. Wait until the cracks appear in the collateral of the credit machine and see what people will do for $100. There are third world countries going to starve if they don't get enough of those $100 bills. There are going to be people told by the sheriff to move if they don't get some of those $100 bills. If corporate Ameica cannot get some of those $100 bills, they are going to ZERO on the stock exchange. All collateral is potentially wiped out and consumer goods quit moving off of shelves and is liquidated in going out of business sales.

Until you understand credit, you will never understand deflation and until you understand the mathematics of debt service and income from financial instruments, you will never believe deflation can happen, much less will. I have said enough on this subject as it seems people are indoctrinated and think all this stuff is made up and the value is just paper. The more debt, the more coercive the money and the system behind it and the greater the end value of the paper will be, before it makes a u-turn and goes to zero. It might go to zero once the masses have no use for it because they have neither property or debt"

@ $ Bill Good observations. The framers of the coinage acts have never allowed the likeness of a living ruler on US coins and currency just to perpetuate that idea. "Render to Caesar," etc. If it ain't your face, it ain't really yours, Mr. President.I personally have a hard time with the idea that really smart people believe a GOD wants more than their hearts, and tend towards the idea that anyone pushing that insanity on folks is doing so to deliberately usurp power by some perceived religious authority. Some really bad things have been thrust upon societies in the name of "GOD", but not IMO, but truly spiritual people.Not far removed from this are people who run for office on the platform of shrinking the government and balloon it as soon as they are in power.This leads me to distrust all "authorities", assuming they are always out for number one. Checks and balances limit government efficency, but also constrict its power.As Will Rogers said, "Be thankful we don't get all the government we pay for!"

EU and Asia focus on currencies and the US on global economic recovery. What an ambivalent situation !
As if EU/Asia are counting on the US to continue expanding the US$ money supply and keep the broader dollar exchange rate (against yen/euro) within acceptable, undamaging limits.

This is a general "status quo" attitude ...and admittance that not much can be done to quick-start sufficient, genuine growth with stability.

This seems (!!!) the recipe for (destructive) price-deflation. This might materialize if,...IF, the dollar exchange rate does not detoriate (the dollar-index not diving below the '95 lows-80).

Or better, if the $-POG remains contained as to not pushing the dollar to new lows.

But the ongoing 2 decades old "trends" are much stronger than the present brakes the financial brotherhoods are trying to put in place. The dollar-index will crash from its '85 ATH (140) and new dollar-lows (sub 80) will provoke hyper-price-inflation. Dollar money supplies will NOT, can NOT, stop or decline in a political economy !!!

Dollar-supply will explode if global recovery is not sufficient. And global recovery is excluded if there is not enough dollar-supply. PERMANENT CURRENCY DEPRECIATION...gravity law !!!

in a pickle, today watch nickle.
5 aint no jive make sure u have foods and water to stay alive,
to drive the gold market u must be secure, and pure

for fear of retribution from those whoes actions are rehensible can overcome the diser for truth and justice. not sure when they wil try to bust us.
. a superconsciousness an awareness from inside is flowing from the ebbtide risingf higher and higher as the mire surronding gold is told and many more will this gold bull let ride. take pride.
love. peace, reality and of course gold set free.
can it be?
alot from a little we do not belittle our foes no step on there toes nor step on there feet as gold loves everyone it meats, word from the street is the like teh panthers the cabal can be beat. moving into the second half they will be writting balnk drafts for gold that is gone ,a fake rush ,a fake blitz, stand your ground absorb the hits dont be fooled into selling fits, come join us at the ritz and enjoy the world wide gold glitz!
gold and silver
honest money for
honest people!

True cold war story about gasline in Russia. reported by w.safire.
"In our complex disinformation scheme, deliberately flawed designs for stealth technology and space defense sent Russian scientists down paths that wasted time and money.

The technology topping the Soviets' wish list was for computer control systems to automate the operation of the new trans-Siberian gas pipeline. When we turned down their overt purchase order, the K.G.B. sent a covert agent into a Canadian company to steal the software; tipped off by Farewell, we added what geeks call a "Trojan Horse" to the pirated product.

"The pipeline software that was to run the pumps, turbines and valves was programmed to go haywire," writes Reed, "to reset pump speeds and valve settings to produce pressures far beyond those acceptable to the pipeline joints and welds. The result was the most monumental non-nuclear explosion and fire ever seen from space."

Our Norad monitors feared a nuclear detonation, but satellites that would have picked up its electromagnetic pulse were silent. That mystified many in the White House, but "Gus Weiss came down the hall to tell his fellow NSC staffers not to worry. It took him another twenty years to tell me why."
The blast in June 1982, estimated at three kilotons, took place in Siberian. The K.G.B. was not about to complain publicly about being tricked by bogus technology. But all the software it had stolen for years was suddenly suspect, which stopped or delayed the work of thousands of worried Russian technicians and scientists."

http://www.usagold.com/AMK/MK-gold.htmlBreaking News.

Strong Currency Three Corner Catch. Getting ready for G-7.

John Law Redux.

You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

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@ $ Bill

""In our complex disinformation scheme, deliberately flawed designs for stealth technology and space defense sent Russian scientists down paths that wasted time and money."

. . . and [wasted] resources, lives, wreaking huge environmental damage.

Gamesmanship being infinitely more important than any of the above.

What an incredibly vain steward of Earth is mankind, when "What's in your vaulit", outweighs "What's in your food, air, and water?"

"No, Lord, I did not outrun the lion, I outran my brother."

http://biz.yahoo.com/rf/040202/table_u_s_dec_personal_income_rose_0_2_pct_1.htmlbut wages and salaries are falling?....rising food and energy costs for the lower and middle income folk eating away at purchasing power...a Bush voodoo rich man's economy with large corporate profits being squeezed out of labor reductions and a recession trickling up from the rank and file who consume more than they earn. Will this trend of growing profit and falling wages continue? Who speaks for labor these days? No voice in the wilderness cries out. A house filled with termites looks strong until it collapses.

http://www.gold-eagle.com/gold_digest_04/ci020304.htmlGood read From Contrary Investor.

Snips.

"There exists an old saying that people do not repeat the mistakes of their parents, but rather they often repeat the mistakes of their grandparents"


"the financial flexibility of our entire system is possibly more limited that anything we have experienced in multiple generations. At least since our grandparent's generation to be specific."

" There is no question in our minds that the Fed is completely aware of the importance of asset inflation in the current environment. In fact to suggest that the Fed isn't targeting asset values in its policies of the moment borders on complete naivet�."

No comments about why gold is tanking today?

As I write, gold is down $7.60, silver down 29 cents, the Euro down .6 cents, the Canadian dollar down 1 cent, and the Australian dollar down 3/4 of a cent. Evidently dollar strength is being used to raid the gold and especially silver. Same old story.

But what is new is the strength of the yen: up .13 of a cent in spite of all this. Either upward pressure of the yen is too strong for the Japanese Government intervention, or perhaps the announcement last week of possible increase of gold to Japanese reserves signals a change in official sentiment.

http://www.reuters.com/financeArticle.jhtml?storyID=4260427≠wsType=usDollarRpt&menuType=currenciesI suspect the gold (and silver) bashing today and $ strength is window dressing for the G7 meeting this Friday and Saturday. It will relieve some pressure on the dollar and US monetary policy.

I look for the weakness to continue this week

http://www.russiajournal.com/news/cnews-article.shtml?nd=42193snippit:

In December 2003, the Central Bank of Russia reported that the inflow of foreign cash into Russia had dropped sharply. In December, it fell 36 percent compared with November. According to statistics, this is due to the fact that the �import� of US dollars into Russia dropped by nearly half. On the contrary, the amount of euro cash brought into the country increased by almost 50 percent. But this trend was short lived. As soon as the euro started weakening against the US currency, interest in euro cash also disappeared, analysts say.

goldilox:

Dollar popularity still dropping in world view. Russians are viewing their own currency as more viable.

http://quotes.ino.com/chart/?s=FOREX_USDJPY&v=sThe YEN made a run to below 105.4, but has risen back to 15.5 and seems more settled there.

http://www.cnn.com/2004/WORLD/asiapcf/02/02/birdflu.wrap/index.htmlsnippit:

(CNN) -- Asian nations are battling new cases of bird flu as the World Health Organization investigates what may be the first instance of humans transmitting the disease in the current outbreak.

China on Monday said it believed bird flu has reached poultry in one of its remotest regions, and reported five more areas with suspected cases, bringing the number of outbreaks in the nation to 11.

And the region's death toll is now at least 12, following the death of a teenager in Vietnam Monday and confirmation from Thai health officials of the country's third death from bird flu.

Goldilox:

CNBC reported that Asian governments have destroyed over 3 million birds. Last year in California, we killed over 12 million chickens over a Newcastle disease scare. Added to growing Mad Cow concerns, and the costs for food producers skyrocket as they scramble to insure safe food supplies.

CBS Marketwatchsnippit:

"SAN FRANCISCO (CBS.MW) -- Shares of General Motors and Ford Motor again fell sharply on Monday as expectations of higher interest rates tempered enthusiasm on Wall Street for the world's two biggest automakers.

During a significant economic downturn, U.S. vehicle sales benefited tremendously from inexpensive auto loans that drew in consumers eyeing some of the lowest rates in more than 40 years. And many buyers have simply financed more than they would otherwise be able to afford, driving off with a nicer car or truck than they would otherwise have been able to afford had rates been higher, or with a shorter-term loan .

Now, with the Federal Reserve signaling that a rate hike looms, automakers like GM, Ford and Chrysler may have a tougher time.

And it's not just the auto business that benefits from low rates. GM, for one, is a major player in the rate sensitive home mortgage market. These finance units have recently been the most profitable of any businesses for GM and Ford."

Goldilox:

I was reading over the weekend that GM has remade itself as a financial company, with autos making less and less impact on the bottom line. As US manufacturing continues its decline, companies are becoming more derivatives dependent and less product dependent.

http://www.thebulliondesk.com/NewsProvider.aspx?NewsID=2802715snippit:

China's voracious intake of raw materials to feed its rising industrialisation and the significant outbreaks of viruses in the food chain are likely to send commodity prices skyrocketing this year, economists and analysts say.

Among the most concerned about rising commodity prices is Sean Darby, head of regional strategy for Nomura in Hong Kong, who in an analysis in January pointed out China ``is already the world's biggest consumer of copper, tin, zinc, platinum, steel and iron ore and the second-biggest for aluminium and lead''.

He goes on to point out that China is the world's third-largest consumer of nickel and the fourth-largest for gold. That is welcome news to the world's commodity traders, although rising commodity prices generally play a major role in driving up global inflation. The upturn follows a three-year depressed commodity market that drove prices down markedly.

China has gone from being a net exporter of oil to being a net importer during the last decade. It is now the world's second-largest oil consumer, accounting for 35 per cent of global growth in oil demand last year.

The implications for world consumption of raw materials are thus clear. World oil prices have surged to their highest point since the Iraq war as crude stockpiles have fallen in the United States and other countries. The frigid weather in the US, a huge refinery explosion in Algeria and other problems have combined to keep prices up. However, China's intake remains a major factor in keeping prices high. Light sweet crude forward prices for March are now at US$36.20 (HK$282.36) a barrel.

Goldilox:

Not a recipe for falling costs.

http://www.prudentbear.com/bearschat/bbs_read.asp?mid=170949&tid=170949&fid=1☆t=1&sr=1&sb=1&snsa=A#M170949Rasputin at Bear Chat did a marvelous job of correlating "investors" to different gambling types. A fun read, and, spending a little time in it, perhaps a mirror we should look into occasionally. (Also, a good deflation/inflation discussion going on there today -- JesseL & others.)

"...Craps Players: This group resembles the options traders. These investors are certainly sharper than the Slot Machine Morons, but they always eventually blow up. They are really in it for the "action" anyway. While they know that they should stick with safe bets, they are continually tempted with the "Hard Way" sucker bets and are frequently wiped out in an instant.

"Roulette Players: This group compares to the current bond market investors. They are placing all their chips on their favorite numbers while hoping against hope that the historically low and unsustainable interest rates don't immediately jump and destroy their portfolio. This game oftentimes turns from Roulette to Russian Roulette. ..."

Have to be concise here -- no time to lay out all the thoughts. Had a conversation Saturday with someone in the "credit counseling" industry, which is paid by the credit card lenders to keep people in debt management plans and out of bankruptcy. Spent much of yesterday reading about it on the 'Net. I feel disoriented today -- what an upside-down view of financial life!

At the same time, _I_ lost some paper money when I was out, and blew up nastily over a couple of Jacksons. Drove back, searched everywhere. Complete emotional blow-up.
(Am I losing my memory? etc., thoughts). Yet, when transactions involving losses or overcharges are electronic, or by check, or other billing forms, I do not react like this.

Therefore, paper money holds a TANGIBLE place in my subconscious view of what money is. This is why it is easier to get people to spend more via credit cards and checks, than by handing over cash that they can see, touch, feel.

My point: If paper money seems so tangible now, to me -- Mr. G(for "G"oldbug) -- and is also "too tangible" for our current consumer economy to rely upon in commerce, then imagine how much more TANGIBLE than today's paper money the gold and silver coins of yesteryear were to peoples' subconscious identification as Money. (To the point where most of them never even had to THINK about what money was. And could just focus on getting it. ;-) How well it fit in as the TANGIBLE pay for their real day's labors.

How much HARDER it was to get them to part with their money capriciously, and encumber themselves as debt slaves! And how necessary it is to such a system as today's to keep HARD MONEY off people's mental radar screens as something to further their financial security. Inevitably, the scam will fade as people either learn their way out of it, or are exhausted and re-discover it as the "last man standing" among moneys.

But "hard money" will have to return for the tangible sense of monetary holding, for this is the way humans are designed. If we do not trust, then we must touch. And trust is being broken...

(I'm leaving out most of the thoughts about how the designers of a paper money system offer themselves as the "parental" protectors of a childlike public, offering them something that will theoretically improve life for all, but only if it is carried out with the utmost INTEGRITY, which the public assumes it will be, and then the players immediately divert into the fullest scam mode imaginable. Or rather the Federal Reserve is designated to manage the scam as cleverly as possible, to the greatest long-run profit of the players who qualify to come in under its umbrella. Voila!)

Whew!

You stated
"At the same time, _I_ lost some paper money when I was out, and blew up nastily over a couple of Jacksons. Drove back, searched everywhere. Complete emotional blow-up.
(Am I losing my memory? etc., thoughts). Yet, when transactions involving losses or overcharges are electronic, or by check, or other billing forms, I do not react like this."

My sincere condolences on your loss. But just think what your reaction would have been to the loss of a pair of double eagles. They have the same face value as the Jacksons.

Boilermaker

http://www.gold-eagle.com/gold_digest_04/ci020304.htmlThanks for a very informative post.

"(I'm leaving out most of the thoughts about how the designers of a paper money system offer themselves as the "parental" protectors of a childlike public, offering them something that will theoretically improve life for all, but only if it is carried out with the utmost INTEGRITY, which the public assumes it will be, and then the players immediately divert into the fullest scam mode imaginable. Or rather the Federal Reserve is designated to manage the scam as cleverly as possible, to the greatestlong-run profit of the players who qualify to come in under its umbrella. Voila!)"

And here's what's happened to those under the umbrella:

"Starting from quite humble beginnings many decades ago, the financial sector is currently the largest sector-specific weight in the S&P 500,"

"From less than 5% of the total S&P in 1980, the financial sector now accounts for just shy of 22% of the total capitalization based weight of the S&P."

http://biz.yahoo.com/rb/040202/media_jackson_2.htmlsnippit:

U.S. Federal Communications Commission (News - Websites) Chairman Michael Powell promised a quick and thorough investigation of the stunt aired during one of the most popular American television broadcasts, which also attracts a major worldwide audience.

"That celebration was tainted by a classless, crass and deplorable stunt," Powell said in a statement that was echoed by others on the panel. "Our nation's children, parents and citizens deserve better."

Goldilox:

I bet this "investigation" gets a lot more publicity than the congressional inquiry into Michael's single-handed dismantling the public trust ownership limit regulations in favor of Aussie neo-con Rupert Murdock. Yes, Mr. Powell, the American citizens DO deserve better.

But, as usual, sneak-peak sex is big news, while political graft and genocide are big yawners.

Even CNBC is spending about 60% of their time talking about Martha's trial and the SC primaries. Where is the real business news? There's more here than anywhere on the tube.

Once again, after the barrage of sellers on the Comex, POG and mining stocks rose after 10:30. Most mines are closing near Friday's close. The after hours action seems fairly regularly to be inverse to the COMEX trend.

http://www.usagold.com/Order_Form.html

This country could go for the loss of a few Jacksons about now........

Maybe Jessie, Michael, and Janet for starters!

http://quotes.ino.com/chart/?s=NYMEX_CLH4snip
"The energy markets closed sharply higher on Monday amidst rumors that OPEC might cut production when it meets later this month.

March crude oil closed sharply higher on Monday erasing all of last week's losses and is challenging the contract high at 35.25. Today's high-range close sets the stage for a steady to firmer opening on Tuesday. If this winter's rally resumes, weekly resistance crossing at 36.37 is March's next upside target. Stochastics and the RSI are turning neutral but will need to see additional strength before turning bullish. Closes below the 40-day moving average crossing at 32.86 and the previous reaction low crossing at 32.35 would open the door for a test of the reaction low at 30.90 later this winter."

comment
Well my favorite commodity, gold, got hammered today but my next favorite commodity, oil, did well, up 5% today. Oil up, gold down. Oil has OPEC support, gold has Western Central Bank (WCB's) manipulation. OPEC trying to maximize a depleting asset while WCB's trying to save their fiats. Who's smarter?
Boilermaker

In the FT article posted today in MK's News and Views the author's opinion is that at the last G7 meeting, China came in for criticism for her currency peg to the US$. But since Japan is now reported to be intervening massively to support the dollar through treasury purchases, he believes Japan will be the one holding the "hot potato" of blame at the next G7 shindig.
If so, then further Yen strength above 105- 106 to the dollar would approach several recent multi-year yen highs vs US$. These are attractive entry points for momentum traders, speculators and funds no doubt.
George Soros hasn't done to the Dollar what he did to the Pound Sterling. Perhaps he doesn't have to.
Likely Greenspan will say little or nothing to roil the Forex markets tomorrow. His words will be interpreted numerous ways by rival domestic and international news agencies and media and their columnists. But the most lucid account will be found here and at other independent outlets.

The trigger, the trigger . . . I've been thinking about that ever since Mr. Powell brought the subject up. Here's a possibility. What do you think of this one?

I was born in 1940. World War II ended in 1945 (VE day was 5/8/45; VJ day was 8/6/45 --- that is, Victory in Europe and Victory in Japan for those of you who weren't around back then). I remember the huge bonfire in the village square celebrating VE day.

So the horny GI's came home en masse in �45 and the baby boomers were born en masse in �46 and �47. I have lived my entire life just half a step ahead of the baby boomers and I can give testimony that it is a real phenomenon.

In Jr. High I looked out my classroom window and watched them building the new elementary school for the baby boomers. I went to college jumping over ditches and walking around bulldozers. They were erecting the new libraries and gymnasiums and residence halls for the baby boomers.

I got married. Six years later everyone got married. I got divorced. Six years later everyone got divorced. My hair turned gray. I went into a state of denial and bought hair dye. Six years later everyone bought hair dye.

I retired. I bought a nice little place with a few acres in the country. I cashed in my 401(k) and paid off the mortgage (wondering at the time how much I was shrinking the money supply by so doing). But at least I'll have a roof over my head. That, plus some hand tools and a stash of gold and silver jingle and I should be OK. That's how your thinking goes when you retire.

Let's see. 1946 + 65 = 2011. 1946 + 62 = 2008. We're already in 2004. Just one more presidential cycle and a groundswell of debt paydown ahead of baby boomer retirement will commence. It will happen. And it will likely lay to waste our ever-expanding, debt-based economy. Retiring boomers will not take on new debt. In fact, they will pay off the debt they already have. They will have the same mindset that I did when I retired.

The money supply will contract. The U.S. economy will be in shambles. And I can't imagine how Dubya or even Hillary can prevent it. You will not convince retiring boomers it would be a smart move for them to borrow money. One of the things that go bump in the night to haunt retirees is the fear they will run out of money before they die. I daresay you will not be able to jawbone them out of that fear. "Get out of debt," will be on the lips of every retirement counselor.

IMHO this is a guaranteed mega-trend; as much of a sure thing as we will ever experience in our investing lifetimes. Boomers will reach retirement age as a group. They will engage a hunker-down mentality as a group. Tap dance around it as you will. This course was charted in 1946 using navigational aids designed in 1913. We are on auto-pilot right now, as we speak, and we will hit the rocks on schedule.

Its the old head in the sand syndrome methinks........

http://www.usagold.com/centralbank/current.htmlCourtesy of our friends at Central Banking Publications Ltd.

(excerpts, new order)

HEADLINE: NORGES BANK IN GOLD SALE

-- At end-2003, Norges Bank's gold reserves consisted of about 37 tonnes of gold, made up of 3 tonnes of coins and 33 tonnes of gold bars.

-- Norges Bank has sold 16 tonnes of gold bars in January and is planning to sell the remainder of the Central Bank's holdings of gold bars at a later time.

-- The background to the sale is that gold only accounted for just over one per cent of the Bank's international reserves, and thus contributed little towards diversifying the risk associated with the reserves. The bank said that return on gold had historically been low.

-- Excluded from the sale are seven gold bars that have been used for exhibition purposes and a large number of gold coins that were transported to England when Norway was attacked in 1940. Norges Bank and the University of Oslo are discussing whether the gold coins can be put on public exhibition.

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

We discussed this last Thursday, January 29th. I suggested that the Norwegian bankers were confident in higher gold values, and that three tonnes later could do the work of 33 tones today; hence, through this reallocation they were effectively "buying their ticket" to that future scenario.

Happily, Belgian was quick to improve upon my suggestion, reminding above all that Norway has a source of oil wealth to help balance their position as these careful steps are taken into tomorrow's world. (see Belgian's 116191 from Jan.29)

R.

I meant to add that this would be a very gold-friendly move. Human nature tends to want a memento, a souvenir, of notable experiences. Can you think of anything as impressive as seeing a sizable amount of gold on public display? Small children would leave tugging on their father's sleeves, "Papa, I want one!"

One gold coin each would be a step in the right direction -- whcih is one coin more than many people now have.

R.

A fascinating personal saga. You are ahead of me by five years chronologically and probably five years wealthier and five years wiser too. You could be correct that there will be a large groundswell of debt paydown that may help save a rather profligate nation. On the other hand (like the one armed economist a past president wanted) I see a different scenario. Maybe I deal with too many "poor people" and it adversely affects my observations. What I see in 2004 USA is the end result of people already haven taken their 40lK's or whatever, having already squandered same, in process of trying to eke out a semblance of "golden retirement years" with some paltry social security payments that they find are too little for reasonable dignified existence. And they feel they have failed. I have seen some of them cry. Indeed, a lot of folk find that even with their home paid for (plus the usual two cars) the rising incidence of property taxes (and utilities) results in a feeling that they are renting their house back after they are paid for. And this does not count upcoming inflationary forces (count on it). And I do not have any answers. And I could be wrong....With some of the families in this world banging out 5 or 6 kids per family I think investments in commodities, among them gold and silver, may be the most logical thing.

http://www.imf.org/external/pubs/ft/def/2003/eng/043003.htmAnyone want to read this IMF article on Deflation and comment back to us?

I'm guessing they'll concede only when it's too late that interest rate manipulation works only under certain optimal conditions, which we left behind long ago. Soon, money "printing" won't work either, when the "bulk volume" of the manufactured dollars is valued in real goods at less than it was last month. "It's beginning to look a lot like Weimar..."

TPTB: Great post! I second Sancho's remarks to you. At least you're ahead of the crowd, with that six-year gap. (Maybe you can learn to fade that crowd's moves by 3-6 months, and get feelthy reech!??)

My only correction would be that the crowd will go for age 62 Social Security, especially when they learn how empty the cupboard is going to be if they wait. All the financial advice magazines will put it on their covers. The breakeven date between 62 and 66 (most Boomers actual full SS amount age) is about age 82. Tell me the USGov's financial condition in 1946 + 82 (2028). Bad!

Kilo -- I'm smilin'...

Ten Bears: 22%! I didn't know that. Banks on every corner, shuffling digital dollars and taking in rolls of pennies from Girl Scout cookie sales (sure, sure). But didn't Buffett show us a couple years ago how 1/3 of corporate America's $350 billion profits were raked off from investors by Wall Street's fees, so 22% seems a pretty likely result of that, doesn't it? The price of ignorance...

Boilermaker: Thanks for sympathies, I agree. Now where DID I put those St. G's? Around here, somewhere...

A really fine observation from TPTB regarding the probable impact of Boomers reaching retirement age and paying down personal debt. This is a dynamic that I haven't seen discussed here.

Are there any other observations from my fellow Norte Americanos about how this might effect POG, POO, interest rates, equities, bonds, or non-personaldebt?

Last year the G7 emphatically insisted that only markets should determine exchange rates. But wasn't this a signal that things would be business as usual in the Forex or even MORE of the same?
Because it was only the day after that September meeting that official Chinese pronouncements on the issue began to predomiminently frustrate hopes for a prompt change to their currency's dollar peg.
Amidst all the hardline Chinese denials of acquiescence to a significant yuan adjustment or a delinkage, there's been only the rare conciliatory nods towards a possible, very small, widening of the permitted trading band of their renminbi vs US$.
Not to be outdone, the Japanese authorities also continued to diverge from the G7 currency market agenda with their own style of apparent autonomy.
By exponentially expanding their own foreign exchange reserves, they embarked on such an untoward infatuation for cheaper and cheaper US$, that Japan's new monetary mission has even less chance of success than Bush's space voyages to find some new world.
Judging from the apparent failure of their past pronouncements on exchange rates to stem or reverse Asian currency market controls, the G7 could abstain from any mention of markets in the determination of exchange rates.
IMO they'll speak of "our mutual desire for currency stability", for public consumption and appeasement, while intimating to any power-broking member of their dynastic jetset, that it's business as usual for their long-term agenda.

I forgot my lead-in thought to TPTB's post before. I was thinking the Boomers are not going to be the trigger to a meltdown, just the follow-on "bulldozer" that really plows equity values under.

I'm thinking of it more as the 80-20 rule. 20% of investors will have gotten out before the wave hits. But they will have driven asset values down (many of them out of cash crunch necessity, not astute timing skills, but they'll be lucky to have done so) by 80%. The rest of the wanna-retires will be picking out used RVs for their downsize home.

I'm more interested in the nature of the workouts that will be mass-marketed in an era of credit collapse. That's why the "debt management plans" being marketed to several million small debtors are interesting. I'm wondering how this will be applied to larger debt sectors, like mortgages and autos.

If the 10 or 12 largest credit card marketers have a regular pay rate (and they do) offered to these credit counseling (read "gentle collection agencies") companies, then the big mortgage holders (FNM, FRE, GNMA) will be expected to establish workout guidelines for people to keep "renting" the homes they "own", after their equity has disappeared.

Oh, another thing I forgot. (Maybe a trivial tidbit, but y'never know.) Trigger?, maybe. Social security indexes your past wage record (by wage rate increases, not CPI measures) up until you are 60, and then it is FROZEN until you start collecting. If you do not collect until 66 or 70, your benefit has been effectively locked in six or ten years back. Imagine if we then have 6 years of 15% CPI inflation (or have already been in it.)

The financial advice mags will be telling people to grab that SS at 62, so they can then begin to get the COLA adjustments upward every year. Especially if CPI inflation has become rampant. (Of course, all of it hastening the day the fund goes dry, for everyone. How to "Get Yours" will be the science of the day, widely taught.)

@ Federal_Reserves .... Even though others seldom commment, I always enjoy your informative posts (ex. #116305). You, and other loyal contributors here at the forum enable us to know what the REAL NEWS is .... Not just the half-of-the-story that the media attempts to feed us.

Thank you.. Thank all..

The most friendly gesture of Norway is, that it made somebody very happy with its Gold. A total of 33 Tonnes is what the jewelry industry consumes in 3 days.
Last year, President Bush made a discrete, out of the blue visit, (stop-over) in Norway !? Norway is not an EU-member or candidate and has always been a rather excentric (isolated) country (cfr. WWII-history). In what direction might we speculate about the receiver of the Norsk precious ?

I'm betting on the Anglo-American dollar-block. Norway sells its oil (black gold) in dollars. Is there some possible analogy with the UK goldsales and UK black gold reserves ?
We must pay attention to the fact that the dollarprice of oil remains strong, whilst the dollar is relatively stabilizing. I stick to the opinion that the POO is increasingly "politically" loaded rather than being the result of offer/demand, influenced by the Chinese needs or dollar exchange rate.

Very favourable oil-(development)-contracts (A.A.) in exchange for very specific Gold-flows !?

If those 33 tonnes are so insignificant to Norway (1% of its reserves)...this Gold can be 100 times more valuable in another context.

I have the strong impression that $-Gold-Containment is coming on the forefront as to be able to stabilize dollar exchange rate and $-IRs !? First POG minus the 6 $ and then $-exch. rate up, $-IRs down/flat.

How damaging is the strong/rising $-POO, already ??? The dollar-block surely needs some relief from the stubborn oil-pricing-power, no ? What is your intuition telling you on this particular aspect of the whole equation ?

@ Belgian

You said:

"I have the strong impression that $-Gold-Containment is coming on the forefront as to be able to stabilize dollar exchange rate and $-IRs !? First POG minus the 6 $ and then $-exch. rate up, $-IRs down/flat."

I must admit I am not getting your point. Would you be so kind as to further elaborate on this for me?

Thanks much
-G

The $-POG since the low of 1999 *IS* the alarm-bell and NOT the other way around. $-POG is not rising because the $-exchange rate is declining but the dollar is tanking because Gold's $-price is rising.

In order to support the dollar, one has simply to contain (lower) the $-POG. A stable dollar can keep $-IRs flat.

In other words...please leave the dollar alone and I (the dollar block) will provide you cheap Gold (some physical and/or paper-gold)...and maybe some cheap/cheaper oil from the Arabian desert and some other places.

As if the dollar is saying...don't go for that euro, no need to chase (accumulate) Gold and don't worry about the POO,...because I (the dollar) will fix everything : POG - POO - IRs - Global growth - Stockmarkets - bonds - money supply - debt - deficits, etc...

I (the amateur) watch the POG, minute after minute, in relationship with many other price-movements. I suspect a change in behavior and see Gold (its $-price) taking the lead.

All other observers do comment on Gold and its price-behavior as a secondary result on the changes in $-exch. rate >>> IRs >>> POO.
I never bought the classic, boring explanations of rising geopolitical tensions (or many other reasons) as to explain/justify, POG's behavior !!! We are continiously and blatantly being lied (purposely disinformed) about Gold !!!

Gold's price behavior has nothing (extremely little) to do with the 2,500 tonnes (or previous amounts) that are yearly mined. Gold is allowed to be controlled/managed by a specific ($)oligarchy !!! It is "this" that is in a process of change.

Please do comment on this, Goldi. TIA.

To return of Shadowfax confirmed what the Goldbugs had just witnessed. The capture of Gandalf by Therroth would weigh heavy on them. Gandalf, many times would do things for unexplained reasons and his actions would be respected.
Yet, to ride out in the face of danger with no escort was to invite death.
The forces of Sir Ari and Sir Belgian reached Hammerton and the news of Gandalfs capture was their greeting. Omar rode up to them and within a few minutes formed a line of attack if front of the west gate.
What are they doing? said Sir M.K. as he pointed across the Epis.
Leona and Cougar were on the ferry when they saw Sir Black Blade riding towards them.
Tell them to stop! Sir Black Blade yelled. Cougar turned to see the formation at the edge of the blackened woods.
The ferry reversed course and before the barge reached land, Cougar had his horse leap into the water.
Both rider and horse felt the cold, still they moved swiftly bucking the current of the Epis. It was a miracle they reached the shore safely. Reaching the top of the bank,
Cougar brought his horse to full gallop. He watched as the swords of Sir Ari and Sir Belgian were lifted above their heads. Noooooo! Cougar yelled and a few riders heard him. Inturn they called out to stop the attack.
Cougar rounded the end of the line and rode towards Omar and the Knights. They all met in front.
It is not time. Look at the far bank of the Epis, said Cougar. Sir M.K. and Sir Black Blade stood at the far shore.
They all looked back at Hammerton.
Leona had made her way across the river. She rode to where Lady Waverider was standing. She dismounted and leaving her horse walked up to Lady Waverider.
Is Gandalf alive, Leona?
He is alive, my Lady, said Leona.

Inside the town hall of Hammerton,Therroth called out for his servant. He sat at a large table and sitting across from him was Gandalf.
The large black orb was gone and he sat motionless in his chair.
A clear substance now surrounded him which appeared to be like water as it reflected light and flowed.
You have a guest and I think he may be a friend of yours, said Therroth.
"Coming my Lord",could be heard and the sound of running footsteps from the far end of the hall.
The little man came close to the table and stopped to bow.
Say hello to our guest, said Therroth.
The little man turned to greet his guest.
Gandalf?

Yes, The Lord of the Castle and Gandalf meet again!

Therroth began to laugh.

The once Castle Lord drew close to Gandalf.

Is he alive? he asked

Look upon his face, said Therroth.

He did,and immediately pulled away from Gandalf.

I see he remembers you too, said Therroth laughing.

Bring us some food and prepare it well.

Yes,my Lord.

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

http://www.larouchepub.com/other/2004/3102parmalat_invest.htmlMore than I ever knew before about Parmalat, Italian banking, and fiat follies made in New York to be "deposited" in the Caymans. Courtesy of LLR, who is probably good as a provocative economics professor, if you will continue on with your own studies after his class.

ski -- I second your remark, having enjoyed several of Federal_reserves' recent posts, and glad to see you around, too.

Ted Butler has new comments out today, and says the increase in commercial shorts' positions of over 50 million ounces silver in ONE week is a record, and thereby produced a sharp sell-off in paper POS. (Makes you wonder: how many more ounces short to get it back down to $5? Like pushing down on a heavy spring?)

Desperation? This is the kind of short position build-up that would precede the event we learned about here early on: SEPARATION. And which we have learned to read as: BUYING OPPORTUNITY!

And, hey -- how 'bout that VOLATILITY! Doesn't that just make you want to go out and load up on PAPER??? me, neither.

The two metals are trading in tandem, too. So they have failed to inoculate one market from a rocket launch in the other. You would think they would have worked to attenuate the correlation between them...

@ Belgian

Thank you.

I get that you're saying the US gubmint wants public shouting from the rooftops about gold sales demonstrating lack of faith in gold (as the amount is trivial to them, not to me).

A few more ?? if I am not totally a boring pest.

Is Norway a net importer or exporter of oil? Does this even matter in the equation?

When you say gold is driving the $ down, not the reverse, why are other curencies rising against gold? Is this an illusion caused by the $'s world reserve status?

Sorry to ask so many more questions after you were so generous in replying before. I truly appreciate your patience and explanations.

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sDX=87.08 -0.51 and falling. Look out below!

I hope Theroth has roo meat in that there castle, 'cause Gandy and his hounds have some work to do!

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10The PPT must be asleep!

Norway is a relative big exporter of (Northsea) oil and has quite some substantional reserves for such a small country.
Yes, this Norsk oil-wealth,...WEALTH, does matter a lot. They have black gold under the water (not sand) and yellow Gold in their vaults is of secondary importance. If and when the euro should become the oil-currency...Norway gets euro as reserve.
Same reasoning goes for states that have undeground Gold...they don't need to hold substantial aboveground Gold-reserves. They can always make underground gold a National Strategic Wealth tangible, overnight (aka semi-nationalisation).

The POG is made in a dollar-market and all currencies are dollar-derivatives. All currencies simply stay where they are and it is the dollar that declines against all of them. And since Gold is the anti-thesis of the dollar...it is Gold that commands (prices) the dollar. Buying Gold and force POG to rise is the same as pushing the dollar lower in exchange rate against the Gold buyers.

That's why oil-reserve holders cannot accumulate Gold and make Gold's price rise, because then they kill the dollar-currency in wich they are selling their oil ! Gold must be accumulated stealthly, cautiously and patiently. That's why the Big colluding mines have been selling Gold forward and why dollar-friendly states support the dollar by putting their gold-reserves available for further POG containment to the advantage of the dollar-system.

Oil + Gold are "political" tangibles of extreme (exchange) Value. But when oil + Gold become scarce and the dollar-system gets hopelessly overloaded with suffocating debt, whilst a challenger euro currency pops up...minds, old habits, alliances,... do change.

Mr Gresham, 600,000 Italian families got clipped by fraud, how many folks are in Italy? Does this represent the entire upper class?

"100,000 Italian owners of Parmalat bonds, mostly families which have been advised by their banks to buy paper which is now worth nothing. This is the third large insolvency hitting Italian investors in one year: The first, the Argentinian insolvency, wiped out EU 12 billion euro in bonds owned by 450,000 Italians; then, the bankruptcy of Cirio, another food company, meant a default on EU 1.2 billion in bonds owned by 40,000 families. Panic is already spreading, and a run on the Italian bond market is on the horizon. Bank stocks have plunged, with Capitalia, the main Italian creditor of Parmalat, having lost 40% since Dec. 4.

The red thread of this catastrophe is represented by the role of the banks. Italian banks, not unlike their international colleagues, have lured unaware customers into high-risk investments�workers, pensioners, and professionals who, in most cases, did not know where their money was invested, or who were fraudulently told that it was "safely" invested.
In the Cirio case, it came out that on the eve of the company's insolvency, creditor banks rushed to dump their Cirio bonds, by selling them to their customers! And Italian newspapers are now publishing letters by owners of Parmalat bonds, telling how they were still being sold such bonds by their banks on Dec. 11, two days after the first Parmalat default, and after Standard & Poor's had downgraded them to "junk" status!"

Most lately it was TPTB's recent post that had me wondering what combination of factors had to be ardently believed (or else flatly ignored) to imagine any rosy glow ever returning to the cheeks of the ancient corpse of Deflation here on American shores. That old man just ain't ever gonna get up and dance again.

To believe that he will requires the following beliefs.

It requires the Deflationists to believe that Sir Belgian hasn't measured his words -- especially when he refers to the "political economy" -- and the operative word there is *political*! Deflationists must *MUST* believe EITHER that our basic governmental/political regimes will utterly change their stripes, OR ELSE they must believe that our federal administration is impotent in its power to influence this and impotent to borrow money.

However, given the government we DO HAVE (and for this it doesn't really matter if it's a Dem. or a Rep. at the wheel) a Deflationist must believe that our government's elected officials will suddenly and uncharacteristically ignore their age-old practice of catering to the electorate with costly entitlements and social programs, and that these same officials will ignore the political and social cost of Deflation should it ever truly threaten to raise its rotting head.

Tap dancing inflation is the typical bugaboo, but if Deflation begins to stir (and here I'm not talking about the penny-ante run-of-the-mill garden-variety downturn in a business-cycle but rather the type of deflation with a capital D that these quirky Deflationists fret about) our government will suddenly grow lively with talk as an early counter-deflation maneuver, following up with bold action if necessary. The bank holiday and Gold confiscation of 1933 is a prime example of that political resolve. So was Nixon's 1971 default on international bond/Gold obligations.

Oddly, even where the obstacles of Gold in the system were deftly overcome by the prevailing political will, Deflationists seem to forget that we're on a paper monetary system now -- and a defaultable, I repeat, a *defaultable* monetary system it remains ever the more!

How are these Deflationists able to ignore record budget deficits from the *typically* austere Republican party now in charge of our government, and a President who talks further in the face of a plunging dollar of elaborate spending schemes like a mission to Mars. If the public fails to react as desired out of concern for the fate of the dollar, will this cheap talk shift into follow through action as the government must become the borrower of last resort? Sheeeeeeeeeeesh. We're left to ourselves wondering how these Deflationists believe miraculously that the value of a paper dollar, UNLIKE so many pesos rubles and lira before it, is somehow immune from falling to zero. Apparently the word "default" is absent from their memory and from their present vocabulary.

At the risk of sounding redundant, the decision to allow defaults on obligations becomes a very likely outcome by elected officials on behalf of their constituents of a sovereign government when walking away is deemed less painful than paying in full as originally promised. Through the acceptability of institutional defaults, the value of a dollar obligation can indeed be pushed in the direction toward zero -- as easily as pulling on a string (to put a twist on a familiar refrain.)

Where Deflationists would believe Congress and the Executive branches of government to have no real power of influence in these matters, the Deflationist would also have to believe in the absolute independence of our central bank, the Federal Reserve, to steer monetary policy without bias toward the political will. The Deflationists seemingly believe that our Independent central bank would not only stand firm through political pressure arising from deflationary social ills, but would tolerate 'Big D' Deflation even as the 'Big D' downturn in business cycle threatened loan defaults to plague the solvency or threaten collapse of commercial banks. Ain't gonna happen, dudes! With small potholes and dips along the way we're on a politically-driven irreversible road to Inflationland.

That's why I say WITHOUT FAIL,,,

Gold. Get you some. --- Aristotle

TPTB: Maybe I remember you: one of the three teenagers growing up in the neighborhood at a time when we younger kids were playing "hide and seek" in packs of 30 or 40. Since I was born about 10 months after V-E Day, I've had a leading edge view of the boomer wave that came along right behind you and changed everything.

During the 50s and early 60s, boomers believed the gestalt presented to them by "My Weekly Reader," "Readers Digest," and all three television networks. Each of us would live someday in an "All Electric House" with electricity so cheap it wouldn't be worth measuring. And out biggest problem would be a "leisure crisis" caused by progressively shorter work weeks. As a disillusioned bunch, some of us are starting doubt whether there will be social security checks on the other side of 2006/2008 or whether a $400 check will be enough to buy a couple loaves of bread.

The buying down of debt that you forsee will be a real trend but it will be offset by the extent to which people perceive risk of hyperinflation. Could be that hyperinflation will turn a life's savings into an amount that can be earned in a week. No point in paying off any debt and most will have to postpone retirement until after hyperinflation ends plus a couple years to save a few million dollars.

However it works out, holding gold reduces the odds that we end up eating dog food.

Caradoc

Your third paragraph nicely addresses one of the stones I left unturned. So much ground, so little time...

Gold. Get you some. --- Ari

Mr Gresham: No need for "debt management" of mortgages at least initially if formal devaluation of currency is accompanied by simultaneous indexing of all mortgages and car loans.

Call it the "double whammy." Not only are our savings and 401-K suddenly reduced in value by some huge percentage but we also lose the benefit of being able to pay off debts with cheaper dollars because the amount we owe just ballooned to match the devaluation. Nice.... Most off us will continue to make the payments on our McMansions because of inertia and because it will seem like a break even situation. But when we begin to realize that the price of natural gas and heating oil won't allow us to keep those big houses warm in winter maybe debt counseling will be needed to keep us making those payments for another year before we walk away from what we naively used to think of as equity.

It occurs to me that just because there's a "significant tax penalty" for pulling money out of a 401-K doesn't necessarily mean it's a bad thing for you; mostly it just means they don't want you to do it. Especially if you're going to put whatever you liberate into physical gold and silver.

My picture of a boomer gathering in 2012: We wash the dirt off some chicory roots, slice them thin and roast them so we can make something like coffee. Gather some sticks so we can heat up the can of Alpo or -- if it's Sunday -- Dinty Moore beef stew. Then we sit around the fire and take turns telling about the financial disaster that happened to each of us.

Social skills in 2012: With the price of gold in new dollars translating to thousands of 2004 dollars, a good listener -- one willing to hear each person's litany of shoulda-coulda-woulda -- will allow each aging boomer to recite how he shoulda pulled the money out, how he coulda bought X ounces of gold, how that much gold woulda been worth [whatever] in the second decade of the 21st century.

Caradoc

PS: Chicory is the one with the blue flowers.

some stare in disbeleif
some stand in fear gripped with grief
others tall in relief
this price drop has allowed most to buy more
gold going to break the tie by going door to door
untill the feet, they are a sore
cause gold is going to win this currency war!
from here on out its gold.......... forevermore!

Certainly not a sure fire thing but if you ever see a "clink" message from Henri,watch for a dip in price and a great buying opportunity. Henri always buys at just the wrong time. :-) See last Henri Clink message and most previous ones then compare the POG trend shortly afterward.

http://english.pravda.ru/comp/2002/07/01/31506.htmlAt the risk of being redundant here's a bit more on Norway's unique position in oil:

"Norway Has Oil Reserves For 50 Years Production

The world's third biggest exporter of oil, Norway, forecast yesterday that it would pump oil for another five decades estimated that three fifths of recoverable oil reserves were still in place.

The Norwegian Oil and Energy Ministry also spelled out in a White Paper that it would remain independent, ruling out any formal agreements with OPEC or other oil producers on output.

�More than sixty percent of the total oil resources remains to be produced and could provide a basis for another fifty years of oil production,� Oil and Energy Minister Einar Steensnaes said in a statement.

�It is not an option to enter agreements or any other forms of cooperation with other producing countries regarding oil regulations,� the White Paper said, but kept the door open to possible future regulations if the market called for it.

Oslo agreed to hold back one hundred and fifty thousand barrels per day to choke production to an average 3.02 million bpd for the first six months of this year to help OPEC to underpin prices. It will suspend the cuts from July 1st however.

Norway said it would aim to increase the oilfield recovery factor, the proportion of the total reserves to be extracted, to fifty percent from a current forty four percent, representing a gross production value of about 500 billion crowns ($66.68 billion).

For gas, which is seen gradually replacing oil in the long term as Norway's main source of revenues, the White Paper said Norwegian producers had committed to sell more than eighty billion cubic metres per annum from the year 2008.

It said it had no plans to change its stake in the Norwegian oil and gas company Statoil, in which it owns eighty two percent, or in the State's Direct Financial Interest (SDFI), also called Petoro."

Comment
The last paragraph above clearly shows that Norway's oil is controlled by the government and hence can be used for political and economic purposes. A reasonably good substitute for gold.

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News & Views also updated.

It is good, in the struggle of life, when people meet and share information and ideas. Thanks to those posters here (and some now long gone) who with fair words have shared freely their honest perceptions and information references.

