http://www.theunionleader.com/articles_showa.html?article=36920Snips:

"...
Taking a cue from the successful implementation of the euro and the growing interest in other regional common currencies, the world should proceed to the next level of currency consolidation: a single global currency, to be managed by an international central bank. Such a single global currency would eliminate worldwide currency trading costs, eliminate currency-related investment risks and eliminate Balance of Payments problems for all countries.
...
The success of the euro has started a trend on the Continent and more countries will certainly join the 12 that have already adopted the euro. Today, 10 more countries are joining the European Union and their continued membership requires their adoption of the euro, but joining the common currency will be on a county by country basis. At the end of the process, there will be 22 EU countries using the euro, and by that time maybe Sweden, Denmark and the United Kingdom will have decided to join. Then more countries will be joining the EU and the trend to a larger eurozone will continue.
...
To assist with such planning, the Single Global Currency Association is holding the First Annual Single Global Currency Conference at the Mt. Washington Hotel in Bretton Woods on Friday, July 9, 2004, the 60th anniversary of the 1944 Bretton Woods conference. The goal of the Association is the implementation of a Single Global Currency by 2024 and there will be a Currency Conference at Bretton Woods every year until such implementation is achieved.
..."

Sundeck: "The success of the Euro" seems to be recognised by some from New Hampshire. (Isn't NH considered to be "progressive"?) Does anyone know about this conference in July? Is it a big deal, or is it a small group of outsiders singing in the wind?

Cheers

:-)

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=W&z=610x300&d=LOW&b=LINE&st=Gold has slipped below the index line and as such is likely a good buy vis a vis it's alt Currency counterparts.

The case for Gold over $Cash should be resolved next week as this market tightness can't go on indefinitely. Oil is the key here, as the one luxury the Dollar bloc doesn't possess is market control of the Oil price.

Imagine $60 Oil, 120-DX ? Scary HuH!

Dear Sir,

Recently you posted a TA of gold and you see the POG at $480. I forget when you expect this. Do you still feel the same way? Is your reasoning similiar to Sinclair's?

Can you comment on 'Half-Monty's' call on G-E at Apr. 30 17:47?

Admiring your bold TA.....

TIA.

http://www.xinhuanet.com/english/business.htmSnip:

1/. China is not going to implode economically without the US, Asia and Euroland imploding first. Before you could have an economic contraction in China, the derivative and politically driven Western market world would fight off the problem just as they are now but with expanded liquidity and therefore more inflation-building fuel. That scenario is just the stuff a positive gold market is made of. So please do not attach yourself to the glib opinions now being promulgated that China threatens the commodity world and gold. Quite to the contrary. The Chinese exterior manufacturing demand equation strongly supports the gold price now and into the foreseeable future.

2/. Gold shares have been assessed by general equity analysts employing the methodologies of multiples of cash flow for sale and also as an earning per share value. Both are totally false because the mining industry is an asset based entity. This industry does not make its final selling price but rather has to take what prices the market gives. Hedging has been disqualified by the bankruptcy and near bankruptcy it has caused. Both of these misconceptions will evaporate as the gold mining industry consolidates by acquisition. It will be seen that the basis a gold mining or gold exploration and development company trades is based solely on its underlying asset value.

3/. Increasing interest rates - when they represent central bank catch up action to a market reality - support an upward movement in the gold price. In 1980, it took 14 7/8% on ten year money before the rate of interest became supported to the value of the US dollar and proved the terminal ingredient of inflation.
**********************
Misetich

Jim was replying to e-mails "economic implosion in China" -

Regarding point 1 - China economic expansion - needs to be put into perspective

The announced "clampdown" that COT and speculators pounced upon to attack and ambush commodities and gold this past week - applies to overheated sectors - primarily to "curb excessive fixed asset investment that drove up prices for capital goods and strained supply of coal, electricity, oil and transportation," quote attributed to Chinese Premier Wen Jiabao

If China were to grow at the 1st half rate - expected 9% rate and without restrains in heated areas such as fixed asset invetments which were reported at 43% in the 1st Qtr -which aided a phenomenal rise in commodities pricing and inventory depletion - then the WHOLE GLOBAL FINANCIAL SYSTEM would be put at risk

China secondary concern is on the energy strain and China - coal, electricity, oil which are in short supply.