I thought of closing this, Ten Bears last post, with a few quotes from Henry George, Alexander Del Mar, Ecclesiastes, and a letter from an early nineteenth century relative, moving west in front of the great European migration.

However, it seems more appropriate to post only an observation from an octogenarian: "God bless the people of America. In the aftermath of policies in the Greenspan era they are going to need it.


Good-by
x

As Ari and others have expounded politics rule the US economy and will even more so in this election year. Bush will be desperately trying to keep things away from the abyss by spinning and spending.
In the meantime the Dems are busily shelling each other in hopes of getting to the Big Dance in November. However, the last week in July when the Dem candidate is confirmed their campaign will be reaimed at the GWB and the Republican Congress.
If GWB is not already falling off the edge by then isn't it likely that the Dems will give him a gentle shove by exposing the fragility of our economy and how the evil Republicans in four short years have blown the gains made by the previous admin. Dems will put a negative spin on the economy and start talking about the same things we talk about here on the forum. Why not trigger a depression such as in the Hoover/Roosevelt era. It's coming anyway (the depression) so why not use it to win the White House and sweep the Congress? Of course they will spook their favorite target "rich people" into defensive mode insuring conversion of paper assets into commodities and offshore assets.
This seems like a no brainer to me. Any other takes on this scenario?

@ Belgian Ari, Caradoc, and BoilermakerThanks much for the eco-geO-politico lesson on Norway.(:^) -Goldilox

CBS MarketWatchsnippit:

February 03, 2004 10:37:02 (ET)

SAN FRANCISCO (CBS.MW) -- Gold futures headed higher Tuesday,

with prices finding near-term support from fresh weakness in the U.S. dollar as traders awaited the Group of Seven meeting at the week's end.

"Once again, the relative stability in the foreign-exchange markets, in turn awaiting a lead either way form the G-7 meeting in Florida this weekend, has been the main determinant of the lack of direction in gold," said Alan Williamson, an analyst HSBC in London.

Gold for April delivery traded at $402.30 an ounce, up $3, on the New York Mercantile Exchange. The contract lost $3.60 in the previous session but had added $3.70 in the session before that.

"The one positive feature of recent trading has ... been an increase in physical demand on the price dips, with consumers taking advantage of the lowest prices in two months to top up," Williamson said in a note to clients.

Goldilox:

"Increase the physical demand" Buy the dips! They're watching us now!

Your thoughts and words will be missed!

Why wouldn't they give the game away?You asked the question I've long been wondering, but you asked it so much better than I could.

1. http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P

Hard to tell what gold will do next. 2 possible outcomes:

1. Gold takes out 412 and is then in bull mode for a rally to around 435. We would then have to reverse to 412-416 to set up the next leg that would take us to around 450.

2. Gold trades below 388 and falls back into the previous 7-column range. If it bounces above 384, a close of over 403.99 would set it up for a much bigger rally to 472.

Which will it be? I would overlay the '3rd time lucky trading rule' on the two scenarios to suggest that 1. is more likely - i.e. another failed penetration of 430, followed by a retreat and then the next run that breaks this level.

@ Boilermaker

I doubt the Demos will come clean in November. We've already heard Dean ask for GS resignation, but purely on political terms. No mention of dollar mess and GS complicity therein.

If any of them were middle class or really represented the middle class, maybe, but come on. They represent the same banking interests as the Repubs - Skull and Bones Kerry is Dubya's frat bro, bro.

Ron Paul is not on the ballot, so real money issues are not gonna be explored in this campaign.

Who you gonna trust . . . the elephant in the living room eating all your peanuts, or the jackass on the porch braying so loudly to get back in the house?

Sue Hererra just called the short dollar rally a "flight to quality". What is she smoking?

She also said that FED inaction during the election year is an attempt at remaining non-political. One might think that inaction in the face of an indicated step is just as political as the reverse scenario. . . unless, of course, the SM recovery is just another bubble after all, thanks to the GS "put".

Their story is wearing thin.

"...I suggested that the Norwegian bankers were confident in higher gold values, and that three tonnes later could do the work of 33 tones today.."

But wasn't the (FOA) argument like this: the $ will lose 90%,and Gold will make up this loss by advancing 10times.Norway might have reduced its Goldholding too early,no!?

Altough I see 1% couldn't make up much anyway (unless you expect it to gain 100x).

http://www.usagold.com/Order_Form.html

Excellent info posts, all--sure do miss Black Blade--but others have really stepped up!

Ari--agree with your premise except that we are 'on the way' to inflationland...govt stats notwithstanding...I believe we are there and that it will get much worse.

$ Bill--Italian bond defaults look grim...but consider our own 30-year treasuries. Say you bought $100M in '45 and rolled them over in '75, to mature next year. Your '45 dollar bought you 20 cokes from the machine--you now get one. Your $100M would buy about thirty top-line Caddies, you now get about two. Did cokes and Caddies get that much better, or did the dollar only get worse?

I remember ads in the paper showing a retired guy who had 'a piece of the rock' that paid $50 per month for his retirement--and he was gone fishin' with his dog and a smug smile. Today, you would be lucky to get a can of worms, fishing license, and dogfood for your fifty! (Will the same thing happen to our plans, only faster? IMO, the ideas around this table are the best insurance that I have!)

Point being, is the same thing happening to us--just in a slower way? And is the music getting louder and the drum beating faster now? Naah, I must be dreaming....

Remember the old Sinatra ballad..."Send in the clowns, there's got to be clowns, where are the clowns,... don't worry.... they're here..." Great music, now if I could just find that nickel juke box.......thanks to all!

Chin--chin...ting!
Buongiorno!

Goldilox,
You may be right. The Dems are certainly in the same pockets as the Republicans and would have every intention of perpetuating the game but I'm thinking that they will see the abyss and know that it awaits the next administration whoever gets elected. In that case, why not pull the plug beforehand, increasing their chances for election and dodging that stomach wrenching crash that signals the New Depression?

Of course if the Dems don't see what's coming they may win the election and then drive off the cliff.

It's like running a nuclear plant. You don't want a meltdown but if one's coming better that it be on the other guys' shift.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1COMIX is experiencing a tough battle to close at or above yesterday's close, despite earlier gains.

@ Boilermaker

Winning this election may be akin to the old WC Field's (I think) contest.

1st Place - a week in Philly in January
2nd Place - two weeks in Philly in January

At this Forum, there is a meeting or intercommunication between Spirits - what else is this reading of ideas and comments on our screens, but a physical expression of a spiritual communion?

If you must stop posting, I hope you will visit this Forum from time to time.

Hail and Fare well!

"We shall meet again"

The GAB

According to the CPI, energy prices have DECLINED
at a 23.8% annual rate in the last 3 months.

That's simply ridiculous, and in the next few months we should see a spike coming in the total CPI (including food and energy) as this ridiculous number is reversed and backed out. The PPI has a huge spike in the crude in intermediate prices that hasn't as yet popped in final energy prices as well.

The FF rate at 1% with a CPI at 2% is a slap in the face and unfair to small investors holding cash reserves. Many are retired and can't take huge SM risks like buying TASER at 300PE. The FED is a ridiculous operation now when it comes to holding down inflation. They have real wages dropping for most lower and middle class Americans while they promote asset inflation for the wall stree investment class. The policies are causing severe imbalances. I don't know what they can do, but inflation in commodities is here. So far not in wages as most good jobs are being exported despite the drop in the dollar.

@ Boilermaker

I believe that the number crunchers are telling the pols that the numbers are "in line" with the historical growth paths, and thus the economy is less vulnerable than proposed by incendiary pundits - like one might find here! Poor education has led us to collectively allow statisticians to mull us with theory and not fear exponential movement. That story will not change until an appropriate scapegoat is set up.

However, judging from the number of Offshore Asset Protection web sites popping up, a lot of high-net-worth individuals are "getting it." By the way, many of them list gold storage as an option.

It's just not in a politician's makeup to "come clean". They have too many spin doctors creating layers of messaging, so they will invent a completely off target scenario, as every administration in history has.

Why cop to accountability when it's easier and safer to demonize someone else and turn the mob against them? As Bush is demonstrating, once the war is over, it's too late to "take it back." Besides, what would all those liberal arts majors do for jobs without spin doctorships?

http://www.pagebypagebooks.com/Aesop/Aesops_Fables/The_Hares_and_the_Frogs_p1.html cooperate!

im tired of the profligacy the central bankers continue to display !

@ steady

nice choice of words

"profligacy

\Prof"li*ga*cy\, n. [See Profligate, a.] The quality of state of being profligate; a profligate or very vicious course of life; a state of being abandoned in moral principle and in vice; dissoluteness."

Goldilox (2/3/04; 00:30:45MT - usagold.com msg#: 116463)

I hope Theroth has roo meat in that there castle, 'cause Gandy and his hounds have some work to do!
===
Sir Goldilox -- IF you could see me now -- you would see that I have a clinched fist held high in the air -- JUST like Sir M.K. and Sir Black Blade that are instructing the Goldbug Army on the other side of the River ---- HOLD, HOLD, HOLD the line, and WAIT for the SIGNAL !!
It shall come SOON and when it does, the ATTACK on the Cabal will be a pleasure to see.
<;-)

Well, it WAS business in Cal's day. Today, all we have is whistling in the dark.

Herewith, a quote from two paragraphs in an article in the Financial Times, London, today: (Emphasis added by the GAB)

"A harsh lesson on why the US deficit matters" Stephen Cecchetti.

"The nearly desperate need to import capital is connected to the significant dollar depreciation over the past two years. FOREIGNERS ARE GETTING NERVOUS ABOUT PROSPECTS IN THE U.S. - It is hard to believe that the world financial markets are going to continue supplying the funds needed at the generous rates we have seen up to now. [Translation, INTEREST RATES ARE GOING TO RISE]

"The most apt comparison is with an emerging market country [Translation, THE U.S. IS BEHAVING LIKE A THIRD WORLD COUNTRY] that must convince foreign lenders that its fiscal policy is on a sustainable path. Otherwise, interest rates rise even further and eventually THE EXCHANGE RATE COLLAPSES. While the probability of such a calamity afflicting the U.S. may be small, it is not zero"

The GAB says: that last paragraph is just cosmetic. The probability of a calamity is not at all small, it is indeed utterly unavoidable at this time. Writers have to insert these soothing words, to keep editors happy.

Look for the unexpected. One of these days, the topheavy ship is just going to roll over with no prior warning.

"No one ever went to the poorhouse buying gold." Period.

Get some. Very cheap now, won't be for long.

The GAB

Talk about profligate, the OMB director was just on CNBC explaining how the president's budget, with 10% "security-related" increase and fixed costs in entitlements would lower the deficit, even though only 20% of the budget meets the requirements of eligibility for reduced discretionary spending.

"Permanent tax cuts will increase revenues by stimulating growth at continued high rates, replacing lost tax revenues by skyrocking taxable investment earnings."

Whew, where are those hip boots?

Why? I hope it is for your benefit you have decided to go, and not any lack that has appeared to you.

It IS better to say Goodbye than to slip away in the night, so thanks at least for letting us know.

Your sign will be on our lodge door, and I hope you will graze your horses by our river, when you pass this way in Spring...

Says Ian Gordon, is were we are. Based on his work this one may be even more severe than the 1930', as he was quoted by Bill Bonner today.

Bill's conclusion: You don't have to be a weather forecaster to own a winter coat.

You got to love the man for his wit. cb2

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Valentine's Day -- February 14th!
 

7 online shopping days and counting down...

place your jewelry order for timely hugs and kisses

Some stream of consciousness stuff - perhaps someone can tell me if I'm getting the wrong end of the stick:

The real deal in the FX markets is the shifting relationship between Japan and the US. The Europeans will bleat about exports and shouldering the brunt of the dollar decline, but they're essentially bluffing since they enjoy the cheap raw materials that a strong euro confers and they don't have a huge trade surplus on loan to the Fed. They are much more concerned with the rate of change of the Euro/$ exchange rate - i.e. they don't want it to go up too fast because it increases perceptions that the Euro is also a speculative currency rather than a steadily increasing store of value.

Why would the Chinese be so eager to buy dollars? Conventional wisdom suggests that if the yuan were allowed to float tomorrow, it would skyrocket. But imagine if they decide to beat Bernanke at his own game and outprint the dollar - in this case, their dollar investments might actually go up in yuan terms - so no writedown there. In essence, therefore, they are introducing a two-tier currency system - the yuan for the proles - lots of it, so that rural farmers are flooded with so much paper that they think twice about heading for the cities, and gold for the elite with the argument 'we're going to deliberately sacrifice our currency on the altar of global trade and domestic prosperity, so we're giving you the nod regarding a way to protect yourselves', since presumably the average peasant hasn't got the disposable income to take advantage of new gold ownership laws. This is what I see ahead, but for now, I expect the Yuan to simply track the dollar. They will only float it when they perceive that the dollar has hit bottom and is about to turn round.

This leaves Japan. As I've suggested in the past, they are trying to shore up their trade balance by offering endless support for the $, but they have to support two variables at once: T-bonds and currency - which is a tough act. Either way they take a haircut, but by propping up the exchange rate, they at least help their export machine.

Now, the Fed thinks that the Japanese are in a lose-lose situation because the exchange rate is in an extremely unstable equilibrium. If the Japs let the Yen rise, then it will explode because of the unwinding of the yen carry trade. the Americans throw gasoline on the fire by simply printing more money. So what can the Japanese do? The Fed's weak point is interest rates, so they retaliate by making noises about buying gold, showing that both Japanese and Americans believe in the Summers doctrine that a rising gold price points to higher real interest rates.

This is why the BOJ declares that it will add gold to its reserves. It can only make sense as a political gesture, since if the yen is going to appreciate, gold presumably won't be such a good investment in yen terms.

The Fed and its friends respond to this with naked aggression, bashing down the price of gold by $16.

Where does this leave us if the above is true? Basically, from the perspective of gold, the Japanese have crossed the floor and are now on the long side of the gold trade. On the short side, there's just the Fed and a few increasingly lame acolytes. The question is whether the rest of the world wants to take them behind the woodshed for a thrashing, or just let them collapse slowly under the weight of their own contradictions.

Presumably there is only a finite volume of yen carry trades to unwind, so once this bomb is defused, the BOJ will be able to start an orderly revaluation of the yen. Any thoughts?

Sorry, should have added that the Fed would prefer them to just buy US bonds, but there's a far greater incentive to prop up the dollar.

The Japanese want the Yen to go down in value. They are creating Yen to buy dollars. With the dollars, they are buying US treasury bonds.

This is designed to lower the value of the Yen in dollars, and to support the value of US bonds (after all, they already have a lot of them and they do not want these to lose value). Yet the Yen keeps rising. Who is buying the Yen. My guess is "the boyz". They are making massive leveraged purchases of Yen. When and if the dollary starts to collapse, they should make a fair amount of money from the Yen to help cover their losses in gold.

After all, there is a limited amount of real gold that is available at the market price. Yen are plentiful.

But there is a downside. By purchasing so many Yen, the boyz risk exhausting the Japanese, and thus bringing on the catastrophe for which they think they are merely purchasing insurance.

It is always sad to lose part of the family who contribute to this forum. I sensed a parting unwanted. I hope that is not the case. You touched me with reference to "a letter from an early nineteenth century relative, moving west in front of the great European migration."

Most of us here descended from that great migration that displaced an earlier culture. Soon we will be challenged by a new culture that I hope will be more responsible financially and ecologically but the outcome is by no means predictable. Your final words, "God bless the people of America. In the aftermath of policies in the Greenspan era they are going to need it." is exactly my sentiment. We will need your prayers and those of many others to find the right path.
Boilermaker

Seems much more likely that they are purchasing Yen to unwind previous Yen carry trades, and avoid being crucified by a rising Yen.

If, as you suggest, they were opening new positions, surely we would have seen more Yen weakness as they held back for a buying point. Also, why not just buy Euros if you're trying to hedge a gold position - since there is less chance of intervention by the ECB than by the BOJ.

The POG in dollars is meandering around the 400 dollar mark. A recurring and distinctive pattern is the sell off towards the COMIX (who's coined the neat term around here?)close is no big surprise. The US admin and its (in-)dependent FED doesn't need any more surprises - until then.

After all, Greenie has already changed his script to alleviate any brutality in the fall of the dollar. So far it was only Trichet using this kind of brutal adjective. The Japanese have been more subtle in their approach , as in - we might at one stage consider to add to our gold reserves, after all its only 1.5% of our reserves.

Whatever, is there a way out of the debt malaise - other than inflating the currency to smithereens? I'm probably too imbecile to think about any other solutions. As the Us indebtness is approaching 350% of (hedonic or not) GDP, the prospects of redemption are slim, to state it kindly.

... and history has taught that debts in the final equation are always paid - somehow -, though probably not necessarily to the creditors - and that may become a relevant fact - even in Japan?

As we are in an important election year - even if I can't understand anybody wanting to become President of the US at this juncture - one thing seems to be assured. GWB and his homely circle of Neo-Cons want another GO! As this may even sound sacreligious, they might deserve the mess they've creted. Not that think there's any chance of cleaning up their act - at least we know they're out next time around ... That is if there still are some remnants of the Constitution in place - and how should we know? Patriot Acts, Homeland Security, WAT and other obnoxious Big Brother Schemes may have destroyed the relative freedom of the Western World alltogether.

As the Dollar Reserve System is destroyed on a daily basis, anyhow, almost by decree, well paying jobs exported by the creme de la creme of corporate America, the political correct will find themselves in a minority soon.

In the meantime to weather the storm, or Tsunami, as Jim Puplava says, it may be prudent to use this pre Boca Raton Week to patch the windows with gold bars ...

Sorry for rambling - as I await next weeks reality - cb2

http://www.bis.org/publ/work137.pdfIn a BIS working paper (No 137), 'The Great Depression as a credit boom gone wrong'found at

http://www.bis.org/publ/work137.pdf

I found the comment interesting on page 89 by Charles Goodhart discussing the question whether the CB should act to correct asset prices that have strayed too far from equilibrium.
He stated, "Perhaps a more useful question is how to respond when such an asset/credit boom does collapse. The current answer seems to be that, should one asset market, in this case the stock market, collapse, then the right response is to recreate another asset/credit boom in another market, in this case the housing market. The hope is that, by the time the housing market does subside, taking consumption down with it, business confidence and investment will have recovered. Moreover, for a variety of reasons, some fortuitous, the Anglo-Saxon countries are engaged in some sizeable Keynesian-type contracyclical fiscal policies, although keeping rather quiet about it. What will happen in the euro zone, where neither of these stimulating factors are as strong, is even less promising, especially if the euro should appreciate further. I wonder whether the ECB would contemplate so-called unconventional measures if deflation in the euro zone should intensify and official interest rates fall to zero."

@ Cobra(too) I thought the quote went: "You don't need a weatherman to know which way the wind blows!"

I went into the archives to read some of your posts and bring some back to the forum as a salute. Well, I didnt find your posts in early 2000 yet, but look at what I did find. A real snapshot of the bubble posted on the forum.
....."Patek Philippe, the Swiss watchmaker known mostly for men's watches that cost tens of thousands
of dollars, recently introduced a new ladies' bracelet watch called the Twenty-4 for $6,250. The
style immediately sold out in the United States, and 2,000 orders are waiting to be filled.
At the same time, there are several hundred back orders for one of the company's men's watches, a
gold bracelet annual calendar watch that sells for $26,500. In both cases, Patek Philippe hopes to
be able to fill half of the orders this year.

"We've never gotten that many orders before," said Tania Edwards, a spokeswoman for Patek
Philippe in the United States. "It's unbelievable, unheard of."
The value of stock holdings in this country nearly doubled last year, going from $3.8 trillion to $7.4
trillion, nearly half of American familiesnow own some form of common stock.
Eric Mendell, one of the owners of Kern's of Burlingame--a jeweler with an enviable location 17
miles south of San Francisco and 20 miles north of Silicon Valley--has benefited from the urge to own luxury items.
"Their stock just went public. They see it, they like it, they want it, they buy it. They don't even ask the price."
One Silicon Valley winner came in one day, ordered several Patek Philippe watches in platinum and
asked that he be notified when they arrived. Without asking the price, he left the store, having
ordered watches worth more than $200,000.

When Rolls-Royce Motor Cars of America launched its most expensive car ever recently, the
$360,000 Corniche convertible, some auto critics called it strictly an image car. It is beautiful, they
said, but functionally not better than, say, a Honda Accord.
Yet, when the company allotted 107 of the cars to the American market, they sold them all.
For those not quite up to a Rolls, there is the $80,000 Jaguar XKR. Ford Motor Co. recently
announced a record 80 percent sales growth in sales of Jaguars--to 40,000 cars.
As the wealth effect--the impact of having more money, if not in your pocket at least on paper--has
gripped the nation, the idea of keeping up with the Joneses has become more akin to keeping up
with the Rockefellers.
"Everybody wants 10-carat emerald-cut diamonds," which can cost between $250,000 and
$750,000 depending on the quality, Haag said.
"People are spending more than they're making and saving nothing," she said. "They choose to live in
a way they're uncomfortable with psychologically, but they have lots of luxuries."
Meanwhile, the average cost of an apartment in New York City jumped by nearly a third over the
past year, breaking the $700,000 mark for the first time.
Even a meal out can be a luxury. French chef Alain Ducasse recently opened what is believed to be
the most expensive restaurant in New York at the Essex House. The prix fixe dinner with foie gras,
sweetbreads and gelee of frog's legs is $160 per person, without wine or drinks. The wait for a
table: 8 1/2 months.
Perhaps the universally recognized luxury purchase is the yacht, all over the world considered the
ultimate sign of affluence. And yacht builders and charterers are filling the need.
"This economy has afforded people an opportunity to pursue their dreams," said Marnie Wright,
director of communications for the Hinckley Co., a Southwest Harbor, Maine, yacht builder.
Right now, the company's most popular boat is the picnic boat, well, a yacht really. The 36-foot
open day boat has a price tag of $400,000 and a waiting list of eight months.
"We're seeing lots of first-time boat owners, perhaps the
company's Talaria 44 Jet is for you. The boat, priced at a little over $1 million, has an 18-month
waiting list.
Or, if you want a boat for only a week or so, there are the 250 or so luxurious private yachts with
full crews offered for lease by the Yachtstore.
One of the most popular is a 189-foot yacht in the Mediterranean with a crew of 16 including a chef
(nearly always the most important crew member, according to Madden), stewards, stewardesses, a
captain, three musicians, a hair stylist and a personal trainer.
The yacht takes 18 passengers and costs about $250,000 a week, Madden said.
Madden's biggest problem right now, he said, is finding enough boats to fulfill all the orders, which
can come from unexpected clients.
In one case, Madden called a customer who had chartered a yacht for more than $100,000 a week
and was told that he wasn't home from school yet. Thinking that the 14-year-old who made the
reservation through the Internet was playing a joke on him, Madden spoke with the boy's father.
"He said that absolutely he would write the check, but it was his son's job to find the charter," said
Madden, who noted that he has dealt with children on several occasions because his service is
offered on the Internet and kids often are better at navigating computers than their parents.
Madden hopes this is a sign that his business will do well in the next generation.
"I'm hopeful that he'll grow up and write his own checks," Madden said."
(I feel like calling Madden and asking him to go through his records and call that boys father again and see what he is chartering lately:)

I just got back in time to read the last few days posts. It is interesting that the weak hands have shaken loose of some of their precious metals positions even as the US Dollar is toast. With the cumulative effects of a growing budget and current account deficit the only course of action I see is massive inflation. I really did not think I would see gold fall below $400 on such emotional events as the Norwegian gold sale and some bullion bank shorting. Oh well, a bargain is a bargain.

- Black Blade

Geez, now off to the gym and my martial arts class (or maybe it's sparring night - hmmm.) ;-)

Suppose Hillary wants to run for president in 2008.
Running against an incumbent Democrat would be problematic.

So maybe she secretly sabotages (or undermines) the campaign of the 2004 Democratic nominee, so that she can run against Bush in 2008 after all the stuff has hit the fan ?

Who were the hecklers at Dean's rally ? They sure succeeded in knocking him down a few notches.

Somebody did the same thing to Ross Perot years ago. Getting him to talk publicly about some incident with tresspassers on his lawn in the middle of the night or whatever it was - made him look a little bit wacko.

Did you ever notice how every rising candidate that stands for REAL change in corporate/bank domination gets knocked down somehow before (or after) the election ?

@ $ Bill The other side of the luxury yacht story is that used yachts, like used cars, are experiencing heavily slumping sales and great family sized yachts are available in most harbors at rock bottom prices. Slips, on the other hand, are still hard to get. Maybe the alternative to motorhome living for retired boomers is used liveaboards.

@ Specie-man My buddy and I were discussing that very question over lunch. We came to exactly the same conclusions. Skull and Bnes Kerry, who has passed almost no legislation in 20 years of Congressional service gets the nod to play fall guy for a Bush re-election, edging out any alternative message politicians. Howard Dean is sacrificed after lighting a fire under a demoralized democratic party. Hillary can then run in 2008 with no incumbent oppostition from the neo-cons, and become the female FDR.

Due to Japan's trade surplus with the US, they have a large quantity of Dollars to "dispose of". And their recent huge currency market interventions have left them holding vastly larger quantities of Dollars (and someone else holding vast quantities of Yen).

Now their quandry is this: What to do with those Dollars ?

1. Buy US Treasury bonds.
While they may earn a meager return on this investment, this scheme helps keep US interest rates low - thus weakening the dollar - causing more intervention to be necessary (not what Japan wants, of course). This may be what has been happening. Japan prints Yen (or issues Yen IOUs) to buy Dollars (and Treasury Bonds with those Dollars). But since the US is issuing an ever-increasing quantity of Treasury Bonds (partly because there are eager buyers for them !), the Dollar always weakens a bit more than the Yen, no matter the level of market intervention.

2. Just keep the dollars and not buy anything with them.
This "investment", of course, produces no income - actually a huge loss if the Dollar's recent declines are taken into account. By not buying US Treasury Bonds, US interest rates might be forced upwards - strengthening the Dollar which is what Japan wants. But this could also backfire. With fewer foreign entities purchasing decreasing quantities of US government debt (Treasury Bonds), the US Federal Reserve might "print" the money to buy them (monetize the debt). This would be highly inflationary and would cause the Dollar to drop - not what Japan wants.

3. Take a lesson from China and buy gold and other commodities and goods.
Perhaps this is what Japan does when the game is over and they give up on their currency market interventions. Their recent talk about increasing their gold reserves was a warning shot to the US stating that the US-Japan currency market interventions are reaching a painful threshold.

Now who could be holding all those Yen ?

Could it be .............. the US Fed ??

Perhaps a "POW" exchange will be in order - Dollars for Yen. (or Dollar IOUs for Yen IOUs).

This is the 4th option - buy back Yen with Dollars.

Japan's recent talk about gold reserves is a MAJOR "sleeper" event !
It may signal a coming end to US-Japan cooperative currency interventions and debt funding. Japan is probably "frustrated" with the US Government's increasing budget deficit (and resulting increased issuance of T-Bills). Japan does not want to continue to purchse them all !

In the end, it will all come down to US interest rates. What happens if (when) Japan stops buying US Treasury Bonds ? Rates will immediately go up - unless the US Fed starts buying more of them (the so-called "unconventional measures" - debt monetization). Will the US Fed "peg" low rates and allow the resulting monetary inflation pain to be inflicted ? Or will the pain of rising interest rates (and resulting derivatives meltdowns) be greater ? A painful decision either way. The final choice will follow the path of least pain (resistance).

If you are a debtor, the path of greatest pain is deflation.
If you are a creditor, the path of greatest pain is inflation.

Banks are creditors.
Governments are debtors.
Households are debtors.
Corporations are both.

Who will win ?
Who will loose ?

TPTB #116396: "There is no doubt in my mind that today's international monetary system is a giant Ponzi scheme, the magnitude of which the world has never seen. And it will end badly as such things always do . . . I'm going to take the minority view here, and say it will end in deflationary depression . . ."

Ten Bears #116398: "Have you factored into your equation 'the borrower of last resort', the US government?"

TPTB: Sure. There's little doubt that, left unchecked, the money machine will run it's little wheels off. But the problem is not in the mechanics of money creation. Deflationary depression is more likely than runaway inflation for purely psychological reasons (ref. #116396).

Ego/image/vanity. As Americans, we have snickered at the likes of Brazil and Argentina and Bolivia with their corruption and graft and runaway inflation for as long as I can remember. No way in Hades is Gee Dubya ever going to stand in front of a West Point graduating class reciting, "I pledge allegiance to the flag. And to the banana republic for which it stands . . ." We'll drop bombs on somebody before that happens.

Bloodshed. Will the folks in charge, the ones behind the scenes pulling the strings, risk the American equivalent of Bastille Day? Runaway inflation will, more likely than not, end in an hysterical witch hunt, a coup, spilled blood, and in a loss of control for the bankers. Deflationary depression will end with selling firewood to your neighbors on Walton's Mountain, still begging the bank for credit (just as you always have). It's a control issue, don't you see, having nothing to do with deficits, derivatives, or repos. For the most part we have been duped into watching the wrong horizon.

Aristotle #116467: "Deflationists must *MUST* believe EITHER that our basic governmental/political regimes will utterly change their stripes . . ."

TPTB: Stripes you say . . . Woodrow Wilson was elected in 1912. He was a Democrat and ran for president on a platform that was anti-big business, anti-big money, anti-big bank, and that denounced ANY plan for a central bank. Immediately after being elected Wilson underwent a noticeable conversion, remarked upon by all the commentators of the day. He pushed hard for banking "reform" and a new banking "system", both code words for central bank. It took him only one year to push through the Federal Reserve Act of 1913.


Stripes you say . . . For how many years did the posters on this forum grouse about Barrick's hedge book? At the Gold Investment Summit in London last November, Peter Munk, known as the "High Priest of hedgers" (as well as being the Chairman of Barrick Gold), gave the keynote speech and made a "spirited defense" of hedging. Twenty-four hours later he made an unscheduled return to the Summit and announced his company had given up hedging and would have no more of it for ten years.

But here, Ari, is something more important to consider. (Call it quirky if it makes you feel better.) I couldn't help but notice that you argued about inflation versus deflation but you did not take issue with the likely violent end of things under the runaway inflation scenario. Do you agree that it would be violent . . . bloody . . . tumultuous . . .? How best to divert the mobs from your door . . . How to educate your children under anarchy . . . How to survive as a wealthy man with pockets full of gold in a sea of poor, hungry, clamorous neighbors . . .?

I'll agree fully that, no matter what the scenario, salting away some gold coins is a wise idea. NOBODY is arguing that. But will they not make you a target of envy? Let's take it to the next level . . .

It's sad . . . or ironic . . . I can't really find the right word . . . that I have begun to post just as you have left off posting. You responded to my earliest posts and I want to thank you for that. I fear ours is a friendship too early ended. May the Force be with you.

Perhaps it's just a matter of logistics. Are we looking too far ahead, or not quite far enough?

Whether inflation or deflation, somewhere it all has to end.

Then what?

I know where I'm putting my "money".......

Real money is an item of value - gold or other barter items. This is really a zero-order IOU, or an IOU raised to the zero power (ANYTHING raised to the zero power is unity).

A gold certificate is an example of a first-order IOU (an IOU raised to the first power).

A Dollar is really a second-order "I Owe You an IOU" - an "IOU-squared", if you will. It represents a situation where someone owes the government, and the government then owes the holder. This is something people think of as money - only because the INTERMEDIARY of the two IOU parties involved in the note is considered sound.

So what is a Treasury Bond ? It is really an "IOU some IOUs for IOUs". An "IOU-cubed".

So what is an interest rate derivative ? It is really an "IOU some IOUs for IOUS for IOUs". An IOU to the 4th power.


Note that the progression from zero-order to higher-order "money" has occured in chronological order throughout history, and has been accelerating in recent years.

Will there be a fifth-order IOU ?

Mathematicians know that higher-order equations are decidedly more unstable.

Surprised that no one else has mentioned this. No link provided. A quote from a recent Ted Butler essay.

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

...."I am told by Bill Murphy of GATA ... that he intends to throw the full weight of his organization behind ending the silver manipulation, as a means of ending the gold manipulation. The thinking here is that silver is the weak link in the manipulator's game, in that it is easier to prove the silver manipulation and by ending the silver scam, the manipulators will be exposed in gold. ..... GATA has the potential to help put silver on the radar screen, and I will be developing specific actions for them to accomplish just that objective."

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

ski ... Does anyone else sense that we are getting ready to enter a "new day" in the PM markets??

Druid: Ten Bears, I wish you well friend and thank you for your contributions and perspectives. I know that there are some wise old "wizards" here at the castle and while I may not always agree with what they post at times, I certainly know when I'm in the presence of giants. The pleasure has been mine and you will be missed.

We are living in such an increasingly "Interdependant" world, that projections into the nearby future become extremely unpredictable/unreliable. A lot of "power" is concentrating in the hands of the International Financial System...the invisible hand(s) ! This hands do have, self-serving, logics of their own, most of the time, logics that are not in line with what we call, common sense. A consequence of the increasing interdependance + hyperconcentration of the financial powerhouses with their deivatives and carry trades.

If the IFS wants the �-$ exch. rate back to 1,15...they will get it there with the paper-leverage-tools and their fulcrums (POG). Always bear in mind how dollar-destructive an explosive POG rise could be, if this should be decided by one of the members of the inderdependant structure. Same story for currency exchange rates, between $-�-yen-yuan.

The longer the global economy is "contracting" the more tensions are building and something will have to snap with dramatic consequences. It is exactly this grim picture that the "interdependance" wishes to avoid. In the mean time, all paper-stuff needs to grow and move-circulate...directionless up until the "real" economy restarts growing on a sustainable and stable basis. I don't see this materialize for no simplier reason than the dollar-paper over-dominance, architected during many decades now.

I don't have any idea if your projections on China/Japan are probable or not. I think that it will take quite some considerable time to maneuver us out of the total mess we got ourselves in to. GOLD seems the safiest bet to me, when we will certainly reach uncharted waters. A new beginning can only take off if there was a clear end. The paper-chase in all its forms must end and be replaced by a growing economy of real "tangibles". The financial/monetary paper-tail must NOT waggle the dog of tangible economics. A saturation level has been reached, where unproductive *paper* has completely overwhelmed the *tangibles*. Dis-harmony,...dis-order,...un-balance. Detoriating debt and declining quality of the remaining profits. A systemic, irreversable evolution, gaining momentum, rapidly.

Let's hope I still have it completely wrong with this same old, grim, pessimistic picture of mine.

Growing global Interdependance is not at all a guarantee for survival, imo. It is the world's dollar that will be "forced" into gigantic expansion, mega-supply, as only way forward...not out of the systemic mess !?

I have been a customer of Centennial and a lurker on this board for many years. The sage advice on this board has given me confidence in my own ideas on the subject of gold ownership. The Cabal: I can out wait their games.
Government confiscation: I can out hide them. But now the concept of the government "indexing" mortgages and other debt has been raised. This is a concept I am not familiar with.

I had always been under the assumption that in a major devaluation or (hyper)inflation, a portion of my gold could be used to pay off my existing long-term debt.

The question I have for members of this board are:

1. Has indexing been implemented in other countries?
2. How is the process implemented?
3. How could the new higher value of gold be used to circumvent the indexing?

Thank you all in advance.

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In Euroland we have less direct indexing of debt and more subtle de-dreaming by taxing on "everything"... EXCEPT *Gold* THAT IS NOT MONEY !!!
Tax (VAT) everything that leads to your acquirement of confetti-capital,... then tax the capital,... income on capital,... capital plus value,...tax any profit, property...and so forth. The main result is more and more un-repayable and unproductive debts, that aren't even worth to service anymore. Wellcome to the dollar-system and its hysterical expansion-ism.

That's WHY Gold should/shall/will be taken completely out of its present money-context. GOLD IS NOT TAXED...but not indexed either !!! Wealth must become "WEALTH" again,...Real Wealth, your sovereign property !

The main and structural problem of the ever expanding dollar-debt is that it has become increasingly UN-PRODUCTIVE, whilst the producing Eastern debt is productive since we are increasingly shifting our manufacturing/servicing infrastructure to them !!!

Indexing, in one way or another, our debt is not going to change anything of/on the detoriating systemics that are in place. Unproductive debt has only one desire...and that is to encourage others to create as much (unproductive) debt as possible as to finally negociate debt-growth for other debt-growth !

Easy money,...easy debt,... is a very attractive mouse-trap.
Soon, even your profits will in fact be,...debt !

I've answered your question already some time ago for myself with the accumulation of Physical Gold in Possession as to consolidate what I consider to be my (modest) Wealth.
Net Wealth,...Real Wealth,not money(confetti),... for ever !

The G-7 will meet again around the expanding dollar-system and ask that same dollar-system to make its "engine-function", happen !!! Expanding dollar debt must be percepted as an "investment". Get this global economy back on its feet and expand as much as is needed to make it happen. What difference does it make to index debt and make it heavier in one way or the other, when more debt is to be added to keep things going !?

If your debt is NOT productive, generating real net profits that add to your Wealth...why have you taken that debt in the first place and for how long do you have to wait until the paper-gold-market implodes as to erase that unproductive debt with Gold-Wealth will be demonetized !?
Will your timing be OK ? The answers will lead to the understanding of WHY Gold has been and must remain at the absolute freezing point for some "unknown"-"unpredictable" period to come. Wealth is NOT an investment !!! Fortunes are confetti stuff,...Wealth is forever.
Time has come to define those things more precisely and not mixing up the fundamental differences. Same goes for productive/unproductive debts,...exchange rates and purchasing power,...etc.

From the article by Singapore Press Holdings, linked to by USAgold's News and Views:

Snip: "Whether a studied statement, an off-the cuff comment or a veiled threat, Japanese Finance Minister Sadakazu Tanigaki's suggestion last week that Japan could diversify part of its huge foreign exchange reserves into gold has had international reverberations.

It has brought home once more the fact that the vast dollar reserves which Japan and the rest of Asia hold are a Sword of Damocles for the dollar and the US Treasury market. The impact of such a move on the dollar would be severe. And as Japan has a third of total US Treasury securities held outside the US, the impact on the bond market would also be severe."

This is why they are doing it. The Japanese and the Chinese both believe that business is a form of war. I don't know the mechanism by which they would accomplish the mentioned objective, and that makes me vulnerable. A lot of people in the US government are as ignorant as I am, with regard to this means. ONe reason might be that our schools focus on good feelings, rather than on real, useful education. They do this, at least partly, because of the misguided social agenda imposed on the gullible American class by others who believe that life itself is war and who work unremittingly to control every aspect of our life, both governmental and private. This makes the future of gold look very, very bright. History contains evidence of those qualities in our people which cause us to overcome such dominance.

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Belgian - I think that we all agree that credit booms alway end badly. There nevertheless seems to be (and correct me if I've misinterpreted you) a tacit assumption that a transnational group of philosopher kings is steering the world economy, when it just looks to me like a huge mess resulting from the aggregate behavior of a lot of private agents playing fast and loose with the connivance of public sectors that have failed to do their jobs as regulators.

I further believe that we are reaching/have reached a point where the problems are so large that it's every government for itself rather than a view which seems to pervade official US thinking that somehow (through a mixture of charm and coercion) other countries can be persuaded to be bag-holders for the US. Once again, at the risk of boring everyone, this was the official US view in 1971, but the reality was that eventually the Germans and Japanese threw in the towel.

2. Indexation - I presume this means adjustment of debt/principal by some inflation index. Given that debtors outnumber creditors, I imagine that any such measures would favor the former, with the result that the latter's risk would explode and manifest itself as a) much higher market interest rates, b) a much lower availability of long-term credit (lenders will simply channel their funds into other less risky assets like stocks/government bonds). In Brazil, for example, such a procedure was applied for years because there wasn't much long-term credit to begin with. Not the case in the US, where the impact on the mortgage bond market would be horrifying. It would be a lot easier to do a debt restructuring and try and persuade creditors that it was a one-off than institutionalize an ongoing default. It would also oblige Americans to save much more, which would no doubt be anathema to any administration.

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I have just been reading a fascinating book by Fareed Zacharia (editor of the international Newsweek and frequent contributor to the domestic edition) called �The Future of Freedom� where he looks in detail into the success and failure of democracies around the world. There appear to be three fundamental requirements :-

1/ A significant history of liberal institutions (that's the original meaning of the word liberal as in intellectual liberty, rather than the vague political term bandied around these days), which include independent legal systems and religious organizations. These are very long-term traditions, as evidenced by the varying degrees of success demonstrated by the democracies set up after the dissolution of the USSR.
2/ A per capita GDP of $6000 (Year 2000 dollars) at the time of the inception of the democracy, where this is the product of industrial output. There is no real explanation as to why this should be except that it is possibly the necessary existence of an affluent middle class which itself is predicated on the existence of strong property laws. Interestingly, the exact opposite is true if the high per capita GDP comes from natural resources such as oil, where dictatorships (in reality if not in name) are the norm, probably because the strong hand can grasp the relatively restricted breadth of the wealth.
3/ A reasonably homogenous population. When new political parties are created, the most obvious division is by religion or race, which often leads to a severely repressed minority, such as the Muslims in mainly Hindu India.

Absent all of these requirements, and a dictatorship is the usual result, often morphing out of the democratic process. A good example of this is Nazi Germany � I didn't realize this, but Hitler actually won three fair elections, the last with 55% of the vote, before things went seriously off the rails.
---------------------
My comment : When taking these three points into consideration in relation to Iraq, it would appear that the prospect of a successful outcome is not only in serious doubt, but that the situation is almost the worst possible scenario that one could imagine !
---------------------
Zacharia also talks at length about the US, where the problem, as he sees it, is of TOO MUCH democracy, particularly stemming from the civil rights movement of the sixties. The more-open government established at that time has meant that, while the citizen can have a clearer view of political goings-on, so can the lobbyist (their numbers have gone from 5000 in the mid-�50s to 20000 by 1990 (and have probably doubled since then)), and, as they are now the prime providers of political contributions, they can see exactly who is voting for what. This means that the pressure immediately applied on politicians does not allow them to discretely vote their conscience but for their pocketbook. There has been a thread here the last couple of days as to the likelyhood of someone �blowing the whistle� before the election. If anyone wants a reminder how unlikely that will be, remember the minimal success that Newt Gingrich and all the fresh Republicans had in �94 after a landslide election win promising to dramatically cut government waste. It didn't happen than, and I don't see it happening any time in the future because each individual lobbyist is going after only his or her individual goal, and be damned for the rest ! No, sadly, just as Another said that there was no saving the dollar at the end of its fiat timeline, things will have to get so bad that something breaks before it can be mended. The Fourth Turning heralds the Age of Crisis.

C!

http://www.dailyreckoning.com/body_headline.cfm?id=3734Mr. Nestmann has apparently published a host of essays on asset protection, privacy and offshore tax and other havens. I must admit I disagree with most of his assumptions, though this latest article is too close to the chest to be offhandedly dismissed.

Wonder, if "Belgian" would be kind enough to offer his views on that topic?

In any case, we'll see what the G7 Boca meetings may bring -except more delusions - some are speculating with a surprise � - rate cut tomorrow. Welteke has assured the community that such a measure is not in the cards and neither on the agenda of ECB's monthly meeting tomorrow.

We'll see - as it's only the first denial so far. c2

@ Cobra(too)

Nestmann definitely takes the tone of a salesman in his article, but one glance at Bonner's advertisers makes him look pretty tame. Looking past his BS, his basic premise that it may be timely to move from an appreciated Euro into gold is not necessarily a bad idea.

Given the increased volatility we may see in the $'s next leg down, it may be prudent for all but the most agile traders to skip directly to quality - gold, PMs.

Got gold?

http://fergusonreport.myonlinepublication.com/article.asp?pop_id=161&article_id=47WOW...this Congress Critter tells it all!

Snip:

Federal Reserve shutting down money supply!! From CBS MarketWatch: "Here's another entry for Ripley's Believe It or Not: In recent weeks, the money supply has actually been falling... Richard Russell, editor of the Dow Theory Letters newsletter, wrote last week that this development is "something that nobody seems to realize or to be talking about, but it's absolutely crucial." Dennis Slothower, editor of On The Money newsletter, interprets it to mean that the Federal Reserve is putting "its foot on the [economy's] brakes... Why would the Fed be doing that, given that Election Day in 2004 is now just a little over a year away...?"[9]

The last time this happened was 1929, after 5-7 years of reckless, wide open, dollar-printing and credit binge, the Federal Reserve families and their compatriots on Wall Street shut off the spigot. Bingo, Depression. Then gold confiscation, and debtors prisons.

END SNIP

The Ferguson Report.....
.....is published by former Maryland Senator Tim Ferguson, who served from 1995 thru 2003 as a fairly conservative Republican representing Frederick & Carroll counties. Views expressed reflect Constitutional precepts - not partisan rhetoric.----Those who hold the reigns of power benefit from public scrutiny whether they are Democrat, Republican, Independent, Liberal, Conservative or Moderate.-------------------------------------------------------------------------------Tim Ferguson, registered as a Republican since 1976, believes the Constitution and America come first. Political party loyalty should never trump America`s strength - which is derived from covenantal morality. "Cookie-cutter" Republicans who place political conformity ahead of social justice damage the party and the nation.

http://fergusonreport.myonlinepublication.com/list.asp?pop_id=161

http://www.nydailynews.com/news/ideas_opinions/story/161031p-141229c.htmlThe U.S. job machine's broken

*Largest net loss in jobs since the Depression
*80% of manufacturing jobs gone for good
*Median earnings in 2001 were just $33,636

SNIP:

In the recoveries of the mid-1970s and 1980s, America was generating about 300,000 new jobs a month within six months of cyclical upturns. In the early 1990s, this expansion slowed to about 200,000 a month, and we had to wait a full two years for that.

This time, we have seen not a deceleration in job creation, but a net loss - the sharpest in any period since the Great Depression, especially in manufacturing. No work and not much in the way of wage increases either. Ouch!

GRTSATHTF, Got GOLD?