Does that mean China's growth will decelerate any time soon? and to what level?

Thus prudently applying, the brakes on overheated areas must be commended.

CHINA will remain the global economic LOCOMOTIVE -

Here are a few headline snips:


http://www.xinhuanet.com/english/business.htm

Economy to grow 9% in 1st half year
China close to 1990s world level in auto-part manufacturing
Business deals at 95th China Export Commodity Fair hit record

and finally a snip from trade:

According to foreign trade report estimates, China will realize total imports and exports worth US$1,000 billion in 2004, a rise of 17 per cent from a year ago.

"Total exports will rise 15 per cent to US$505 billion with imports growing 20 per cent to US$495 billion, resulting in a trade surplus of US$10 billion."

Jim Sinclair alludes that "the China economi implosion" represents disinformation by COT - and by all accounts it is disinformation

Putting things in perspective the US economy benefitted from bargain basement commodity prices in the late 90's keeping the rate of the "official" price inflation down - Prices of commodities in general will remain at the in/around current levels

The kicker is ENERGY PRICES - where COT has been able to do little on

Thus PRICE INFLATION presently in the system and in the pipeline will implode

All Aboard The Gold Bull Express - Part ll

http://www.nationinstitute.org/tomdispatch/index.mhtml?pid=1409Snip:

The goal here appears clear: limit overproduction and keep oil prices high, not flood the market with cheap oil. And with the Saudis clearly not playing ball on oil, one can only surmise that their hitherto almost reflexive move to recycle petrodollar surpluses back into the dollar has likely dissipated as well, removing an important marginal bid in the bond market, at a time when inflationary pressures are intensifying and 10-year bond yields have headed north of 5%. The broader economic and geopolitical implications are enormous: the House of Saud, which has cultivated a special relationship with successive U.S. administrations since the days of FDR, seems to have effectively decided that politically and economically distancing itself from at least the present American government provides a much better means of ensuring its long-term survival.

All of this implies an increasingly precarious backdrop for U.S. financial assets and the dollar, the rallies in which do not fully reflect today's deteriorating geopolitical and economic variables. Consumers have reached debt saturation with short-term rates at 1%. What happens as rates rise and the oil price explodes? A further price spike in energy could well exacerbate a growing inflationary psychology now predominant in the credit markets, which in turn could undermine the Fed's recent efforts to "talk down" yields on long-term interest rates.
*********************
Misetich

A very good read - from an article by Marshall Auerback No "October Surprise" Courtesy of the Saudis - wherein Marshall disects the deterioration in realtions between the House of Sad and current US administration and defacto actions taken by the Saudi's

A second article can be found at the same link - "The Real Oil War" by Brandon Sprague- in Iraq that examines Iraqi Oil and potential conflicts that may arise in Iraq by its citizens as the effort of the CPA to "privatize" Iraqi Oil and its affects to Iraqi citizens who under Saddam's regime benefitted from a subsidy

IMF is reportedly going to be involved in Iraq - post June 30 - and if they follow their method operandi the sparks will fly

Very little is being said in the media relating to reinvestments of petrodollars back in the US - but indirectly there's confirmation as the US $ has been supported by the Bank of Japan - (via proxy for the US?)

US foreign policy - fingerprinting of travelers etc- will do little to appease the Saudi's and Arabs -

Under the existing homeland security, patriot act etc the US carries a big hammer to confiscate, freeze holdings/investments - which once again deters Arabs/Muslims in particular to rechannel/hold investments in the US

Thus petrodollars - Arab/Muslim investments are seeking other currency/investment alternatives

US Trade - Current Account - Budget deficits are imploding -and former allies such as the Saudis are being alianated

Is this situation sustainable? Does it put the US $ in peril?

All Aboard The Gold Bull Express - Part ll

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5007235Snip:

Sat May 1, 2004 11:37 AM ET
OMAHA, Neb., May 1 (Reuters) - Warren Buffett, the world's second wealthiest person, said on Saturday that inflation was "heating up" in the United States.
Speaking at the annual shareholder meeting of his Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) , Buffett said, "I think we're starting to see (inflation) heat up in this country."

Buffett's company owns dozens of businesses including insurer GEICO, apparel maker Fruit of the Loom and ice cream chain Dairy Queen.

He told shareholders that the companies that will be best suited for this environment will be ones that either have unique products and services or aren't as dependent on purchasing inflation sensitive goods.