So..., what does "GRTSATHTF" mean? I did a search on this
and only got two incidents of its use, neither with an
explanation. Please explain, if you care to. Thanks.

http://fergusonreport.myonlinepublication.com/article.asp?pop_id=161&article_id=69snippit:

"The coalition of interests which converged on war against Iraq as a strategic necessity for the United States, included not only the vocal and highly visible neo-conservative hawks around Defense Secretary Rumsfeld and his deputy, Paul Wolfowitz. It also included powerful permanent interests, on whose global role American economic influence depends, such as the influential energy sector around Halliburton, Exxon Mobil, Chevron Texaco and other giant multinationals. It also included the huge American defense industry interests around Boeing, Lockheed-Martin, Raytheon, Northrup-Grumman and others. The issue for these giant defense and energy conglomerates is not a few fat contracts from the Pentagon to rebuild Iraqi oil facilities and line the pockets of Dick Cheney or others. It is a game for the very continuance of American power in the coming decades of the new century. That is not to say that profits are [not] made in the process, but it is purely a byproduct of the global strategic issue.

In this power game, least understood is the role of preserving the dollar as the world reserve currency, as a major driving factor contributing to Washington's power calculus over Iraq in the past months. American domination in the world ultimately rests on two pillars -- its overwhelming military superiority, especially on the seas; and its control of world economic flows through the role of the dollar as the world's reserve currency. More and more it is clear that the Iraq war was more about preserving the second pillar -- the dollar role -- than the first, the military. In the dollar role, oil is a strategic factor."

Goldilox:

Thank you Melting Pot for the link to Tim Fergusen's site. Further investigation into his views on the link "Here's the Problem" revealed the above quote. It sounds like he's been reading FOA.

Get ready the stuff is about to hit the fan.

http://www.federalreserve.gov/boarddocs/speeches/2004/20040107/default.htmStrange! This speech was delivered on 1-7-04, but was not posted on the Federal Reserves site until today. Usually, speeches are posted the same day as given. Whats up?

There are so many "Bernard Connolly" echo's out there (in and outside the EU), with the sole task of discrediting (not critizising) the euro-concept and its maturization.
They know very well what kind of particular animal the EU is and they know also very well that it is going to be extremely difficult to deviate the ECB/BIS-team from its architected path ! It is the ECB that wants to "force" the EMU-politicians as to engage on the "INEVITABLE" structural reforms, deep reforms...sooner or later,...with or without a smile !!!

This anti-euro stance pictures very well in the frame of global "interdependance", with ABSOLUTE DOLLAR DOMINANCE !

Mr.Nestmann arguments are very superficial and his reasoning on $-�-Gold are utterly nonsense. He knows there is that Huge dollar-problem and tries to deceive his own subscribers.

Look at the present Hashimoto-bis event/threath. The dollar wants to eliminate the third currency block (euro) in its erection and get it back into the dollar-supporting-camp.
China and Japan might get too inspired by the euro-Gold-concept. China/Japan, challenging the dollar-dominance with the dollar's own antithesis, Gold ! Hey, you dollar, don't manage our global currency for your own selfish profit and stop bullying us,...or we crash the dollar under the Gold- weight, alter the global trade-flows and organise an expanding internal, Asian/EU, economy as to get rid of that dollar-dominated-global-interdependance system (globalization).

Not that far away from a war-declaration, dearest Cobra. For the time being there still exist sufficient goodwill for the classic give and take, trade. But if the global economy doesn't get starting soon with something else than pure dollar-expansion,...economic/financial and monetary war(s) will happen. EMU goodwill might probably be shwn with a decline in the �/$ exch. rate (1,15). Emphasis on "might".

But how is this global dollar-house getting in order, when "export-ism" can keep going on the same basis ? This is not the euro's fault, isn't it ? Oh yes, the dollar blames the euro for not contributing to the global growth,...because of the stability pact syndrome !!! Yep, the ECB must and shall be blamed for not enough crazy confetti expansion-ism. It is "this" that is so bloody wrong with that stupid euro-thing.

And now Asia seems to sound a bit, Charles de Gaulle-like...h�h� !

The dollar is losing its grip on Gold !!! That's what bothers the dollar the most ! Once a FreeGold market breaks into the open, dollar-dominance will immediately fall to its real proportions. But who knows,...it might restart on Mars ?

Whatever the final outcome might be,...with GOLD we are all on the safiest side of the battlefield. And that's what this forum is all about, isn't it, Sir ?

When the existing huge confetti-bergs slow down in *** rotation-velocity ***...that's a very,...VERY... bad signal !!! The bigger the bergs become, the more "activity" is needed as to keep a health rotation cruising speed. But the "thing" is slowing down,...Why print some more of it !?
That's where my word "saturation" comes from.

BTW / The Ferguson-report isn't mentioning Asia-euro or Gold. As if these items are non-existant/irrelevant !?

http://www.usagold-jewelry.com/

Valentine's Day -- February 14th!
 

6 online shopping days and counting down...

place your jewelry order for timely hugs and kisses

The Federal Reserve Banks (FRB) says,

"Any elements of rigidity...in labor and product markets...limit the channels through which the adjustment process can work. Rigidity...limits the world's ability to realize the full potential of the rise in global productivity to lift standards of living."

I read that as let us, the FRB, do what we want. We've (FRB)been taking advantage of you debtors for centuries, and now that you're (debtors) getting smarter and want to limit our (FRB's) control, we (FRB) must object. We (FRB) need the freedom to control you debtors and establish the NWO. Let us run things and never mind the Constitution. We (FRB) are your friends. Help us control you.

Buy gold, silver, and ...

Snow warns of costs in fixing Social Security, Medicare
Wednesday February 4, 3:22 pm ET


WASHINGTON, Feb 4 (Reuters) - U.S. Treasury Secretary John Snow said on Wednesday that steps needed to be taken soon get publicly funded retirement and health-care systems onto a sound long-term footing, and warned it will be costly.
Testifying before the U.S. House of Representatives' Budget Committee on the 2005 budget proposals, he said the bulge in the number of "baby boomers" headed for retirement by the end of the decade means "demographics are destiny" for America.

"The Social Security problem is going to have to be dealt with and it will cost something to be deal with," Snow said, but ducked a question whether he was hinting that benefit payments to retirees might be reduced.

"It'll cost something," Snow said. "Any fix for Social Security, any fix for Medicare will inevitably involve some give somewhere in something."


###
LOL! The previous guy gets canned for bringing out the estimate of 44 trillion in liabilities and this guy comes out with "well it will cost somebody, something"...LOL!

What do you get when you cross a lawyer and an economist?

SNOW JOB.

As soon as the rich folk realize they will be the payers they'll be leaving the country in droves, cashin in everything of value, and the lower and middle class will inherit the US and right the ship. That's where its heading.

"When the existing huge confetti-bergs slow down in *** rotation-velocity ***...that's a very,...VERY... bad signal !!! The bigger the bergs become, the more "activity" is needed as to keep a health rotation cruising speed. But the "thing" is slowing down,...Why print some more of it !?
That's where my word "saturation" comes from."

Druid: They're are having to "create" more credit to "turn" a dollar (velocity rate). Dollarzilla is running rampant over Japan and his brother Creditzilla is doing number on us locals. If the FED has slowed down the liquidity creating process, have the GSE's taken up the slack in an unauthorized kind of way???

is godzilla morphing? godzilla becoming a gold bug and going to terrorize japan g fo rits gold?

we havent seen him or heard him for a while as well hes been doing his godzilla thing. how long till the new 21st cetuary godzilla terrorizes japan turning over every unit of account in his search for the ultimate primo currency gold, so when does godzilla make a return to japan ?

when he does we will see a decrese in the value of the dollar as japan turns its attention to fighting its own battles instead of being a proxy for someone else. they are to proud to let that monster run loose in there country without using it for there own advantage.
got godzila proffing? gold/silver/platinum./pladium all displayed at once, in his face an no dont sweat his fire breathing. gold loves fire especially confetti fiat fire flames, and theese metals have the unique quality to repeal godzillas fire breath and even the staunchest fiat flames.
here godzilla , here godzilla there is a fiat currency on the offering table for you , come destroy mans folly and repalce it with the galatctical universal accepted currency gold here godzilla here godzilla,. wonder if he reads this or has one of his minons report to him?

http://quote.bloomberg.com/apps/news?pid=10000103&sid=amte7nlG2OqA&refer=ussnippit:

U.S. January ISM Service Industry Index Rises to 65.7 (Update1)

Feb. 4 (Bloomberg) -- An index of U.S. service industries rose more than forecast in January as orders increased and employment grew for a fourth month, an industry report showed.

The Institute for Supply Management's index for financial services, construction and other non- manufacturing businesses rose to 65.7, the highest since the survey's inception in July 1997, from 58 in December. Since April, the gauge has held above 50, signaling expansion.

Increased manufacturing may help lead to even greater demand for services from companies including United Parcel Service Inc., suggesting growth is quickening from the 4 percent pace in the fourth quarter, economists said. Shipping companies, retailers, homebuilders and other services account for 85 percent of the economy.

Goldilox;

"It may be a burger and it may be some fries, but you gotta surve somebody!"

http://ap.tbo.com/ap/breaking/MGAKJT5H9QD.htmlsnippit:

PORTLAND, Ore. (AP) - Oregon voters resoundingly rejected a proposed $800 million tax hike, turning aside warnings about looming state budget cuts for schools and other key services.

With 95 percent of precincts reporting early Wednesday, the measure was failing 59 percent to 41 percent. Rejection of the tax package automatically triggers $544 million in spending cuts on May 1.

Political analyst Jim Moore said the vote showed that Oregonians weren't swayed by warnings that schools and other services would suffer big cuts without the tax increase.

"People are suspicious of government, and they simply weren't buying the doom and gloom thing," Moore said.

Goldilox:

Maybe they DO buy the gloom and doom thing, but are tired of bureaucrats getting a free ride! Kalifornia could learn a little something here.

so we hear japan to consider offically joining ecoism ranks by buying gold, we do know for a fact that many individuals in that country are allready on board , have front row seats and are passing out, shots of saki and hot tea to calm those who are fixen to jump on board and those who have yet to see the golden light in there eyes.

Ecoism reach is getting wider and wider, yet its internal strength needs to be tested.


ecoism still awaits a refutement that it doesnt exist and is a fallacy, a made up fantasy of some dude typing on a computer, the challeng is out there. it wont be met nor can it be, it is real it is happening and many many more are becoming aware. they just dont know it yet, there minds yet to decipher the signals sent by by ecoisms growing popularity. ecosim is taking shape and digging its foundations deep upon rock solid foundations, while warily eyeing those individuals whose castles are in the air, and others whose castles are made upon the shifting tides of sand whose base is washed away by the eroding of time upon the floundering gasping for life federal reserve note and wonders , will they pervail against the firce winds and destructive fires heading our way as the universe struggles to gather enough positive energy to turn this economic quagmire upside down like hegel did to marx.
cause what it has come down to is two fing sides seeing whose black box trading programs can out manipulate each other on the moving averages line by running numbers and mumbers of shares thru the tunstiles of companies stock to effectivly decieve those individuals who folow the market that yep there are really that much money and shares trading hands each day, when in reality its just turning the tunstiles with x amontu of shares untill we get the 10, 20 , 50 200 day movung average to where it appears what we say thu our syndicated highly politicated ofetn time hated by those who desire the truth and fair opennes about what really is going on media outlets is actually happenig, but that crap aint going to fly any more(follow the repo pool numbers) as before ecosim people couldn communicate and bridge the gap of well what re you seeing there as compared to here and well wow what is happening here dotn apper to be happening on the air and over there, (do i dare? yep gots to say! )well its not that way here either, so the credulousness of the news is so suspect cause it dont jive with what the real workers of the hive report, someone somewhere needs to file a tort,.
so ecoism rember is like nationalism in that it has a unifying force for everyone to gather round, fairness, open honesty in earthly monetary matters.where the facts are not hid behind closed curtains and doors, where one knows what the value of there wealth looks like, feels like and smells like, as we are not so advanced yet to have a currency that is a shape shifter , like the federal reserve note is at this moment disguezed as The United States Of America dollar, which it aint!!!!!!!!!!!!
Ecosim is like mercantilism as it has behind it the drive of every individuyal to acqurie real wealth real store of value tangible things that like crows and other birdes, we humans also like to adorn our residences with.
Ecoism is also an understanding a tolerance of others universal right to worship thre own religios diety in tehere own way with santicty respect and with full grace of that diety.
ecosim also realizes that it is still in its infancy that a few people get it and a few people want the movment to grow, manly from the religous front as of late, but true gold bugs gold hearts silently sit backk and ponder naw it cant be, can it, then they to realize dam im participating cause one im here reading this stuff, and two im buyig gold/silver or i want to buy gold and silver. and hope that a truer understanding of economic monetary affairs develope so that a fairness can be brought about in a fair orderly way as the planet wakes up to the scheme forced upon it by richard nixon when he cut (and yea yea yall ythought his staged victory photograph was about peace , hell no it was about cutting the gold link, ever played rock,paper, scissors? go look at that photo it aint peace signs the tricky one is flashing as any tru earthly hippy know peace sign is is given fingers up towards the sky! not like the scissors nixon is flashing(rember perceptions) they are pointed out and that ill fated experimet, ponzi monetary schemis still is forced down our throat by not the barrel of a gun,but by the tip of a continental,programable,keyboard launched cruise missle that by corordinated plots can hit within 3 feet of its target(would u like it deliverd in the fireplace or the window?)
Ecoism growing hoping for intellectual ecomonic creativuity, knowledge to help create its own identity. One based upon integrity where what is gained is earned, a what is earned is kept, providing further stability for the base> It does apppear, the first ditch for the foundation has been completed and with your help the digging can begin on the second ditch,, its shape, demension and depth to be determine by the golden ones!

Ecoism hand in hand with

gold and silver
honest money for
honest people

http://www.nh-inews.org/articles/04/01/040131a.htmlSnip:

(iNews Concord) --As the Beatles sang, "Money can't buy me love!". That may or may not be true, depending on how one defines love, but we do need money for pretty much everything else.

As I understand it, HB1342 seeks to provide stability to the wealth of New Hampshire residents by creating a way for the citizens of New Hampshire, through the State government, to choose to save and store all or some of their wealth in gold and silver, instead of dollars (aka, Federal Reserve Notes).

One reason that this is a good idea is that, for about 5000 years, gold and silver have maintained their worth, while history is replete with examples of paper money losing its value, or even completely collapsing, as in "Not worth a Continental." And we all know that the dollars in our wallets are worth less and less each year. What many do not know is that this is due to the devaluation of the currency caused by the money-expansion policies of the Federal Reserve Bank system. As the money supply keeps growing, yours is worth less - the basic law of supply and demand.

END SNIP.

States now jumping on the gold train too...Yee Haw!

Good posts as as always.
I don't see how New Hampshire can get very far with that bill now that things are falling apart all over the place, a dictatorship is in the White House and Bush's top officials are predicting another 9-11 or worse.
But I'll never tire of seeing all the commotion over circulating precious coins. Because each day, more people will get their priorities straight regarding gold, gold derivatives and the nascent banking crisis. And before the 2004 election, or shortly after, gold could be backing the dollar, the yuan or the Yen IMO.
And let's see them try and audit the U.S. gold holdings! Asking: "Hey guys, where's the beef?" That would only pose a problem if it turns into a tv tour of the "houses of the rich and famous"!
And what about our right to audit the underground vaults of the privately owned Pheral Reserve System in NY?
Demand: "It won't be breaking new ground to sort out Greenie's lab before NY gets a seismic shift."

Feral, not Pheral Reserve System.
(Feral- Wild, undomesticated, out of control)
Let's have fun with that. Just one more from me, a Haiku.
Why not? A quickie with the title: Financial Renegade Society

Central Command Post,
Phantasmagoria Bank.
Vanishing money.

Any kind of activity that makes money go around is wellcomed in a world that grows confetti-bergs. Look at what happened in Japan (N� 2 world economy) when wave after wave of "public works" didn't produce any enduring relance (expansion) of the internal economy. "Economy" (2/3-consumerism) is a funny, ficle/inconstant, thing !!! And certainly when a basic economic activity has morphed into "political" economy.

When the main confetti-flows decline in rotation speed, adding more of the same confetti is not going to change much in a positive sense. An "healthy" economy cannot be based on masses of "unproductive" debts and growing masses ($-Trillions) of idle reserves. Why go to Mars, when millions still die, daily, from simple diseases on the blue planet ? Politicians desperately come up with "whatever" when things economical are getting stuck.

Until further notice, a more interdependant world, doesn't seem to change much on these periodical fundamental economical inconsistancies.

The Western part of this economist globe needs some "consolidation". We simply don't want to admit this. This mistake might become fatal due to the wrong decisions that we want to enforce, per s�. That's what my gutfeeling tells me after amateuristic, daily observation, of what is happening, globally. Will see how it evolves...

I wouldn't count on seeing a 2004 election. If Kerry (skull & bonesman) isn't the Demos choice to go against Bush (skull & bonesman), then look for martial law to be imposed. (probably due to terrorist threats or acts.) Then, attempted gold confiscation shortly thereafter. Forget your rights to question these actions. Thus, the stage will be set for the American people to reclaim their country and constitution, most likely by the same methods used in the 1700's.
Gold and silver accumalation, with other preparations, (ala Black Blade}are now more important than ever.

I just put in my order for apple trees and plum trees to spruce up the old orchard. That apple sauce may taste pretty good when the Dollar Crash sets in.

The financial situation here in the US is getting desperate. I think everyone knows that you can't prosper by going further into debt, but we have had a very bad example set for us by the Private Bank know as the "FED".
It is interesting that Sir Allan has always warned against regulating the Derivatives markets. These derivatives positions that have been loaded onto American enterprises, are going to give a lot of CEO some major migranes in the days ahead.

Has anyone in Europe heard if Marc Rich has the old Enron energy trading platform back on its feet? I heard it was being moved over to Switzerland a couple years ago when UBS or one of the Swiss/Wall Street banks took it off the hands of the Enron Creditors.

I think some of our US Bullion Banks have become the largest gold smugglers in the world. And that gold has been smuggled out of Central Banks right before everyone's eyes, and no one says a peep. That to me is the sign that the fiat currencies are worthless, once one of them crashes.

I took a walk into my lakefront cabin today, and I should of brought snow shoes or skiis. It is in about a 1/2 mile off the paved road, and the snow was up over my knees. On the way into my place I saw a timber wolf cross the road about 30 yards ahead of me. They are really beautiful animals. I yelled out to it, so I wouldn't scare it. He didn't seem to see me. He seemed to be floating in the deep snow, and his coat was really think and healthy looking. He was by himself, I didn't see any other tracks in the area. They usually travel in packs. They are not know to attack humans, but I'm sure you couldn't fight one off in the deep snow.

That was enough exitment for me this week.

http://trinity.mips1.net/MGFin.nsf/Current/42256E2B005DFF9785256E3000713A64?OpenDocumentsnippit:

RENO, NV (Mineweb.com) -- The head of the National Mining Association today called upon Congress and federal agencies to create a domestic minerals policy that will provide the regulatory certainty to needed to attract investment in the U.S. mining industry.

In a speech Wednesday before the National Western Mining Conference in Denver, National Mining Association CEO Jack Gerard said the domestic mining industry requires greater regulatory certainty�not to weaken environmental laws�but to strengthen manufacturing and stimulate high-wage employment. Mining companies must be prosperous businesses in order to provide the jobs, tax revenue, and energy and minerals essential to economic growth. Instead, U.S. mining is being beaten down by a "stealth" de facto government policy which discourages new mining investment and forces U.S. manufacturer into a dangerous reliance on foreign supplies of vital minerals.

This "stealth policy" defies congressional intent that "U.S. Policy should promote mineral mining," Gerard asserted. Ironically, the federal agencies may be more supportive of Martian mineral exploration than projects here on earth. "Luckily, NASA's transportation costs aren't competitive with yours [U.S. miners]," he joked.

"It is not solely in the economic forum that we face our big challenges," Gerard said. "Rather it is in the public policy forum that we must be especially vigilant and resourceful." He cited Canada's Fraser Institute study, which concluded that public policy�not geology�is increasing the decisive factor for new investment. A recent Behre Dolbear study arrived at a similar conclusion. "When ranked by timeliness of [mining] permits, we [the U.S.] ranked among the least attractive, a 3 on a scale of 10 with 10 the best."

Gerard warned the Colorado mining association members attending the Denver show that the state mining industry's investment ranking won't be helped by the news that Summit County joined four others in banning the heap-leach mining technique.

In its annual Mineral Commodity Summary released in January, the U.S. Geological Survey underscored the declining rate of mining investment. "Of all the money invested in global mineral exploration in 2002 the U.S. share was just 7%, a 66% decline from just 1977," Gerard stated, "Obviously, this anaemic investment rate is not the result of poor exploration prospects."

Goldilox:

Miners complain of too many "not in my back yard" regulations and attitudes, but their major complaint seems to be lack of consistency and delays in permitting.

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

If the employment picture doesn't improve significantly in the next few months we could have some big problems. It is estimated that two million more Americans will exhaust their unemployment benefits by June with no more available extensions from the States or the Federal Government. Most people that become unemployed have on average about two month's worth of living expenses in their savings account. Many eyes will be focused on the employment data tomorrow and Friday to see if the economic recovery is for real, or just a lot of hype and artificially inflated statistics. It will be interesting to see how the Treasury auctions go next week in the wake of the G-7 meeting. I also have to think the stock market will be under additional pressure next week as the authorities will need to "talk" more money into the bond market in order to absorb the huge supply of government debt. I tend to believe the dilution of the U.S. dollar will continue to push commodity and precious metals prices higher. The quarterly refunding next week will bring the debts and deficits into full view of the investment community, which should put pressure on the dollar and could provide the fuel for the next leg in the precious metals bull market.

Black Blade: Interesting article tonight. I especially find the last paragraph interesting. Actually the whole article is "right on the money" so to speak. It alludes to the good ole "data massage" I have so often pointed out. Yesterday while in the field I heard on the news that the Bush admin wants the BLS to pump the employment numbers with "self employed". I wonder if that includes pan handlers and street corner "car window washers" in major cities. ;-)

What is "interesting" is that many if not most mines are located in communities where the mining industry is the major employer. You should see the devastation of these communities thrust upon them by regulators and outside enviro interests. Take a drive through towns such as Tonopah and Ely, Nevada for example and you will see what are fast becoming "ghost towns". This is typical of many small towns and cities in the intermountain west where outside interests have brought devastation to these communities and the working families living there. It's really a tragedy of how the eletists of wealthy outsiders and advocacy groups have destroyed the lives of so many working class people and working profesionals in the natural resource industries.

- Black Blade

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=2&u=/afp/20040203/bs_afp/us_economy_jobs&sid=96001027
Snippit:

WASHINGTON (AFP) - American employers swung a heavier jobs axe in January, announcing more than 100,000 cuts for the first time in three months, a closely watched survey showed. Companies planned 117,556 cuts in January, traditionally a tough month for the labor market, up 26 percent from December, according to a survey conducted for outplacement firm Challenger, Gray and Christmas. It was the biggest job-cutting figure since October. "It is too early to tell if we are going to have another year of heavy job cutting," the company's chief executive John Challenger said Tuesday.

Black Blade: Yep, I guess I better study Cantonese and Mandarin before long.

http://www.azcentral.com/arizonarepublic/business/articles/0203budgetsavings03.html
Snippit:

WASHINGTON - The Bush administration, in its 2005 budget delivered to Congress on Monday, proposed allowing Americans to save up to $10,000 in two types of untaxed investment accounts, scaling back last year's proposal that was criticized by Democrats as a tax shelter for the rich. If adopted by Congress, the plan would let an individual invest an extra $7,000 annually in tax-free accounts that have a $3,000 limit now. Half of that money would grow untaxed in "lifetime savings accounts" that could be withdrawn for any purpose without penalty. The accounts would open markets for financial service companies such as Citigroup Inc. and Fidelity Investment but threaten the $112 billion U.S. variable-annuity industry, which relies on existing tax advantages to attract investors. "To our industry, it is an absolute calamity," said former Oklahoma Gov. Frank Keating, head of the American Council of Life Insurers, the industry's largest lobbying group.

Black Blade: Not that many Americans save now as they are living paycheck to paycheck and accumulating debt. The savings rate in the US is pitiful. This should be interesting anyway.

SPOT and SPIKE are getting very eager to GO !
Watch for the SIGNAL -- Where are you Sir Slingshot ?
We need a "SPECIAL EDITION" !
<;-)

@BB

I lived in Storey County in the 90's and we experienced cave-ins of old shafts off and on and permanent bad water from chemical leakage (some 100 yrs old). My water purification system cost $5K to make my water batheable. That's where some of the paranoia is bred. There are also a fair number of wildcatters in that area who try to bypass all regulations as "interference", hoping they're small enough to slip through the net.

I do, however, sympathize with the professional miners who are willing to jump through some hoops when there aren't too damn many moving targets.

-G

http://www.riskcenter.com/story.php?id=8016"Any kind of activity that makes money go around is wellcomed in a world that grows confetti-bergs. Look at what happened in Japan (N� 2 world economy) when wave after wave of "public works" didn't produce any enduring relance (expansion) of the internal economy. "Economy" (2/3-consumerism) is a funny, ficle/inconstant, thing !!! And certainly when a basic economic activity has morphed into "political" economy.

When the main confetti-flows decline in rotation speed, adding more of the same confetti is not going to change much in a positive sense. An "healthy" economy cannot be based on masses of "unproductive" debts and growing masses ($-Trillions) of idle reserves. Why go to Mars, when millions still die, daily, from simple diseases on the blue planet ? Politicians desperately come up with "whatever" when things economical are getting stuck."

Druid: Belgian, you have some incredible insights and I'm hoping you are logging all your posts so you can write a future book because I definitely would buy it.

You're exactly right and hitting the nail on the head. The maturity and compositions of the primary older western economies (engines of growth) are not conducive to producing anything of real or lasting value. Our economy is probably composed of an 80/20 split between government (federal, state, city), financial, health care, retail and real estate services/manufacturing and is requiring HUGE amounts of credit just to sustain it. Throw in the age demographics and this picture just does not look pretty no matter how you view it.

Going to Mars, Jupiter, Pluto or anywhere else close by isn't going to help the situation as these are long term type of projects and would increase the overall creation of "money" then the velocity of it.

Political economy is where it's been for quite some time.
It sure is interesting watching how the central banks throughout the world deal with their political constituencies much less the private speculators raiding (or should I say riding) their paper. The global financial architecture is fragile at best with different political and economic agendas tugging at it. This coordination thing is really turning into a lot of work.

We, along with, Japan and Europe have to do a lot of de-centralization (in a lot, if not all industries, hehe) in order to have a fighting chance in the future (the future being yesterday) so as to avoid another dark age. Of the three countries, it appears that the ECB group is in the better position to withstand a blizzard of confetti, but for how long as the pressure is building.

I've posted a URL that might interest you as it pertains too, among other things, the creation of paper instruments globalwide.

@ Gandalf

I went grocery shopping tonight and couldn't find any roo meat. I hope that is because you have already cornered the market.

-G

P.S. I hope Jack hasn't been hoarding it again. Back in the eighties we used to sing:

"Tie me Jumbo Jack down, Sport, tie my Jumbo Jack down."

At the other Castle a poster stated he encounted a person purchasing 100 ounces of gold and did not know the term, Goldbug. Post at 23:09.
This amount is in the stratosphere for me to obtain. I was told that the big investors would not come on line buying till gold hit $450.00.
I suspect if so then my expectations of very large swings in POG will occur as profit taking comes into play.
How many others are purchasing this amount or more.
In one of my past posts I said their was a purchase of 100 ounces at my coin dealer. I have read (at other Castles) the premium is going up. Silver too!
Are we seeing a stealth buying and in quanity in progress.
Maybe, just maybe with these amounts signals that the end is closer than we think.

Another point. When you see Men in three piece suits on their lunch time buying weapons at the Gun Shows, you'll know somethings up.

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

@ Druid

Dang, I went to the website and read the titles - whew - overwhelming.

Then at the bottom of the list I saw one entitled "Speaking a Common Language", so I linked it, and voila, it immediately morphed into Greek.

While Jon is learning Mandarin, I better dust of the Calculus and Differential Analysis books!

(:^( - G

@ Slingshot

I live in rather large city (too bad for me), and I interface with about three coin shops and one PM wholesaler from time to time. Even the wholesaler rarely stocks more than 20 or 30 of each major coin type (for walk-ins), but orders to match his retailers demand. It keeps his inventory exposure manageable.

A hundred ounces is a lot for a Mom and Pop coin shop. A focused specialty shop like CPM is a better bet for quantities like that.

"Dang, I went to the website and read the titles - whew - overwhelming.

Then at the bottom of the list I saw one entitled "Speaking a Common Language", so I linked it, and voila, it immediately morphed into Greek.

While Jon is learning Mandarin, I better dust of the Calculus and Differential Analysis books!"

Druid: Lox, I know what you mean. I took an International Money and Finance course some 13 years ago and on occasion have to refer to it for some of the simpler models that are illustrated. Yeah, this is a pretty good link and I find myself having to break out some of the old textbooks when coming across some of the "magic" that these paper alchemists of today create. I hope it adds to your repertoire of data. Well, off to meditate for a few hours. Keep after them Lox.

Hearing a friend was in danger was almost too much for Sir Ari, Sir Belgian and Omar to stand. And as they now stood with Sir Black Blade and Sir M.K around the fire, no chastisment was to be heard. Only to find a better way to drive the Dark Forces and Therroth from Hammerton while rescuing Gandalf. The next few days were hard and long as they planned an assault on the town.
It was in the middle of the week when at dawn this army awoke and each Knight took his place. Ari, Belgian, Black Blade, arranged their lines. Bonfir, Jachin and Boaz and their men could be seen moving into position. Both Gates were to be attacked but the west gate would bare the brunt of the assualt.
They come sooner than expected, said Therroth to Gandalf.
Therroth called his Captains. Riders exited the west gate and assembled in front of the earthworks. Behind them foot soldiers. The air was surreal. The Lady Warriors were to attach the east gate, Supported by Bonfir and Jachin.
Sir M.K.and his flagmen appeared on the bluff. He would coordinate the attack from that position.
Raise the first Flag! was heard in a steady voice and the flag was thrust upward.
Swords were drawn and held high.
Slingshot was now in the front line with Sir Ari's Knights.
Sir Ari on the left. Sir Belgian in the middle and Omar Kahyyam on the far right.
More Dark Forces come from within the town.
Then as in Slingshots dream, Suddenly Omar moved his men in front of the others.
Sir Ari and Sir Belgian were startled by this movement in the line.
But it was too late.
Lower the Flag! was ordered by Sir M.K. and the flag dropped.

The sound from those of the desert was loud and their horses rode at breakneck speed.
They rode down to meet their foe and Omar's men felt the sting first.
Men fell from their horse as the volley of arrows found their targets. Still they pressed on more determined than ever.
In their strange accent could be heard, "FREE GOLD" and the first clash of riders filled the air.
Sabers clanged and the anguish of men drown the noise of Sir Ari and Sir Belgian's entrance into battle.
Lady Waverider and her Warriors were now engaged and found themselves within the earthworks.
Bonfir made it to the spot where Gandalf was taken and retrieved his staff. He rode back taking it with him to safety.
In a strange occurance, Sir Ari and Sir Belgian found themselves fighting together in close quarters.

Where did they all come from? asked Sir Ari, CLANG!

Clang! Ask me later, Sir Ari, I'm a little busy right now, said Sir Belgian.

The battle rage on and consumed the day.

For in this day, the Dark Forces will find the Goldbugs have more than sword or arrow!

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

My personal observation in my neck of the woods is one coin dealer is conservative , while the other goes for broke. I think the one orders an amount cashing in on volume and its profits, while the other loads up cashing in on larger premiums when the other dealer runs out of stock.
Timeing is the game I play. Against Spot plus premium and against who has stock to sell.
Slingshot-----------<>

O.K. Goldbugs.

If you have Ziggys Marley's CD Dragonfly
Play the cut "Looking"
From the movie "Ice Age"

Just Move The Bones.

Good Night or is it Good Morning?

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

My gold coin arrived today for being a joint winner in the last contest.

Many thanks to Sir MK and the great folk at Centennial, I will treasure the coin always.

For followers of feline forecasters Fur Face fancies a further rise in the gold price coming soon. He has also forecast rain and that in a city where its rare to see rain between November and May. We will see.

http://www.gold-eagle.com/editorials_04/images/bloom040404d.gifIf friday's US employment figures are good (300,000), the dollar/stock market, could get a temporary boost !? Might be welcomed by the G-7.

Some speculation (merger-take over) about Deutsche Bank and Citigroup !? FWIW.

BoE will rise IRs to 4%. Funny that US-IRs don't see a need to do the same, since the US economy is the fastest growing one ?

Link with 30 yrs DM-�-POG chart. More than a decade of horizontal "Stability" !!! Thoughts anyone ?

My Silver eagle which i won at last contest arrived today. Thanks to Marie.

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

rember when the silver gold ratio hovered at 72 for a long time, now it seems to have established a base at 64 regardless of what the price of the two metals have done over the past two/three weeks.

the abacus has 8 rows, maybe each row once it is filled up one ounce of silver at the lowest ratio. it passes teh acquired silver over to the next row, untill the acquired silver has travelled all the way across teh abacus board and ended at8 where the restocking and resupplying for the new cycle where all 8 rows are basically empty except for the residual grains and quarter to thousandths of a gram remain.
what base will be used now 8 or 5, <;+) have to learn the opperation of the abacus as a cash register. pick the correct base or u be out of luck enie meanie mine moe which base will be used thats for u to figure out!

http://www.bankofengland.co.uk/pressreleases/2004/012.htmSee link for press release.

Meanwhile, the neighboring European Central Bank's Governing Council decided today that no change in euro rates was appropriate monetary policy for the euro zone.

Key monetary policy rates stand at 1% for the U.S., 2% for the euro zone, and now 4% for the UK.

R.

Price increases are reported for aluminum and aluminum sheet; asphalt; automotive parts; bearings; beef; blood; chemicals; chicken; copper; dairy products; #2 diesel fuel; food; truck freight; fuel; furniture; gasoline; #2 heating oil; medical and surgical supplies; natural gas; office products; polyethylene; plastic; pork; PVC conduit and PVC pipe; soy oil; steel; steel coil; steel pipe; and unleaded gasoline.
***Aircraft parts; beef; computer equipment; and surgical drapes and gowns are reported down in price.

Commodities reported up in price are: Aluminum; Aluminum Extrusions; Brass; Cobalt; Coke; Copper; Electronic Components; Energy; Ethylene; Freight; Fuel Oil; Gasoline; Natural Gas; Nickel; Polyethylene; Polyethylene, Film; Propylene; PVC; Resin; Scrap Iron; Soybean Oil; Stainless Steel; Steel; Steel, Bar; Steel, Galvanized; Steel, Hot Rolled; Steel � Sheet; and Sulfuric Acid.
***The commodities reported down in price are Caustic Soda; Corrugated Cartons; and Linerboard.

http://www.federalreserve.gov/pubs/feds/2004/200401/200401abs.htmlfed logic

http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

If you are considering investments in gold we invite you to request our freeintroductory information packet detailing the products and services offeredby USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and lookforward to working with you.

@ Belgian, TC

Tony might be willing to spill English blood to support Dubya, but he's not about to set the pound up for another Soros debacle. He'll let the $ fall solo first.

Blood is blood, but this is the bloody pound.

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

Breaking News

_______________

Snow May Resist European Calls to Counter Dollar's Slide

Newsmont's Lassonde Sees Gold Strong for Three Years

Japan & Gold

________________

You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

CNBC is harping on higher retail numbers for January. Didn't they justify lower December numbers by touting higher sales of "gift cards", which are not booked as sales until redeemed? Are these in the expected column, or are they a "gift" to the retail numbers?

http://www.reuters.com/financeNewsArticle.jhtml;jsessionid=CWQGEYRWWN0ZOCRBAEKSFFA?type=businessNews&storyID=4292448snippits:

WASHINGTON (Reuters) - U.S. business productivity rose at a slower-than- expected pace in the fourth quarter and at the lowest rate in a year and jobless claims rose unexpectedly last week, government reports showed on Thursday.

Non-farm business productivity, or worker output per hour, increased at a 2.7 percent annual rate in the final three months of the year after an upwardly revised 9.5 percent pace in the previous quarter, the Labor Department said.

The advance was the slowest since a 1.5 percent gain in the final quarter of 2002 and was lower than the 3.0 percent clip expected by analysts.

Unit labor costs fell 1.3 percent, a larger drop than the 0.8 percent decline expected by analysts, after a 5.6 percent tumble in the third quarter.

"Productivity growth has slowed down from the second and third quarter but it's still managed to eke out a decline for unit labor costs and that's what it comes down to," said Elisabeth Denison, an economist with Dresdner Kleinwort Wasserstein.

"To have unit labor costs declining is a good sign for corporate profits."

and . . .

"The Labor Department said separately that claims for state unemployment aid rose 17,000 to 356,000 in the week ended Jan. 31 from a revised 339,000 in the previous week.

Analysts were expecting claims to dip to 340,000 from the originally reported 342,000 in the week ended Jan. 24."

Goldilox:

Productivity down, wages down, number of workers down - a trifecta! The betting window is open! Step right up!

dem bones, dem bones . . .

It is also very interesting to note that the pound has to stick with the euro's stability, whilst the globe's dollar-reserve is declining. But one will NOT hear one word about this pound-euro camaraderie.
Financial commentators are constantly mixing up their reporting : strong,...stable,...rising euro and NOT weak,...unstable,...declining dollar ! How amusing :-)(-:

But the word about $-IRs is publicly out now : The 13 $-rate cuts were NOT at all for economical reasons, but each time to *** STABILIZE *** (!!!) the dollar...LTCM,...9/11,... etc.
What has been and still is, "de-stabilizing", the dollar that these extremely low IRs are still needed ? And why do the �-IRs support the dollar with much lower IRs than needed and not having any economical benefit ?

< $ + �-IRs > AND < $-�-POG > are managed for the sole purpose of "stabilizing" the dollar !!!
No wonder that euro-POG remained stable (+/-300�/Oz) during the decade preceding its (�) birth !!! This, whilst the dollar-index made a 50% (80 >120) during that same '90-ties decade.

Conclusion is rather simple : A stable euro versus a de-stabilizing dollar. That's what the ECB's marking to market of its gold-reserves is all about. A pr�cautionarry measure for the increasingly destabilizing dollar-reserves to be substituted with the re-valuation of Gold in a euro FreeGold market.

It will happen, dear forumers !

"The mistakes of our grandparents" (GE) : Look at the $ Trillion Debt-figures and realize WHY the dollar is/will/shall, destabilize non stop ! No way back or out !!!

All this hullaballu about WMD! Let's hear some more about Weapons of Mass Illusion - BLS, FED, CIA, and Michael Powell's personal arsenal of CNBC, FOX, etc. (Too bad about that costume thingy on his watch)!

Payroll numbers are traditionally the most accurate measure of labor, but press analysts are setting us up to disbelieve it, since it is anomalous to all the other confusing labor statistics, i.e Household Survey, etc.

Bill Seidman just reported that SSI "borrowed trust" of $160B has been deleted from Bush's budget, increasing his reported $550B deficit to over $700 PLUS the also unreported War costs - can you say "$1TRILLION" once the cost overruns in MediCare and the Highway bill are invoiced?

What's a few hundred billion between friends?

The rubber band powering US growth is being stretched to its limits, but the lumpeninvestorate is being treated like a naive customer in a crooked mechanic shop.

Got gold?

http://www.urbansurvival.comsnippit:

"Let's say you have 10 workers and they make 100 widgets all told. But one of the workers is in research & development and one is in a "soft" market position. Whatever the function though, the company supports 10 workers to make 100 widgets and that's an average of 10 widgets per workers, right?

OK, let let's fire the R&D worker. This means we now have 9 workers making the same 100 widgets. That's 11.11 widgets per worker.

Now here's the trick: When you're the Fed you get to proclaim this as an economic miracle because the productivity has increase (11.11/10) or a productivity increase of 11.1%! Is this a great economic miracle or what. About the unemployment? That fellow in R&D was given a job for 6-months as a "consultant" and because he was doing that without paying into the state unemployment fund, when he was finally let loose, he was invisible.

Now our next sleight of hand. We're now going to fire that person in the "soft" marketing spot. That means we now have 8 people making 100 widgets, which means we have 12.5 widgets per person. So what if we have now fired 20% of the workforce? That's not the Fed's measurement point. THEIR measurement point shows that productivity is up 25%. Hallelujah brother, American workers are the most gung ho on the planet. Amen. That Bush feller and his buddy Al Greenspan are sure making this a great economy, huh?

Heck, with productivity jumping, the stock price is bound to go up, right? And so it was.

Low let's put the final piece of decoration on this half-baked economic cake. Let's outsource two more jobs - in fact let's make them customer service jobs - and put them in Mumbai India. Now we're down to just six employees making the same 100 widgets. That's a whopping 16.66 widgets per worker, or a 66.6% increase in productivity!"

Goldilox:

George "splains" the productivity miracle in non-FEDspeak English.

http://www.drudgereport.com/flash1.htmSnip....

"China Forecast To Become EU's Top Trading Partner In 2005
Thu Feb 05 2004 10:17:54 ET

For China, this could well be the Year of Europe, the WALL STREET JOURNAL reports on Thursday. Little noticed above the clamor over China's economic boom and the size of the U.S. trade deficit with China is an economic forecast with huge repercussions for business: In 2005, the European Union is likely to become China's No. 1 trading partner, displacing the U.S. this year and Japan in 2005, according to the EU Commission in Beijing.

EU policy makers say they sense an unprecedented Chinese interest in Europe, chiefly driven by China's hunger for export markets, which are seen as key to sustaining economic growth at home.

Officials add that it is also partly the result of Beijing's quest for new allies to bolster its view of the need for a multipolar world, rather than one dominated by the U.S.

Developing... "

1.49995 billion to go (Chinese citizens yet to buy physical gold). Tick tock.

PA

typo

The "FREE GOLD" battle rages on !
HOLD THE LINE !
<;-)

All observers and commentators, unanimously repeat that the US economy is the best, fastest growing and therefore the globe's main economical engine ! Why then, is everybody leaving the US$ ??? I always thought, and still think, that a strong and healthy economy (US) went hand in hand with a strong, healthy ($) currency !? Why is there a flight from dollar into the euro-currency that is the numeraire of that slow, collectivist, old continent !?

And BTW, what about that Daimler (�) > Chrysler ($) experiment...(and many other fiasco's of that kind) ?
These pr� G-7 communiqu�'s are simply wind. A declining dollar exchange rate is going to change nothing for the better for the US. Nobody asks the question IF the dollar is still able to remain strong, despite eventual support !?

From 1990 to 1995, the dollar-index declined steadily from 95 to the ATL of 80. Nobody complained during that period and Euroland did not sink into the abyss. There must be Another (hum) reason for the present alarms ...!?

And it was (still is) the ECB's wish, that the euro gains dept, outside EMU !!!!!!!! And it is happening. Unstable dollar on its way out and destabilizing more,...stable euro in and becoming more stable. Thank you Sir Douglas !

@ Belgian

The DC experiment would be small potatoes compared to the rumors flying around about Citi-Deutche Bank merger. Although both banks are denying the rumor, the collateral damage of any basis of fact could be devastating to the US $. The largest (US) bank in the world moving to euro?

Greetings Sir Goldilox:

Do you have a link or other info regarding the Citi/DB meregr rumor? I would be very interested to find out more about this.

Take care.
PA

@ Belgian - thank you for response the other day.

So now we know, Trichet or the ECB did'nt budge to political pressure, at least up to now. Let's wait and see what the G7 meeting will bring ... and of course the much hallowed Jan. employment B(L)S number!

As I see it after 100 days of Trichet, following in the footsteps of outspoken Duisenberg - we've lost an elephant in a porcellain shop and gained a diplomat. A diplomat, who's trying to calm the political waves behind the screen.

... and as we all are aware that the "bizarre" growth of the US economy is solely built on debt and hedonics - there may be no way to raise IR's - except to accept the endgame.

Never - says GWB - from his corner of an alledged and proven liar, as some of his cronies have already stated the truth of no WMD's in Iraq; We need more time says CIA - more time? - So why was Iraq attacked before time? To oust a dictator in the name of democracy ... spare me any other comments.

This game is certain to sink the ship of the dollar standard as sure as the Roman Empire's Sesterces!

I'm still, while not holding my breath, figure the POG will be managed until the endgame will be clear for all to see.

Meandering around 400 confetti will seem like the greatest bargain for eons to come ... ha, cb2

No link. It was mentioned on CNBC (my background music) as a denied rumor. That's all I have so far, but I will continue looking.

http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:C&Feed=RTR&Date=20040205&ID=3359646Druid: One spin.

Back in my day, productivity was stimulated by the use of more capital per worker. You could pay a worker more money because he had 10X the output. Both worker and capitalist benefitted.

Old version of productivity....

Visualize 1000 workers digging a ditch by hand with shovels.

Now visualize 1 worker digging a ditch with a high powered steam shovel in less time than the 1000 use too.

1 worker doing the job of 1000.

The combine cost of the 1 worker + the captail for the steam shovel is 1000x less than the 1000 workers. 500 can go to the worker, 500 to the capital.

Plus...Now 1000 workers can dig 1000x that many more ditches and expand the economy!

===
What we call productivity today:

Visualize 1000 workers digging a ditch by hand with shovels.

Now visualize 1000 workers (illegal immigrants) digging a ditch by hand with shovels but willing to work for 90% less money displacing the 1000 union workers who go on the unemployment line.

http://www.expatica.com/source/site_article.asp?subchannel_id=52&story_id=4398Druid: A different spin.

@Druid

I am truly unworthy! Excellent piece of spelunkering on the Deutsche-Citi rumors!!

Of course, this award is only verbal, as I am not lightening my stash! LOL!

(:^) -G

eom

http://news.yahoo.com/news?tmpl=story2&cid=1503&u=/afp/20040130/ts_afp/france_britain_spain_040130193838≺inter=1Snip....

"First European lottery set to go on Friday the 13th
Fri Jan 30, 1:38 PM ET Add Top Stories - AFP to My Yahoo!

PARIS (AFP) - The first western European lottery is to take place next month in Britain, France and Spain, officials said, with fans of the game of chance hoping next Friday the 13th will be their lucky day.

For a wager of two euros (nearly 2.50 dollars), fifteen million euros (18.6 million dollars) will be up for grabs every Friday in "Euromillions."

The first drawing will be in Spain in two weeks' time, on Friday, February 13th, if Spanish officials give the final go-ahead."

End snip

Want to play the lottery in Britain? You will need to convert your pounds to euros first.

Tick tock.

PA

dadgumit, what the heck is going on out there?
the g7 decides to call a meeting and everyone goes ohhhhhhhhhh ahhhhhhhhhhhhh wowwwwwwwww hey if u want to watch buy a fiat! if you want to play get out theree and go get some gold.
set your own,,,,,,,


buzzzzzzzzzzzzz tweet,
1, 2,3, whatever it takes! hurah.

Reuters Stockwatch - E*tradeAfter watching high-flying AMZN undergo a two week squeeze from near 60 to the 40's (PE only down from 500 to about 350), less radically valued companies are lining up for their trims, as well.

CNBC's stock of the day is MDT (Medtronic), off 5 to 47 on 25M shares traded. MDT announced a $35M drop in quarterly revenue to $2.195B from $2.23B for the quarter.

With 1.2B outstanding shares, that's a $6B cap haircut for a $35M drop.

Ouchers! Bubble whackers are hitting hard, and not only junk stocks get ripped!

Got gold? TSIHTF

http://quote.bloomberg.com/apps/news?pid=10000080&sid=aKD.Yudu8Si0snippit:

"Gold Standard

Until 1971, when Former President Richard Nixon ended the ``gold standard,'' the value of the U.S. dollar was backed by the U.S. government's gold reserves. Countries such as New Zealand, Israel and Oman have since cleaned out their vaults of gold, according to the World Gold Council.

Canada dropped its gold standard in 1931 and began selling its reserves in 1980. Gold reached a record $850 an ounce that January, then dropped as low as $252.55 in August 1999. Bullion has since climbed back to about $400.

``The policy is still on,'' Houde said. ``The difference is that additional factors have to be considered.''

Houde declined to discuss the face value of the coins, their condition, or give any description, saying such information was commercially sensitive.

That makes it impossible to assess the value of the cache, and the effect the release of 100,000 ounces would have on coin prices, coin dealers contacted by Bloomberg News said.

Price Declines Feared

Cameron Bevers, who runs Colonial Acres Coins in Kitchener, Ontario, said he knows of only two types of coins the government could hold as reserves. The most likely would be the so-called Maple Leaf coins issued annually for the past 25 years by the Royal Canadian Mint, the government-owned coin maker.

Collectors have little interest in them outside their gold value, Bevers said in a telephone interview.

Alternatively, the government may have retained some of the 675,000 C$5 and C$10 gold coins minted between 1912 and 1914 to back the country's paper currency, said Bevers. A C$10 piece from 1914 might be worth C$1,000 to a collector, even though its gold value is only about C$250.

``I'd be annoyed,'' if the government suddenly released a large quantity of those coins, said Bevers, 29, who has been collecting since 1985 and dealing since 1991. ``If I was holding lots of them, it would be devastating.''

Some Favor Melting

Bevers said it's unlikely the Bank of Canada has much in the way of foreign gold coins, since there are so many of them in circulation that the government wouldn't be concerned with the impact of sales on market values.

Houde declined to say when the government might offer the coins for sale.

Canada also is considering options such as melting down the coins and selling them as bullion, she said. The 100,000 ounces in coins would have a bullion value of almost $40.2 million at today's gold price in New York of $401.70 an ounce.


Calgary dealer Robert Kokotailo favors that alternative, saying he doubts the government holds coins of value to collectors. If it does, and decided to sell them, his clients would be hurt, Kokotailo said.

``Could they be holding gold sovereigns from the early period?'' he asked in a telephone interview from his shop, Calgary Coin Gallery. ``If they are, that could cause a problem in the market for collectors of those coins.''"

Goldilox:

Now the bas***ds are considering how to ream the very collectors they mint the gold coins to supply. No mention of any "excess" silver Leafs, however. What do you wanna bet some "inside" bidder will get the whole stash sight unseen and unaudited.

http://money.cnn.com/2004/02/05/news/international/deutsche_citi.reut/
Druid: Lox, PA thanks and yet another spin.

http://comitecanadien.netfirms.com/ENGLISH/partners.htmWhile searching out bank merger info, I ran across this CIBC-Fortune story outlining the ENRON/Bank frauds in the most understandable form I have seen. Too long and involved for a snip, but good reading if you have some time.

http://www.theonion.com/4004/top_story.html

Belgian: You write, "I always thought, and still think, that a strong and healthy economy (US) went hand in hand with a strong, healthy ($) currency !?"

It almost appears to me that such a rationale is slightly out-of-date. The development of the US dollar as the only measure of value throughout the whole world that is implied in the concept of "reserve currency" means that the dollar has long outgrown any meaningful connection to the US economy. I much prefer the explanation of Sir Douglas that the dollar is in the process of being replaced in its role of "reserve currency". Such an interpretation makes observable facts far more understandable... a process for which I salute your many and profound contributions.

While we're at it, may I comment on the observable behavior of the POG as seen from my own personal vantage point? It becomes more and more obvious that our "free markets" are anything but! Just as the pronouncements of the "Moron in Chief" become more and more divorced from reality as we know it. (See: above link ) "George W. Bush pledged Monday that, if re-elected in November, he and running mate Dick Cheney will "restore honor and dignity to the White House." Yeah, and where have "honor and dignity" been for the last three years? This is the same clown that claims to have fought a war in Iraq to bring access to "free" markets. Ha! Ha! Yes, the same one who brays: "They hate us because we are free." There is nothing free about the gold (or silver) market, and that has to be obvious to whomever bothers to think about it. If there was, someone (George Soros, or Sir Douglas or any sovereign government?) would simply stand for delivery of a few hundred (or thousand) futures contracts and the whole house of cards would simply fold. The delivered metal would soar in value and the manipulation would be over! But I imagine that before that would ever be allowed to happen there would be a "mysterious" death in the family. A la Safra. Of course, any actual metal realized by such a manuever could be used to set up the "freegold" market that Sir Douglas postulated.

I still remember words of Another to the effect that "The entrenched powers that include Greenspan, et all, will fight a fierce rearguard action to postpone the inevitable for as long as possible". I wonder if Another and Sir Douglas ever imagined that their defense could possibly last this long.

A question to the forum.Would it be advisable to store short term fiat in gold and silver.This is money in a savings paying very little interest,it may be needed from month to month to pay bills?Are we at the point were this is the way to go? Thnx 21

A ploy I see credit card companies playing now,is the low rate loans they offer everyone for life of the loan.If these companies review your credit report and find you past due on any bill gas,water etc they rase your rate to the maximum on your low rate loan even if you disputed the late payment on your credit report.If the economy tanks even worse and people cant pay there bills on time all of these low rate loans will go to 20%.The little guy cant win in this system.No wonder gold and silver are hated by the big banks it frees you from there catch 22 system.21

If doing so with the possibility of needing to convert the metals back to fiat in the short term, it would be advisable to "save" only in the lowest premium / highest liquidity items available, such as Krugerrands or 90% silver coin. Since both are available at very near spot gold and silver levels, you would be at less risk of losing on the premium side if you needed to sell. However, in general terms, it is probably safer to just keep a few months expenses set aside in cash and then place anything beyond that into the metals if you expect further dollar declines or an economic crash and an inverse rise in the metals.

The long trend is obvious and in place, but there's enough amplitude in the short-term fluctuations (the size of the waves and ripples on the incoming tide) that a prudent man wouldn't unnecessarily expose himself to potential losses from roundtrip Gold/dollar exchanges on reasonably *foreseeable* flows of SHORT-term savings to cover life's expenses.

I keep a small, effecient padding of spendable cash in a checking account that floats along atop income and expenses from month to month, but the bulk of all longterm monetary excess has been and continues to be exchanged for the reliablility and permanence of Solid Gold, wealth for the ages.

At the point where the dollar is failing so fast short term that you'll want to keep even short-term savings in Gold, you'll know it because you won't even have to ask the question. But even then, there'll always be a need for the effeciency of a cash/monetary padding. What'll change is you're perspective on the meaning of short-term. Right now I consider short-term to be about two to three months. At some point it'll probably shrink, depending on the balance between your earned interest and the perceived inflation rate of prices.

The key is to get a good start on that long-term accumulation of Gold savings. You want to have in-place a good stake in the inevitable upward revaluation of Gold that, when it comes, will seemingly happen overnight -- so quickly that efforts to keep your floating pad of liquidity in the form of Gold won't fully
avail you of reaping the astounding gains in purchasing power due to the inefficiencies in what would as quickly become a disorderly market.

Gold. Have you some. --- Aristotle

Apparently, the ruling from the judges is that I was just ONE measly typo shy of winning the "Golden Thumb" award. Better luck next time!

Gold. You gotta *have* it. --- Ari

What do you think about silver, aside from storage problems? I look on my silver as something that I will trade for gold at some point.

Silver is many things to many people.
Silver has been around for so long that people take it for granted. But they're paying for their parents and grandparents negligence. And more learning the hard way, to ensue. Definately keep at least one or more of the many appealing forms of silver in your core holdings at all times, IMO, and dutifully pass it down to the next generation with gold.

Haiku:
Silver Maple Leaf
And Mexican Libertad
Started a big trend.

As many stories and opinions of the upcoming weekend G7 ('fiat lovers')meeting as one could imagine. Interestingly, the last few days have seen more of the all 3 (US,EU,JPN) race to the 'fiat' bottom speculations.

Accordingly and with uncertainty, many stocks (can they be counted on?) moved to the upside today. It is with a large degree of amazement, and for illustration only, that a handful of non-hedgers moved up aggressively from 3:30 or so into the close. Perhaps a 'leak' was borne this afternoon!

I for one will be watching for advance 'leaks' of the intentions of the G7 central banks. Not because I like them or anything similarly frightening but solely for signs on the price of gold.

And in regards to the price of gold, is there anything more exciting?

Thanks.

Hey, maybe they should call the G7 meeting "Fiat Fest 04".

Valentines Day nears and reminds me that silver jewelry is a core holding for many, esp. woman, couples and foreigners. As it's value in dollar terms has been supressed so long, along with gold,
it hasn't had the fair opportunity to be taken seriously
as an investment like it used to. Witness even many (Asian)Indians, reported today to be cutting back purchases after recent price rises, or because stocks look more attractive. Another case of mistaken identity, aggravated by unscrupulous investment bankers, brokers, financial media, (recently lifted) government regulations, short selling, asset bubbles, debt, etc.

It's been my observation that primary silver investors confuse their passion with rationality, and won't be swayed by anything contrary to their preferred viewpoint. So, at the risk of incurring unwanted wrath from their ranks (yourself excluded since you kindly asked) I must confess my reservations to comment -- the less I say, the better. I'll try to keep this reply to an executive summary.

As a commodity play I'm not qualified to provide any insights whether silver prices will do well or not, better or worse than, say, sugar, coffee, copper, or hog bellies. To the extent that inflation takes hold, silver prices should tend to float higher with all the other boats. But that's all I can say for silver -- from a commodity standpoint. From a *monetary* perspective, which is what drives my interest in this area and is why I frequent this forum, silver is a non-starter.

As I see it, in this specific financial function, silver AND Gold are redundant, and I'm certainly not the first to make that observation. The verdict has been decisively handed down by the market which has cast its votes over time, driving up the silver:Gold price ratio from 15:1 to over 60:1. Gold has already won that battle (against silver) because the market abhors redundancy. In filling the niche for hard assets, a briefcase of Gold property is simply more efficient than a truckload of silver property. By the same token we can note that iron was never really in the race, and by modern standards, silver is now fully out of the competition, lapped many time by Gold.

For now, we can see silver is still limping along in a sad legacy to its old track record, but in time it will drop out and take its rightful place in the bleachers. As I alluded to in my previous post, Gold has yet *yet* to demonstrate its full speed winning sprint to the finish line. Sure, it's left silver far behind, but it still has a few laps to go as it's now pacing itself (before the runaway sprint) in primary competition with papery derivatives vying to fill the Wealth Security niche in the winners circle.

The market is rendering its verdict here as well. The fact that the *price* of Gold has risen (from $35/oz to $400/oz) in spite *IN SPITE* of the proliferation of these modern derivatives shows that Gold is also winning this latest phase of the footrace against redundant challengers.

So, behold Gold! Although it might look lowly and sweaty today as the race runs its course, Gold is indeed beating all comers -- ancient silver, and modern paper -- and will one day soon take up its crown without ambiguity in the winner's circle to be counted by all in its full majesty. King FreeGold.

Gold. Get you some. --- Aristotle

http://www.nytimes.com/2004/02/04/opinion/04WALK.html?pagewanted=1The Debt No One Wants to Talk About
By DAVID M. WALKER

(No snip due to copyright protection.)

Sundeck:

The article at the link by David Walker is worth a read. It appeared in Wednesday's NYT.

Independently confirms what Ex Treas Sec O'Neil was talking about a year or two ago ($44T shortfalls going forward).

David M. Walker is comptroller general of the United States, i.e. Head of the General Accounting Office.


Gross federal govt debt equates to $24,000 per US citizen, increasing to $100,000 per citizen when Medicare and Social Security committments are included. The new Medicare prescription drug benifit will increase that by several thousands more.

Walker explicitly states that these committments cannot be met by economic growth, but will require other ***dramatic*** solutions: increased taxes or spending cuts.

He doesn't mention "foreign military conquest", but that doesn't seem to be working at the moment.

A brave and responsible alert from the Comptroller General...will not go un-noticed by the Administration...perhaps Walker is looking forward to early retirement while there are still "meaningful" dollars to pay for his pension??

;-)

Sundeck

To meet those obligations does anyone really find credible the solution "increased taxes or spending cuts" or a "combination" proposed casually?
The ones seeing thru rose colored glasses a "healthy, recovering economy, stock bull market, strong job growth and weekend Mars excursions.
Maybe a 10 to 1 US$ devaluation would be a good antidote, with or without the Tequila.

By the way, great find.
Good ole GAO's voice never seems to reach the White House anymore. Maybe more of Congress will listen this time, considering that Social Security, Medicare + the true total government liability seem to be, well at the threshold of retirement?

http://business-times.asia1.com.sg/storyprintfriendly/0,4568,106947,00.html
Snippit:

WHETHER a studied statement, an off-the cuff comment or a veiled threat, Japanese Finance Minister Sadakazu Tanigaki's suggestion last week that Japan could diversify part of its huge foreign exchange reserves into gold has had international reverberations.

It has brought home once more the fact that the vast dollar reserves which Japan and the rest of Asia hold are a Sword of Damocles for the dollar and the US Treasury market. The impact of such a move on the dollar would be severe. And as Japan has a third of total US Treasury securities held outside the US, the impact on the bond market would also be severe.

Mr Tanigaki's statement (in answer to a question in Parliament) that he felt it necessary to take a view on the future composition of Japan's foreign exchange reserves (the bulk of which are in dollars), and that this might include a review of gold holdings, comes at a time when other Asian nations have been expressing concern about their vulnerability to the dollar. It also occurs when Asian central banks (the People's Bank of China for one, an informed source told BT) are expressing strong interest in gold.


Black Blade: I know this has been addressed already. Just remember China, Singapore, and the Philippines central banks already are in the process of accumulating gold. Japan is "caught between a rock and a hard place". When AG and friends at the Fed along with the Treasury Dept. begin to raise rates watch the Japanese MOF go into panic mode. Inflation (or better yet - stagflation) will set the US dollar into a downward spiral ("death spiral"?) forcing a rise in rates to attract more foreign investment (for what?More nearly massively created worthless Yen?). Damned if they do and damned if they don't. The one persistent rumor is that China may set things off by selling more US debt and increase gold holdings as the fear of a falling dollar and lower valued US debt is in the cards. Meanwhile the budget and current account deficits in the US are cumulative and will never ever see possitive territory again. The smart Asians are bailing (albeit slowly) while others are just debate the issue and make threats that they cannot possibly make good on (Japan as a case in point). Meanwhile look for a good entry point to buy PMs at bargain prices as G7 approaches.

Snippit:

Feb. 5 (Bloomberg) -- The dollar declined against the euro in New York on speculation U.S. Treasury Secretary John Snow will resist European calls to counter the currency's slide when Group of Seven finance ministers gather tomorrow. Japan is preparing to combat a weaker dollar by selling more yen to stem the currency's appreciation, said Haruhiko Kuroda, an adviser to Prime Minister Junichiro Koizumi. Europe should do more to boost its economy and cut interest rates instead of seeking a stronger dollar, he said in an interview. ``We see plenty of reasons for continued dollar weakness,'' said Trevor Dinmore, a currency strategist at Deutsche Bank AG in London. ``Because of the event risk, you don't want to be adding'' dollars before the G-7 meeting, he said.

In a letter to Snow, the Coalition for a Sound Dollar, which represents U.S, manufacturers and labor unions, said the dollar is still ``not weak.'' Snow said on Tuesday, he supports ``flexibility'' in exchange rates, a phrase the G-7 used at their last meeting in September. ``It looks like the first thing traders will do next week is sell the dollar,'' said Xinyi Lu, chief strategist in Tokyo at UFJ Bank Ltd., a unit of Japan's fourth-biggest lender. Group of Seven finance ministers and central bankers meet on Friday and Saturday in Boca Raton, Florida, amid speculation they won't agree whether to or how to halt the U.S. currency's slide. The G-7 includes the U.S., Japan, Germany, France, Britain, Italy and Canada.

The dollar is down more than 8 percent against a basket of six currencies since September's G-7 meeting, which ended with a call for ``more flexibility'' in currency markets. Some traders interpreted the language as support of a weaker U.S. currency. ``The U.S. wants the current trend of the gradual decline in the dollar to continue as it is supporting the economy,'' said Tohru Sasaki, a currency strategist at J.P. Morgan Chase & Co. in Tokyo and a former Bank of Japan official. ``The U.S. doesn't want any statement'' reversing the dollar's drop. ``There is no way the G-7 will say the weakness in the dollar has gone too far,'' said Michael Jansen, a strategist in Sydney at National Australia Bank Ltd. ``The most important aspect of the G-7 is to get robust, or U.S.-centric global growth,'' which requires a weaker currency.


Black Blade: That about covers it. The USD must weaken just to gain some competitiveness.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=46677615&ID=cnniw≻ategory=Metals+%26+Minerals%3APrecious&
Snippit:

MOSCOW. Feb 4 (Interfax) - Commercial banks bought nearly all of the 174 tonnes of gold that Russia produced in 2003, the Gokhran or state precious metals repository said.
Just five banks - Sberbank, Vneshtorgbank, Nomos Bank, Rosbank and Alfa Bank - bought over 62% of the gold, Vladimir Rybkin, the repository's head, said in a report for the Gold 2004 conference in Moscow. Gokhran said the 174 tonnes, which is a tentative figure, included mine-production, incidental or by-product gold mined together with other, core minerals and gold recovered from scrap and was 1.5% higher than gold production in 2002. Rybkin said a total of 53 banks traded gold in 2003. He said the five banks named bought more than 62%, but that the first ten banks on his list bought 80% of the gold produced in Russia.

Black Blade: What? Russian banks buying gold instead of US dollars? Go figure. ;-)

To quote Black Blade in previous posting.....

"The USD must weaken just to gain some competitiveness."

This appears to be an impossible task.
#1-China's Yuan is fixed to the USD. No benefit there.
#2-Japan continues to sell Yen to buy US debt to make their currency weak and strenghten the Dollar.

China and Japan represent a bulk of the US imports and trade, so the rest of the world's nations do not have a deciding factor on the weakening of the USD. On a trade level that is.

The holding of US debt by foreign nations is Another impediment by design which does not allow the USD to weaken in relation to other currencies because of the loss of capital on the debt instruments held.

Now we read comments by a Mr. Haruhiko Kuroda that Europe should cut interest rates to stimulate growth rather than seeking a stronger USD. Can he not see that the Euro does not want to play that game?

And how about the 25 point interest rate hike in the UK today. Conformation of coalition breakdown.

Heed the words of Aristotle....Gold, Get you some.

Needles to say that I do, completely, agree with your msg #116607. With the "sound economy = intrinsically valuable currency"-thought...I just wanted to make it a bit more clear, WHY all these political-declarations (blablah) are utterly non-sense and radically in-consequent! Yep, the powers are entrenched ! The deeper they dig themselves in, the higher the probability of collapsing walls.

For instance : 13 consecutive $-IRs cuts, by the chef d'orchestre of the financial brotherhood...$ Trillions of debt-paper (bonds) that steadily-systematically, rose in price + the $ Trillions (notional) IRs-derivatives, as a gigantic dollar-supporting-machine, serving the colluders with profitable priviledges.

Yes, dearest PH/LA, they digged (entrenched) themselves and all bystanders in 45 yrs deep trenches. Now they have to find a way to climb out of these trenches with keeping those $-IRs low/stable...moderately rising. Hope that the contractive economic rains don't make these walls slippery and hoping that everybody keeps supporting the entrenching dollar, as they have been doing for so long. ECB,...Jean Claude, don't you dare to raise those �-IRs !!! OK, Tony, you can do it with your pound, because you have to stick to your �-neighbour...

And indeed, PH/LA, A/FOA seemed rather confident about his timing. But as you mentioned in the title of your posting, there is that "political will"-thing ! In the EU-parlement, the catholic fraction (coalition) is dominant !!! IMVHO, a possible link for further (relative) indirect dollar-support, based on flou, ideological (outdating) (political)ties. Old Friends...Trans-Atlantic allies, slowing down the formation/building of converging political will, reaching enough critical mass ? Let me call it the "Aznar" (Spain)factor !

Simplier : The old European continent "is" modernizing and leaving the West for what it is (was) and is turning to the East,...Far East. A dramatic change to swallow for the old garde (crocodiles), that silently agreed (agrees) on "crusades",..."axis of evil", etc...

This is a conflicting passage for the EU in its transitional period. Very difficult to *time* such a change in political spirits and minds ! Eurolanders going in space with...chinese !!!!????...oh boy ! Catholics living together with muslims,...Jesus ! And on top of all this, a euro that has the ambitions to challenge its old dollar-friend ! God...!

Does the above answers your implicite question on political will and timing ?

We "ALL" know bloody well "what" our problems, exactly are ! We know very well how dimple the "real" solutions are...but we simply refuse to implement them for nothing else than pure "POLITICAL" reasons. Plenty of academics are simply paid for keeping "analysing" things, ad nauseum. These academics are paid for NOT raising real solutions !

GOLD,...OIL,...CURRENCIES,...other things, are, have always been, political stuff !!!
Many,...most fortunes are made by those who are able to morphe into the ever existing political tissue. FreeGold will be the result of a political change and nothing else but political. This understanding might save a lot of gold-bugs from losses !?
(What's your view on this, Cobra(too) ?)

Remember the ship, it sails to a port but tacks on it's way. This was something that Another told us about. Remember Aznar maybe trying to pull the US public to realise "Another's" view. Lot's of Hispanic's in the US of A. And possibly they can come to thinking in the same line? Aznar may be pulling the ship in one direction but his, (or shall I say their) way of thinking is to move the people in the "right way". I always remember the speech from his (?) foreign sectretary in front of GWB, when he was over looking for support for the "Iraq exercise", she said we are concerned about the "Hispanic" people and would work towards there welfare first. She didn't mention a single word about Iraq. And Aznar was nowhere around. Go figure?
Let's face the fact's = EU has presence world wide via old colonial connections. We all want to work and trade on an equal trading field. agreement's between EU and all other organisations worldwide are already in existance. Alan and company can scream and shout and do what they want but the rest of the world want's to trade equally, and this is the driving point. (The world wants new reserve or trading vehicle, now)
Caution, for sure. Why are there 120,000 US of A troops stationed in Europe? They should be in Iraq, yes? The cold war was over in 91?
Our American friends need to ask the questions. Does AG and GWB want to play by the new rules or do they wish to "try" to drag the rest of us with them on this madness of "deflation/inflation/war/oil/gold conspiracy?". They are already losing and the longer this takes the more in control the rest of the world will be of what happens in the US of A.
Sorry no offence intended.

brings a smile
lasts more than a while
get you a pile

Looks like the boys, Spot and Spike, are frisky and chasing some shorties around the COMEX today. Grrrr, Go get em boys

Could this Friday, the opening day of the G7 Fiat Festival, be the occasion for a sneak attack by a cadre of well-heeled goldbugs? The $ sharply down, gold up, and the HUI strong finish yesterday in spite of a dismal day for gold? I like the concept and will cheer the troops. Perhaps they are an underground force secretly supported by some of the G7 members who wish to challenge $ hegenomy at a time that is most embarrassing for all to see. God speed and good luck!

Boilermaker

Gold up $8, DX down .75

http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

If you are considering investments in gold we invite you to request our freeintroductory information packet detailing the products and services offeredby USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and lookforward to working with you.

I remember seeing Rube Goldberg award winners for making simple tasks,i.e., pouring a cup of coffee, as incredibly complicated as possible. The world's CB's and fiat pushers have created the biggest Rube Goldberg machine of all time. Endless debate about this currency vs. that currency, whether to float this one or peg another, fretting about a "weak" dollar or a "strong" dollar. It is mind numbingly complicated yet all designed to conceal one truth. It is all dishonest money. The only question is the degree of dishonesty between the competing fiats. The approaching G-7 meeting is a bankster pow wow to decide the rate and velocity of their dishonesty. Gold could never win a Rube Goldberg award. It is the antithesis of complicated. It reveals fraud for all to see. As long as banksters exist The scheming and conniving against gold will also exist. They can talk all they want this weekend down at Florida. An 800 billion deficit can only mean one thing. The printing press must run full tilt. And fiat currency holders must lose. That doesn't require Rube Goldberg to figure out.

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

Breaking News!

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Gold Hits $410 in Fast and Furious Trading
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You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

DX has only hit its 50MA three times since Nov.

Currently 1.5 below MA and falling.

Got gold?

http://biz.yahoo.com/rb/040206/health_cigna_earns_6.htmlsnippit:

CHICAGO (Reuters) - U.S. health insurer Cigna Corp. (NYSE:CI - News) on Friday said it would cut about 9 percent of its work force after its membership ranks dropped sharply in the fourth quarter, sending its shares tumbling.

Cigna, struggling to recover after failing to price premiums in line with skyrocketing medical costs in recent years, posted a fourth-quarter net profit but also said it would slash its quarterly dividend.

Cigna hopes to trim $300 million in operating expenses this year, but Chief Executive Edward Hanway said the company is working in an increasingly challenging market. Hanway said he could not rule out more job cuts and enrollment losses.

The company will cut the dividend to $0.025 per share from the current $0.33 although the higher figure will still be paid in April.

Goldilox:

Now there's a dividend haircut!

Disappointing labor statistics and the dollar currency + its antipode, Gold, move dramatically in a matter of minutes.
That's the incredible force of the "colossal" derivative business. This "complete" financial-paper-circus, paper-gold included, is hedged (virtually derivative protected) from top to bottom.

It "must" be very clear by now, that one day, somebody, somewhere, is going to crash, part or the whole, dollar-derivative-business for the only reason that this dollar-supportive circus is NOT sustainable.

Soon, all hedging functions are going to become "discredited" ! Price-inflation will come knocking on the door when all those $-paper-prices ran out of derivative-led, control. Today's action is Another nice and clear example-rehersal of what will happen on a much bigger scale.

Isn't Boca Raton commonly referred to as the "maggot mile" for all its shady business inhabitants? Couldn't think of a better place to have a bankster summit.

@ Belgian. Think you have brought up a few intriguing points and so has PH in LA. Thank you both for your input.

My take on one issue is quite similar to Belgian's. In particular that Europe is looking across Russia to the evolving Far East. In the long run Russia will be becoming a natural partner, as it already is supplying nat. gas, oil, pipelines (via Poland) and other resources to the EU - as the EU is not dependent on the Turk's Ceyhan oil facilities. Ceyhan may be predominantly in the interest of the US to have an alternate route to the ME and Caspian Region Oil; That is if any other "pipeline" alternate to a warm water facility as the Hormuz Straights become politically blocked ... see Afghanistan, Chechnia et al, though I also feel that the Kurd question will eventually make Ceyhan as inaccessible.

Tough decisions ahead and noone to decide. As the US is slowly sliding into political stalemate with the elections looming ever larger, the twin deficits and the overall indebtness of the system becoming unmanageable - and the rest of the world is aware of the dollar malaise - it won't be a far cry by the captain of the Titanic to declare "from here on all men for themselves" ... SOS.

... As I intend to go skiing for a week and am just tydiing up some loose edns, please forgive my brief answer.

Will try better after a relaxing vacation - so long and stay the course, my friends - regards to all of you cb2

Looks as if I gave SPIKE tooooooo much Roo meat this morning !
WAIT for SPOT to catch up, SPIKE.
<;-)

In regards to your thoughts from yesterday (116619), can I agree? The concept of holding physical metal as reserves implies, does it not, that enough metal exists to "back" the paper which is necessary for an efficient functioning monetary system. Was not the limited quantity of gold one factor, restraining excessive deficit spending, that caused Nixon to close the gold window? Lips, in "Gold Wars" opines that deficit spending was necessary to (unfortunately) prolong World War 1. He believes a monetary system based on a gold standard would have ended the war in a very short time simply because the funds would not have existed to prolong it.

Silver's modern uses are almost all industrial in nature. However, I tend to believe that any precious metals or gemstones still serve as a convenient storage vehicle for wealth. Perhaps this is so as the majority of people believe it so. This begs the question of what constitutes truth which is my cue to end this babbling.

I see some volatility this morning as silver spiked up to $6.49 in a heartbeat, then retracted. Gold was also frisky. Is all this related to the poor jobs report? How much of this is temporary market noise as opposed to a well founded, fundamentally supported trend? Never a dull moment!
Rich

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLTB[PA][DA][F!3!!]⪯f=GLater today this GOLD P&F Chart at the above LINK will be showing a NEW little Green "X" ROCKET to the MOON !
<;-)

http://www.financialsense.com/editorials/schmidt/2004/0205.htmlsnippit:

HEADLINE from 2013:
FEDERAL RESERVE ADMITS POLICY ERROR
Washington: In a historic press conference today the Board of Governors of the Federal Reserve System released a statement admitting to a policy error. Observers noted that what made the event newsworthy was not that the Fed made an error. Rather, what was special about the announcement was that the admission that they made a policy error. An analyst for a world renowned think tank commented, "Once in a hundred years is a good start."

Perhaps the most incredible speech of this century to date is that of the Chairman of the Federal Reserve System to the American Economic Association on the 3rd day of January. This group may be the one most appropriate for a speech attempting to validate inept policy formulation. In that speech Greenspan said,

"It is far from obvious that bubbles, even if identified early, can be preempted at lower cost than a substantial economic contraction and possible financial destabilization � the very outcomes we would be seeking to avoid. ... The notion that a well-timed incremental tightening could have been calibrated to prevent the late 1990s bubble while preserving economic stability is almost surely an illusion." (www.federalreserve.gov/boarddocs/speeches/ 2004)

The above comments say essentially that the economic costs of preventing the stock market bubble would have been greater than the costs experienced by the popping of the bubble. Reaching such a conclusion is difficult, and a sign of dubious thinking. We are being told that preventing the bubble would have cost investors more than the trillions of dollars that were lost. In short, the Chairman concludes that investors are better off with the popping of the stock market bubble and the trillions of dollars of losses they have experienced.

Goldilox:

An in-depth analysis of Sir AG's latest bubble stance. Good reading from FSO once again.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10I like this one better. The $ drop takes up the whole page!

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1Go go gadget gold chart!

"BOCA RATON". Hmmmmm...let's see that's

"MOUSE MOUTH" in Spanish. Mousey characters in Mouse Mouth.

Seems right...

The GAB

@ GAB

Are you sure that's not "RAT MOUTH"?

..."While Greenspan likes a gold cover clause to protect against deflation, maybe he likes housing more. A housing cover clause? Might work for a good little while. Besides, we need to bail Fannie Mae out of its derivatives positions at some point before interest rates are allowed to rise. So where will this end up? At that point where the Fed buys sufficient mortgage backed instruments so that the directional interest rate derivatives position in these instruments is unwound or netted out.

So the squillion dollar question is what is this point? Does the Fed have the power to pull this off? Will the new gold standard be housing? Or will Mr. Market intervene and cause interest rates to run away from the Fed before they net out the one-way bets in the other direction? It seems unlikely that the world will accept a housing-backed dollar. At least right up front and at current prices. Exorbitant prices relative to much of the rest of the world."
I wonder....Maybe the world WILL. the BIS report did say that EU central bankers had not decreased thier investment in the us, but switched it from equities to fannie mae. In 20002/early 03.

RATA=Rat

RATON=Mouse.

The GAB

http://www.bls.gov/news.release/empsit.t12.htmGetting Jobbed

Well the jobs report came out again, and it was truly the same old same old.

Payrolls increased by 112k, too little to cover the requirement of 150k just to cover population growth.

More jobs lost in manufacturing, and the retail/services sector lead in the gains. Construction remains strong, you can't as yet buy a house built in China and ship it here.

Weekly hourly wages barely budged up .1%, next to nothing, but average weekly earnings rose by 0.7 percent in January to $522.01. Longer work week for those on the job. This .07 increase is usually a tip off for the CPI rate coming up this month. I expect a BIG BUMP in the CPI.

The wall street stocks loved the news, as long as labor is depressed, encased in debt prisons, they have the upper hand, and they can't be squeezed by rising rates or wages.

Gold loves it too, the dollar is being trashed on the news as well.

On final point - look at the link. The real rate of unemployment is 11% when you count it the same way as the Europeans do, that is everyone who is marginally employed or wants a job but hasn't searched lately because they have given up hope of finding a job.

Our old friend "up $6" is putting up quite the resistance. Breaking through $405 again towards the close could put the "smack" on containment specialists.

http://www.urbansurvival.com/week.htm
Let's see if we follow the the Whopper, shall we? If you believe the administration, there were 112,000 new jobs created in January. Now, this is pretty interesting because a lot of spoon-feeders (pseudo-economists) didn't even question the rise in construction jobs when the weather was some of the worst in recent memory - and the retail jobs increase looked suspicious because there was virtually no hiring at Christmas. The "cleansed" version of the story is being found on places like:

http://ap.tbo.com/ap/breaking/MGAYRU2CCQD.html.

But hole on a minute. Without even commenting on Democrats pointing out that 90,000 people per week are falling off the government's nose count, let's look at the OFFICIAL numbers contained in the Alternative Measures of Unemployment table at

http://www.bls.gov/news.release/empsit.t12.htm

which shows that unemployment this year is 10.9% - statistically a dead heat with last January's 11% reading. Within margins of error.

Want a simple prediction? Look for the BLS to come under heavy-handed pressure from the Bushocrats who obviusly don't want numbers like this 10.9% measurement getting out to the public. How do they fix it? A couple of ways: 1) Don't be surprised if we don't see some personnel changes at BLS and 2) don't be resurprised if between now and election day we don't see somne sudden "revisions" of the "alternatrive measures" table to spruce up the numbers so they will look a little prettier than the crap coming in now.

Of course that won't change anything, and worse, Kerry is just another Yale secret club crony wrapped up in new marketing gear, but regardless of who leads in the polls, the BLS numbers are pointing at the emperor's clothing...

Collapsing Walbucks

We've noticed an interesting trend - one that is very interesting indeed: As the U.S. gets hit with a tough economic assault, it's usually preceded by a massive attack on gold. Well, with gold recently under $400 an ounce, but snapping up $7.00+ today, we notice that the jobs numbers have not helped the falling U.S. dollar.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982326577&p=1012571727088

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982358153&p=1012571727207snippit:

Dip in gold price viewed in positive light
By Gordon Smith

Analysts saw the fall in the gold price this week to its lowest level in two months as a useful correction rather than the start of a long-term decline.

Analysts at JP Morgan viewed the fall below $400 an ounce at the beginning of the week as a positive development. "We are now looking for confirmation that a base is developing for a run back through $415."

"The US has voiced its desire for flexibility and for growth to offset the effects of the weaker dollar," said Alan Williamson, precious metals analyst at HSBC. "We forecast a euro-dollar rate of $1.35 by the third quarter then stabilising for the rest of the year, and a gold price of $440 by the year-end."

Goldilox:

Buyers exiting the woodwork?

http://www.usagold.com/Order_Form.html

http://www.usagold-jewelry.com/

Valentine's Day -- February 14th!
 

FOUR online shopping days and counting down...

place your jewelry order for timely Valentine's Day hugs and kisses

Just for the record, Goldilox is not fond of the opinion that this Jobs report is "not too high, not too low" as is being touted by media shills (or is it shrills), except for the one reporter who remarked that it might be an indication that the report is a fairy tale.

However, since Gold and miners are reacting well, I'll let it pass. Miners are continuing up after the Comix close, suggesting that Monday may hold more of the same directional movement, unless GreenSpam and SnowJob can spook the metals markets with their inane witticisms over the weekend.

http://members.aol.com/makfritz/ficgold.htmHo Lox, You're gettin famous. Doin wheelies past the local police station wasn't enough. Now you've screwed up a whole planet! We goldbugs must have higher standards.

Many thanks for your contributions to the forum and try to stay out of jail. ;>)

TGIF!

Boilermaker

snippit:

By Steve Kerch, CBS.MarketWatch.com
Last Update: 3:58 PM ET Feb. 4, 2004

CHICAGO (CBS.MW) -- Despite a drop in the rate of mortgage refinancing in the fourth quarter, a greater percentage of those who obtained a new home loan opted to take cash out of their property, Freddie Mac said Wednesday.

The mortgage agency said 45 percent of Freddie Mac-owned loans that were refinanced in the last quarter of 2003 resulted in new mortgages at least five percent higher in amount than the original mortgages, the threshold for a loan to be considered a cash-out refinance.

In the third quarter of 2003, just 34 percent of refinanced loans had higher new loan amounts. A year ago, when fixed- rate mortgages were still falling, 40 percent of refinanced loans were for cash out, but the number of loans being refinanced was considerably higher, according to Freddie Mac's quarterly refinancing survey.

"The atmosphere around refinancing changed in the fourth quarter as mortgage rates started rising from the 45-year lows of the summer. Since most of those who could refinance for lower rates have already done so, the later-year market became more attractive primarily to those who want or need to take equity out of their homes," said Amy Crews Cutts, Freddie Mac deputy chief economist.

Cutts said homeowners were using the money to purchase big-ticket durable goods, fund home improvements and pay off more-expensive consumer debt. Refinancing contributed significantly to the more than $100 billion spent on home renovations and additions in 2003, she said.

With home prices rising at a good clip in most parts of the country, homeowners figured to have plenty of equity to tap. Overall, Americans now hold a record $7.9 trillion in home equity.

Goldilox:

Spend, spend, spend, borrow borrow, borrow! Good luck!

The gold share action today suggests some shorts were taken off the table. Do you think that some big players know something about gold's near term future? How could that be happening in a free market where no one is an "insider". I guess I'll just sit back and watch the action next week. My bets are in place and I'm ready for some ACTION!!!

"With home prices rising at a good clip in most parts of the country, homeowners figured to have plenty of equity to tap. Overall, Americans now hold a record $7.9 trillion in home equity".

That equity is like our belief in Santa Claus. It will disappear with the hard reality of learning the truth.

In the meantime, Party On!
I'll have a Genny Cream Ale please. No Yuppie brews for this old boilermaker.

....from Cairo...life here has been extremely interesting the past few weeks - from visiting the geological and historical wonder of Petra, Jordon to diving in the Red Sea and climbing Mt. Sinai by the full moon to watch the desert sunrise from the peaks. The Egyptians are very friendly and there have been no problems at all but I have been staying and traveling with friends who speak Arabic and that of course makes a big difference. I must say that viewing the 14 pounds of Gold in King Tut's mask was rather impressive - the Egyptian history as portrayed in the museums, pyramids, etc. is breathtaking. Anyway, just a quick hello and a happy weekend to all! Cheers,
Waverider

http://biz.yahoo.com/djus/040206/1748000930_1.htmlHere's a new incentive for going on the bonepile or whacking your partner;

"Debt cancellation clauses, also known as debt suspension agreements, allow borrowers to pay extra for the understanding that their loan will be forgiven or suspended if certain events take place, such as a death or job loss. In some cases, the agreements have drawn fire from consumer groups for being prone to abuse."

Get out of debt free. Monopoly game for free spenders.

Thank you for your replies to my quaere.

Waverider,
Thanks for the "hello" from Cairo and its good to hear you're in good company and having a good time. But please do not stay too much longer because there has been a serious attack on the remnant of goldbugs left to defend the castle. We are in need of your council, leadership and valour to win the day in the next battle. Perhaps you can recruit some Egyptians to support our cause!

Safe journey,

Boilermaker

I was doing a little catching up and had to cringe a bit when I saw you post the following bit:


"""""""the pronouncements of the "Moron in Chief" become more and more divorced from reality as we know it. (See: above link ) "George W. Bush pledged Monday that, if re-elected in November, he and running mate Dick Cheney will "restore honor and dignity to the White House." Yeah, and where have "honor and dignity" been for the last three years? This is the same clown that claims to have fought a war in Iraq to bring access to "free" markets."""""""


My good Sir, do you not know the nature of the "news source" you cited in your link? The Onion is the next best thing to Saturday Night Live. It's purely saterical, for entertainment purposes only. Didn't the warning -- "The Onion� is not intended for readers under 18 years of age." -- at the bottom of the pages tip you off? If you research the Onion's site further, you'll discover the following information:

"The Onion is a satirical weekly publication published 47 times a year on Thursdays. [...] The Onion uses invented names in all its stories, except in cases where public figures are being satirized. Any other use of real names is accidental and coincidental."

After that demonstration of missing the point, I'm more than inclined to think you could benefit from a relook at Another's and FOA's writings, especially because of this. No serious student of FOA would ever write, as you did:
"If there was, someone (George Soros, or Sir Douglas or any sovereign government?) would simply stand for delivery of a few hundred (or thousand) futures contracts and the whole house of cards would simply fold. [...] Of course, any actual metal realized by such a manuever could be used to set up the "freegold" market that Sir Douglas postulated."

To explain why they *wouldn't* do this would be to reiterate the whole Gold Trail.

I want to be extra clear on this, The Onion is not to be taken seriously, except as entertainment. On the other hand, the writings of FOA are to be taken very seriously, studied as if your financial well-being depended on the strength of your growing comprehension of their commentaries.

Best wishes on a great undertaking for the weekend.

Gold. Get you some. --- Ari

@ Ari- The Onion is definitely a satirical publication, but the text of Dubya's "speech" was authentic - from a recent delivery, as I saw excerpts today on CNBC. Only the reactions were proprietary. I also agree that no one is going to "stand for delivery" against the Cabal. Even GG's large stash of gold was inconsequential beyond battering the stock price for management's stupidity. Japanica and Chinica are the only entities large enough to radically change the monetary imbalances, and it is not in their interest to do so.

Thanks for updating the P+F chart with some nice colorful green. One of the best technical analysts I know is now calling for $470. He uses a large combination of indicators but mainly candlesticks.
Hello to Waverider in Eygpt.
Happy weekend to everyone, everywhere!
Rich

First worst idea: allow foreign interests access to the 30 yr bond market...

second worst idea: allow foreign interests access to fannie and freddie...sold out again.

All those trillions in mortgage payments now going to benefit the foreign masters of our politicians.

Wasn't there some verbage somewhere that the reason we are in a continual state of national emergency allowing the preponderance of executive priv...oops I mean orders was that the nation has been effectively bankrupt (to which creditors?) for what seems like the last 100 yrs.

Well now how was this debt to be settled....

well how about lets figure out a way to allow the foreign masters to actually own all of America...we'll ramp up incentives to borrowing with the multidecade inflationary scenario that creats the illusion that investment in real estate is a no brainer slam dunk, then drop returns on bank interest to ridiculousity so people look elsewhere to accellerate monetary velocity...then allow banks to extend ridiculous amounts of credit on home equity...then...

pull the rug out from under the whole thing forcing massive foreclosure. New owners? Who owns Fannie mae?

The previous posting was issued in a state of utter exasperation and lament for this great nation of ours and how the masses are so easily hoodwinked by slick talkers and the wonderful wizard of the emerald city ($-land).

My very dear Aristotle:

Thank you for extremely well-informed/probably well-intentioned and certainly diligent effort at scholarly research expended in reading the fine print over at the Onion satire site. I am also grateful to Goldilox for reporting having heard the Chief Moron's "speech" on CNBC, saving me the trouble of digging up more absurdities from the mouthes of the (temporarily) reigning crowd in Washington to demonstrate my contention that the color of the sky in Moron's universe is very different from the sky in mine. Please rest assured, however, that such a task would in no way be difficult.

As per your (as usual) supremely egotistical admonishment that I review the writings over at The Trail, which you purportedly find necessary to suggest based on your (now disproved/misguided) scholarship over at The Onion, let me point out that I was working from memory on Another's words... something that I did mention in my post. I do not pretend to be a scholar on Another's writings (nor indeed on any other guru's work) preferring to study and comment on reality as I see it, through my own eyes. In any case, your leap of logic in suggesting that because my source for The Moron's words was suspect (in your eyes), my recollection of Another's words must also be suspect, is far more suspect than my own for choosing The Onion as a source of quotation... an oversight for which I, nevertheless, humbly beg your august forgiveness.

On the subject of "Standing for Delivery on Futures Contracts", I was actually thinking more of the future's market in silver more than gold, which I admittedly may have failed to mention in my post. You see, my dearest Aristotle, (according to Ted Butler, et al), worldwide supplies of silver do not appear to exist in sufficient quantity for the futures market to supply such an action. (Of course, I'm sure you already knew that.) At the same time, we all know that "central banks around the world stand ready to lease metal in sufficient quantity... blah blah..." which for the time being still seems to provide underlying support for the manipulation of the gold market.

Nevertheless, as is its wont, your acerbic tongue has outrun itself, a rude habit that I am willing to pardon and for which I assure you I take no offense. Hope you have a happy weekend.

Manners. Get you some!

Greetings PH in LA, the onion piece is a lie. Or, humor if you like. But fiction. When GB was running for pres, folks tried to say Quail quotes were from G Bush. Onion is not an actual news source you know! They make up stuff they think is funny.

http://www.prudentbear.com/snippit:

Global Reflation Watch:

February 4 � Bloomberg (Petter Narvestad): "Knightsbridge Tankers Ltd. and other owners of the largest oil tankers are collecting as much as 50 percent more than break-even on multiyear contracts as spot-market rates surge close to 30- year highs." "Freight rates for dry-bulk cargoes such as iron ore and coal are at a record after rising in January for the ninth month in 12 as an expanding Chinese economy boosts demand for raw materials and port delays tie up ships. The Baltic Dry Index, a measure of the price paid for shipping dry-bulk goods, climbed for a seventh session today to 5,681 points. The index, which gained 17 percent in January, has more than tripled in the past year as demand outpaced growth in the world's bulker fleet. �We are seeing close to a 100 percent utilization in the dry bulk market,� said Nicolai Hansteen, an analyst at Oslo- based shipbroker Lorentzen & Stemoco� �It's made rates go through the roof and the situation may last into the second half of this year.�"

Goldilox: @ $ Bill:

Check it out. Shipping costs keep rising, and demand keeps adding to delays. No end to this inflation "stimulus".

Sir, stick to the forum rules and spew your political venom elsewhere. I don"t come to this forum to hear such trash. White Hills

snippit:

February 5 � American Banker (Erick Bergquist): "Home appraisers are usually selected and paid by commissioned loan officers and mortgage brokers, who have an incentive to close as many loans as possible for the highest amount possible. So it is almost inevitable that some appraisers would complain about pressure from originators to overstate property values. But several appraisers interviewed by American Banker said such pressure intensified during the refinancing boom of the last three years. As more consumers sought to take equity out of their homes, the appraisers say, loan officers and mortgage brokers increasingly leaned on them to come through with values high enough to make cash-out refis worthwhile. If the appraisers held their ground, they said, they lost business to others who did not. The perception appears to be held by appraisers nationwide� Of the 500 appraisers October Research Corp. surveyed last year, 55% said they felt pressure to overstate home values�"

January 28 � United Press International: "At the current median price of $560,240 for a Bay Area home, California's housing costs seem to have gone through the roof. At that rate, one would need an annual household income of at least $124,000 to buy an average home, says KPIX-TV, quoting California Budget Project, an advocacy organization for low and middle-income groups. The group says the state's affordable housing crisis is now on an emergency footing. The group says the qualifying income of $124,000 is about $47,000 higher than the average income of an Oakland household, and $32,000 higher than the average income of a San Francisco household. The organization says home prices continue to rise much faster than incomes, keeping many potential buyers in rental housing."

February 6 - Sierra Sun (Truckee, CA � Alisha Wyman): "It's a modest home -

one story, 1,400 square feet, located in Tahoe Donner. Six years ago, it sold for $164,000. Today, it's listed for $450,000. The difference between the prices alone is enough to buy a house in most markets� According to the Truckee Affordable Housing Land Use Evaluation Study conducted by Bay Area Economics, a four-member family with an income of $70,800 could afford a home for $234,692. The medium cost for a home in Truckee is $383,000."

Goldilox:

Wow! Truckee? I can vouch for the prices from 6 years ago. I moved into the Storey County side of Reno side in 1996, and purchased an 1850 sq foot modern Alpine on 1.5 acres for $162K. Unfortunately, I sold it in 1999 for $175K - Boo Hoo. But I made up on this side, as my San Diego property netted me a bunch in four years.

Henri, you asked "Well now how was this debt to be settled...."

I say, this explains the move to legalize the illegal aliens! After their numbers reach a critical mass, we tell them about the debt they "inherited".

In this age of political candidates promising anything and everything in exchange for a vote, it doesn't seem too far fetched to imagine someone running on a platform of "vote for me and my first order of business, as President, will be to renege on YOUR debt." (Perhaps followed by a Dean scream for added effect.)

Seriously, and unfortunately, it's no secret that the debt is a political hot potato that each and EVERY administration passes on to the next because they don't have the integrity to do what needs to be done. Just ask Paul O�Neil.

The sad fact of the matter is that it's our children who will inherit the multi-trillion dollar burden dumped on them by past and present Administrations and Congressmen, Republican and Democrat alike, who, without regard for the consequences have perfected the act of borrowing and spending into an art form.

This is not to be unexpected when the leadership of a country worships at the alter of the almighty vote. And once the voter discovers their ability to acquire the largesse of the state for themselves in exchange for their vote, the downward spiral begins.

javaman

BTW Henri, I happend across a couple of your posts I saved from 2000 - 2001 with subjects of:
Message in a Bottle, and
The Joy of "Giving" and learning how to "Receive" as well. They're real Gold and I'm glad I saved 'em.

Greetings Sir Goldilox!
I suppose even national enquirer gets some parts of its stories correct, although who knows how much or how important context might be. I think I like finance partly because is is not listening to politicians, or thier supporters or enemies. Following the money is more fun.

Now, Bill, my post was from Bloomberg and Prudent Bear, as linked. (:^)

Are we all still fuming about the Onion farce? It was even better than National Harpoon.

OK, Everyone take a deep breath and SMILE! It's time to relax.

I don't know about y'all, but I made some dough today, so no BS is gettin' my dander in a tizzy! - I was gonna say it different, but wardrobe malfunctions are off limits on Michael P's watch, if'n ya get my drift.

Ag - UP
Au - UP
Miners - UP
DOW - UP
My mood - WAY UP

Say, who's chilling the Negro Modelo while WR is off puttering around in the pyramids? Pop me one of them bad boyz, eh?

Goldilox, Just got back from your link and brought this back. I reread yesterday and posted before I caught up with todays second half postings. Just got back from your link and brought this back.
"..To wit, if we do get more inflation, it doesn't actually reduce the average person's debt load unless we also
get wage inflation. If debtors don't start earning more of those "worthless" dollars, their debt burden remains unchanged. It seems likely the debt burden would actually worsen under higher inflation since the costs of food, energy, health care, insurance, etc., which have already been increasing while wages stagnated would accelerate further. There is widespread concern Asian central banks (China, Japan, Hong Kong, Taiwan, Korea,...) might soon stop buying US Treasury bonds. To point out one more point missing from rate-hike discussion, stop and think about why GM or Ford decides to build and sell a car for
effectively a zero net profit. It is in large part because even just breaking even is better than the guaranteed losses they suffer from the cost of idling workers and factories. They are deciding to losing money a little at a time, slowly, rather than lose a lot, quickly.
This is similar to the dilemma faced by the Asian governments and central banks. Even if the dollars they receive in payment become "worth less," this loss is slower than putting thousands and thousands of their citizens out of work. Barring a dollar collapse, the loss will
be smaller also."

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982323966&p=1012571727304snippit:

BMW, the German carmaker, has warned of tough conditions in the North American luxury vehicle market this year as an increasing number of products compete for sales in a gradually improving US economy.

Tom Purves, chairman and chief executive of BMW North America, said he was optimistic that the luxury vehicle business would grow due to a stronger US economy. He also said that BMW would benefit from the introduction of two new models for the US one of which, the X3 sport utility vehicle, goes on sale on Friday.

Goldilox:

NO scat, Sherlock! Since I have been involuntarily "self-employed" since 2002, my 2000 BMW is gonna have to PROVE itself with some longevity!

"Chrome don't get you home, by a boxer twin will bring me in!" Actually, at 20K miles, she's just gettin' broke in right! VROOOM!

Has anyone seen any news from the FIAT-FEST down in MouseMouth? Are they still drinkin' and fishin', or is there real work going on there, as well?

http://www.usatoday.com/money/world/2004-02-05-g7_x.htmSnip.

WASHINGTON � Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow host a meeting this weekend with their counterparts from around the globe at a time when the world economy is recovering solidly.
But the long-awaited good news is expected to be overshadowed at the Group of Seven meeting in Boca Raton, Fla., by growing concern about the declining value of the dollar. (Related chart: Currency per U.S. dollar)

Officials from some nations in the G7 � which includes the USA, Japan, Germany, Britain, France, Canada and Italy � worry the dollar's decline will sap strength from their economies.

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

Druid: A few hours prior to the meeting.

http://www.jsmineset.comsnippit:

The cash to asset ratio of US mutual funds hit a low in December �03 that is comparable to another recent month in our market history, although the double dip does seem like an echo of another famous bear market.

Goldilox: the posted graphic is very convincing. Check it out! By the way, the VIN and VIX found new lows today. Complacency is pervasive.

http://straitstimes.asia1.com.sg/topstories/story/0,4386,233897,00.html
Snip.

FOR the first time, finance ministers from the powerful Group of Seven (G7) major industrialised countries will hold their annual meeting in Singapore in September 2006.

The G7 consists of the United States, Britain, Canada, France, Germany, Italy and Japan.

Advertisement

The widely-watched meeting is to be held in Singapore because the G7 ministers will already be gathered here in 2006 for one of the biggest events on the international calendar.

That is the prestigious two-day International Monetary Fund (IMF) and World Bank Group annual meetings. Singapore's hosting of those events was announced in 2002.

News that the G7 meeting would be held here was disclosed by co-chairman of the Singapore 2006 Planning Committee Goh Chye Boon to reporters at a cocktail function last night organised by the Monetary Authority of Singapore for the finance industry.

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

Druid: There's nothing like long term planning.

@ Druid - just kidding. I know those cuts and pastes can be confusing.

Snip.

BOCA RATON, Fla (Reuters) - European finance chiefs will urge Group of Seven counterparts meeting in a Florida resort this weekend to craft a clear statement on currencies to prevent the U.S. dollar's dive from accelerating and crippling euro zone exporters.

With the United States showing no concern about the pain the dollar's dive could cause the euro zone, European ministers said they also want to press the United States to help by cutting its record budget deficit.

Speaking in Washington en route to the G7 gathering, French Finance Minister Francis Mer said the group's last message on sensitive foreign exchange issues needed clarification.

Mer told reporters currency markets had not understood the full message in the statement that followed September's G7 meeting in Dubai urging large economies to adopt more flexible currency policies.

"We will try to do the maximum together to state that the wording of Dubai does not satisfy anyone and try to hatch a wording or expression that satisfies all of us," Mer said.

A G7 government source said European delegates believed a further euro surge would "constitute a problem." But he said dollar weakness was being driven by huge U.S. budget and trade deficits and Washington needed to tackle these

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

Druid: This is a more recent.

http://www.forbes.com/markets/newswire/2004/02/06/rtr1249829.html

Druid: Should read "This is a more recent article".

http://www.forbes.com/home_europe/newswire/2004/02/06/rtr1249589.htmlSnip.

BOCA RATON, Fla (Reuters) - France urged world financial leaders meeting in a Florida resort Friday to issue a clear statement to calm volatile currency markets which has pushed the euro to record highs, hitting European exports.

Speaking in Washington en route to a gathering of finance ministers and central bankers from the Group of Seven richest nations, French Finance Minister Francis Mer said the group's last statement on sensitive foreign exchange issues needed clarification.

Mer told reporters currency markets had not understood the full message in the statement that followed September's G7 meeting in Dubai that urged large countries and economic areas to adopt more flexible currency policies.

"We will try to do the maximum together to state that the wording of Dubai does not satisfy anyone and try to hatch a wording or expression that satisfies all of us," Mer said.

European governments have fretted for months that the euro is rising too steeply against the dollar, which skidded to record lows against the single European currency last month and risks stifling the euro zone's export-led economic recovery.

Euro-zone officials have repeatedly argued that the Dubai statement on more currency flexibility was aimed primarily at Asian countries, particularly emerging economic giant China, which use currency pegs or heavy intervention to keep their currencies weak and their exporters competitive.

***********************************************************8

Druid: Well Duh, I missed "WRAPUP 1".

http://www.bloomberg.comSorry for the shortened link; it's the best my computer can bring up. Here's a different spin on what's happening:
U.S. Tries to Focus on Growth, Not Dollar, in G-7's Last Day Feb. 7 (Bloomberg) -Excerpts:
"The Group of Seven industrial nations entered its main day of talks in Florida split about whether to focus discussions on the falling dollar or underperforming world economy. As French Finance Minister Francis Mer and Germany's Hans Eichel lobby counterparts to condemn the euro's 17 percent rise against the dollar in the past year, they face resistance from U.S. Treasury Secretary John Snow, whose economy is benefiting from the dollar's drop. The host wants the G-7's priority to be finding solutions to ``anemic�� global growth.
``Not everyone can come away a winner,�� said Nancy Roman, the president of investment consultancy the G-7 Group in Washington and soon to be a vice president at the Council on Foreign Relations. ``On the currency agenda, someone is going to come away unhappy.��"

"Finance ministers of the 12 euro nations signed a joint statement condemning ``excessive volatility�� in currency markets at a meeting in Brussels last months. Since then, officials from Germany and France have suggested they would like to see similar language in the statement the G-7 will publish later today."

"``The number one issue this weekend is continuing the process to create global growth,�� said U.S. Treasury spokesman Rob Nichols."

"``Growth is the key to every economic problem we confront,�� Snow testified. ``That�s why we urge other countries to institute pro-growth policies. It�s good for them and it�s good for the global economy that we are a significant part of.��
`We Are Interdependent�
European officials take a different view. Pointing to a growing budget deficit in the U.S., which has been inflated by tax cuts and rising spending, Mer said yesterday that the world's biggest economies should think about the consequences of their policies on other economies. ``We are all interdependent,�� Mer said, urging the U.S. to reduce its budget gap. ``Nobody can even temporarily think that the way of solving their problems won�t affect others, and in turn them again.�� The concern that America is living beyond its means has been one of the main reasons for investors to sell dollars over the past two years."

http://www.upi.com/view.cfm?StoryID=20040206-065531-3997rSnip.

COLOGNE, Germany, Feb. 6 (UPI) -- German Chancellor Gerhard Schroeder�s sudden resignation as leader of the Social Democratic Party Friday came as a surprise even to many senior SPD members. In his announcement, the chancellor said he wanted to be free of the burden of also running party affairs in order to concentrate his energies on the government�s recently launched program of economic and social reforms.

The opposition, predictably, was quick to interpret Schroeder�s latest move as a sign of desperation. Christian Democrat party leader Edmund Stoiber called on the chancellor to resign, and to make way for new elections.

But to some observers it looked like a shrewd political tactic. After a long period of indecision, of fits and starts, Schroeder may at last be coming to grips with the political reality that there is no escape from forcing the Germans to swallow some very strong medicine. By resigning as party leader, these observers say, Schroeder is sending the message that he is serious about the reforms.

If so, it is going to take all the chancellor�s reputed public relations skills to sell the targeted cutbacks in social benefits and services to a dismayed and indignant German public.

A drastic streamlining of the legendary but extremely costly social "net" that takes care of every German from birth to the grave is crucial to the country�s economic recovery. And while it is true that the German economy is showing some signs of improvement, the reforms continue to be necessary.

Schroeder�s decision came at a time when his reform program was losing steam. For example, the introduction of fees for health services were being undermined by an increasing list of exemptions from paying them. At the same time, the cost of an ageing society continues to increase faster than the pay-as-you-go pensions system.
************************************************************

Druid: We're entering the late innings and he needs to focus his attention on more pressing matters.

Snip.

"``Growth is the key to every economic problem we confront,�� Snow testified. ``That�s why we urge other countries to institute pro-growth policies. It�s good for them and it�s good for the global economy that we are a significant part of.��
`We Are Interdependent�
European officials take a different view. Pointing to a growing budget deficit in the U.S., which has been inflated by tax cuts and rising spending, Mer said yesterday that the world's biggest economies should think about the consequences of their policies on other economies. ``We are all interdependent,�� Mer said, urging the U.S. to reduce its budget gap. ``Nobody can even temporarily think that the way of solving their problems won�t affect others, and in turn them again.�� The concern that America is living beyond its means has been one of the main reasons for investors to sell dollars over the past two years."
***********************************************************

Druid: Mikal thanks. It's amazing how these same social engineers who created this "interdependency" can now complain about it. Well, Frankenstien is loose so now deal with it. On a side note, how about that Lou Dobbs? I caught about 5 minutes of his program today and he almost sounded like he cared for Joe Sixpack and Sally SUV. What's he selling???

http://www.plata.com.mx/plata/plata/comHSP45a.htmSnip.

Mexico's Central Bank, the Banco de Mexico, has ample reserves of some $50 billion U.S. dollars. Indeed, President Vicente Fox of Mexico declared some months ago, that "we really don't know what to do with them, they are so large." Using a small part of these reserves, the Banco de Mexico could purchase silver for coining "Libertad" pure silver ounces.

These coins could be placed into circulation as legal tender money, with a floating value which would be quoted daily by the Banco de Mexico. The floating value would be determined by taking the international price of silver, presently quoted in dollars, multiplying this price by the exchange rate of the Mexican peso for dollars, and adding on a small percentage of seignorage for the Banco de Mexico. This would be the legal tender value for the one ounce, no nominal (engraved) value, pure silver "Libertad" coin.

Banco de Mexico could put these into circulation, by exactly the same means which it presently uses to put bills and coins into circulation. (In 2002, the Banco de Mexico added $39 billion pesos � some $3.7 billion dollars � to the Mexican bills and coins in circulation) Thus, the silver "Libertad" ounce would enter circulation along with other bills and coins, through the banking system.

The reader may object: "But these higher quality coins would never circulate! They would be hoarded." The reply: Indeed, they would be hoarded. But, let us reflect that there are two types of circulation, active and passive. The active circulation is of those bills and coins we are willing to spend first; the passive circulation is of coins such as the "Libertad", which we will only spend as a last resort. The silver coins, with full and clearly determined legal tender value, will be circulating passively, as savings, but fully useable by the holder, at any time. This passive circulation is called "hoarding", but it is still circulating, legal tender money, held in reserve for emergency use. "

Druid: I don't know that I would totally dismiss a role for silver in future monetary affairs.

http://www.plata.com.mx/plata/plata/comFHR47a.htmSnip.

There is an old saying, supposedly from the racetrack, which means, "It is reliable information". In this particular case, I do not know how reliable this information results, but I can assure you that it comes from the horse's mouth. Oh, well, at least from the IMF's Factsheet: Gold in the IMF. What follows are extracts of the amazing document.

August 2002

"Before the Second Amendment of the Articles of Agreement, April 1978, the role of gold in the international monetary system was central and pervasive. The Second Amendment contained a number of provisions that, in combination, were intended to achieve a gradual reduction of the role of gold in the international monetary system and in the IMF. However, gold is still an important asset in the reserve holdings of a number of countries, and the IMF remains one of the largest official holders of gold in the world".

�No comments! The IMF declares the role of gold central and pervasive. �Central? �Pervasive? �What that means? Immediately afterwards, declares itself one of the largest official holders of gold in the world. �Who's being central and pervasive?. Then, they inform:

"What are the IMF's total gold holdings? As of June 30, 2002, the IMF held about 103 million ounces (3,217 metric tons) of gold at designated depositories. The IMF's total gold holdings are valued on its balance sheet at SDR 5.9 billion (about $7.8 billion) on the basis of historical cost. Valued at current market prices, the IMF's holdings amount to some SDR 24.5 billion ($32.4 billion)".

Again, no comments; well, almost no comments; if the gold is so useless �For what charity purposes they hold such an important quantity of gold? "

Druid: An old but very informative article.

Re: Interdependency
Agree, the "social engineers" who created it though did so for a reason. They also know that the purported US "growth" is a facade of inflated GDP, understated debt, hidden deficits, predatory multinationals and other centralizing policies. Maybe martial law and global taxes will follow the planned dollar and US bond crisis.
Re: Lou Dobbs
What was it about?

http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/
Druid: He almost had a fire in his eye about defending the job base here in America. At the time that I tuned in, he was reading a quote by a famed witchdoctor (economist) who in that quote suggested something to the affect that (I'm paraphrasing) globalization is here to stay and instead of complaining about it, American companies need to get more competitive and adjust too or embrace the change. Mr. Dobbs retorted that there is no way American companies can even come close to competing with third world countries because of the lower wage rates... and that Mr. Strauzhiem (I think) needs to....It really caught me off guard to hear this coming from a commentator who is a part of the status quo.

I've posted a link to his part of the web universe as he instructed his viewers to peruse a list of companies that he has on there that are outsourcing jobs.

http://www.lewrockwell.com/hein/hein53.htmlAmazeeng vat te moterland von't do for uz, ya:

White Hats Waiting by Paul Hein
Excerpts: ��������
"I recently read a report that the Post Office wants to require ID on mail. It would be the sender who would have to provide the ID; apparently a return address just won't cut it. The Post Office's recommendation, published in the Federal Register October 21, would require some sort of "unique, traceable identifiers" on all mail, including first class, periodicals, standard mail, or package mailing eligible for discounted postage rates � whatever that might be. I suppose that includes everything that you could mail, or it would be pointless. The stated purpose of this proposal is to reduce the danger of terrorism via the mails. Who could argue with that?
The President's Commission on the U.S. Postal Service also advised the use of sender identification "for every piece of mail," saying "requiring sender-identification for discount-rate mail is an initial step on the road to intelligent mail."

"Whatever form this ID takes, it must obviously be unique to each individual. And since you never know when you might want to mail a letter, you would be advised to keep this unique identifier upon you at all times. Do you get the direction here? Once a citizen becomes accustomed to carrying his unique mail identifier with them, what's the harm in producing it, in the name of national security, truth, justice, and the American Way!! It's not really a national ID at all, you see, but a mail-security device. That's OK!
The immediate stimulus to this mail ID thing is said to be the anthrax threat of a few years ago. Remember that? People dead and dying all over the place, right?"

"And, Lo!! A few weeks after the above words were written, there is news of a Congressional office building being closed down because of mail received containing a white power, presumably ricin, a deadly poison. Now we REALLY need that ID! If at first you don't succeed-----."

Thanks for the heads up. What we're really seeing in these media exposes of late is "better late than never", but in so many ways "too little too late".
And naturally the inference to us is also to take heed of the preparations others are making and to further watch these preliminary signs of eruption and fissure, though a major default for example, would catch most by surprise.

your expository on silvers non monetary role is being challenged here, notice how fast they put it out after your mussings about silvers non-monetary role.
as we know if tptb want to declare something money and add a numeria on it then who on planet earth is to stop them and those that chose to participate in it?
How to introduce the one ounce silver "Libertad" coin into circulation in Mexico
http://www.plata.com.mx/plata/plata/comHSP45a.htm


whats your reply to this intrusion upon your sanktafacy in gold as property deal going on here?
not challenging you , tey are not me . im just informing you of the timing of the two polar opposite post are to coincidental not to allow you a retort, as im sure they will retort your tort untill this idea of silver reestablishing itself as money has firmly imbeded itself in every human mind, silver will save teh nations duped by the wests folly in trying to impalmnet the stong dollar via gold leasing doulbe booking and all the other junk they did with gibsons paradox in order to manipulate this generation of earth dwellers into beliving the printing press was somehow more honest than simple but steadfast and trustworthy silver and gold>

coming soon to a viewing platform near you

gold and silver
honest money for
honest people!

http://www.cyberhymnal.org/htm/n/m/nmgtthee.htmFrom Druid yesterday (in part)
Speaking in Washington en route to the G7 gathering, French Finance Minister Francis Mer said the group's last message on sensitive foreign exchange issues needed clarification.

Mer told reporters currency markets had not understood the full message in the statement that followed September's G7 meeting in Dubai urging large economies to adopt more flexible currency policies.

"We will try to do the maximum together to state that the wording of Dubai does not satisfy anyone and try to hatch a wording or expression that satisfies all of us," Mer said.

comment;
The quote above posted yesterday by Druid reminded me of the orchestra on the famous ship Titanic. Lets keep the passegers calm as we sink slowly into the abyss. As for me, I'm already in my lifeboat with my stash humming "WHEN THEY RING THE GOLDEN BELLS" http://www.cyberhymnal.org/htm/w/h/e/whenthey.htm

Cheers and good weekend to all
Boilermaker

@ Houston

Great site! I worked at a startup company a few years back where the CEO had a spinning "title" generator. When we were hired, we would spin three wheels and get three 'TITLE" words to combine as our job title. If they sounded too weird, we could spin again.

I got "Director-Vertical-Integration" on the first spin.

Six months later, we changed it to "Director-Advance-Technologies", without the use of the spinner, but almost as vague.

http://www.financialsense.comDon't miss today's FSO broadcast. Jim talks about taxes and the flight of wealth from the US offshore. As taxes (local to replace federal) increase along with virtual taxation (inflation), estates look for alternatives to lessen the burden. Who loses? The middle class contracts (or disappears) and the lower class is squeezed by inflation - everyone loses to pay for profligate government spending.

I can't blame anyone with assets from wanting to protect some from massive distribution, but the government spending machine could not even be touched by tax increases. Not one candidate is showing fiscal responsibility. Bush talks the talk, but as usual for him, he is not walking the walk, given that he has has yet to oppose a single spending initiative, and his deficit is at $550B leaning towards $1T when expected cost overruns are added. The demos seem to want the opportunity to show that they can spend even more than Bush. ARRRGH!

FDR, you old fiscal conservative, where are you?

The plan outlined sounds good. Maybe doable.

One thing only is lacking: political will! Is it possible for ANY government in this whole wide world to challenge their Central Bank and introduce even a tiny bit of silver into circulation? Maybe Iran or Malaysia or some other country in that wide area, can do it.

******

The GAB expects some fireworks on Monday, the dollar is open to a speculative run - downwards.

*******

Nixon and those around him thought about gold, so:

"I got along before I metcha,
I can get along without you now..."

Well, yes...but "before I metcha (gold)" we were in the Early Stone Age; and we'll be back there if we do without it now.

The GAB

Taxes Here's one for you, nineteen for me.

Cause I'm the Tax Man.

Yeah, I'm the Tax Man.

Beatles.

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

The Jan 19 issue of "Coin World" had a front page story about Mexico releasing bimettalic, ringed 100-peso commemorative coins into circulation having a silver center.

snip:
"These circulating issues will have a .925 fine silver center with an aluminum-bronze outer ring. The diameter of each coin is 39 millimeters, and the weight, 33.967 grams."

The story did not give the total silver weight of each coin.

http://finance.yahoo.com/q/bc?t=1y&s=%5EDJI&l=on&z=m&q=l&c=%5Evix&c=%5ESPX@Goldilox
I concur with your appraisal of complacency in the markets. The chart linked above shows the smooth 1-year trajectories for the DOW, S&P and VIX. This is completely unreal in view of the weak domestic job market, economy and $ devaluation realities of this past year. Low interest rates apparently have pried money out of savings and money markets into stocks in spite of increasing valuations and risks. On Friday the SM went up because employment was weak which the market iterpreted as keeping interest rates low ergo better for stocks. That kind of twisted logic baffles me. Up is down and down is up. The absence of even a 5% correction in the SM for the past year has to be indicative of PPT or other intervention on a regular basis.

I believe that next week could be the beginning of the next leg down for stocks and a strong move up for gold. We are way overdue for something substantial.

That new Mexican coin is an example of "decorative" use of silver.

The content of the 100 peso coin is 1/2 ounce of pure silver. The value of that half-ounce in pesos is today worth about $35 pesos. (Silver at US $6.25/oz.)

Better than a paper bill of one hundred pesos, but leaves a lot to be desired. No protection from inflation of paper money supply, until the price of a half-ounce reaches 100 pesos.

That means the peso has to fall from 11.15 to the dollar, to 32.00 to the dollar, before the value of the silver in the coin protects the owner from further loss.

Not satisfactory.

The GAB

@ GAB Ah, but if silver goes to $50, that 100 peso coin contains about $300 of silver. Maybe not satifactory by today's measurement, but tomorrow ain't today. Better some insurance than none.

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

http://groups.yahoo.com/group/gata/message/1869A dispatch from GATA.


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http://groups.yahoo.com/group/gata/message/1869Real gold or paper gold?

http://groups.yahoo.com/group/gata/message/1871... invites Japan and China to be more
"flexible" with exchange rates.


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http://www.azcentral.com/arizonarepublic/business/articles/0206powerplant06.htmlsnippit:

A new $700 million power plant near Gila Bend is the latest casualty of the boom-or-bust Western electric power market.

Tampa-based Teco Energy Inc. said Thursday that it would turn the power plant over to lenders after it failed to garner enough customers to operate the plant profitably.

Three years ago, operators of such plants reaped huge profits selling electricity for prices that, in some cases, were 20 times higher than the year before.

Teco said the Gila River Plant, powered by natural gas, would continue to operate through the transition.

Analysts expect the plant eventually to be sold to another utility or investment group. If sold substantially below replacement cost, it would enable a new owner to sell electricity at below-market prices. Eventually that could lower energy costs for consumers.

The Teco plant is the second recently completed power plant in the state abandoned by developers.

PG&E National Energy Group, now called National Energy & Gas Transmission Co., is surrendering its 1,000-megawatt Harquahala Power Plant, west of Phoenix, to a group of lenders led by French bank Societe Generale. It also will likely be sold to bargain hunters.

Billionaires Warren Buffett and Carl Icahn have been picking up ailing power properties at near-liquidation prices. Also looking is David Bonderman, whose Texas Pacific Group is the largest stockholder in America West Airlines.

Duke Energy, which owns a power plant near Palo Verde Nuclear Generating Station, has announced plans to sell a group of Southeastern plants but keep the Arizona facility that sells power to California.

Goldilox: The power scams continue. Utilities get state bailout money to build and operate power plants and then sell them at a loss to Buffett, et al, because they can't pay the mortgage (even though public funds were supplied to buy it upfront). Meanwhile, the public money is syphoned off to some ENRON/Swordfish account to privately "fight terrorism", lobby for more government support, condos in Bermuda, or who knows what. Anything but what it was earmarked for! Duke got the lion's share of the $5B that the state of California paid to bail out SoCalEd and PGE. Did they "lose" that money in derivative scams, too?

Is anyone watching the stores?

http://www.azcentral.com/news/articles/0207delaware07.htmlsnippit:

Feb. 7, 2004 12:00 AM


DOVER, Del. - Delaware officials ordered the destruction of about 12,000 farm chickens on Friday after confirming that the flock was infected by bird flu.

State Agriculture Secretary Michael Scuse said that the flu strain is different from the one that has spread to humans in Asia and that there is no threat to human health.

Scuse would not disclose the location of the infected chicken houses or identify the grower, saying only that it was an independent operation in Kent County.

The strain, known as H7, has the potential to cause severe economic damage if it spreads to the commercial broiler industry, a linchpin of the region's agricultural economy.

Avian influenza spreads easily among animals through nasal and eye secretions, as well as manure.

Goldilox:

Who'da thunk it?

http://www.azcentral.com/news/articles/0207summit07.htmlsnippit:

Europe had hoped to insert into the final G-7 communique a warning against excess volatility in currency markets, which would signal traders that governments were prepared to intervene to keep the dollar from falling too far.

But Snow has given no hint the administration will accept Europe's pleas.

The administration contends that the answer to the trade imbalance is for Europe and Japan to pursue pro-growth policies at home rather than urging the United States to curb its own demands.

Goldilox;

Bugger thy neighbor continues!

http://www.usatoday.com/travel/news/2004-02-05-overseas-fees_x.htm?csp=14snippit;

The United States angered some foreign governments on Jan. 5 when it began fingerprinting and photographing foreigners from many countries arriving at 115 airports and 14 seaports in a broad effort to weed out terrorists. The effort touched a nerve in countries still smarting from the budget-squeezed U.S. State Department's decision in 2002 to raise tourist visa fees from $45 to $100.

The most notable destination striking back at the USA by raising hurdles for U.S. travelers is Brazil. The South American country took a page from the U.S. Customs Service playbook and began fingerprinting and photographing arriving U.S. travelers in January, causing hours-long delays. Americans also now must pay a $100 visa fee and a $10 handling fee to visit, and business travelers face new scrutiny.

U.S. travelers also will find higher fees or new hassles when traveling to:

�Nepal. The mountaineering and trekking mecca doubled visa fees for Americans this year to $30.

�Thailand. The backpacker's haven raised visa charges for U.S. tourists this year to $25, up from $10 last year. Business traveler visas rose from $20 to $50.

�Russia. New rules require U.S. males ages 16 to 45 who are seeking a visa to declare the cities and countries they have visited in the past decade and to give background on military service.

The changes are just the latest for U.S. travelers heading overseas. Several other countries, including Chile and China, increased visa fees for U.S. travelers last year after the U.S. State Department raised rates. Chile now charges $100 for U.S. travelers, more than double what it charges residents of other countries. China charges U.S. tourists $50, two-thirds more than in the past. Visas for business travelers heading to China shot up last year to $150 from $90.

Goldilox:

Hassle "revenge", health security for "war diseases" and US $ devaluation adjustments for good measure. US press may ignore the 8000 soldiers medivac'd for "various illnesses", but Russia was paying attention.

Hey ! This is an international forum - you could just as well have said 'Revenge ON the foreigners'.

Seriously, we may well be seeing the thin end of the wedge on a whole bunch of reciprocal agreements between 'interdependent' states which are beginning to unravel as a result of unilateralism. Income tax, criminal extradition, police cooperation, CB cohesion, agreement to military presence, trade tariffs, you name it.

C!

I wonder how many of these unravelings found their origin in Bush's "no international prosecution for US agents" mandate. I heard Powell was threatening some countries with nasty financial consequences if they did not comply.

A lot of people say that war will not expand much beyond current theaters, but it sure seems like there are a lot of political preparations in the works.

http://money.cnn.com/2004/02/07/commentary/column_hays/hays/index.htmsnippit:

It may not sound like much, but to Europe a sentence calling volatility bad sounded just right.
February 7, 2004: 10:14 PM EST





Boca Raton, Fla. (CNN/Money) - Has the Group of Seven actually done something to stop the dollar from falling further?

Hard to say. Even if the U.S. is throwing Europe and Japan a strong dollar bone, there isn't much meat on it.

The dollar has been falling hard since the G-7 last met in Dubai in September and called for more flexibility on exchange rates. That was seen as a message to China to stop pegging its currency to the dollar, but currency markets also understood it as a sign the G-7 would let the dollar fall and the euro and yen rise.

So the big sale on dollars began.

So, going into today's meeting of finance ministers and central bankers, the big question was this: would the G-7 signal that they don't want the dollar to fall any further?

Here's what they did.

They added these 12 words to a paragraph in the one-page statement: "Excess volatility and disorderly movements in exchange rates are undesirable for economic growth."

Goldilox:

Visit the link for the Snowman's response to reporter's questions about Japanica and Chinica.

I'd sure hate to see the total gubmint expense report items racked up that cumulated in only 12 words of "Plain English". Probably comes out to about $25K per word, with security costs thrown in.

http://groups.yahoo.com/group/gata/message/1874Latest GATA dispatch.


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Already in 2001, FOA talked about an "Orderly exit from dollar-use". At the G-7, they know that the dollar cannot be deflated (declining dollar expansionism) and take the rest of the world into deflation with it. The call for low/lower IRs, must support the dollar-system, that is still building on global "debts" and requires the permanent illusion of a "stable" goldprice. Low IRs do "stabilize" debt and POG and vice versa.

Asia + China must do what the dollar-system requires and help stabilizing the < dollar exch. rate-debt-IRs-POG-POO > so that further dollar-inflation (printing) can go on as to meet a NEW " FIAT USE " demand.

The G-7 communiqu�'s don't say (suggest) the above in a clear and understandable way. They want to revive the global economy without saying "HOW" this must/should be materialized. Produce and Consume, but don't take notice of what happens to the dollar-(inflating)-system !!!

FOA continued in 2001...in Sunrise...

Rates are lowered time and time again (45 yrs low) as money substitutes (all paper stuff) expand at ever higher rates.
Suddenly there is no room for a FED induced business slow down (IRs-rise). Because such a change would not just slow the economy, as in the past it would,...but actually "wreck" the $-currency-structure ! That's what bothers those G-7 folks, whilst our internal manufacturing sector is weakening (minus another 11,000 jobs) !

The above might help to understand "WHY", IRs and the goldprice do remain *** extremely *** low ! Nobody dares to connect this with the ongoing dollar-realities.

http://www.negt.com/news_20030127.html@Goldilox
I could be wrong but to my knowledge the recent spate of foreclosures of gas fired merchant power plants have not involved public monies or subsidies. These plants were typically built by independent subsidiaries of existing power companies and financed by private lenders under non-recourse loan provisions similar to the mortgage on your house. When the owner/operator can't make the payments the lender gets the facility and it goes back on the market at a distressed price. It's not so much a scam as it is just poor investment by the lenders.

The main reasons for the failures are high natural gas prices combined with recent over-capacity in generation forcing electric rates lower. Many of the new plants are merchant plants (speculative) that did not have long term contracts to sell their power and/or rate relief protection for higher fuel costs.

No doubt this will dry up the pipeline of new power plants and create the conditions for future shortages. Until then, the electric consumer will get lower rates thanks to the stupidity of the lenders.

Boilermaker

dont forget to use the hosts services.
--------------------------------------------------------------------------------
Cooking the Books: U.S. Banks are Giant Casinos

by Michael Edward


While media financial reporters keep the current focus of the public eye on Martha Stewart, the insolvency of U.S. banks due to their derivative holdings is being swept under the carpet.

Because banks have not been making a profit from traditional lending, derivatives became a fantastic way for them to net huge gains by trying to guess (gamble on) future prices of commodities or stocks. They were able to take these gambling risks because the Fed is supposed to back them from losses that would make them insolvent (more liabilities than assets). The worst part is that derivative transactions stay off the books and away from the prying eyes of investors and analysts.

U.S. interest rates being kept low by the Federal Reserve System (which is neither Federal nor does it have any intrinsic reserves) is to simply hide the nearly hundred $billion ($100 Billion U.S. Dollars = $100,000,000,000) of derivative losses and the true insolvency of U.S. banks. The moment interest rates start to run up, U.S. banks will be left holding little paper value assets to offset their vast derivative gambling losses.

U.S. stock markets are being manipulated to show overall value gains and "profits" is to keep U.S. banks "paper solvent". In reality, the public is being conned into thinking that U.S. banks are still solvent because they show "gains" in their stock "paper" value. If the U.S. markets were not manipulated, U.S. banks would collapse overnight along with the entire U.S. economy.

U.S. banks are merging with each other to hide their derivative losses with "paper asset" bookeeping that incorrectly shows they are solvent with enough "assets" to overcome their losses. In reality, this is smoke and mirror accounting, a scam worth $Trillions.

U.S. banks - with the privately owned Federal Reserve System at the helm - have turned into giant casinos by running a Casino Economy that is splintering into vast piles of insolvent firewood. The kindling was lit in the early 1990's, but now a bonfire is raging with great plumes of red-ink smoke. Can the Fed and the Fed-controlled media keep the public from seeing that red smoke with their manipulative mirrors? If the public would just open their eyes and wake up, they would see what's really going on, so here's something to focus your eyes on:


The top 25 U.S. banks with the largest derivatives holdings (estimate based on OCC Q3-2003 report and updated from news releases since 10/03). Remember, $1 Billion U.S. Dollars = $1,000,000,000.

RANK - BANK NAME - DERIVATIVES (in $US BILLIONS)

1 - JPMORGAN CHASE BANK - 33,700 ($33 Trillion, 700 Billion)

2 - BANK OF AMERICA - 13,800

3 - CITIGROUP - 11,000

4 - WACHOVIA CORPORATION - 2,457

5 - BANK ONE CORPORATION - 1,133

6 - HSBC - 1,043

7 - WELLS FARGO BANK NA - 911 ($911 Billion)

8 - FLEET BOSTON - 494

9 - BANK OF NEW YORK - 496

10 - COUNTRY WIDE FINANCIAL - 410

11 - STATE STREET - 320

12 - TAUNUS - 307

13 - NATIONAL CITY - 203

14 - ABN AMRO - 188

15 - MELLON - 153

16 - KEYCORP - 98 ($98 Billion)

17 - SUNTRUST - 82

18 - FIRST TENNESSEE BANK NA - 58

19 - U S BAN CORP - 54

20 - PNC BANK NATIONAL ASSN - 45

21 - DORAL - 31

22 - NORTHERN TRUST - 25

23 - CIBC DELAWARE - 25

24 - METLIFE - 22

25 - UTRECHT-AMERICA - 20


If you want to get a hint at how much red ink your U.S. bank casino is swimming in, look at their latest financial report and keep an eye out for an entry such as, "adjustment of derivative financial instruments" or "adjustment of non-interest instruments". If they list such an "adjustment" (most do not), this means they have written off the losses incurred from their derivative gambling.

If you bank with one of the 25 banks listed above, you can expect worse than the 1986-1990 Savings & Loan bank collapses when people were unable to remove all or most of their money from their accounts until years later. This time, you can expect to loose whatever they claim to "hold" for you because the FDIC and the "Fed" have no means to replace the losses with any intrinsic value.

If you choose to keep accounts with these U.S. banks, you have just become a high-stakes gambler, and the odds are stacked against you.

@ Boilermaker

After watching the so-called "crisis" of 2000 really closely, it became clear to me that the manipulations used to funnel "public monies" were pretty sleazy, if not downright criminal. In San Diego, the utility broke into separate "companies" under the Sempra company umbrella. The supply company made zillions while the utility portion went bankrupt. The public monies (increased rates) were then used to "bail out" the debts of the utility company, who paid their other pocket, the supply company, with the money.

Duke, one of the companies mentioned as selling their generating plant, received a very large payout ($BILLIONS) from the impeached governor of California to bail out SoCalEd's electric bill. Whether Duke used those same $Billions to construct the plant or shifted it from one pocket to another with fancy accounting is fairly irrelevant. "Deregulation" (lobbied for heavily with energy company money) forced utilities to sell their generating facilities and cancel their long term contracts which were deemed "anti-competitive" to the poorer "independent" suppliers. Once the utilities were no longer allowed to generate their own power and their long-term contracts were legally cancelled, the "independents" forced them into the spot market and promptly bankrupted them with windfall price hikes. All "deregulation" did was put the public at the mercy of the likes of ENRON, DUKE, and so on.

Now we're watching Buffett buy both the pipeline contracts in Alaska and the generating plants in the lower 48, both at "discounts", so it's guaranteed that competition will not be a factor in future gas generated electricity.

Reality...get you some!
fats be facts!

gold and silver ARE BOTH MONEY and will resume there monetary roll.

http://www.gold-eagle.com/editorials_04/bloom020904.htmlsnippit:

The % [of stocks trading over their LTMA] line peaked out at well over 90% in January, and this was CLEARLY an exaggerated level when look at in historical terms.

More importantly, the reader's attention is drawn to the "Time Line". Note how, during the Primary Bull Market, the index was in 80% territory for more time than it was in 20% territory BUT, since 1999, the proportion of time has flipped over - with more in the 20% territory and less in the 80% territory.

That the recent move to over 90% was NOT a sign of the re-emergence of a Primary Bull Market flows from what is clearly emotional behaviour: With the S&P Price Earnings Ratio standing at 29.29X in January 2004, the >90% level can only be seen as "emotionally" driven as opposed to rationally driven.

Goldilox:

One of the best analyses I have seen on the current SM technicals. Check it out.

While it cannot be denied that the total notional value of those derivatives takes ones breath away, there are three crucial factors which must be taken into account :-

1/ Some of those contracts are calls and some are puts, so it is the net value of these contracts which is important. Unfortunately, while derivatives are already hidden by a wall of opacity, this differential is hidden behind another one. As the author of Sir Steady's post says, the only way that you may (perhaps) see an effect is by looking for some cryptic one-liners in the financial statement.

2/ Who are these contracts taken out with ? Suppose bank A has a perfectly balanced derivative portfolio, with equal calls with party B and puts with party C. The exchange rates move such that the calls are worth a lot to party B, with the money to pay for them coming from party C. And then, for some reason, party C becomes insolvent. Bank A either takes the loss, or, if it is too big, itself becomes insolvent, which, in turn, gives a problem to party B. With the size of these contracts to the capital reserves of the bank (I seem to remember that this was around 125 for LTCM and now 800 for JPM - Adam Hamilton wrote a couple of articles on this a year or so ago), this domino effect could very rapidly cause problems for virtually everyone involved in derivatives trading, and there is no real way of knowing what this risk is as the contracts are not declared. Mr Greenspan is adamant that no regulation of this market is either necessary or even desirable. (Why he says this is another, very interesting topic).

3/ These contracts all have different timelines with different maturation dates. In the same way that there could be cash crunches as I described in point 2/, the derivatives portfolio needs to be balanced in maturation as well as in quantity, or else the same scenario of default could occur. Party C may be ready and willing to pay up in March, but that is no use to bank A if party B needs paying in February. (Unless, of course, they either sell the contracts to someone else for a lesser profit or borrow the money for a month - either way will cost money, and effectively unbalance the portfolio)

This is all fairly straightforward stuff, which one supposes the risk committees of the various banks are fully aware of. However, after the debacle of Enron, et al., it would appear that that supposition is open to serious doubt. I forget who said that you should never put down to conspiracy that which can be explained by simple stupidity, but it occurs to me that simple, individual greed would be a perfectly satisfactory alternative.

C!

http://worldvisionportal.org/WVPforum/viewtopic.php?t=160Cooking The Books.

@ Goldilox
You made some good points with the California electric problems in 2000 but I do take issue with the statement "The public monies (increased rates) were then used to "bail out" the debts of the utility company, who paid their other pocket, the supply company, with the money"
Strictly speaking, rate increases are not public monies even though they are borne by the constituents.

Also, California did not deregulate their electric market across the board. They deregulated the suppliers of wholesale power much of which was coming from out of state (due to a virtual blockage of all new power plant construction in the state) but they maintained regulation of the local utility retail rates. This was done because the theory was that deregulation of wholesale rates would force wholesale power rates down and the local retailers like SDE&G would not need rate increases. Unfortunately this was all wrong because there was a shortage of electric generating capacity in the California area in 2000, mostly caused by a refusal to build plants in that state. The wholesalers with capacity were given a license to steal due to this shortage and steal they did.

California was (and is) a special case where idiots in government positions have insured their constituent's suffering. The situation in California in 2000 was not a conspiracy of power companies but an event predestined to occur due to special governmental bungling. I offer for further evidence the fact that 49 states did not go through this anguish. I recall that Black Blade has weighed in on this subject of the special situation in California in the year 2000 on several occassions with a similar analysis.

Please note that I am not an electric utility advocate or critic. The power generators will try to make a fast buck given the golden opportunity afforded to them in Califonia in a New York Minute. They also risk huge sums of their own and other private sources of financing whenever they build a plant. The only bailouts that have steamed me were the ones given by state regulators for "stranded costs" associalted with the huge overruns experienced by some utilities when they built their nuclear plants. My local utility, First Energy, is a case in point. They built two nuclear plants in the 70s-early 80s both of which had huge overruns. The Ohio PUC, when they deregulated utility rates did so with the provision that First Energy could charge its customers, me included, for sunk costs associated with those overrun projects. To add insult to injury, One of those plants, Davis-Bessie, has been out of service for two years due to lousy maintenance. I pay 12cents per kilowatt-hr while the neighboring utility, AEP, gets 8 cents for the same product. First Energy has historically been run by accountants and lawers and it is as close as you can get to a business run (and screwed up) by politicians.

Sorry for the rant and somewhat off-topic subject but I see this as an important economic barometer.

Boilermaker

http://www.commodities-now.com/links/trading/lbma_members_list.html
Druid: For your perusal.

Ecoism moving along in time!


an ecoist doctrin based upon individualism , , ITs rather simpistic. Seriously, gold equal for everyone. dialectical monetaryism advocates a return to the gold standard in some form ( havent figured that out yet, but others who know how to do it will and link it to silver)ecoism advocates for a monetary system that is emerging from the long stuggle over what is more honest and fair, a printing press or gold/silver.


dialect n. 3.(creative definition)one of a group of closley related fiat units of account, lira, peso, federal reserve noote, yen, euro.All dialects descended from GOLD/SILVER> {Latin=dialectus,
dialetic n. art or practice of logical discussion as a means of critically examining the truth or theory or a opnion. dia here fiat script vs. gold/silver
we can proceed in a didactic manner. { greek< didaktikos< didaskein...teach)

http://www.usagold-jewelry.com/

Valentine's Day -- February 14th!
 

TWO online shopping days to ensure delivery...

place your jewelry order for timely hugs and kisses

--Feb. 6, 2004--
The global economic recovery has strengthened significantly since our meeting in Dubai and risks have diminished. Growth projections for 2004 have been revised upward to their highest in three years. Fiscal and monetary policies have helped bring about these welcome changes.

Yet much more remains to be done. The pace of growth among our economies remains uneven. In our Agenda for Growth initiative, we emphasize supply-side structural policies that increase flexibility and raise productivity growth and employment. Today we released a progress report on our Agenda for Growth. This agenda and sound fiscal policies over the medium term are key to addressing global current account imbalances. We outlined strategies for sustained medium-term fiscal consolidation as economies recover. International trade is vital; we call for further efforts and for countries to take the steps to resume the Doha round, which is pivotal to global growth and the alleviation of world poverty.

We reaffirm that exchange rates should reflect economic fundamentals. Excess volatility and disorderly movements in exchange rates are undesirable for economic growth. We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in exchange rates is desirable for major countries or economic areas that lack such flexibility to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.

To combat terrorist financing, we urge all countries to strengthen their asset freezing regimes and to combat abuse of the informal financial sector and non-profit organizations. The IMF/World Bank should make permanent and comprehensive their assessments of countries' efforts to combat terrorism.

We are committed to further enhance transparency and supervisory standards in financial markets, in particular non-compliant off-shore centers.

We have a shared interest inn seeing strengthened economic growth in the greater Middle East. We had a productive meeting with our counterparts from Afghanistan and Iraq. We welcome the completion of the currency exchange in Iraq and the removal of interest rate controls, and we look forward to the approval of the new central bank law. We welcome progress on reform and reconstruction in Afghanistan and the renewed efforts to collect revenues from the provinces. We call on others to join us in reducing the debt burdens of Iraq and Afghanistan. We welcome the plans of the IMF and the World Bank to provide financial and technical assistance to Iraq and Afghanistan.

The private sector plays a critical role in fighting global poverty and creating jobs in developing countries. We encourage the MDBs to work with governments to improve investment climates and provide more resources to support the private sector. Remittances are an important source of income for many developing economies. We aim to reduce the impediments that raise the cost of sending remittances. We reaffirm our commitment to fight global poverty and to help countries achieve the international development goals of the Millennium Declaration through our work on debt sustainability, aid effectiveness, absorption capacity, and financing facilities.

We discussed the progress in our efforts to reform the international financial system, including improved surveillance, collective action clauses, limits on exceptional access, measuring results, and the use of other mechanisms, including grants, to avoid heavy debt burdens. We also discussed how to consolidate and build upon these reforms. We welcome the improvement in financial conditions, and the higher economic growth in many emerging market countries. We welcome the efforts by creditors and issuing countries to develop a code of conduct, which will be discussed in the G-20. We call on Argentina to implement policies in line with its IMF program. Argentina should engage constructively with its creditors to achieve a high participation rate in its restructuring. --end--

where do we start
if ideas are things, and these things can become things we see feel touch have, then where do the ideas come from? s and how does a world go about repudiating a false idea peacfully without a bunch of needless killing, while debating what is the best course for the forseeable time frame we find ourselfs in on this planet? while having evryone make some compromises some give and takes before no on ehas controll and things devolve back to past practise where he who has the gold makes teh rules.

why do i see so much pink?

Townie's post

"To combat terrorist financing, we urge all countries to strengthen their asset freezing regimes and to combat abuse of the informal financial sector and non-profit organizations. The IMF/World Bank should make permanent and comprehensive their assessments of countries' efforts to combat terrorism."

Goldilox:

Notice that abuse of and by the FORMAL financial sector is not addressed here. Currency/resource raids on third world countries are not considered abuse by these gurus.

OK, let's assassinate/depose the elected ruler of some hypothetical country, call it Chilica. In his place, we'll prop up some hypothetical neo-Hitlerian generalisimo, call him Pinochile. We'll "loan" him about $50 billion to purchase military toys. However, before he can get the loans, his banks must divest themselves of their gold reserves on the world market. Then we'll short the s**t out of their currency in the Forex. Once their paper has been "toiletized", and his government can no longer pay back their military loans in US$, we'll kindly reorganize the loans to include privatization of the resource companies into "free market" assets, which few in his country can now afford due to hyperinflation. To maintain "order", he'll use that $50B of military gear to eliminate university "intellectuals", labor "commies" and any "political dissidents" who protest the theft, all the while transfering their country's resources to a few foreign "free market" stockholders and preparing hideaways in the Caribbean banking islands for the regime. On to the next frontier!

This plan has been repeated ad generaseum in Monroe Doctrine satellites, but TPTB are finding a tad more resistance in other hemispheres.

Much to their consternation, Islamists, South Africa and Australia refuse to debase their currency in the "bugger thy smaller neighbor" game. They seem to value their resources ABOVE the almighty dollar, and prefer to endure some currency pain rather than fall prey to the IMF/WB manipulations.

As Monte Python spake, "It's people like them what cause unrest!"

Anyone care to make a prediction as to the Monday direction of the dollar or PMs based on all the Greenspanese style double-speak we got out of the G7 this weekend?

My "guess"..... Euro interest rate cuts in the works = strengthening dollar = more downside on the PMs. It will continue to revolve around the dollar.....

http://www.lemetropolecafe.com/dospassos.cfm?cfid=93093&cftoken=38325355πd=3588at Le Met. Cafe, bringing Tim Fergusons's essay "The New American Century;Not!" to our attention is very crucial. It is probably one of the most objective historical accounts of the last 50 years plus.

The geopolitical agenda of today's ruling, say, neo-cons in the US and all, who strive to counterbalance the hegemon, turned imperialistic is probably what's really going on behind the scenes.

Even if I'm still unwilling to believe some of its cruel statements, in particular 911, it is un-deniable that in its wake life and liberties all over the western world have been severely curtailed. And what's more the differences of political opinion among former allies have become more pronounced, not to say definitely, though stealthly opposed.

The Bretton Woods era, to post BW, Petro-dollar and IMF era's are well documented and the dire effects on developing countries are historically indisputable.

As it also becomes clear that the status quo can't be kept going for-ever, or even much longer. In the face of rapidly disinte-grating monetary fundamentals, id est twin deficits and overwhelming debt in the US, the empire can't rely on a military dominace, lastly paid by its vasalls,(not yet) opponents. Opponents, though, already on the hegemonial front of the global reserve currency.

In essence, paper currencies without any backing of reality have never worked. And the US dollar in retrospect will just be another failed experience in the dust bin of history.

The case for gold (and silver) is once again being proven by the folly of man...and the paper destruction will not be exclusesively limited to the dollar's fall ... cb2

PS: Bliizzard in the alps - makes my day and a late morning ...

Hello Gold Girl, (tough to say Lady to a girl, or is it?),

I presume not having had the pleasure to respond to you before! Though, does it matter how the members are picked, as the results will only be available 2005.

Kind'a convenient, as I guess you can't impeach a retired president. Well, not impeach, for sure! Don't even want to bet if that's lucky or not, given the alternatives.

Well, he's had the chance to rectify the Clinton/Rubin and maybe Greenspan ploy - the latter known as Put.
Apparently, his comptrollers ("controls" in another agency) have forgotten to de-brief him on essential Texan behavior. Shoot first and ask questions later. So he plugged the dollar with lots of lead ... and the rest may just be gravity.

Similar to John Snow's stale statements about a strong dollar policy. Dead and lead ducks don't float very well, though other decoys will follow suit.

Don't worry about relative truth's - worry about absolute value - and you're worth it - go absolute - go gold! cb2

@ Kilo

I don't think I heard anything concrete out of the G-7 notes. I don't mean REALLY concrete, but even for them!

Watch the euro ratemeisters closely. If they don't flip the down switch, it's "Ce la vou, Ethel" for the Walbuck, at least down to .80/1.30, which has been hinted as the pain threshhold. Japanica may tell the tale in this morning's Asia action.

Druid: It's been about ten years since I watched the Grammys. I know who the Gumby looking figure is, whose the dish???

http://www.jsmineset.comsnippit:

"1/ The first�thing I take exception to in the article is the universally understood assumption that this effort is designed to "talk" the dollar up and - by default - the euro down.

2/ The problem of the dollar cannot be talked away. It is a situation born of the triple deficits of US Budget, Trade and Current Account. Only when these three problems are addressed directly can the dollar gain and maintain strength.

3/ The problem is not as presented in the form of a strong euro but rather a weak dollar.

4/ As long as the Federal Reserve plays the Japanese bond game -and using this non-traditional tool liquefies the system as the manager of the Japanese float by buying across all maturities of US Treasuries via the New York Federal Reserve Bank - the dollar will remain weak and the euro strong.

5/ The recent US Jobs Report puts into the mind of the Fed, the marketplace, and the incumbent administration, the possibility that the economic revival brought on by the Bush anti- deflation program - a complete duplicate of the Roosevelt 1930-1940 program but fully applied in 18 months - will fail to support US expansion into the final quarter of 2004.

The US economic cargo plane might well transport all world economies but as someone said months ago, "It could end up landing on one wheel." In the jargon of flying that means if it doesn't crash before, it certainly will after the November election.

The fact that this is an election year guarantees that nothing will be done to address the US triple deficits that has caused the US dollar weakness and will continue to do so over the next nine months. So any weakness that the hot air of the G7 might produce is the buy signal before both currencies and gold resume their Up Trend against the falling USDX."

Goldilox:

Analysis of G-7 by JS.

Greetings goldgirl, or goldperson, This is not a political forum, and your source of news is totally untrustable.
Please find a political forum to educate.
Goldilox, your post is indicipherable.
But I still love you.

@Goldilox- Good to see you and others up and about tonight. Just started to scan tonight's posts and I see where you have mentioned a currency "pain threshold" @.80/1.30(dollar index and euro/$). Reminding me of how many of these so-called thresholds and limits have been repeatedly recited and quoted by the media stage directors and bit players.
I can no longer put an ounce of credence in concealments that chase cash into a fright, throw curve balls and control curtains in today's cynical tragi-comedy called the currency market!

Are You Banking at One of These Casinos?

Derivatives were designed to help banks, corporations, and countries hedge against risk. But banks found they could make a killing by concocting more exotic derivatives that effectively bet on the future direction of interest rates, foreign exchange, commodities, and stock indexes. And since banks aren't making money from traditional lending any more, derivatives are a fantastic new way to net huge gains. And why not take some big risks when the Fed will 'supposedly' back you - and the transactions can stay off the books - far away from the prying eyes of investors and analysts. Looking at this list, America's banks have turned into giant casinos. And now this Giant Casino Economy has begun to splinter. Are you banking with one of them?

10 U.S. Banks With Largest
Derivatives Holdings

RANK BANK NAME DERIVATIVES (in $US Billions)
1 JPMORGAN CHASE BANK 33,118.5
2 BANK OF AMERICA 14,216.9
3 12,836.0
4 WACHOVIA CORPORATION 2,456.4
5 BANK ONE CORPORATION 1,132.9
6 HSBC 1,043.0
7 WELLS FARGO BANK NA 911.0
8 BANK OF NEW YORK 493.9
9 FLEET BOSTON 495.6
10 COUNTRY WIDE FINANCIAL 410.0

When the house of cards fall, starting with JP it will cause a domino affect. The crooked bankers will have their day soon. Like my friend says, the only thing worst than a crooked lawyer, is a crooked banker. Got GOLD>

Aw, come on $ Bill, I'm not THAT cryptic. Just trying to remind Gold Girl that politics is NEVER EVER EVER what it seems on the surface. It's the nature of the beast.

You're right, though, back to the focus on dollar toast and gold as real money!

The Asian mkt is starting out the morning with some "trickle up" economics. As long as TPTB still hype their "supply side" BS, my strategy is unaltered. Buy the dips, and "go, go gadget gold chart."

Hey, there's an echo in here in here!

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Wow, 86.04 to 85.91!

The DX just began it's schawon dive!

http://www.lbma.org.uk/publications/alchemist/alch_arch.htm
Druid: Pretty interesting reads. You'll have to down load them as they are PDF files. Pretty web site.

http://money.independent.co.uk/personal_finance/loans_credit/story.jsp?story=486534snippit:

Consumers with poor credit histories usually struggle to borrow more money. The only way to get round the problem is to pay extortionate rates of interest.

Leaflets from credit card company Vanquis, part of the Provident Financial group, are currently being dropped through letterboxes. Vanquis is touting its plastic as a way to shake off debt and rebuild a damaged credit history. But its customers pay for the privilege - interest rates on the cards are as high as 58.5 per cent.

Vanquis spokesman David Stevenson argues that it operates a fair system because it grants bigger loans at lower rates of interest to customers it regards as a good risk. The highest rates of interest apply only to the smallest loans of �100.

Vanquis targets mainly low-income households but its leaflets have recently been sent to professionals such as teachers, doctors and engineers. This shift in focus is a response to rising levels of debt across all income groups. Excluding mortgages, the average UK household is now �6,800 in the red. With the Bank of England base rate on the rise, pushing up the cost of mortgages and personal loans, more people than ever are in danger of overstretching their finances and harming their credit rating.

The Consumer Credit Counselling Service (CCCS) last year received 125,000 calls asking for advice on debt, up by a quarter from 2002.

Goldilox:

The gist of the article is fixing bad credit, but the rates astounded me. Banks that are floating in derivative losses borrow for 1-2%, while consumers get hit with 58%? Britain's hot economy has some gaping holes, as well, it seems.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10DX now 85.82

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1Gold battling around $405 +2.0

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO_02_04.htmBill Gross at Pimco Bonds gives his "high noon" commentary.
I personally believe in the "japan as 51st state" theory, but I am in the lunatic fringe while Gross here takes aim at the issue without Japan as 51st state figured in.

"My point is that at some point on this seemingly never ending ascent of debt/GDP, someone will say "no m�s." Maybe it'll be PIMCO and PIMCO think-alikes; maybe it'll be foreign holders of bonds grown tired of currency/inflationary erosion of principal; maybe it'll be risk takers in high yield/emerging market/levered hedge funds scared to death from a future LTCM crisis. Hard to tell, but I'm telling you it'll happen, helicopter or no helicopter and with it will come an economic slowdown/recession unseen since at least the early 1980s when Volcker began his vigil. High noon."

"I personally believe in the "japan as 51st state" theory, but I am in the lunatic fringe while Gross here takes aim at the issue without Japan as 51st state figured in."

Druid: My bet is that we will attempt to form our own trade block with Canada and Latin America. A large demographic to spread the debt over and mucho mas natural resources to pilage under the guise of spreading capitalism and democracy.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10DX now down to 85.71, losing about 0.10 per hour.

The Monroe Doctrine - "The Americas for Americans"- that is to say, the Western Hemisphere as the fortress for the U.S. of A.

I don't know if it can be done politicallly, due to nationalist feelings which take forever to die out; but the aim to make a huge bloc: Canada-U.S.A.-and the rest of 'em down to Patagonia, would seem to make sense from the bankster point of view.

Take Mexico: Only two Mexican-owned banks left in the country. The rest of the banks, won't lend, except to consumers. A dead end, economically. Same sickness as U.S.A.

The banks allege exchange rate risks which they don't want. So why did they buy the banks in the first place? Ah, there's an answer: for the time when the dollar substitutes the peso. Then, all the foreign-owned banks in Mexico will lend some big number - why not mention $1 Trillion over a period of years? 15 years sound OK? Mexico: 13th Federal Reserve Area.

There's 100 million Mexicans who want EVERYTHING, and the banks can expand dollar credit there to their hearts' content. Lend each Mexican $10,000 dollars, and you have the $1 Trillion debt.

Of course, after the Banks lend out $1 Trillion dollars, the Mexicans will be saddled with that huge debt which will have to go on growing - no way out. They will become tenants in their own land, paying interest just to live in their own country, taking on more debt just to pay the interest.

The temptation to resist all the "free money" that will be offered, will probably be too much to resist. Mexicans will sell out their country - and repent later.

The same process could be applied on down to Patagonia.

Questions:

Will Nationalism keep this process from going forward?

Will the U.S.A. go bust before this plan can be implemented?

The GAB

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=SLV.FX1Silver just made a strange move after moving slowly from 6.27 up to 6.31, there was a quick drop to 6.25, followed by a return to 6.30. Maybe the specialist decided to buy some for his personal account, but certainly not at the ASK!

Neither Ag or Au is moving much as the DX falls. Maybe the behind the scenes compromise at the G-7 FIAT FEST was to allow the dollar to continue falling, but hold PMs in a tighter range. . . or not.

It's hard to judge the Asian market (except when they're buying $ like drunken sailors), NY open will be very interesting.

http://home.flash.net/~jaybanks/real/g_edward_griffin_-_the_creature_from_jekyll_island.rmI had never heard him before -- here's an audio from 1994. Enjoy.

http://www.plata.com.mx/plata/plata/silver.htm"Druid - I think you are on to the grand scheme that will develop...."

"Take Mexico: Only two Mexican-owned banks left in the country. The rest of the banks, won't lend, except to consumers. A dead end, economically. Same sickness as U.S.A.

The banks allege exchange rate risks which they don't want. So why did they buy the banks in the first place? Ah, there's an answer: for the time when the dollar substitutes the peso. Then, all the foreign-owned banks in Mexico will lend some big number - why not mention $1 Trillion over a period of years? 15 years sound OK? Mexico: 13th Federal Reserve Area.

There's 100 million Mexicans who want EVERYTHING, and the banks can expand dollar credit there to their hearts' content. Lend each Mexican $10,000 dollars, and you have the $1 Trillion debt.

Of course, after the Banks lend out $1 Trillion dollars, the Mexicans will be saddled with that huge debt which will have to go on growing - no way out. They will become tenants in their own land, paying interest just to live in their own country, taking on more debt just to pay the interest.

The temptation to resist all the "free money" that will be offered, will probably be too much to resist. Mexicans will sell out their country - and repent later.

The same process could be applied on down to Patagonia.

Questions:

Will Nationalism keep this process from going forward?

Will the U.S.A. go bust before this plan can be implemented?"

Druid: GAB, You have asked some tough questions in that who can predict what politicians and bankers will come up with because they play both sides of the trade. I posted a link to an interesting essay which suggests that there is a move in the other direction in Latin America albeit I don't know how strong it is (I'm still researching both on the net and through friends). We could get into a pretty deep discussion about my own theories but it would raise the passions of many and I certainly wouldn't want to do that.

When the President of Spain addressed both House's of Congress the other day he illuded to "Latin America" and Latinos in this country. I thought it odd at first but then I smiled and realized, oh ok. Belgian hit on some issues a couple of days ago that were AWSOME but did not get too much feed back.

Mexico has always had an "interesting" relationship and history with the U.S. but an even more interesting history and relationship with Spain And Italy. Read up on Villa and Zapata and land ownership in Mexico. Too answer your questions directly, I do not know because very strange things are happening at a very rapid rate. The current administration is only paying lip service to illegal immigration. One must ask why?? I will keep it at that.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Looks good for the YELLOW !
<;-)

"US$ continues to DIVE, DIVE, DIVE !! "


Druid: Wizard (loved your latest movie), on this note a good night to all. You and Lox offer some of the best play by play second to none. I'm still laughing.

http://home.flash.net/~jaybanks/real/g_edward_griffin_-_the_creature_from_jekyll_island.rmMr. G- This audio is fantastic. I am blown away by Griffin's lucid explanations of the whole Central banking equals extra taxation scam. This is MUST listening for any real money advocate.

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sClear the bridge! DIVE! DIVE! Gold and silver are pretty tentative through all this. The CABAL must be concentrating more of their effort in PMs and letting the dollar find its level.

http://biz.yahoo.com/rf/040207/bush_debt_1.htmlNever stand in the way of a mob determined to commit folly.

Never go out on the ledge with a man determined to jump off a building.

Goldilox -- My thoughts, too, though I think toward the end he loses emphasis by getting into the "foreign aid, IMF, United Nations" spiel. That was standard "Birch/right wing" chatter that turned off most of the public throughout the 60s-70s and relegated the monetary message to obliviousness.

(I did appreciate how he was able to speak so fairly and insightfully about Greider's book.)

He should -- to sharpen the focus of his presentation and book -- emphasize those only as one more avenue for the major banks to create guaranteed interest-paying clients for their Fed-supplied low-rate fiat, with the knowledge that the actual capital to repay profitably would come from US taxpayers. Whether international types are corrupt, or stay in poverty, is a sidelight to his argument, that while true, is not supportive.

The key observable line into the Jekyll history as he's telling it, IMO, is that it brought the Morgan and Rockefeller banking dynasties (the suppliers of perhaps every President since the Civil War?) together to lock out future competition, and has been largely a successful cartel. One focus of our present curiosity might be on how well that cartel is holding up, and, does the Fed visibly enforce it.

For example, are any regional banks acting with some measure of independence, and prospering? Or is the Fed able to undermine them in some way, to keep the old New York line on top?

To check that, we might study the politics behind banking mergers, e.g., BOA/NCNB into BOA, and of course JPM/Chase as the end product of that dynastic cooperation. What a book THAT would make!

http://biz.yahoo.com/rf/040209/financial_china_yuan_1.htmlBEIJING, Feb 9 (Reuters) - China denied a report that it may allow the tightly held yuan to rise by up to five percent next month and said it had been studying currency reform for a long time -- and not at any prompting by the Group of Seven.

..."There shouldn't be blind speculation about this," a spokesman said. "We have always been studying plans to reform the exchange rate system." ... "We are still studying detailed plans and I cannot really give a timetable."

Many economists now rule out an outright revaluation -- wrenching the entire trading band higher -- as too drastic.

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

How much of your wealth is tied up in money or in elaborate financial derivatives of that same money? Have you considered the many factors (many of them oversea) that could easily drive that value lower? Can you think of anything at all that would reasonably drive it higher? A candid analysis of the state of the dollar calls for a prudent diversification of your net worth into gold.

R.

Dollar Bill,

Sorry about the war rant; it was news on Friday and I wonder how it will affect gold in the near-term and the long-term? Do you remember watching CNN for 3 months as Bush & Blair ran contrary to the entire planet? (Please let me finish so I can tie this together). If you and I and the absolutely minute (gold buying) crowd can see the 'fabrications and lies' what happens when the TRUTH speakes out and the WORLD see the farce that B&B have created? I'm afraid 'politics' will have alot to do will gold, Sir!

Goldilox,

Yes girl! Politics is never at face value! Agendas, agendas!
Thanks.

Breaking News!

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Snow tells CNN no change in dollar policy
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http://quote.bloomberg.com/apps/news?pid=10000039&sid=a8d5LVc4uW6U&refer=columnist_peseksnippit:

Feb. 9 (Bloomberg) -- Your country is stuck in a multi year funk. The government's promises to tackle poverty and crime are proving as hollow as the last one's. Coup rumors circulate with surreal regularity.

How best to turn things around? Elect an action-film star as president, of course.

That's just what the Philippines's 82 million people may do in May. Action-picture icon Fernando Poe Jr.'s approval ratings consistently dwarf those of President Gloria Arroyo. In 2001, Arroyo, 56, replaced the nation's last former B-movie-star president, Joseph Estrada.

The main issue for voters is repairing the corruption- plagued economy. You'd think Arroyo's past as an economics professor at Ateneo De Manila University and Georgetown University classmate of Bill Clinton would give her an edge over Poe, 64, who never finished high school.

Never mind that Moody's Investors Service last month cut the nation's foreign-currency debt rating by one level to Ba2, two levels below investment grade, citing risks from the election and rising debt. Poe, beloved for playing scrappy, blue-collar heroes fighting against injustice, would easily win the role of president if the election were held today.

Goldilox:

Hey, it flew in Kalifornia!! TWICE!

snippit:

Company to Leverage Its Unique Non-Conforming Expertise to Transform Financing Business Model

Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Feb. 9, 2004 Residential Funding Corporation (GMAC-RFC) today announced the creation of GMAC Manufactured Housing, a new business unit dedicated to delivering capital and providing operational infrastructure to the manufactured housing market. GMAC Manufactured Housing, along with select industry partners, plans to originate, acquire and service manufactured housing loans. GMAC Manufactured Housing will ensure that manufactured homes are sold, delivered and financed so as to preserve value to the customer and to investors in the manufactured housing market.

"Based on the affordability of manufactured housing as a vehicle to homeownership, we expect there to be high demand for capital resources, committed leadership and transparent operational platforms in this sector," said Chris Gilson, executive vice president and business leader of GMAC Manufactured Housing. "GMAC Manufactured Housing, along with our strategic partners, including Fannie Mae, is committed to providing an influx of capital to this underserved housing segment with the goal of establishing the highest standard for non-conforming and conforming manufactured housing financing across the industry and helping hundreds of thousands of families qualify for affordable, high-quality manufactured homes."

Goldilox:

GM already receives 90% of his income from the finance units, so this trend toward banking continues. Remember when you went to the bank for a loan and got a new toaster (OK, I'm old). Now you can get a new car or house with your loan!

http://www.economist.com/opinion/displayStory.cfm?story_id=2404984This is worth the visit if only for the cartoon.
C!

http://www.depression2.tv/nwo/archives/000024.htmlSNIPPETS:

An informed electorate is essential for the survival of freedom. When a half trillion plus dollar budget deficit goes almost totally unreported - and the ostensible opposition party neglects to even mention it during the campaign - the access to information that makes democracy possible does not exist. The future has been stolen from the people of this country, yet even now most Americans have no idea of what has been done to them.

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising them the most benefits from the public treasury, with the result that a democracy always collapses over a louse fiscal responsibility, always followed by a dictatorship. The average of the world's great civilizations before they decline has been 200 years. These nations have progressed in this sequence: From bondage to spiritual faith; from spiritual faith to great courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; from dependency back again to bondage." --Alexander Tyler, in his 1770 book, "Cycle of Democracy"

http://moneycentral.msn.com/content/P72746.asp
Take heed, enjoins Sir John

On a final note, I would like to share with readers a rather interesting comment that John Templeton, founder of the Templeton Funds, made to Paul Kangas during a PBS interview last Monday.

Templeton's quote will be instantly recognizable to folks who have read the longstanding header on my Web site, which echoes one of my most fervently held views: "In a social democracy with a fiat currency, all roads lead to inflation." (Readers of the Contrarian Chronicles may also refer back to my Nov. 17 column, "All roads now lead to inflation."

And now for Sir John's wisdom: "All currencies, not only the American dollar, but all currencies, always go down, mainly because of democracy. The voters will vote for a person who is going to spend too much, and so you have to expect all currencies to go down." In future columns, I'll have more to say about the dollar, the variables affecting it and why this should be of concern to you.

End Snip:

None ever point out the causes of inflation do they? It's Fractional Reserve Banking, Usury, and Fiat Currency not "Democracy" that is the culpret! TPTB are always attempting to mask and hide this truth:

"The two enemies of the people are criminals and government, so let us tie the second down with the chains of the constitution so the second will not become the legalized version of the first." -- Thomas Jefferson, US President

"Public works are not accomplished by the miraculous power of a magic wand. They are paid for by funds taken away from the citizens." --Ludwig von Mises

"The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence." -- John Adams, "A Defense of the American Constitutions, 1787"

Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.

http://www.bullandbearwise.com/FOMOOutChart.aspReuters
U.S. Treasury to sell $19 bln 4-week bills Tuesday
Monday February 9, 10:59 am ET
WASHINGTON, Feb 9 (Reuters) - The Treasury Department said on Monday it will sell $19.00 billion of four-week bills on Tuesday, Feb. 10.
The bills will be issued on Feb. 12.
Proceeds from the sale will be used to refund $8.00 billion of publicly held, four-week securities maturing on Feb. 12 and to raise new cash of about $11.00 billion.

######

Big REPO(6billion) and coupon pass (1.3b) today by the FED. They had to do a coupon pass last week too.
Are the Asians no longer willing to print money and buy our growing pile of excessive debt? What's up with that?

Looks like the FED will be printing a lot this week to cover the congressional halls of spending and no tax.
Major treasury operations this week to raise cash.
By June/July the debt ceiling must be raised again. Why do they call in a ceiling rather than a bottomless pit?

Its one thing if others are willing to step forward and buy the debt based on the products you buy, quite another if the FED becomes the buyer of last resorts for congressional mismanagement. Al speaks to congress on Wednesday. Will he scold them?

What is a repo? What is a coupon pass?

TIA.

PA

http://www.eubusiness.com/afp/040209030947.7x4cldn1
-- As the US dollar continues its slide against world currencies, should oil, the most valuable global commodity, now be priced in euros?

The Organization of Petroleum Exporting Countries (OPEC) is having a think about the relative merits of abandoning the greenback for the European single currency, and some analysts expect it to be discussed at the powerful oil cartel's special meeting in Algiers on Tuesday.--

A picture that says it all - the cartoon really is worth a thousand words (and several snickers, too)!

Thanks for the link!

http://www.usagold.com/Order_Form.html

Game Over, Player OneThis guy has an entertaining take on the Fed.

http://www.usagold-jewelry.com/

Valentine's Day is Saturday!!
 

place your jewelry order TODAY for timely Valentine hugs and kisses

http://www.nytimes.com/2004/02/07/opinion/07MORR.htmlsnippit:

"If President Bush can maintain the recovery through his re-election campaign, he will be in rarefied company. Richard M. Nixon, in fact, may be the only recent president to accomplish this feat, timing a recovery from a midterm recession to coincide with his 1972 race. The reason this is so hard is that, despite all the bragging about creating jobs or speeding growth, presidents really have few economic tools at their disposal. Most federal spending is outside a president's direct control � locked up in things like retirement programs that chug along pretty much by themselves. The same is true of taxes and interest rates. A president can set the agenda, but taxes are ultimately controlled by Congress. Interest rates fall under the domain of the independent Federal Reserve.

Yet Nixon proved that if a president plays his weak hand ruthlessly � without restraint or regard for long-term consequences � he can make the economy sit up and roll over at his command. In the end, of course, the Nixon "recovery" was short-lived and America soon paid a steep price for it. Unfortunately, Mr. Bush's economic performance so far is eerily similar."

Goldilox:

Many people are betting the markets will rise right up to election day. What happens then?

http://www.nytimes.com/2004/02/09/international/09GROU.html?pagewanted=allsnippit:


WASHINGTON, Feb. 8 � Treasury Secretary John W. Snow has tacitly but unmistakably abandoned Washington's longstanding support for a strong dollar in favor of a weak dollar that is getting weaker, though he continues to insist there has been no change in policy.

Stripped of the code words and elliptical references to "excessive volatility" in exchange rates, the message that Mr. Snow delivered this weekend to finance ministers from Europe and Japan was that the dollar's plunge against the euro is just fine and that the dollar should now decline more rapidly against Asian currencies as well.

In so doing, the Bush administration has made a calculated economic and
political choice. By condoning and even encouraging a cheap dollar, the administration is providing a big push to American exporters by making their products less expensive in foreign markets.

Goldilox:

Of course, in the long run, those cheaper imports that have fueled "low" inflation must increase in price closer to the domestic producers for this to work.

http://www.nytimes.com/2004/02/08/books/review/08KRUGMAT.html?pagewanted=allsnippit:


Eighteen months ago, American capitalism seemed to be in crisis. Stocks had plunged, and some of the nation's most celebrated business leaders had been exposed as phonies if not crooks. Now the economy is growing, and the Dow's been back above 10,000. Alan Greenspan gave himself a big pat on the back at the American Economic Association meetings, in effect declaring that he was right all along. So is it safe to buy stocks again? After you read Roger Lowenstein's ''Origins of the Crash'' and Maggie Mahar's ''Bull!'' you'll have serious doubts. Both tell the story, from different angles, of how ordinary investors got suckered into supporting the lifestyles of the rich and shameless. And you have to wonder whether anything has really changed.

And those who cooked the books weren't just richly rewarded; they were celebrated. In 1998, CFO Magazine gave an Excellence award to Scott Sullivan, the chief financial executive of WorldCom. In 1999 it gave one to Andrew Fastow of Enron. And in 2000, it gave one to Mark Swartz of Tyco. All three have since been indicted.

Those who tried to blow the whistle were silenced. Lowenstein tells the sad story of James Bingham, an assistant treasurer at Xerox who was ordered to ''destroy'' an e-mail message warning of accounting misstatements. When that instruction became public, the company characterized it as an ''unfortunate selection of words.'' Then the company fired him. Two years later, all his misgivings were confirmed.

What happened to the regulators? Bipartisan pressure prevented public watchdogs from doing their job. When the Financial Accounting Standards Board tried to get companies to account for the cost of issuing stock options, Kathleen Brown, the Democratic California treasurer, led a public rally at which she shouted ''Give stocks a chance!'

Alan Greenspan -- who Mahar says won his job as Federal Reserve chairman ''first and foremost because he was a Republican'' -- emerges as a particular villain, not just because he so quickly switched from condemning irrational exuberance to cheering it on. Faced with growing concerns about accounting for derivatives, he ''repeatedly sided with private bankers to inhibit controls and even to suppress disclosure.'' After the collapse of the hedge fund Long-Term Capital Management, which nearly caused a global financial crisis, Greenspan called for less regulation.

Goldilox:

If nothing changes, nothing changes.

http://www.usagold.com/AMK/MK-gold.htmlNugget #1:
"No, we do not [own gold stocks], and there's a specific reason. . . The reasons for holding gold are to act as a guard against inflation, devaluation of currency, and as a safe haven in times of instability. Therefore, the value in gold for us is to act as a low-correlated asset to stock and bond holdings, and by this I mean the factors that drive price movements in gold, upside or downside, are different than the factors that might move equities or bonds upside or downside.

"So in order to achieve the greatest benefit, or the lowest correlation of gold to equities and bonds, thereby creating a better pure diversified allocation, we decided it's more appropriate to hold the metal itself, vs. the mining companies. We hold gold in the form of gold bars and gold coins. This is also true of our silver holdings."
--Michael Cuggino, Permanent Portfolio Fund


Nugget #2:
"In 2004, gold and silver will appreciate against the so-called strong currencies as well as the weak. The metal's best friend in 2004, we predict, will turn out not to be Alan Greenspan, but Jean-Claude Trichet. When -- not if -- the president of the European Central Bank announces a reduction in the prevailing 2% ECB repo rate, it will be seen that his purpose is to cheapen the euro. So seeing, investors will call the thing by its name, 'competitive devaluation.'� Some investors, reflexively, will take that opportunity to buy the dollar, reasoning that it is the dollar's turned to be 'strong.'� Others, correctly, will reflect how small a monetary role the 'store-of-value' function plays in the councils of our central bankers.� With this understanding, they will buy more of those monetary assets listed in the Periodic Table of the Elements. [i.e., the aforementioned precious metals]"
--James Grant, Grant's Interest Rate Observer

Click the url above. Make it your morning habit for fresh news hand picked by MK and served up daily with warm toast and jam. (What? Hey, it's all there... don't blame me if your browser or ISP doesn't support our hi-tech Toast & Jam algorithms.)

R.

Repurchase Agreement. repurchase agreement (repo): Fed purchases securities with an agreement
that the seller (dealer bank) will repurchase them in a short period of time, anywhere from 1 to 15 days from
the original date of purchase. Its a short term loan to a dealer bank that must be paid back. The money is
used by these dealers to support treasury operations and the markets. A repo is kind of like a pawn shop for the banks. If they are caught short of funds they can tap into the FED using securities they own as collateral. Its a short term vehicle for increasing liquidity.

Coupon/Bill Pass. The purchase of treasury notes or bonds from dealers, by the Federal Reserve. The FED prints
up fresh money on the printing press, goes into a bank and buys the notes. Basically they just deposited 1 billion
in cash from nothing. If the need is long term the FED uses this vehicle to increase liquidity. Imagine
how rich you would be if you could print out millions on your laser printer at home, go into a bank and buy
some bonds....nice huh?

Thank you kind sir.

PA

@ TC

"(What? Hey, it's all there... don't blame me if your browser or ISP doesn't support our hi-tech Toast & Jam algorithms.)"

Are you apologizing in advance for using lots of new fancy-pants MS bells and whistles? Or just poking fun at us UNIX guys?

Just got my new Java 1.4.2 upgrade and Gold-Eagle's JAVA-hell quit crashing my browsers. YEAH!!! Still can't get Opera to handle CGI scripts properly, but it sure is way faster than any other browser for lookups!

(:^) -G

http://www.cfo.com/article/1,5309,12142||T|141,00.html?f=home_todayinfinancesnippit:

"More than 4 in 10 employers offering defined benefit pensions said they have converted to hybrid plans, according to a recent survey from Towers Perrin. Another 29 percent have eliminated defined benefit pensions for new hires, and 27 percent have reduced or frozen their defined benefit plans.

Medical coverage is also receiving the scalpel from employers; 41 percent of more than 365 human resource executive and benefit directors representing 340 similarly sized companies said they have already reduced retiree medical subsidies for future retirees. Another 35 percent said they are likely to do so, and 69 percent said they have increased their current retirees' share of medical plan costs via such steps as higher co-payments, deductibles, and co-insurance."

Goldilox: No surprise here!

http://www.cfo.com/article/1,5309,12140||T|141,00.html?f=home_todayinfinancesnippit:

During recent hearings into the restatements and accounting practices at mortgage-finance company Freddie Mac, Rep. Cliff Stearns (R-Fla.) laid part of the blame on U.S. generally accepted accounting principles.

"It is possible Freddie could have hidden billions of dollars on income in a way that complied with GAAP," said Stearns, chairman of the House Subcommittee on Commerce, Trade, and Consumer Protection. "I suggest this is not the result we want from U.S. accounting standards.

Stearns acknowledged that U.S. GAAP was once hailed as the premier accounting system, and he said he still believes GAAP is strong. "I applaud FASB for all their efforts to shore up the system over the last two years," he added.

He added, however, that "we, as the committee of oversight over accounting standard setting, have a responsibility to ensure standards produce financial statements that are transparent and comprehensible," Stearns explained. "I encourage my colleagues to join me to produce legislation to reform GAAP."

Stearns specifically criticized Freddie Mac's use of so called "mixed-attribute accounting," which the legislator said allows companies to decide whether financial assets are carried at current market price or at historic cost. "Freddie shifted assets between categories to manipulate earrings, without any change in the underlying economics of its performance," he explained. "Taxpayers do not have the option of changing the characterization of assets to change the tax treatment; I think GAAP should not allow this either."

Goldilox:

If you can't blame the accountant, try blaming the accounting methods.

goldie good thing gold bugs know how to avoid burnt toast.


c

Greetings Gold Girl, Here on the forum we discussed the resistance of germany and france to UN action. Yes, everyone agreed that he was not following un directions, yes, everyone agreed saddam was hiding something, yes, everyone agreed that hans blix was getting resistance from the saddam govt when he was looking for wmd in iraq. The only difference was........should we just keep putting up with his resistance or not.
Some say france and germany were more enlightened and pure in motive and intent.
Grownups know no one is all that pure in life and so what was thier real motive?
Since this is a currency forum, this forum was quick to decide that saddam trading in the euro rather than the dollar was probably the main reason france and germany didnt want any change in government. Later, we find out that besides the euro reason, the oil for food program was not as advertised and was a money fund to russia and france and germany and not helpful to the iraq people AND, america was getting the blame for saddam keeping medicines and food from his countrymen and children. In addition, we know now that chirac, the pres of france, was getting LOTS of money from saddam by saddam giving chirac's freind lots of oil at a cheap price which could be sold at much higher rates making money for chirac and his freinds and purposes.
The oil never had to arrive at anyones door, it was available to be traded because the ownership was transferred to chirac's freind and that ownership could be sold sight unseen.
Unfortunatly, there are NO knights in shining armor. You can point fingers at one side, but guess what, the other side is more sleazy than you know, and unfortunatly, they use us to fight for them while lying just as much.
No need to throw ourselves off a cliff because the world is made up of flawed humans, but as we age, we are lucky if we can at least find a way not to be used by one side to attack the other without knowing all the facts. Young people crusade against wrong, and thank goodness for that, because thier intent is goodness. But unfortunatly, there is no pure side. The anti bush folks scream "liar!" without knowing that those galvanizing them are liars themselves.
This forum is all about getting above the fray and seeing clear.

http://www.bloomberg.comOPEC Should Rein in Excess Production, Ministers Say
Feb. 9 (Bloomberg) -- The Organization of Petroleum Exporting Countries, the producer of a third of the world's oil, should halt output above its quotas to prevent a drop in prices, a majority of ministers from the 11-member group said. The OPEC president and Indonesia's oil minister, Purnomo Yusgiantoro, said the group is pumping as much as 1.8 million barrels above the planned 24.5 million barrels a day. Ministers from Iran, the United Arab Emirates, Kuwait, Algeria, Libya and Iraq said no change in quotas is needed, only in actual output. ``A decision will be made to rein in this overproduction, at least through better discipline,�� Algeria�s OPEC minister, Chakib Khelil, told reporters before the group meets tomorrow in Algiers. Otherwise prices will be ``well below�� the group�s target range of $22 to $28 a barrel, he said. Oil prices, which last year had their highest average in two decades in New York, have been above OPEC's target since November as members seek to compensate for a weaker U.S. dollar, the basis of oil sales. Ministers including Khelil have said they are concerned prices will fall as demand slows in the second quarter as spring arrives in Europe, the U.S. and northern Asia. ``We are always concerned about the second quarter,�� said the Saudi oil minister, Ali al-Naimi, as he arrived in Algiers. He reiterated that OPEC seeks an oil price of $25 a barrel. The minister for Iran, Bijan Namdar Zanganeh, has said it's ``too early�� to talk about cutting quotas and OPEC should instead eliminate production above the target. The group has no formal mechanism to enforce its accords. Venezuela�s oil minister, Rafael Ramirez, said he expects to hear calls for greater compliance.
`No Justification�
A change in quotas ``is unlikely because prices are at the upper end of the range, which is exactly where OPEC wants them,�� said Kevin Blemkin, a broker at GNI/Man Financial Ltd. ``If it cuts tomorrow, it wouldn�t go down well politically as there is no justification for it at the moment.��
The March Brent crude-oil futures contract gained 28 cents, or 1 percent, to $29.11 a barrel on the International Petroleum Exchange in London. On the New York Mercantile Exchange, March crude oil rose 35 cents to $32.83 a barrel. Kuwait's minister, Sheikh Ahmad Fahd al-Ahmad al-Sabah, said production may have to drop by 1 million to 1.5 million barrels a day as the group seeks to keep prices between $22 and $28 a barrel. OPEC members from nations such as Libya have argued the group needs higher prices than their official target range of $22 to $28 for their benchmark to compensate for the dollar's drop against currencies such as the euro. ``The price is in the upper part of the band, but we are also concerned what is going to happen in the second quarter,�� said the OPEC president, Purnomo. ``There is no room for OPEC to increase production.��
Libya's Target
Libya's minister, Abdulhasid Mahmoud Zlitni, said ideal oil prices are between $28 and $35 a barrel because of weakness in the U.S. dollar. The group should cut overproduction now and may consider lowering the quota at its March meeting, he said. OPEC maintained its quota when members last met on Dec. 4 in Vienna but said then that a reduction was likely in February. The first OPEC meeting of 2004 comes amid forecasts supply in the 80 million-barrel-a-day world market will exceed demand next quarter by 2.5 million barrels a day or more, partly because of rising output in Russia and other non-member countries. While OPEC's oil-price index has been above $28 since Dec. 2, the price has dropped 9.3 percent to $28.20 a barrel as of Friday from a 10-month high on Jan. 13, as concern faded that heating fuel would run short this winter.
`Leaked�
The Saudi minister said members have been producing extra oil to bring down prices. ``A little bit leaked to lower the heat in the market,�� al- Naimi said. The 10 OPEC members who agree to output quotas, all except Iraq, agreed in September to produce 24.5 million barrels a day. They've surpassed that limit since it took effect Nov. 1, because rising prices give them no incentive to cut back, according to Bloomberg estimates. ``We are worried about the second quarter,�� said the Kuwaiti minister, Sheikh Ahmad. OPEC has to ``at least to cut the overproduction we are having now.�� OPEC ministers are next scheduled to meet to review output policy on March 31 in Vienna, where the group has its headquarters."

I must have mis-heard, but on Nat.Public Radio, the news-announcer just said that the Gov't had just reopened one of the post offices back East that had been contaminated with anthrax back in 2001. Get this: They said it cost the Gov't $80,000,000.,,, that's eighty million dollars to decontaminate the place!!!

My Gosh, anyone could buy the entire town that I live in along with it's Walmart and it wouldn't cost half of 80 million dollars. In fact, you might be able to buy the entire county for $80,000,000. How do you spend that much to decontaminate a building?

ok so the clowns at the comics are lenthening trading contracts so as to dillute the money flowing in as it just isnt big enough to handle the fiat script being thrown into its three ring circus, so in order to entertain the crowd they shorten the time frame and lengthen the duration.
many wonder what happend to the regualr show hours that where shortend after the towers fell, audiences worlds wide hoped in vain for a return to regular hours but are always met with the same carnaval barker repeating the stale ol warn out yelp these are our regular hours, these are our regular hours, monotonousily, ,apethetically, repedativly, half-heartedly so as the newbies walking by think nothing of it. while those standing still in this circus of disallusionment point out the true silver pickpockers,while the authorities perform the paradoy of the keystonecops, to the delight of the crowd.


A NYMEX statement said trading will be extended in gold options on a June/December cycle, with the addition of contracts for June and December in 2006, 2007 and 2008.
In silver, options trading will be extended on a July/December cycle, with contracts added for July and December 2006, 2007 and 2008.

uh um question/ clarification came a we lil wholipean voice...... would those be trading under shortend hours or regular hours, you know the oones we had before 9-11?

huh? was that........................

http://1010wins.com/topstories/winstopstories_story_040111441.htmlFeb 9, 2004 (HAMILTON, N.J.) -- A mail distribution facility that was shut down in October 2001 after handling anthrax-tainted mailings ... has been deemed free of any traces of the potentially deadly bacteria, state and federal officials announced Monday.

Thomas G. Day, vice president of engineering for the Postal Service, said he expects the building will reopen by the end of the year, and possibly as soon as late summer.

Day estimated the cleanup cost to be $80 million for the Hamilton site. Additional costs will be incurred as the facility is prepared to reopen.

The Hamilton center is one of two shut down after letters containing anthrax passed through them in October 2001. The Brentwood processing facility in Washington reopened in December. ........ Using the same fumigation procedure employed at Brentwood and the Hart Senate Office Building in Washington, a chlorine dioxide gas was pumped through the Hamilton center in October to kill any remaining anthrax spores.

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

Would anyone like to make an educated guess how much the Brentwood fumigation bill was?

With examples like this, does anybody still doubt the goverment's determination and ability to "push on a string"?

"We shall have the hyperinflation"

R.

http://www.lifeaftertheoilcrash.net/Snip.....

"Civilization as we know it is coming to an end soon. This is not the wacky conclusion of a religious cult, but rather the result of diligent analysis sourced by hard data and the scientists who study global "Peak Oil" and related geo-political events.

So who are these nay-sayers who claim the sky is falling? Conspiracy fanatics? Apocalypse Bible prophesy readers? To the contrary, they are some of the most respected, highest paid geologists and experts in the world. And this is what's so scary.

The situation is so dire that even George W. Bush's Energy Adviser, Matthew Simmons, has acknowledged that "The situation is desperate. This is the world's biggest serious question."

According to Secretary of Energy Spencer Abraham, "America faces a major energy supply crisis over the next two decades. The failure to meet this challenge will threaten our nation's economic prosperity, compromise our national security, and literally alter the way we lead our lives."

If you are like 99% of the people reading this letter, you have never heard of the term "Peak Oil". I had not heard the term until a few months ago. Since learning about Peak Oil, I have had my world view, and basic assumptions about my own individual future turned completely upside down."

End snip...

Take care.

PA

Ever since COMEX rolled out their ACCESS system to offer the illusion of gold ownership nearly around the clock, there is a bigger question you might want to pursue. Rather than wondering why the standard COMEX pit trading in gold has been merely shortened in daily duration, you might want to contemplate why it hasn't been eliminated entirely.

R.

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

What We Can Expect

Printing Presses in Overdrive

Since governments are addicted to spending money and central banks exist only to create new money and credit, additional asset bubbles are inevitable. Since the U.S. economy is now a financially-driven economy, we can expect more money and credit to find its way into other asset classes. In a financial economy such as the U.S. where a disproportionate share of capital is invested in the capital markets, additional credit leads to speculative bubbles. Greenspan/Bernanke & Co. have argued that the Fed has unlimited ability to create unlimited amounts of new money (helicopter money) and intervene endlessly in the financial markets to support asset prices of stocks, bonds, or real estate. Therefore as long as this ability isn't curtailed through constitutional means or through gold and silver backing, the Fed can create sufficient quantities of money to bail out any financial entity be it a bank, hedge fund, or government enterprise such as Fannie and Freddie.

Currency Depreciation

What we've seen so far is financial asset inflation in the form of rising stock and bond prices. More recently this asset inflation has spilled over into the housing markets. Looking at the rise in commodity prices and the cost of goods and services, it appears that money and credit are feeding into hard goods. Judging the policy decisions of Asian, European, and especially the U.S. central bank to expand the supply of money and credit, further currency depreciation is inevitable globally.

Asset Bubbles in Natural Resources

What I believe that we will see later this year is that the price of gold and silver will begin to appreciate against most major currencies and not just the U.S. dollar. Therefore if one views the current rate of monetary debasement, I believe the next asset bubbles will take place in the natural resource sector. Commodities and especially the precious metals are only in the beginning stages of a new bull market. The charts of the CRB Index, energy and precious metals are tell tale signs of the coming boom in natural resources. We are close to the second phase of the boom when institutions recognize that they have been fooled.


Black Blade: That essentially covers it.

http://www.reuters.com/newsArticle.jhtml;jsessionid=CB23NIKMJ3OSECRBAELCFEY?type=businessNews&storyID=4310170
Snippit:

BEIJING (Reuters) - China's trade surplus with the United States rose to $58.61 billion last year from $42.7 billion in 2002, the People's Daily Overseas Edition said on Monday, citing customs figures. The United States says its trade deficit with China is much larger -- hitting $103 billion in 2002 and likely to top $120 billion last year.

Chinese exports to the United States, its second-biggest trade partner, rose an annual 32.2 percent in 2003 to $92.47 billion, while imports from the United States rose 24.3 percent to $33.86 billion, the newspaper said. Washington is pressing China to revalue what it says is an artificially cheap yuan currency that is making its products cheap abroad and hurting U.S. manufacturing jobs.


Black Blade: The soaring twin deficits will take the US dollar lower. There is no alternative.

http://www.iht.com/articles/128648.html
Snippit:

WASHINGTON Though he continues to insist there has been no change in policy, Treasury Secretary John Snow has tacitly but unmistakably presided over a profound shift away from supporting a "strong dollar" to thinly veiled glee for a dollar that is weak and getting weaker. Stripped of the code words and elliptical references to "excessive volatility" in exchange rates, the message that Snow delivered this weekend to his counterparts from Europe and Japan at a Group of 7 financial ministers' meeting in Florida was that the dollar's plunge against the euro is just fine and that the dollar should now decline more rapidly against Asian currencies as well.

In so doing, the Bush administration has made a calculated economic and political choice. By condoning and even encouraging a cheap dollar, the administration is providing a big boost to American exporters by making their products cheaper and more competitive in foreign markets.

The United States as a whole needs to attract $1.5 billion a day in net capital inflows from abroad - $500 billion a year more than it sends out - which means that the world is being flooded by American debt at levels never seen before. The Bush administration's huge federal budget deficits could increase that need for foreign capital even more, and higher interest rates would add billions of dollars to those deficits. The dollar would probably be declining regardless of what Snow said, because the United States is now so indebted to the rest of the world that the investment appeal of holding U.S. securities is considerably less than it was at the height of the economic boom.


Black Blade: And yet the US dollar remains grossly overvalued.

@ BB

While you're watching, could you give the 20 word tutorial on POO? The earlier article said tha OPEC was concerned about prices falling below $22-28, but the NYMEX oil is $34+ and the London oil is $29.

Are all these differenet prices before and after shipping costs, middlemen, etc., or am I nuts?

Ok, they're two unrelated questions, but help anyway, please.

P.S. @$ Bill - the best explanation of the political beast I have heard yet. kudos to you. It fits right in with "They're moving their lips!"

http://www.nytimes.com/2004/02/09/opinion/09MON1.html?thGoldGirl, DollarBill,

GG, you raise an interesting point on what might be the affect on the $US if and when faith in the Administration declines, as it seems is currently happening (refer to the editorial in NYT for 9 Feb, at the above link, which gives a "restrained" view entitled "Mr. Bush's Version").

Without going into the lies and misrepresentations that are part and parcel of politics in general (and the politics of nation-states in particular), I think that faith in the $US may well be strongly linked to faith in the incumbent Administration and its fiscal policy. As you say, GG, the chorus is becoming louder around the world. Likewise, POG will be similarly linked.

USAGold Admin: I suspect this may be an uneasy thread for you to accommodate in the fabric of your gold/finance discussion. Do you have any ground rules for this "emotive" topic?

:-)

Sundeck

http://www.sltrib.com/2004/Feb/02092004/business/137110.asp
Snippit:

OPEC oil ministers are shifting their justification for high prices to a weakening dollar, rather than war and terrorism, a sign that crude near $30 a barrel may persist for months as the U.S. currency slides. The Organization of Petroleum Exporting Countries meets tomorrow in Algiers, Algeria, and analysts expect no change in quotas because of declining inventories and rising prices. The oil ministers of Saudi Arabia, Ali al-Naimi, and Qatar, Abdallah bin Hamad al-Attiyah, have said a falling dollar drives down prices in Europe and Asia, while hurting OPEC's ability to import goods from those regions. Crude oil prices, around $29 in London, have declined 21 percent in euro terms in the past year, while for Japanese buyers prices dropped 19 percent.

Black Blade: Never fear, it won't show up in the "core rate" of the CPI either. ;-)

In a nutshell the price ranges are for differrent types of oil. WTI (West texas Intermediate) is higher grade oil )low sulfur and less processing, Brent Crude is slightly lower quality requiring more refining and costs, and then there is the basket of oil (a combination of crude oil supplies or if you prefer an index of various crude oils). For example, recently heavy crude from the Orinoco Belt in Venezuela yeilds 65% final product (distillates) whereas WTI can yeild up to 95% final product (as can many Middle East light "sweet" crude).

- Black Blade

@ GG, Sundeck

I think in many ways we have not opened that can of worms as many of us believe that the spendthrift ways of US government are independent of administration. No matter who wins in November, odds are good they will spend and borrow more than Dubya, just to keep up with the geometric progression.

Dubya's record dealing with allies and satellites is suspect, mainly his neo-con "cowboy" approach, but the real issues will, as always, remain unaddressed.

Then why does OPEC complain about it being $22-8 when LSC is $35 on NYMEX? Is $35 the "delivered" price, including drayage costs?

Some current headlines...
Bloomberg: Japan's Bonds Gain on Stock Decline; Five-Year Auction Highlights Demand
USA Today: Heating bills jump
USA Today: Job searchers quit
ABC News: Japanese Stocks Drop to 7-Week Low
Bloomberg: Euro Rises After European Ministers Say They Didn't Discuss Currency Sales
ABC News: Tokyo Stocks at 7-Week Low
MSNBC-Business: Dow loses 14, Nasdaq trims �3 points MSNBC-Business: USDA ends U.S. mad cow probe
MSNBC-Business: Court win opens doors for hemp food

The higher price is for WTI while the "basket" is the range used by OPEC as the organization comprises several producing regions of various grades of crude including "sour" (sulfur rich) vs. "sweet" (low sulfur). There are variable refining costs and shipping costs involved as well. I could go into deeper detail but this is the simplest explaination.

- Black Blade

http://www.bls.gov/news.release/empsit.t12.htmAll you pointy-headed pundits and pernicious pedagogues. . . please PAY attention!

The US bone pile should no longer be referred to as "laid-off", "between jobs", "unemployed", "unengaged", "mothballed", "RIF'd", "given-up looking", "job-jacked" or other such epithets! No less an authority than the BLS has finally coined the politically correct term for our plight.

We are now the "UNDERUTILIZED". I'll thank you all to refer to us appropriately in your future expository endeavors!

The weirdest thing I found in Webster's Thesaurus was that the second entry for "unemployed" was listed under "DEAD". OOH, that smarts!

http://bonds.yahoo.com/rates.html
Druid: Wow! I wonder which rate is going to represent the rate for all maturities? One lowly rate for one giant market of debt, hmmm. At some point someone has got to separate themselves from the pack and start heading for the doors.

http://www.etherzone.com/2004/henr021004.shtmlPOOR GEORGE
SYSTEMIC INTELLIGENCE FAILURE
By: Ed Henry
The saga continues. Was President Bush the innocent dupe of misleading information about Iraq's weaponry? As the British put it, was he the victim of "sexed up" information�a question that seems to say more about the British libido than anything else�or did he and his cohorts deliberately distort qualified intelligence reports, limited information, and educated guesses?
And what about the media or what passes for news in this country? Compare more than six months of daily appearances on television and radio by the most publicity conscious president we've ever seen, leaning over the podium to tell us the 9/11 terrorists "must have thought we'd sue them" and later one-liners like "bring 'em on" while our troops and equipment massed on Iraq's borders and Tommy Franks played computer games in Wolf Blitzer's "Cutter" (Qatar) and the Iraqis dismantled their short range missiles or played with drones from FAO Schwarz.

With about 80 percent of the rest of the world against our invasion of Iraq, the substantive news coverage of opposing views could have been written on a pinhead with a shovel. And Rupert Murdoch's propaganda and disinformation empire still absolves itself of any complicity in the illegal invasion or the fantastic promotion of weapons of mass destruction.
No doubt our compassionate conservative, fiscally frugal, born-again Christian President is the innocent victim of poor advice from the intelligence community. Nor should he be held accountable for any of the following:
� Ignoring a decade of on-the-ground first hand experience and documentation of the destruction or absence of WMDs by the United Nation inspectors. Instead of vilifying former inspectors who tried to tell us otherwise, we could have simply gone to the UN files for information or to at least draw a comparison with our own intelligence. Of course, the UN team, like most intelligence agencies, seems steeped in wishy-washy qualified reports and hesitation to make the sort of didactic statements that appeal to fascist war mongers.
� Expecting and demanding that Iraq prove the negative "yes, we have no bananas" when we knew full well they once bought them from our store and we still had the invoices.
� Stonewalling everything about Vice President Cheney's energy commission meetings with people like Enron's Ken Lay where the Iraqi oil fields were openly discussed and thrown into the mix of eventual availability and control.
� Abandoning the 1972 Intercontinental Ballistic Missile Treaty so that we could get on with the development of a star wars shield and other nuclear testing.
� Establishing a first-strike initiative. For the first time in U.S. history we have established a foreign policy that allows us to attack sovereign nations that have done us no harm and obviously can be attacked on hearsay.
� Passing the Patriot Act that takes away the very freedoms Americans have been
willing to fight and die for.
� Making a mockery of the Nuclear Nonproliferation Treaty by extending our own nuclear development into "mini-nukes" that can be used by foot soldiers and have one third the power of the bombs we dropped on Hiroshima and Nagasaki. The President of Brazil summed it up best when he said: "The nuclear nonproliferation treaty makes no sense unless the big boys lay down their weapons." So far, not one nuclear secret has remained secret and, therefore, new nuclear development means the proliferation of more weapons of mass destruction.
� Extending our own weapons of mass destruction with things like "Tactical Bunker Busters" or the "Mother of All Bombs" and COIL (the chemical oxygen iodine laser) that destroys all plant and animal life while preserving buildings and infrastructure and is being mounted on all Apache helicopters.
� Rather than do the common sense thing of closing our borders immediately after we were infiltrated by illegal aliens who trained in our nation and carried out the suicidal attacks of 9/11, George W. Bush has gone forward to a proposal to open our borders even further by allowing legal status to those who break our immigration laws and then claims that "it's not amnesty." Illegal immigration has gone up fifteen percent since his announcement.
� After running up the national debt $555 billion last year, the situation for 2004 is even worse, but like an ad on late night television Bush promises to cut the deficit in half in five years. Wow, a fifty percent reduction after a one hundred percent mark-up. Just have your credit card ready.
These activities can, no doubt, all be laid at the feet of faulty intelligence and justified by special commissions set up to investigate how our hapless leader was duped into going along with the opinions of his staff.

As Ted Lang so aptly put it in a recent Ether Zone article titled "Another Phony Bush Investigation: "Has everyone already forgotten the special, independent, autonomous, separate, jointly created 9-11 Kean commission, created via agreement by both Congress and the White House? Has everyone already forgotten how the Bush administration blocked funding to the commission, blacked out 28 pages of its report, refused to turn over information and documents, and is now fighting to shut down the commission after having so seriously delayed it? Has everyone already forgotten how Bush tried to stack it and bias the commission by appointing as its chair Kissinger the Hun?"

And let's not forget the special commission Bush appointed to study "private accounts" for Social Security where ex-senator Daniel Patrick Moynihan, the very same person who along with Bob Dole was responsible for the 1983 skyrocket increase to payroll taxes that is still producing an overtaxed surplus, was appointed to co-chair this committee�a committee that never did put together a final report or recommendations other than a wishy-washy pile of actuarial data compiled by the underlings in the committee.
We don't need another phony investigation. Bush needs it, but we don't. We already know the answer and we got it from the horse's mouth. It was decided that "weapons of mass destruction" was the best argument to use in order to rally the troops and get the people behind an invasion of Iraq and seizing their oil. The end justifies the means. Just like Nuremberg, the only question now is what's the punishment?
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."

@ Mikal

Don't forget the one plane cleared to fly during the 9-11 grounding. It picked up Saudi "friends" of the administration and wisked them out of the country. Not exactly the work of the "uninformed" and "ill prepared".

It was only the mass production of war material for WWII, financed by the mass borrowing of the four Roosevelt administrations that put labor back to work and ended the major depression of the 1930's. Does anyone truly believe a similar scenario is not unwinding for us with the undefined "War on Terror". Even if Dubya loses the election, this aberration will not disappear. At best, it will morph into some new campaign slogan.

TPTB are resigned to replay their father's follies as they see no other answer in an economy where too much money chases too little demand for goods. "Redistribute" the world's wealth at the cost of some "underutilized" cannon fodder and some third-world miscreants.

What better way to stimulate work than blow everything up so it can be rebuilt using government "reconstruction" contracts.

As the Firesign Theater so aptly penned, "Where there's smoke, there's work!"

By the way, as I write this Au=408.60, DX=85.68 - Man the lifeboats, debtberg dead ahead.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Your posts really straighten out my fuzzy thoughts !
Tks for your time, BB
BTW, the LINK shows that the US$ is in DIVE mode again -- down to the 85.7 level AGAIN tonight !!
<;-)

FInd out who is behind the company that was awarded the contract for cleaning up the Building and you might find out who it was that sent the anthrax through the post office
in the first place.....Nice Job ....Sounds like an inside JOB.....like ENRON or IRAQ.......

Is It the season ..... It just seems like the last four years has been a perfect time to RIP OFF TAXPAYERS by RIpping off the GOVERNMENT by INSIDERS>.....

Its so easy ....when you've got cover....."shelter" under the wing of DARK ANGEL.....Don't ever think that they are like you or I .........thus they sell their souls....for money and influence...

THERE IS A HOUSE in Washington DC
THEY CALL THE RISING SUN
IT'S BEEN THE RUIN OF MANY A POOR BOY AND GIRL ,
AND LORD I know I'm not one

My RIGHT foot was on the platform
My left foot was on the train
I swore to GOD I would never go back TO Washington DC
TO WEAR THAT BALL AND CHAIN>......

...THE ANIMALS.....( words have been changed to indict the
guilty)

Our COngress is BRAIN DEAD
OUR SEC IS TOOTHLESS (FAIRY)
and
OUR GOVERNMENT COFFERS and
CORPORAT COFFERS are being gutted by
Unscrupulous villains .....
THE CONSTITUTION IS BEING GUTTED
and the ECONOMY is being gutted ......
.........all systematically ......and
all on the watch of GEORGE BUSH

Maybe the Carlisle group is now in the Hazmat business, cleaning up it's own messes....maybe a political investigative journalist should look into this before the election...

Late afternoon came and at both bridges the battle was ferociously being fought. An endless stream of adversaries flowed like the river from within Hammerton to repel the Goldbugs. At times the bridges appeared to have a solid black line from gate to the entrance of each bridge. The earthworks were like ant hills disturbed, unleashing a deadly horde.
Each thrust was met with resistance and at times the masses swirled. Those caught within vanished.
Sir M.K. had his flagmen raise and lower many flags. Sending more into battle.
It would seem all would stagnate except for Sir Belgian had seen a weakness and he at first retreated. Omar and Sir Ari were amazed at what was to them the beginning of defeat.
Yet,Sir Belgian felt the battle and knew his foe would follow him out beyound the earthworks. And they came!
Like mad dogs on the hunt. The bridge emptied and when they were exposed, Sir Belgian turned on them. He knew what Sir Ari and Omar would do. On command their knights swung left and right and cut into the main body. The foot soldiers behind, which by the way had many Scots, blocked them from retreating. The dark forces were surrounded and Omar and his men slashed with precision. But it was Sir Belgian's turning to ride through the middle and up and over the earth works that placed the Goldbugs at the West Gate of Hammerton. Now closed his Knights dismounted and began to cut at the gate with axes. They were so close that the arrows of the dark forces could not find their mark.

On the East Gate Lady Waverider, Boaz and Jachin had broken the earth works and were advancing on the bridge to the gate of the city. Bonfir returning, had directed his men to secure the earth works.

Inside Hammertons Hall, Therroth conversed with Gandalf.

They fight well my student. They truly have Heart and they come to rescue you but in a short time I will change Triumph into Despair, said Therroth with a snicker.
He continued. I have more forces on the way to Hammerton.
What have you to say, Gandalf?

It is all preception on you part, Therroth, Said Gandalf.
His voice remained calm. If you killed all but one, that one would still oppose you!

We shall soon see, said Therroth.
We shall soon see.

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

http://www.gold-eagle.com/editorials_04/salinas021104.htmlThanks for another heads-up message on your GATA Groups forum. Tonight you had this to say on Hugo Salinas Price's latest essay @ GE: "... a fascinating commentary by GATA's
great friend, Hugo Salinas Price, "Globalization Dissected," which shows how economic globalization is destroying local production in most countries and creating worldwide imbalances that can only end catastrophically. Salinas Price argues that only returning gold to its role as the primary method of international payment can balance the system and preserve local production.
This essay is as thoughtful and profound as anything you're
likely to read for weeks. Don't miss it. It's here:
http://www.gold-eagle.com/editorials_04/salinas021104.html
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc."
Best Regards

http://www.plata.com.mx/plata/plata/english.htm
Druid: Mikal, agreed, that was a great read. If you're interested in other reads by the same author, link on to his site.

http://www.guardian.co.uk/business/story/0,3604,1142959,00.htmlsnippit:

The number of people going bankrupt has risen by almost a third over the past year to its highest level since the last recession, exacerbating fears that






ADVERTISEMENT


Britain's borrowing binge could be about to tip over into a major debt crisis.

Less than 24 hours after the Bank of England raised the cost of borrowing, official figures were published yesterday showing that more than 10,000 people saw their finances go into meltdown in the final three months of last year - the equivalent of 111 people a day. That is 29% up on the corresponding period in 2002 and the highest figure since the first quarter of 1993, when the economy was emerging from recession.

The data prompted warnings that Thursday's rate rise, which many analysts see as the first of several, will dramatically increase the number of people struggling to keep up with their debts. At the same time, some experts said new legislation coming into force in April, aimed at reducing the stigma attached to bankruptcy, could create a fresh surge in personal insolvencies.

During the period from October 1 to December 31, 10,271 individuals in England and Wales became insolvent, the Department of Trade and Industry announced. But at the same time the number of company failures fell to 3,316 - a 22.5% drop on the corresponding period in 2002.

That starkly illustrates how the consumer spending boom has spelt dramatically differing fortunes for consumers and many businesses, said Mike Jervis, a partner at the business recovery services arm of PricewaterhouseCoopers. "Increased consumer spending is filtering through to businesses with a significant fall in company failures. However, the increase in consumer debt has led to record levels of personal insolvencies."

The increase has been blamed in large part on people amassing excessive debts on credit and store cards. The figures come the day after the Bank of England's monetary policy committee raised interest rates by a quarter-point to 4%, which is likely to increase pressure on people who are already troubled by debt.

Goldilox:

Sound familiar? Debtberg dead ahead! ah-ooo-ga

http://quote.bloomberg.com/apps/news?pid=10000086&sid=ayvhyB_Gbu44&refer=latin_america
Druid: GAB, let the march toward unification begin. And so it goes. there's a whole lot of latinos that need to embrace the "American dream". Now let's see, that's a possible market of 800 million, even Europe would have to take notice but then does Europe have the "inside" play??

http://www.plata.com.mx/plata/plata/comHSP46a.htmsnippit: (Price on China)

"Chinafication" harms China itself and the rest of the world, too .

It is only an unimportant exaggeration, to say that China threatens to become the only manufacturer in the world, of everything for everyone, just because it does not demand payment in gold for the balance of its exports not covered by imports. It is enough to send dollars to China, and the purchase operations by buyers around the world are considered paid.

The situation is truly absurd. China will manufacture everything the world wants to buy � no one can equal their labor costs. (For example, a recent buyer interested in tenis racquets was taken one night on a tour of a Chinese factory producing them. He was ushered into a pitch black building. The light was turned on, and there he saw hundreds of workers working completely in the dark, stringing tenis racquets. No lights were normally on, to save on electricity costs.) All factories in the world are potentially at risk from Chinese competition. In the U.S., once a manufacturing superpower, factories are firing workers or closing. Enormous Kodak, an icon of industry and technology, is firing 15,000 workers. A very bad omen, among many others.

If the world continues on this path, China looks set to absorb a goodly percentage of all production on this planet. In exchange, it is willing to receive in payment, dollars and more dollars; simple digits.

Dollars are not wealth

Dollars are a means of acquiring wealth, but they are not wealth in itself; nor is receiving them really and truly, collecting. But, no matter! The Chinese do not appear to give much thought to this question. They are pleased to receive dollars and more dollars, and to add to their stash. For what purpose?

All the while, as China produces goods for the rest of the world, most of its population lives in poverty, because in return for their exports, the Chinese are not receiving imported goods, which are the things which raise a nation from poverty. The proof that they are not receiving imports in a volume similar to their exports, is that they continue to accumulate massive amounts of dollars in their reserves.

The trend is irrational. On the one hand, Americans are happy to receive imported riches from the whole world, while their factores close and their population is increasingly unemployed. And on the other hand, the Chinese amass incredible amounts of dollars while the people remain in poverty, because all those dollars represent goods which they have not received in payment � real payment � of their exports.

Goldilox:

I still find it hard to believe that China's near-slave labor is going to run to the Shanghai Gold exchange and buy out the store. There's something more sinister in the works in a country that betters all competition by literally working laborers in the dark and purchases nothing but natural resources in return. Look for some major confrontations over Mid-east and Caspian oil in the near future. Hmmm . . . sounds a lot like the prelude to WWII. History rhymes.

I think it was Marx who said "the surest way to disrupt any society is to debase its currency."

What might be the agenda of the Central Bankers who are debasing ALL major currencies in their "bugger thy neighbor" schemes?

Food for thought. Nighty night.

11:26 PST
Au=408.8
DX=85.61

Oil on the machine. Lubricant.

What a Forum!Ladies and Knights of the USAGOLD FORUM.

Time to retrospect.
I have posted for about two years and have never conversed with a better bunch. Down to earth individuals with freedom in their hearts. Does not matter what country. The thread entwines us all. I read all your posts and no matter how dire the posts may be, there is always a Gold Lining to be found. Heated discussions may unfold but, reconciliation is obtained in the greater percentage.
That has a lot to say about us all.
Our Host has allowed the Human factor to be explored as the world expounds its limitations and soon to be hardships upon us.
To all I extend a JOB WELL DONE.

I have no doubt we will persevere through thick and thin

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

http://www.businessreport.co.za/general/print_article.php?fArticleId=344627&fSectionId=553&fSetId=304
Snippit:


Opec considers ditching the dollar


Algiers- As the US dollar continues its slide against world currencies, should oil, the most valuable global commodity, now be priced in euros?

The Organization of Petroleum Exporting Countries (Opec) is having a think about the relative merits of abandoning the greenback for the European single currency, and some analysts expect it to be discussed at the powerful oil cartel's special meeting in Algiers on Tuesday.

"I would be surprised if the question was not examined" in Algiers, a source close to Opec said at the cartel's Vienna headquarters.

Opec's current secretary general, the Venezuelan Alvaro Silva, recently indicated that the question was being mulled by the 11-member group, which has massive influence over global oil prices and production.

"We are speaking about negotiating for crude in euros. It is possible that the organization will discuss this and take a decision at a given moment", Silva said.

Comment: Just a marker on the Trail, plenty of opinions on this subject floating about, I see this article chock full of them as well. Especially enjoyed the "Trader" at Rothschilds opinion. He added...nothing of substance to this argument.

The CoinGuy

Ditto that one.

The man's a philosopher -- who feeds his family. Rare. (Still working on that one myself, so all good examples, as well as good company, welcome. Amazing, how long the road of learning is.)

That the euro is a currency, is now generally accepted...but, that behind this �-currency, there is a "concept" is totally unclear, for the general public.

In this global "credit"-society, the �-system is build (building) upon * neutral *, multi-national that is, management and associated with a "FLOATING" gold-reserve-structure, (ECB's-marking to market), that finally abandoned the now obsolete "fixed" gold legacy (dollar-fixed/gold-standard) of the failed (!!!)...FAILED, Bretton Woods structure.

Heavy emphasis on "Neutral" and "Multi National" !!!

A small anecdote from the Belgian lilliputan Kingdom : One of the former Iran Shah's sons (muslim) becomes the god father of the King's newborn grandchild (catholic). Very controversial overhere and therefore of much broader significance than superficially percepted.

Another link in the multi national euro-system is the building, French-Sino relationship, reinforced by Chirac's clear, pro China stance, about Taiwan on the Chinese visit to France.

At Ecofin's meetings, Austria explicitely expressed the opinion that a stable euro versus a declining dollar is OK !

ECB (or the E-System of CBs - � bonds) is not going to intervene on the $-exch.rate. And if oil (and EMU) is not (yet) wanting to fasten the dollar's fall (euro for oil), the ECB/BIS remains on its management as to organise the smoothiest practicable $ > � transition, with the freely floating gold reserves in the background.

Belgium's prime ministre (G. Verhofstadt), suddenly, cited von Hayek's name in today's speechs. Very unusual and surprising, whilst the dollar and euro competition is coming more under the spotlights.

Hugo Salinas should know better when he speaks about China. Who is going to tell us, how much Gold, China already exactly has in its direct/indirect (HK) possession ? Same goes for the amounts of silver (overhang or shortages)(China/India/other) ? Can the Charles River Associates, really track *all* silver stashes and their moves on our globe ?

Many Gold and finance commentators/reporters, should better investigate on the concept behind the euro and its consequences.

thru thick and thin
this honesty battle we will win
a grin, a reconciled sin
when does the new monetary system begin
pink bills
goldbug thrills
fiat kills,
leads to shills, hookers, and alot of debt bills
over the hills
thru the wooods
we aint settling for coulds or woulds
not even a should or a could
as we remove the false monetary hood
covering the worlds monetary eyes
and oh my
what a surprise as the gold ands and silver light emerges to set everything right.
a battle
a fight
who cares as we will come out right
so get yours before it gets light for the price
dont think twice
it will serve you better than rice has served humanity,
no need to listen to me,
then u wont be free.
silver and gold wont be told how to behave
since they be around long after all of us are dead and in the grave
soon to come the worlds newest 21st centuary rave

gold and silver
honest money for
honest people!
(inspire by slingshot)

In Georgia, a new AFL-CIO study found 10,000 children of Wal-Mart employees were enrolled in Georgia's public health insurance program. As comparison, the next highest employer was Publix, with 734 children enrolled.
And this from wall street journal.com
"Unlike most families, the federal government can perpetually spend more than it takes in and still remain fiscally sound. That's because unlike us mortals, Uncle Sam isn't going to retire. His income isn't going to top off in middle age and slip in his golden years. The occasional but short-lived downturn notwithstanding, it will continue to grow with the economy, forever." Whodathunk the WSJ editors would ever get to allowing this view under thier name.

Dollars going overboardLONDON : The dollar fell against the euro after the European Central Bank's chief economist said the ECB would not be pressurised into cutting its key interest rates to curb the surging eurozone unit.

The single European currency rose to 1.2776 dollars from 1.2696 late on Monday in New York.

The dollar fell to 105.38 yen against 105.60 on Monday.

Asked by the daily Sueddeutsche Zeitung whether the ECB should have a strategy to rein in the currency, ECB chief economist Otmar Issing said: "Our monetary policy strategy as its stands cannot be bettered.

"The exchange rate is not a target in itself but an important variable for gauging the risks for price developments," Issing said.

"There is no point in making some sort of flash in the pan. That was demonstrated in the case of Japan back in the late 1980s when it was pressurised by other countries to pursue a monetary policy that was too expansive."

http://www.usagold.com/DailyQuotes.html
The Daily Gold Market Report has beenupdated.

If you are considering investments in gold we invite you to request our freeintroductory information packet detailing the products and services offeredby USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and lookforward to working with you.

OPEC is not happy with its declining purchasing power. Oil revenues in US$ and 70% of their purchases are done in euro.
Next meeting in march.
In the mean time, $ and �, continue their competition. Watch your personal reserves, carefully !

http://www.usagold.com/AMK/MK-gold.html
Economist Richard Duncan (The Dollar Crisis: Causes, Consequences and Cures) says the Bank of Japan has launched the most audacious endeavor to conjure wealth since John Law. . .

Also, "Gold May Stage Bullish Channel Breakout"

_________________________

You are invited to visit now, often. Updated regularly. Stay abreast the gold market via News & Views, this forum and the Daily Gold Market Report.

This is the website where serious gold investors congregate and keep in touch with the market. Please bookmark this page.

http://thepriceofloyalty.ronsuskind.com/thebushfiles/archives/000064.html
An Experiment in Transparency

These documents are drawn from a collection of 19,000 files of Paul H. O'Neill, the U.S. Treasury Secretary for the first two years of the Presidency of George W. Bush. Like all Treasury Secretaries, O'Neill was the top domestic appointment of the President and also a principal of the National Security Council. The files, which range from memoranda to the President to handwritten notes to "sensitive" internal reports, cover a sweeping array of foreign and domestic issues. They also display the attending political and personal matters that often determine policy. They were collected as part of a Treasury Department archiving process in which every item that crossed O'Neill's desk, from every department in government, was copied into a TIF, or image, file. Documents cited in the "The Price of Loyalty" are presented with explanations of context and little comment. They speak, as does all irrefutable evidence, for themselves. More files of compelling public interest will be released in the coming days and weeks.

The posting of these files is meant to encourage more productive, fact-based public dialogues. Those who wish to add documents to The Bush Files, can contact Ron Suskind through this site or send submissions to his private post office box.

"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman."
-- Justice Louis Brandeis, 1913

http://thepriceofloyalty.ronsuskind.com/thebushfiles/

You said "ECB (or the E-System of CBs - � bonds) is not going to intervene on the $-exch.rate."

I am in much agreement with you on this.

The ramifications of this are that the Euro in now the safe haven currency of choise, and the Yen is the More Speculative currency play. The Yen is not safe haven, because its rise will not be sustainable in the long run. This rise will jeopardize it's soon to be crumbling Export production.

Both the strenghtened Euro and Yen will be available to purchase much impaired Dollar based Assets. Everyone on Wall Street knows the Euro is the Safe Haven, and they are taking actions accordingly.

Greenspan is now in a position, where he has no effective tools, except to debase the Dollar, to continue the illusions to the American Consumer, that all is well in Kansas.

Thanks

http://www.washingtontimes.com/business/20040209-114428-9699r.htmDon't call, don't walk, RLH (run like hell) to gold and protect yourself from the political and economic insanity as debt reaches maximum potential, the dollar collapses and there is no way out of the ponzi scheme for TPTB!

Damn right this is investment advice....

The essay "MZM Exponential Growth vs. Fed Funds Rate" @

http://www.depression2.tv/chronicles/theend.html

predicted that MZM and debt would double in this time period. Look out below folks, this is economic destruction on a grand scale.

Do not harm America with high/higher oilprices !!! Is there something brewing....?

Melting Pot is correct. One more card has been laid down and they're getting pretty easy to read so I'll risk a prediction:
* surge at end of day to ~410.
* tomorrow takes out mini-resistance at 413.XX. Maybe even slightly stronger resistance at 417.XX
* either way, Thursday takes a run toward tougher resistance at 430.XX
.....if we break through by Friday's close, we're good for at least mid 440s next week and maybe 10 or 20 bucks higher before consolidating
.....if we don't break through, back to 405 for another buying opportunity.

None of the above matters a whit to those who have wisely taken possession of real wealth. Go thou and do likewise.

Caradoc

CNBC (aka CourtTV these days) played statements from the attendees, who all praised the Bush Health Savings plan. You know, the one that lowers the participation of corporate insurance programs and forces individuals to purchase their own insurance or seek state sponsored health care. Always shifting responsibilities, but never fixing anything.

The admin buys breakfast for the CEOs', whose priorities are cutting costs by shipping labor abroad and cancelling worker benefits. They, of course, love the admin's initiatives, as they increase the profits and golden parachutes for the top tier.

Notice TPTB never sponsor a "worker" breakfast.

Imagine a "jobjacked" breakfast, inviting only people whose jobs have been shipped to China, India, or some other third world country.

"Mr. President, I was a customer techncal rep for Acme software for ten years. Now they've sent my job to India, and I am a Wal-Mart greeter part-time. Can you tell me how the Health Insurance Savings Plan is going to help my family pay for potential health liabilities on $6/hr?"

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10DX made a run on 86 this morning, only to be turned back in the high .90's. Currently fallen back to 85.75.

Can you say "toast"?

@ Caradoc - I like your style. I hope your prediction is deemed to be "conservative" by next week.

http://www.homelandsecurityus.com/Badr.htm#AJAl Jazeera yields to Al Quaeda pressure and broadcasts tape showing greater terrorist strength and organizational capability inside Saudi Arabia than most would expect.

With looking at for anyone who can connect the dots between the kingdom and oil, between oil and gold.

Caradoc

http://www.economagic.com/em-cgi/charter.exe/fedstl/busloans+1947+2003+3+1+1+600+900++0"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hamphill, Atlanta Federal Reserve Bank

"Someone has to borrow every dollar we have in circulation, cash or credit."

Look at this chart 2000 - 2004:

http://www.economagic.com/em-cgi/charter.exe/fedstl/busloans+2000+2003+3+1+1+600+900++0

Now look at the "Total Loans and Investments at all Commercial Banks." It must NOW rise horizontally straight up going exponential.....or collapse!

http://www.economagic.com/em-cgi/charter.exe/fedstl/loaninv+1947+2003+3+1+1+600+900++0

Now you know why the M's are declining! How long can TPTB hold on? Don't know, history is replete with failed fiat systems, however the US Dollar is nuclear and militarily backed....and our [p]Resident stated he is a "war president." Who needs gold when ya got nukes???

http://observer.guardian.co.uk/waronterrorism/story/0,1373,1143624,00.htmlThe Guardian reported the story linked above on the 8th of February. You could have read about it on the 7th of January at Doug Hagmann's Northeast Intelligence website:
http://www.homelandsecurityus.com/Airtravel.htm#AT01

Hagmann's stuff often makes the news two or three days later, but scooping the Guardian by more than a month on news leaking from Saudi Arabia is impressive and makes his whole site worth exploring for those who canconnect the dots:
http://www.homelandsecurityus.com/

Caradoc

PS for Goldilox: At least this time these old fingers spelled "worth" correctly instead of "with."

Shocking to me as crude trades higher on that news.

Gas at $2, and no jobs.

Stock investors know no fear.

@ F_R

OPEC announced cuts mean sustained high prices. Volume losses, as usual, will be made up in "quota cheating". Margin, margin, margin.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Another run on 86 thwarted at 85.95. Quite a battle.

The UST-10yrs (benchmark now) touched, but couldn't break its LT declining resistance line on the IR-chart. TI says that IRs will go down, again, and resume their LT declining trend, further. Most probably up until election time in november. Not a surprise that OPEC is cutting its output for the sole reason to rise th $-POO. The Whitehouse warning has the more significance in this context. What will/could happen ($-retaliations) if and when SOME OR ALL OPEC-members decide to price oil in euro, when the dollar goes at full-steam printing overdrive !?

It remains amazing that POG can be kept frozen, under the widely known, helicopter $-situation. Is the US already shipping part of its own gold-reserves to the Japanese $-collaborators and/or the $-POO managers (OPEC) ?

What a wonderful bubble-world.

South African government is complaining that it can't collect enough taxes from its goldmines, due to the very low mining profitability, thanks to the rand-appreciation !!! Keep watching the true nature of your personal reserves.

Re: Retaliation against Opec. I wouldn't expect to see much of that after Opec prices oil in euros. By that time, this year or next, any trading partners the US wishes to retain could receive concessions to compensate for declining dollar losses. Euro pricing could be one of them.
Opec can also sell more oil, as a strategic stockpile, to Japan and China if needed.

http://biz.yahoo.com/rf/040210/markets_bonds_foreign_1.htmlHEADLINE: US Treasuries in demand from foreign central banks

NEW YORK, Feb 10 (Reuters) - Treasuries were easier but pulled off their lows on Tuesday as an auction of new U.S. government debt drew strong demand from overseas central banks, boding well for the rest of this week's $56 billion refunding.

...Traders had been hoping for strong demand given the Bank of Japan is known to have bought massive amounts of dollars in recent week to restrain a rise in the yen.

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

Buying bonds, buying time, 'til there comes a new dawn with a gold sunrise.

R.

I am from one of those old Scottish families where, when
the mist is lurkin' over the glen, you know somebody's
hoverin' around with his bodkin bared, a bodkin being, in
those days, a slender dagger. My ancient ancestors even
gave their fealty to the McDuff's, of Shakespeare fame. So
it should have come as no surprise when my daddy died,
that it was by none of the expected means.

He had a heart attack at 47, and we thought that would do
him in. But he lived on. For a decade or more, emphysema
seemed the likely culprit. Cancer had its chance and
failed. There were numerous additional calamities that
could have done it. We were on pins and needles for
eighteen years, waiting to see what would get him. Then
one bleak Thanksgiving eve he came into the living room
all dressed to kill, and said, "It's my time to go." They
took him to the hospital, where he died in stages, from
the toes up, of what seemed to be low blood pressure. The
doctor told my mother that he looked like he'd been
poisoned. She told me years later that when she got home,
most of his medicine was gone, thirty pills or more, but
she was not certain. Rest assured however: I was the only
member of the family who was not present.

That was the first time I fully understood that -as the
Italians say- "If ten troubles are coming down the road,
nine of them will fall into the ditch."

I read this morning of the emminent demise of planet
earth, it inhabitants and all their governments, by
various means, all plausible and going on right now. These
grim matters furnish me with the greatest kind of
pleasure, since, compared to the mundaness of my own
existence, they promise variety. Being the type of person
who could walk two thousand miles across frozen ground,
with a body on my back (for food), disaster tends to calm
me. Give me boredom and I'll do anything to get
recreation. Now the dollar will collapse, the Euro soar,
the markets fail, bonds sink, a trillion in new debt
requested, oil run out, the nation rendered into a bannana
republic -or bannana pudding, whichever's worse- each of
these seems likely.

Myself, I vote for the Wayward Asteroid Theory, continent-
shifting earthquakes and volcanos the size of states
notwithstanding, because it would be visually spectacular
in some places at least. Not like a dull old market flop,
where nobody can see anything but citizens hopping out of
windows, which, as fate has it, can't actually be opened
as in the nineteen-twenties. They'd just take a good run
in their offices and splatter against them. Not a pretty
sight.

No, an asteroid -or three or four- would be more dramatic,
and the press would be happy too. Plenty of pictures. And
the networks would have to hire people to cover the story,
at least for a while. I am sure some candidate would point
out the increase in jobs.

No matter which it is, though, that does us in (next week,
next hour, or next year), in every one of these, gold is
still the safest bet as the way to hold on to your
britches, so to speak.

I've got mine -or most of it.

Got yours?

I was going to tell you, and forgot: The world is not fully grown yet, it's like an adolescent, and these economic perturbations are, in some ways, like a humongous zit. We can all see what's happening to us, we all know what it will become, we know that it's eventually going to pop, but when,...when?

All I can say is, when it does, Look Out!

The first thing that entered my mind upon reading your last message was John Belushi and mashed potatoes......

http://www.businessweek.com/magazine/content/04_07/b3870105_mz020.htmThe Bond Market May Lead The Next Rate Rise -By Rich Miller -Excerpt: "The way some folks in the financial markets talk, you'd think the Federal Reserve was the only game in town when it comes to setting interest rates. Just keep a close watch on the Fed and you'll know where rates are headed, or so the market chatter would seem to imply.
Well, it's not quite that simple. Sure, Fed Chairman Alan Greenspan and his colleagues control short-term interest rates via monetary policy. But when it comes to determining long-term rates in the bond market and elsewhere, their influence is much less direct. Ultimately, it's bond investors' independent judgment of where the economy is headed -- and the implications of that for Fed policy -- that determines long rates. That may seem obvious, but it's a point well worth remembering as pundits debate whether the Fed will feel constrained from raising rates as the Presidential election approaches. Indeed, if bond yields do rise in coming months in reaction to faster economic growth and falling unemployment, that would make it easier for the Fed to increase short-term rates without triggering a big political backlash. "It would give them cover," says David Gilmore of consultant Foreign Exchange Analytics."

http://www.trimonline.org/congress/articles/crockett.htmLearn somethin' new everyday...now, where'd I put that hat?

What is robbing a bank compared with founding a bank? ~Threepenny Opera
Corporatio, n. An ingenious device for obtaining individual profit without individual responsibility ~Ambrose Pierce

Remember, democracy never last long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide. ~John Adams, letter (1814)

The surface of American society is covered with a layer of democratic paint, but from time to time one can see the old aristocracy colors breaking through. ~Alexis de Toqueville, Democracy in America

It is not the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. ~Adam Smith, The Wealth of Nations

Here we have inflation as measured by commodity prices rising at record YOY rates, yet wages remain stagnate and falling from 4% growth rates in the late 90's turn of the century to only 1% rates now. That tells me real wages are falling. Even today 20% of disposable income goes to food and energy for the average US worker. We are seeing big increases in these areas right now. The CPI including all prices is likely to move upward quickly next couple of months. Can the FED stand back, keeping rates low, while US workers are raped by this combination of low wages and rising prices? It appears Asia is behind the rising commodity prices and the low wages. On the one hand they are chewing up raw goods, while keeping a lid on wages with slave labor and non-union shops. Even so, I hear inflation in China is skyrocketing to levels not seen before. Should the FED go for a rate hike, cooling off the commodity price surge, and then loosen again when the heat is off? Today OPEC cut production and one of the reasons was the too weak dollar, and they want more for their money. 70% of their purchases come from EURO, and the dollar dropping against it, hurts them. It seems they are going to pressure crude higher as the US economy show nominal strength even at these $35/crude prices which may threaten the consumer confidence. THe answer is higher rates on the buck. Doesn't something have to give? Some say the FED can't hike until the labor markets have improved. The stock market is focused 100% on it. The minute the labor market goes up with jobs and wages the FED will definitely hike and the stock market looks to tank. But nobody really knows what Greenspan is thinking or looking at, he is just remaining patient and flexible. Maybe he will tell us something in the next couple of days in front of Congress, but more likely we will just get more obscure statements about flexibility and patience that leaves everyone puzzled and confused like me.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=akmm0guWCxaw&refer=home#It's been in Limbo for the last few years but now the bankers want to know......what are you going to do about it?

Following are snippets from the story that came out last Saturday with the Boca Raton meeting (I wonder if they'll ever revisit Jeckyll Island?).

"The Group of Seven industrial nations demanded Argentina step up efforts to restructure payments on $99.4 billion in defaulted debt, prodding the nation to make good on promises negotiated with the International Monetary Fund."

"Argentina has yet to start negotiations with bondholders more than two years after the biggest default in history and is two months late on a self-imposed deadline to select a bank to advise it on the debt talks."

"Morgan Stanley and Goldman Sachs Group Inc. pulled out of negotiations because of concern bondholders would reject the government's restructuring offer to compensate them with new securities worth $250 per $1,000 face value of defaulted debt, people familiar with the matter said last week."

"Snow declined to say whether the nation was now in compliance with the IMF's requirements."

"U.K. Chancellor of the Exchequer Gordon Brown said The G-7's advice is ``a very powerful statement that's being made and will support the reform process."

"Armando Torres, a spokesman for Argentine Finance Minister Roberto Lavagna, said the minister was ``reading the communique, and we have no immediate comment.''

Max....... I wonder what kind of "reforms" are in our future.

http://www.nytimes.com/2004/02/10/opinion/10KRUG.html?thPaul Krugman at the NYT provides concise discussion of the present US jobs situation and Bush's "surreal" expectations for jobs growth in 2004. (Also emphasises some of the inconsistencies in unemployment statistics.)

Thars oil in them thar sand dunes...Blair to Meet Qaddafi, After Libya Aide Has Talks in London
By PATRICK E. TYLER

Published: February 10, 2004


LONDON, Feb. 10 � Prime Minister Tony Blair will meet the Libyan leader, Col. Muammar el-Qaddafi, "as soon as convenient," a British official said after the first formal visit here today by a Libyan foreign minister since 1969.

UK is running low. This could be more low hanging fruit for a thirsty coalition. Watch the great Libyan leader cut the deals with BP et al.

The race to secure energy is in full stride. A currency crisis adds to the intrigue.

Whine whine whine! Oh gasoline is over 25 cents the pint!

The saudis wanted 28$ for a barrel back when the DXY was at 100. Now they want 34$ at DXY 85 which works out to... about 28$ adjusted. Oil hasn't gotten expensive, the dollar's gotten smaller!

Oh... ooops! wait a minnit!.. My goverment 3-D decoder ring glasses slipped off... thats better, now W's fantasyland all makes sense again... The asians help by buying bonds and the oil kingdom contributes by giving oil away for free. How dare they be so uppity as to refuse!

One of these days soon, the wine/gasoline ratio will cross unity.

From its aspirations comes its insperations!

seen the light, a reflection of once was and will be again.
who did this message send? was it to fences mend?
as love knows how to bend
but not break
reflections of a lake
blue skys above
really its the color of the peace dove.



.

MR. K. down in argentina ( no im not talking coach k, hes hughe ok but im talking this MR.K of argentina is epic, hes huge) If you puruse the mans policy and review the platform he was elected upon you will find a golden plank. go ahead go look , he ran an honest money campaign and won in argentina, and he was pretty open about the gold aspect, just no one really paid attention to it as they where to concerned looking backwards at the mounds of paper debt that had accumulated instead of joing the visoonary new 21st centuary breed of leaders who understand what it means to care for the flocks, rather than destroy them with cumbersome indebetness passed not to your clan, when your time has passed but instead leverage it forward to the unborn to carry as there yok as soon as the enter this world, no wonder all babies enter this consciouness screaming and kicking, no one till now has ever decipherd what ehy are screaming, every baby born screams...............

gold and silver
honest money for
honest people!

http://www.usagold.com/gold/special/Longbeard.html

Why are the banks only now putting pressure on Argentina to restructure debt? I suspect the defaulted debt was never written off by the banks, at least not fully. Coming after the partially burst stock market bubble, it could have bankrupted them. Argentina had the upper hand. Now after a new series of bubbles caused by a long period of free money from negataive real interest rates and the consequent transfer of wealth from savers (in paper monies) to bankers, they have regained the upper hand. A year ago Argentina could blow them off. Not now. The day of reckoning approaches. In the end the lender has the better hand.

http://www.blackmask.com/page.php?do=search&query=hegelone thing ecoism isnt morphing into is political. ecoism is apolitical.
Even though ecoism encompases some hegelian thought, doesnt necessarily mean it strives for political recognition nor force any policies. No ecoism just is.

maybe dialectical monetaryism isnt he right term either , cause whats happening now isnt just like dialectical materialism its similar but in a different way
as the classless society envisioned by the socialist doctrine, which makes up the doctrin of dialectical materialism,

rather what is happening is the long struggle between classes has been superceeded by the stuggle for the numerari controll. rather than the bourgeois vs the proletariot, we are witnessing proletariot vs proletariot, using the bourgeois.
i think with hegels ability to postulate theorims to difficult questions, he would have opted for simplicity in describing the series of events unfolding before our eyes on this planet wide struggle for controll of the numerari, by agreeing with me and labeling it ecoism, because this time the bourgeois for the first time in recorded history get to pick sides, simply by declaring fiat script/ or gold and silver.
in the 21st centuary the buurgeois will have a choice as what to do. and are becoing further aware of the real battle going on>
where what the individual decides what to do decides his /her own fate.

http://www.cbsmarketwatch.comMeasuring patience in numbers
Market to look closely at updated Fed forecast
By Greg Robb, CBS.MarketWatch.com
WASHINGTON (CBS.MW) -Excerpts: "There are times that the bond market is dogged in its pursuit of Federal Reserve Board Chairman Alan Greenspan. So when Greenspan testifies to Congress Wednesday on the state of the economy, the market will looking beyond Greenspan's words for clues about how patient the Fed will be in keeping interest rates at their 46 year-low levels. "Obviously those in the bond markets who are very sensitive to those kinds of things, will be combing through word, sentence, and paragraph for clues as to what Greenspan means by being patient," said Carl Tannenbaum, chief economist at LaSalle Bank in Chicago. Some clues could be embedded in the Federal Open Market Committee's updated "central tendency" forecast for economic growth, inflation and the unemployment rate for 2004."

Belgian (2/10/04; 10:09:02MT - usagold.com msg#: 116851)
Whitehouse warns OPEC.....
Do not harm America with high/higher oilprices !!! Is there something brewing....?
--------------------------------------------
Goldendome: We do like to remind others from time to time, that we DO have the biggest and the baddest military the world has ever known...and if you wander too far from the verdent pastures of the "American Dollar Way", we just may send the posse out to round up the strays!!

Belgian, Your being in Europe, I don't know whether or not you've heard of an old-time American baseball catcher named, Yogi Berra?? (Old time like: 1940's to '60.) He had and still has (still alive) a wonderful way of spinning phrases, many of which are now famous--Collectively called, "Yogi-isms." One such phrase referred to the game of baseball itself. He said and I quote:
"Ninety percent of this game is half-mental."

Perhaps we could turn a phrase on a Yogi-ism and say:
"Ninety percent of the Dollars' strength is half-military."

A short, late night read for those not already tucked safely into bed and enjoying their golden dreams...
----------------------------------------------------
The debt that sank America

By Joel Engelhardt, Palm Beach Post Editorial Writer
Thursday, February 5, 2004



"So, tell us about the fall of America, Uncle Leo."

"Well, son, I've been trying to tell you that story for years. Are you sure you're ready to listen?

"It all started with the national debt. You know, the one George W. Bush thought he could rely on to finance his war in Iraq and his tax cuts? Few politicians seemed too concerned back in '03 and '04. Guess they knew they'd all be long gone before... well, I'm getting ahead of myself.

"The idea, you see, was to keep the real debt off the books by doing things like stealing from Social Security in good times. Sure, retirees would need that money later, but the government didn't care. It's pretty funny now, looking back, to think of a paltry $7 trillion national debt when every high school history teacher now knows that the real number was closer to $30 trillion, counting Social Security, Medicare and all those other off-book costs.

"Just think, 20 years ago, Social Security produced surpluses of $160 billion a year, and the government frittered it away -- even though everyone knew the government would need that money to pay the Baby Boomers. Heck, you young people would have been better off if they had just closed the whole program down at the turn of the century and let you keep all your earnings. At least you'd have something to show for all that hard work.

"Fortunately for Ol' W., no one ever asked how the nation would replace the $160 billion while finding even more cash to keep Social Security and Medicare afloat. And if anyone did, W. would spout some garbage about cutting the federal deficit in half in five years. That's the annual deficit, mind you, not the ever-rising debt. Cutting the deficit in half is like bailing out the Titanic with a thimble.

"Anyway, Ol' W. had a war to pay for. And a tax cut. And plans to go to Mars. And, heck, let's face it. Be it run by Republicans or Democrats, the government exists to spend. So with the published debt at $7 trillion, interest rates at historic lows and Social Security purring along with plenty of workers paying in and fewer retirees taking out, the average Joe had no idea of the downfall awaiting America.

"So W. kept cutting taxes, his Mideast wars dragged on, and Congress kept spending. The deficits we could see grew and grew and grew. But what of the deficits we couldn't see? What was happening with Medicare, the welfare program that Bush kept saying he was going to reform but never did? Well, its commitments caught up with it, just like Social Security's. What'd they say back in '04, $24 trillion? Yes, that was about right.

"I guess we average Joes began to clue into what was going on when interest rates finally began to rise. When the debt hit $15 trillion in 2014, with interest rates hovering at 8 percent, paying interest alone cost $1.2 trillion -- half of all government spending in '04.

"Just four years later, the Social Security double whammy hit. The $3 trillion that was supposed to have been there was long gone. That left the government in a deep hole. It no longer could use the Social Security surplus to prop up its annual spending. And it had to come up with an additional $3 trillion to try to keep Social Security afloat for another dozen years, until the Baby Boomers had begun to die off. Top that off with a $15 trillion national debt, and you begin to see what that Democratic senator, Kent Conrad of North Dakota, meant when he called the Bush budget in '04 'absolute fiction.'

"Finally, just servicing the national debt ate up half the federal budget. No amount of political chicanery could turn it around. What were they going to do, quadruple the payroll tax? Eliminate defense spending?

"The sleepy fools back at the turn of the century failed us. What did the so-called alarmists, like the budget-savvy Concord Coalition, call the coming calamity? Oh, yes. An 'unsustainable economy.'

" 'Unsustainable'? That's an understatement. All hell broke loose. The government couldn't print paper fast enough to satisfy the people who held the debt. Inflation made the dollar worthless. Workers had no buying power. I'm not just talking about luxuries like high-definition, big-screen televisions. I'm talking about food and shelter.

"It's funny what happens to social order when a nation's financial system falls apart. I'll tell you one thing, that turn-of-the-century war in Iraq no longer seems like such a big deal."

"Why are you laughing, Uncle Leo?"

"Well, I was paying attention back in '04. I didn't believe the politicians. I took care of my own."

"Really? How could you have prepared for the financial fall of the United States of America?"

"I did the only thing I could do back then. I bought gold."

http://times.hankooki.com/lpage/biz/200402/kt2004020818363011870.htmsnippit:

Skyrocketing raw material prices may pose a serious threat to the economy combined with scarcity of industrial resources, market analysts cautioned on Sunday.

They said domestic brick-and-mortar firms had a hard time in procuring raw materials and predicted an industry-wide crisis in the coming months due to the price hike.

Medium- and small-sized companies, which are vulnerable to external shock, are expected to be the first victims of the anticipated crisis, as many of them are likely to stop operation should the high-flying price trend continue.

Even more damaging are predictions the soaring input costs will trigger price hikes for other products across the industry, which will dent the economy's fragile recovery.

``The hikes in material prices might delay the economic recovery by raising overall price levels and thus reduce Korea's overall purchasing power _ a vicious cycle which will weigh heavy on the economy,�� experts said.

They stressed the government should step in and come up with proper measures to prevent such circumstances from threatening the health of the economy.

Goldilox:

Just what those "proper measures" be?

http://www.usatoday.com/money/economy/employment/2004-02-09-dropout_x.htm
Snippit:

A growing number of white-collar workers and other job seekers are so discouraged that they're giving up. Instead of looking for work, they're living off severance or buyout packages, moving back in with Mom and Dad or relying on a spouse's income to get by. They're gray-haired managers who are going back to school and working mothers who are becoming stay-at-home moms after being laid off. Some disheartened job seekers are making money on e-Bay, selling their poetry or doing odd jobs for neighbors instead of sending out more r�sum�s. About 4.7 million Americans want jobs but are not looking for work, up from 4.6 million in January of 2003, according to the Department of Labor. There are a variety of reasons they may be unable to look for work. They may be unable to job hunt because they don't have a car or can't find child care. But some aren't looking because they believe there are no jobs out there: More than 400,000 workers are so discouraged by the job market that they've given up looking for work. More and more workers are jumping out of the game. The January labor force participation rate was 66.1%, up slightly from a 12-year low in December when 66% of working age people were working or seeking work. While some are trying to develop new skills or make career changes, others are so demoralized that they're doing nothing.

"They're watching soap operas and drinking beer. It's living hell," says Damian Birkel, a career counselor who founded Professionals in Transition Support Group, which holds support meetings for unemployed workers in Winston-Salem and Greensboro, N.C. "The discouraged worker is beaten down by the weight of rejection. Their money is running out, their self-esteem is at an all-time low." The unemployment rate dipped to 5.6% in January, and December marked the lowest unemployment rate in 14 months. But some economists don't believe the decline is good news. Rather, they say, the rise in discouraged job seekers is what's driving down the jobless rate. "They've gotten out of the game," says Jared Bernstein, an economist for the Economic Policy Institute. "It's a major factor behind the unemployment rate, which fell not because people found work, but the contrary: They left the labor force because of a perceived lack of jobs."

"Some of these people taking time off say, 'I deserve a break,' " says John Challenger of outplacement firm Challenger Gray & Christmas. "Others are rejected so often they abandon the search. There's a lot of talented people who are sitting on the sidelines."


Black Blade: Ditto that! This is what I have been saying for some time as well as pointing out flaws and the abuse of the statistical measures used by the BLS. Now Dubya and friends have the audacity to say that unemployment is down because the BLS doesn't put more weight into "self employment" figures. For a time in the 70's through the 90's many thought that "high tech" was the place to be, but that is a "dead end" as highly educated cheap labor is available offshore. Actually the whole article is rather interesting (see link). Wages are falling as inflation is accelerating (regardless of BLS statistical massage and various filters). Someone earlier wondered why the stock market indices rose on news of OPEC production cuts and a weaker US dollar. I'll give you a hint here (actually a couple). The equities markets have risen in recent months on days of "light to moderate" volume while falling on days of "heavy volume". Also, with Alan Greenspan gearing up for the semi-annual Humphrey-Hawkins testimony before the House and Senate this week some may be hedging their bets and others sitting out the market until the Fed chairman mutters and mumbles (and talks in "circular reasoning" statements) while the ignorant committee primates with eyes glazed over and mouths agape shake their heads in agreement will AG as if they understand what is being said.

In a side note: OPEC decided to cut 1 million bbl/day production to maintain higher US dollar priced oil. Who can blame them? The US dollar remains grossly overvalued against other major currencies even as it slides lower. I find it rather amusing that many people (including friends) who are unaware of the energy picture are very supportive of domestic environmental activism and yet wonder why utilities are charging higher rates (and that will continue for several years more too), and why fuel prices are rising. Activists have challenged the exploitation of domestic energy sources (NatGas, Oil, Coal, Nuclear, etc.) in courts with activist judges putting many projects on hold (in spite of huge US NatGas and coal reserves). Of course the uninformed blame Big Oil and other energy producers and distributors of "price gouging" when they themselves are partly responsible and prices are set by "the market" and speculators based on "supply-demand dynamics. With a falling US dollar and global "competitive currency devaluation" (aka "currency war") I do not blame OPEC at all for their decision to get higher dollar-priced oil and NatGas. Those countries do not exist for the sole purpose of serving Americans "cheap energy". Besides, Iraqi oil is still below pre-war production (for many reasons beside sabotage and ruined oil fields under a despotic regime), Venezuela is producing less as the professionals and experienced workers were fired by "el presidente" Chavez during the petroleum worker strikes and now less foreign investment in the sector due to high political risk, government demands for at least 50% participation (making even minor production and marketing decisions a national issue), and a proposal to more than double taxes on producers, Many other OPEC and non-OPEC producers have reached peak production and are in serious decline of output in spite of several attempts to squeeze out more oil. Even Saudi's super elephant Ghawar field is peaking as water (brine) is fast encroaching into the production zones. Competition for the remaining world oil and NatGas supply is growing more intense (especially with China and other Third World Asian nations demanding more of this diminishing resource). Of course many (including some of my close friends) will blame OPEC, "Big Oil", utes, etc. of "price gouging" while supporting enviro activism (even some of the more ridiculous claims based on emotion rather than science) to stop domestic resource exploitation.

Anyway, as always: get prepared for the inevitable approach of what must come. Get your house in order. Get out of debt and stay out of debt, stash enough emergency cash (or rising hard liquid assets easily and quickly exchangeable for cash) for more immediate expenses, accumulate gold and silver (and maybe even platinum if you wish) for diversification and its "portfolio insurance" properties, and at least start a storage program of nonperishable food and basic necessities that will last several months if not a year or two (anything can happen � unemployment, costly family medical emergency, natural disaster, etc.). Yeah I know, you heard it all before from me but trust me on this one � if you are prepared you will sleep easier, especially if you have a family to take care of.

I guess I digressed enough for now. Just get prepared and figure what went wrong after.

http://www.jsmineset.com/snippit:

"With the American public, all that matters is the stock market, the real estate market and jobs -�in that order. The total decadence here rivals Rome's�Caligula, the madman who met his fate at the hands of his own Praetorian Guard.

The US dollar can easily fall into the grip of a powerful gravitational force that is increasing daily in what has become a long grinding bear market for the dollar.� Enron and JDS Uniphase are examples of how quickly such a debasement can occur.�

Japan must have an enormous payback deal because it is risking sinking the island in this sophisticated paper debt game. Do not buy the excuse that all this is in Japan's best interest as an exporting economy.

All this is positive to gold and negative to the dollar but represents the economic strategy of re-election of an incumbent administration.

It is a win-win situation for gold and a total sellout of the US dollar. It will go on until it stops. Only a market can stop it and that would result from gravity dumping the dollar.

Forget that Chairman Greenspan will see the "Divine Light" and do the right thing. He would be drawn and quartered as a terrorist after being interned at Gitmo if he did."

Goldilox:

Got gold?

http://moneycentral.msn.com/content/P72746.asp
Snippit:

Some government data suggest computer and car prices, among many other things, are falling. But when was the last time you paid less for a car? Here's why you should be concerned. Please join me this week in a trip to the government department responsible for fun with numbers. Those D.C. statisticians may churn out their work with a straight face, but that doesn't mean we have to fall for it. Among the skeptics are Steve Milunovich of Merrill Lynch, Jim Grant of Grant's Interest Rate Observer, and, of course, yours truly.

In a recent report, Milunovich noted that the Bureau of Economic Analysis (BEA), whose job it is to compute the Gross Domestic Product each quarter, has "stopped reporting the real computer hardware shipment figure used to calculate real GDP growth, though it is still used in GDP calculations." The BEA, which is part of the Commerce Department, made this readjustment because it is "concerned the rapid price declines for computers made the figures misleading."

Let's stop and review the bidding for a second. Remember: GDP is the measure of goods and services produced in this country. The government decided that certain of its data series involved in calculating GDP were misleading. So, what did it do? Simply stop breaking them out. Makes sense to me; how about you?

This would be a humorous window into the lunacy of government calculations, were it not so important to many statistics. Regular readers of my daily column know that the magic of "hedonics" and all its attendant distortions is something that I have railed about for a long time.


Black Blade: Bill has some fun at the government's (and our) expense by shining a light on the cockroaches in Washington DC. A good read but there's enough material out there that can make one hell of a book on statistical massage. To be a government bureaucrat you just have to have no conscience and be willing to live a life of deceit and have no sense of honor. I have hammered this nonsense to death many times in the past. Still a good read even though it essentially focuses on "hedonic deflation" (see link).

http://www.newsmax.com/archives/articles/2001/1/22/190620.shtml"Goldendome: We do like to remind others from time to time, that we DO have the biggest and the baddest military the world has ever known...and if you wander too far from the verdent pastures of the "American Dollar Way", we just may send the posse out to round up the strays!!"
***********************************************************
Druid: Gdome, each of us would like to go to sleep at night thinking we have the superior military force but who knows anymore? Stay out of the sun. I hope whatever our military is experimenting with at area 51 pans out. Very scary indeed. You want to venture a guess as to whether some of these toys are deployed somewhere near the vicinity of the middle east.
***********************************************************
In September 1995, U.S. Navy Principal Deputy Vice Admiral W.C. Bowes provided the letter of "bona fides" to Admiral Felix Gromov, Commander-in-Chief of the Russian Navy. Bowes advised the Russian Navy that America intended to purchase the Sunburn supersonic cruise missiles.

"I appreciate the opportunity to convey to you the United States Navy's interest in acquiring all variants of the SS-N-22 'Sunburn' Anti-Ship Supersonic Ship-to-ship missile for test and evaluation," wrote U.S. Admiral Bowes to Gromov in a September 1995 letter.

Amazingly, the U.S turned down the Russian Sunburn offer. Defense Department run by then Secretary William Perry. According to one Pentagon source, the administration balked at the Sunburn price of nearly "a million dollars" a missile.

Without the 1995 U.S. Navy sale, the hard-pressed Russian contractor instead cut a deal with Beijing 12 months later, agreeing to supply the inventory of Sunburn missiles to China. In 1996, China purchased the Russian Sovremenny destroyer Yekaterinburg and second warship, the Alexandr Nevskiy. Each Chinese warship is armed with eight nuclear-tipped Sunburn missiles. China took possession of the Yekaterinburg in November 1999. The Alexandr Nevskiy is under way with a joint Russian-Chinese crew and will join the Yekaterinburg in the Taiwan Straits this month . Official Navy documentation notes that the Sunburn missiles are armed with a "nuclear" warhead equal to more than 200,000 tons of TNT. The Sunburn is more than four times larger than the Krypton, weighing nearly 8,000 pounds and carries a nuclear punch 10 times as powerful as the atomic bomb used on Hiroshima. The Sunburn also flies to its target at more than 1,500 miles an hour, as fast as a rifle bullet, skimming the water at only a few feet over the surface.

In July 1999, defense analyst Richard D. Fisher wrote an evaluation of the Sunburn. Fisher reported that the Sunburn is capable of a dive speed of nearly 3000 miles an hour, helping it evade U.S. naval defenses.

"The Sunburn anti-ship missile is perhaps the most lethal anti-ship missile in the world," wrote Fisher in a review of the Chinese navy.

"The Sunburn combines a Mach 2.5 speed with a very low-level flight pattern that uses violent end maneuvers to throw off defenses. After detecting the Sunburn, the U.S. Navy Phalanx point defense system may have only 2.5 seconds to calculate a fire solution - not enough time before the devastating impact of a 750 lb. warhead." The Clinton-Gore administration could have bought the entire active inventory of deadly Sunburn missiles in 1995, ending forever a deadly threat to our allies and U.S. Navy warships. Today, the Navy is still interested in buying Sunburn missiles from Russia. In August 2000, the U.S. Navy quietly issued a defense contract proposal on its Internet site to "evaluate the feasibility of obtaining" Sunburn missiles from Russia. According to the new proposal, the Navy is now willing to pay $2 million a Sunburn, more than twice the price of the 1995 Russian offer.

The Krypton and Sunburn are part of an overall failure of the U.S.-Russia military purchase program. The intention was to simulate the threat with the real thing from Russia. Instead, the policy forced the Navy to shut down U.S. missile factories in favor of Moscow. The Navy has exhausted its supply of aging U.S.-made target missiles and the factory has closed forever. A new "all-American" target made by Orbital Sciences Corp. will not be available for at least three years.

The Clinton-Gore administration elected to rely on the good graces of Moscow to test our billion-dollar Aegis warships. U.S. defense contractor Boeing has a contract with Russia to supply up to 300 "improved" Krypton missiles over the next three years, 28 percent fee included.

The Navy has a missile gap. After a decade of effort and hundreds of millions of dollars the U.S. Navy still has no new target missiles and no old ones left. Over 10 years the threat has grown. Sunburns and improved Kryptons are deployed within striking distance of the U.S. Seventh fleet, Japan, Korea and Taiwan. Instead of turning their swords into plowshares, the Russians continue to make the best weapons in the world - with our help.

How can such a hot real estate market cool down as long as interest rates are so low? I was talking with a 20 year veteran of the San Diego RE market tonight.

In a county with 3M people and 15000 RE agents, there are only 3500 residential listings. Since RE is the last bastion of value for the lumpeninvestorate, no one wants to sell! Lots of buyers, but NO sellers.

If there is no volume in the market, it collapses from lack of activity. All those web-artists turned loan agents are not getting any commissions, because there are not enough unit sales.


Goldilox:

"More power to the engines, Scotty!"

"I'm givin' her all she's got, Captain. She's breakin' up!"

The Khadaffi-show illustrates, more explicitely, the dollar(and euro)-quest (control) for the remaining oil (gas) reserves on planet earth. Your "conclusion" is imo, absolutely correct : oil and currencies !!! Both are the very basis of the modern economy. A lot of useless and absurd, human suffering, could be avoided if we all, would simply admit that it is about oil and currencies that we are having war(s).

Goldendome : " 90% of the dollar's strength is 1/2 military". It is VERY easy to win any war...but, extremely difficult to win *peace* after each war. It is "peace" that is included in the neutral-multi national, euro-concept !!!
FreeGold can lead us to more peace...closer to meritocraty (to merit). A system where all the Ceasars on this planet, get what the Ceasars deserve...
Hope that I may keep dreaming...smile.

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Answer: USAGOLD (and I've maintained same myself)Reuters
Economists say U.S. growth spurt will end, crisis looms
Monday February 9, 10:59 pm ET
By Anthony Boadle


HAVANA, Feb 9 (Reuters) - The U.S. economy is enjoying a growth spurt that will not last beyond 2004 because it is driven by military spending and tax cuts while the Bush administration turns a blind eye to a looming deficit crisis, American economists said in Havana on Monday.

@ Cavan Man

If those are "official", economists, they better be careful what they say or like JS suggested, they could be moved from Havana to Gitmo!

then I would expect to see the usual (and all too predictable) five dollar or more spike in the price of gold following Greenspan's testimony today. The cabal likely views Greenspan's testimony as an event equivilant to that of a FOMC meeting announcement. There CAN NOT be any rise in the POG immediately following said event. To do so would indicate a lack of confidence in the omnipotent Fed.

It's just business.

I may be wrong. I often am. But I would be willing to bet that we see a spike down into the close and end at $400 today. However, I still think that we will be above $410 by the end of the week.

PA

http://www.urbansurvival.com/week.htmsnippit:

"Eyeing Eisner?� Gobbling Goofy?� Maximize Mickey?� Wire Disney World?� What the hell is Comcast thinking?� OK, here's the story in a nutshell as I see it - and I don't pretend to be a stock analyst.� The big story of the day is that Comcast is trying to get Disney in an all stock deal.� And, at least hyperficially, there's� a case to be made.� At a market cap of� $60.8 billion, http://finance.yahoo.com/q/ks?s=DIS Disney seems the junior of Comcast's $100.5 billion cap. http://finance.yahoo.com/q/ks?s=CMCSA �Makes sense, right?

Well, not really.�

Drop down those same statistics a big and you'll find the number that Comcast is really eyeing.� REVENUE.� Despite all the hype, Comcast has trailing twelve month revenues (TTM) of $19.12 billion.� By the same measure, Disney produced $27 billion on the same basis.� Getting the picture?

In order to maintain its rich P/E, Comcast has to figure out how to grow its business.� Knowing full well that government regulation is likely to constrain cable revenue growth, and what isn't constrained will be hemmed in by DirecTV and Dish Network.� So how does a profit starved old technology company like Comcast, which has been losing money, make itself look attractive?

Buy revenue.�

To offer to "buy" Disney by printing up paper (called stock) seems to us to be the kind of shareholder grandstanding so typical of the late stages of a bubble."

Goldilox:

George Ure's take on the Comcast offer for Disney. Another TW/AOL deal?

http://www.post-gazette.com/pg/04041/271362.stmsnippit:

"By Warren Vieth and Edwin Chen, Los Angeles Times

WASHINGTON -- The movement of U.S. factory jobs and white-collar work to other countries is part of a positive transformation that will enrich the U.S. economy over time, even if it causes short-term pain and dislocation, the Bush administration said yesterday.

"Outsourcing is just a new way of doing international trade," said N. Gregory Mankiw, chairman of Bush's Council of Economic Advisors, which prepared the report. "More things are tradable than were tradable in the past. And that's a good thing."

The report, which predicts that the nation will reverse a three-year employment slide by creating 2.6 million jobs in 2004, is part of a weeklong effort by the administration to highlight signs that the recovery is picking up speed. Bush's economic stewardship has become a central issue in the presidential campaign, and the White House is eager to demonstrate that his policies are producing results."

Response from Urbansurvival.com:

"A fine example of garbage in, garbage out today from the President's Council of Economic Advisors.� They has issued a 400+ page "report" that tries to explain how outsourcing (e.g. sending what should be U.S. jobs to India and other least cost nations) is a good thing.� Take a good stiff drink first and click over to [the link] and see if you can figure out just how stealing American jobs so India can have an 8.1% growth rate while 90,000 a week are at the end of their unemployment in the U.S. is a good thing?� Seriously, if you can explain it, let me know?"


�

http://www.moneyfiles.org/usapower.jpgAnother look at Bud Wood's dollar value graphic from moneyfiles.com

What's 25X inflation divisor between friends?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=a5z8k14ECUoUsnippit:

"It seems a reach to blame Fed Chairman Alan Greenspan and his colleagues here in Washington. After all, Asia isn't a huge blip on the Fed's radar screen these days. The Fed also has taken its share of flack for the U.S. bubble of the late 1990s. But the U.S. central bank's global reach is being felt in Asia.

``The Fed commitment to keeping interest rates low for a considerable period of time fueled speculation in high-risk assets,'' says Andy Xie, Hong Kong-based chief economist at Morgan Stanley Asia Ltd. ``The byproducts of this speculation,'' Xie explains, ``are the wealth effect on consumption in the U.S. and the cheap capital-fueled investment boom in China -- the twin engines or bubbles, depending on your perspective, for the global economy today.''

The cycle, Xie says, will end with either the Fed reversing its policy or with a financial accident caused by the leverage building up in high-risk assets around the world. ``History would not be kind to the Fed,'' Xie says. ``Its accommodation and even encouragement of speculative excesses would be viewed as the primary cause of the massive bubble in the global economy today, the consequences of which are yet to show.'' The Fed's culpability is debatable. What's not is that speculative capital flows into Asia reached a record high last year, surpassing the previous peak in 1996.

In 2003, East Asia's foreign-exchange reserves rose $234 billion more than the region's trade surpluses. That compares with an average of $26 billion in the 1990s and $8.3 billion in the 1980s. China and Japan were the main capital recipients in Asia last year.

What can be done about all this? China needs to tighten capital controls to slow the inflow, Xie argues.

Such a step would be anathema to free-market aficionados and to the Group of Seven nations, which last weekend renewed its call for flexible exchange rates. But the longer Beijing allows such rapid inflows of speculative capital, the more difficult it will be to avoid a financial crisis."

Goldilox:

More on the "effects" of globalization. No such thing as local economies anymore.

BB said "Also, with Alan Greenspan gearing up for the semi-annual Humphrey-Hawkins testimony before the House and Senate this week some may be hedging their bets and others sitting out the market until the Fed chairman mutters and mumbles (and talks in "circular reasoning" statements) while the ignorant committee primates with eyes glazed over and mouths agape shake their heads in agreement will AG as if they understand what is being said."

I nominate this statement for the Hall of Fame. Sounds like BB has a little Will Rodgers in him.

This statement sums up our situation to a tee. Its pretty funny too!

http://money.cnn.com/index.html?cnn=yesAu=408.15
Ag=6.42

http://www.federalreserve.gov/boarddocs/hh/2004/february/testimony.htmGreenspan's testimony.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10DX STRIGHT DOWN ON GS Speech! Barney Frank (MA) is grilling Sir AG on the shift from career, insurable employment to fill-gap employment. The CA rep is asking about the sustainability of massive Asian Treasury market intervention. "What if they sell?" GS - "That's unlikely!" "When you sell short term instruments, you can't significantly affect the price." HUH?

Wow, what's in their coffee this morning?

No wonder gold and silver are rallying on this testimony.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=SLV.FX1Au up $6 to $411 settling to $410+

Ag hits $6.52 + 0.26 overnight swing.

The Greenspan PUT(T) stops short of the cup, as he bogies the 11th.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10So far, not much upward bounce!

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Goldilox (2/11/04; 10:37:31MT - usagold.com msg#: 116909)
DX Bungie jump - 86.10 to 85.10
---
I know that when I come to the USAGOLD Forum the first thing after getting my cup of java each morning that you will have ALL the NEWS that is important !
BUT today, I MUST disagree with one of your comments !! <;-)
You characterized the US$ Greenspan as a "Bungie Jump" --- BUT bungie jumps come right back up most the way to the starting point --- THIS time the chart should be called a --
DEAD CAT BOUNCE !!
GO GOLD !!!!!!!
<;-)

@ Gandalf

True enough, oh great wizard. The bungie bounce has reached 85.32 from 85.10 so it endeavors to qualify, if but weakly.

Two things are inherently critical to bungie reflex.

1) The elasticity of the cord, which we all agree has been overstretched over time, and

2) The weight of the subject, something only a serious Congressional spending diet can address.

Might we accept "Dead Bungie Bounce" as a reasonable compromise?

(:^) -G

The print at 412.00 marks a 3-box reversal to the upside setting us up for a move to somewhere in the 432.00-435.99 range.

Anything above this is toppy on this run. If this plays out as expected, we then get a pull-back to the mid to high teens followed by another run to somewhere in the 456.00 to 459.00 range. Note that after 415, 458 is the first significant Fib resistance, so I'm expecting reasonably easy going to there followed by some significant consolidation.

http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P

http://www.marketwatch.com/news/story.asp?guid=%7BA92674D6%2D95FB%2D4E84%2DBE77%2DD155AB984398%7D&siteid=yhoosnippits:

CHICAGO (CBS.MW) - The dollar fell sharply against its European rivals and remained under modest pressure vs. the Japanese yen after Federal Reserve Chairman Alan Greenspan signaled U.S. rates would remain low for now.

The euro was up more than 1 percent at $1.2811, nearing the $1.29 all-time high hit last month.

The British pound was up 0.9 percent at $1.8835, to mark another fresh 11-year high. The pound gained in the wake of a Bank of England report that upped the forecast for U.K. inflation, buttressing expectations the central bank will hike interest rates again.

The greenback fell 0.7 percent vs. its Swiss rival, at 1.2297 francs per dollar.

Against its Japanese counterpart, the U.S. currency was changing hands at 105.31 yen, down 0.2 percent from Tuesday's U.S. session.

"The federal funds rate will eventually need to rise toward a more neutral level," Greenspan warned. "However, with inflation very low and substantial slack in the economy, the Federal Reserve can be patient in removing its current policy accommodation.

The dollar's downside remains intact, say some, despite a reworked weekend statement from the Group of Seven, which came largely at the urging of the Europeans, was welcomed by the Japanese and tolerated by the United States. The leadership of the world's seven industrial powers said "excess volatility" in currency markets was undesirable.

Those words did little to stop the euro's ascension, however, as the shared currency nears a revisit of the $1.29 all-time high touched briefly last month; the euro has rallied 40 percent on the dollar in two years.

The G-7 statement also urged flexibility, but wasn't seen deterring Japanese market intervention, or selling yen for dollars on open markets. Intervention proceeds are then invested in U.S. government debt in order to influence higher U.S. interest rates.

Goldilox:

Can you say "toast"?

http://news.independent.co.uk/business/comment/story.jsp?story=486877"A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences." - Proverbs 22:3

"How the US economy is giving deflation a new respectability"

A world of 'good' deflation would make life a lot more complicated for central banks
02 February 2004

Something really odd is happening. I mentioned it a few weeks ago, and I just can't get it out of my mind. The dollar is weak, but US inflation is falling. Oil prices are high, but US inflation is still falling. US growth was very strong in the second half of last year, yet US inflation still keeps falling. Anyone who's delved into economics textbooks will know that THESE THINGS ARE NOT MEANT TO HAPPEN. Currency weakness, commodity price strength, buoyant economic activity: in the old days, these were the essential ingredients, the key drivers, for higher inflation.

-END-

"THESE THINGS ARE NOT MEANT TO HAPPEN." TPTB are calling in the oil card to create the much needed and required dose of inflation. The blame for the rising POO will be placed on those dirty filthy A-Rabs>>>>

"The fate of the nation and the fate of the currency are one and the same."--Dr. Franz Pick

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." [Human Action, p. 572.]

Doesn't look like there will be a voluntary abandonment of further credit expansion....sooooooo!

"However, with inflation very low and substantial slack in the economy, the Federal Reserve can be patient in removing its current policy accommodation." -Greenspan

I don't know how it could be clearer. Accomodate: "do a kindness or a favor to." You don't do something as a kindness or a favor to somebody if that person has the power to force you to do it. Therefore the significance is explicit, not implied or equivical: The US government does not have the power to force the Federal Reserve System to do what the Fed is doing as a favor, which is, namely, holding the interest rate low. Further, Greenspan makes this even clearer by saying that the Fed can be patient in removing this favor, which means that interest rates are going to go up -sometime- whether the government wants it to or not. In other words, Greenspan is confidently brandishing the fact -unambiguosly- that the Federal Reserve System is not subject to the rule of law, or to the US government, in deciding its actions. In the extent to which the action of the Fed is in conflict with the best financial interests of our citizens generally therefore, the FED is an enemy of our nation. I don't know how it could be proven more clearly.

http://www.bls.gov/news.release/cpi.nr0.htmGreenspans 1% inflation rate is bogus. There is an unprecedent squeeze of the lower and middle income class underway, both economically and intelluctually. I consider it close to rape.

There is no intellectual argument for leaving food and energy off the inflation rate. That is ridiculous.

First off, inflation is not low; according to the BLS the inflation rate was 1.9% in the last 12 months running. In the next couple of months, one would expect a rather large spike to due continue rising food, energy, tutition, insurance and medical costs. Today's inflation rate is higher than 1997(1.7%), and 1998 (1.5%) when the FF rate at 4-5% was also a lot higher. What is low is wage growth. The rate of growth in wages has fallen from 4% to 1% per annum. Real wages are negative now. Greenspan is keeping wage inflation in check by global wage arbitration and the exportation of jobs while promoting commodity inflation for the holders of these assets. He very fearful of protectionism, he rants and warns about it all the time now. He knows once the US protects it working class citizens his game is up. He can be patient as long as the working class remains subdued without political power and the 5/10/30 year bonds remain strong�.he can pump and pump asset prices while labor rates and jobs remain in low gear. A rather large squeeze of the lower and middle income class is well underway and their social security benefits are being made ready for the cut as the size of the government deficits is running out of control. For now consumer spending is being held up by debt growth and tax cuts; once the tax cuts are spent, the debt remains, and ultimately the collapse and backlash of the working class who are being hoodwinked by central bankers picking their pockets clean.

Greetings Sir MP!

"The dollar is weak, but US inflation is falling. Oil prices are high, but US inflation is still falling. US growth was very strong in the second half of last year, yet US inflation still keeps falling."

IMO, the author of this piece is either delusional, fueled by an agenda, or just a moron.

Where to start?

How about with the notion that inflation is falling. Inflation is defined as the expansion of the supply of money (or in a fiat world - bank credit since we no longer utilize lawful money for the payment of debts in these united States). It is not falling. It is increasing exponentially with the occassional dip in it's never ending upward march to infinity.

Secondly, going along with the authors contantion that inflation is falling for the sake of argument (definition aside), I would say that he is wrong on this point. Very wrong. His mistake may be a result of blind accpetance of the decpetive poo poo that the government statisticians spew, or it may be that he has chosen an incorrect metric by which to measure "falling inflation."

If medical costs, food, energy and other services are increasing but the prices of houses are decreasing as a result of the great debt pyramid reaching it's mathematical limit, then I would suspect that this guy would assert that we are on the verge of defaltion. Inflation / deflation, as this example hopefully illustares are both relative and coexistant. It is simply a matter of what metric you are looking at when you scream that either has taken hold of the economy.

While my prognostic skills are lacking (see my earlier prediction of today's price action), I believe that the cost of real goods will increase and the cost of assets whose price is a function of ever expanding attendent debt will decrease. Will this be inflation or deflation? That depends on whether you have bet your future on owning physical gold / silver or a big mortgage.

PA

Let start by saying I am not a fan of Congress. Thus noted, they seemed offended enough by GS' assertion that US economic woes are fueled by excessive spending to counter-attack the FED on interest rate and jobjacking issues.

Not much real dissection of the real issues, but mere mention is huge progress for this government.

I think some precinct stumping in this primary season has convinced some representatives that the war, WMD, etc., are not the primary concern of the electorate.

"It's the jobs, stupid!"

On another front, one Congressman asked AG if the consumer might be getting stretched by card debt. AG, in his "let 'em eat cake" tone, replied, "We at the FED have always operated on the assumption that "no one has better understanding of individual debt tolerance than the individual himself."

Essentially, they're not going to address increasing bankruptcies until they feel the pain in their banks, at which point they will act to buttress their bankster shareholders.

No one really cares if high-risk lenders continue to borrow at 1-2%, while high-risk consumers get socked for high double digit rates.

As the old saying goes, "The buck stops here!"

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Oh great and wise Wizard,

After viewing the more complete formation at the bottom of DX today, I humbly withdraw even my "Dead Bungie" suggestion.

Dead cat bounce it is - textbook quality! Oops, there goes Kitty, off to bed in disgust! He hates when we talk like that!

Go go gadget gold chart!
Au=411.3
Ag=6.58

We haven't heard from Sir Rich today. Is he busy burning up the abacus calculating his silver gains?

The debt entered into last week pays your paycheck and services existing compound interest....the system is a debt system creating debt as the basis...when the economy slows down like now, there is not enuff debt being created to service commerce and also service compound interest. The result is unemployment.

Data suggests that 6 dollars of every new 7 dollars created by new debt is servicing compound interest. This only leaves one dollar of every 7 new dollars created to produce GDP and economic growth....

Deflation in not lower prices, lower prices are the consequence, not the ailment. In basic terms it is rather a falling money supply. Are the money supply aggregates falling? YES!

As more and more new money creation is required to service prior compound interest obligations, less and less money is available to conduct commerce and trade, the resulkt is more and more businesses filing bankruptcy, this destroys monetary aggregates also until the entire system feeds upon itself moving into depression.

The fractional reserve/usury system is a ponzi pyramid that even John Law would be proud of.....

1776 to 1991 MZM growth 2 Trillion in 215 years

1991 to 2000 MZM growth 2 Trillion in 9 years

2000 to 2003 MZM growth 2 Trillion in 3 years

So from now until the end of 2004 MZM must grow by 2 Trillion and after that it must grow by 2 Trillion in 3 months then 1 month then 1 week then 3 days then 1 day then 8 hours then 2 hours then less than an hour and so on and so forth until we are down to nanoseconds and beyond...

Or the System will collapse...the end

Try all you want to deny it...the dawn of economic doomsday is upon us...

Inflation creates deflation, cannot have one without the other...we have had inflation since Bretton Woods 1945...can't you smell the whiffs of deflation????

I agree entirely with your example of exponential growth of the money supply and the inevitable outcome. So are you saying that hyperinflation and a deflationary collapse will simultaneously occur? I am a bit confused here. Which will it be?

Take care.

PA

@ Gandalf

DX seems to have broken through the bounce line at 85.10.

Last quote 85.05.

Maybe morphing from "dead cat" to waterfall!