"Inflation is the enemy of the investor in real terms," Buffett said. He suggested one way to protect oneself against inflation was investing in certain inflation-resistant bonds.
*********************
Misetich

Warren says price inflation is heating up - and the "sage of Omaha" has a large following -
A few months ago - when he announced the US $ was overvalued-and he was diversifying in other currencies - the market followed

Whilst he recommends a "paper shuffle" ANOTHER better alternative is - Physical Gold - Bars, coins is the ultimate storage of value and utlimate currency

With Sir "Accomodative" Greenspan at the helm - we're months away from IR increase- though the seed of higher IR's has been planted

This non-immediate Fed reaction will cause price inflation gather more steam and accelearate further in the next few months

Housing, derivatives, stock market, bonds cannot be "shocked" by rapid acceleration of IR

Add a "soft" labor market ...and...presidential election..

All Aboard The Gold Bull Express - Part ll

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5006804Snip:

NEW YORK (Reuters) - Consumer spending, which has been a major prop for the stock market's gains, may fade in coming months, raising questions about where the economy and stocks will draw future strength.

The market has recently given back some of its gains and more investors have turned wary about the outlook.

Consumer spending, which accounts for 70 percent of U.S. economic activity, has benefited from fiscal stimulus like tax cuts and from easy credit engineered by the Federal Reserve, but these stimulants have pretty much run their course, analysts said.
........................
"The market is not priced for continued growth. The market is priced for accelerated growth" from current growth levels, he added.

The last leg of Uncle Sam's fiscal stimulus -- tax cuts -- will fade away in the next couple months.
.....................
In addition, Fed Chairman Alan Greenspan says interest rates will have to rise to prevent rapid inflation from taking hold. With consumers already carrying a heavy debt load, what will higher borrowing costs do to future personal spending?
.........................
Long-term rates have gone up, slowing the pace at which home owners are refinancing mortgages, which had been another important source of ready cash for consumers.
..........................
"For good consumer spending to continue, we need to see job growth," said Connors, whose firm manages $100 billion in assets.

April's jobs figures are due next week.

Another head wind buffeting consumer spending is higher prices. A key inflation gauge in the gross domestic product report on Thursday nearly doubled in the first quarter.

Whereas not too long ago the Fed was worried that prices might be falling too fast, the concern now is that prices may rise uncontrollably. Milk is heading to $4 a gallon in some localities. And gasoline prices reached a record high U.S. national average above $1.80 a gallon this month.
******************
Misetich

Governor Ferguson recent presentation on - Trade - Current Account Deficits (barely mentioned budget deficits) argued that foreigners have been pouring funds into the US in the last few months at the rate of $60 billion as the rate of return in the US exceeds those of other countries - thus foreign appetite and provide the required daily funding of approx. $2.7 billion

IF genuine JOB CREATION is not taking place at the high range expected (Treasury Snow had predicted 300,000 jobs per month - but has since tempered his forecast - to "many")
and IR - debt burden etc increase there's a strong possibility of a severe SM correction

The SM has really performed POORLY in 2004 given the "positive historical" of a presidential election - given the very strong inflows both from domestic and external sources

PRICE INFLATION is a global phenomenon and restricted to the US thus other countries will follow suit and increase IR-offsetting the Feds action and negate any advantage re: bond market foreign inflows

Bottom Line

No meaninful genuine job creation =

- increased IR - debt burden - increased price inflation - tanking SM - potential derivative debacle - out of control government deficits soaring

Mr. Ferguson and other governors theory will be severely tested as will the US $

All Aboard The Gold Bull Express - Part ll

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

http://quote.bloomberg.com/apps/news?pid=10000103&sid=afZ6zjZwmS4A&refer=usBuffett says inflation's heating up. But that's not all he may be hot about. Now he's advising Kerry, criticizing the Fed and Bush administration, mocking Arnold Schwarzenegger and Bill Gates and adding to his dollar gambit:

Buffett Says He Has Increased Bet Against Dollar on U.S. Deficit Concern

Buffett Says He Has Increased Bet Against U.S. Dollar (Update2)
May 1 (Bloomberg) -Excerpts: "Billionaire investor Warren Buffett said he increased his bet against the U.S. dollar on concern that the country's trade deficit will weaken the currency. ``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' said Buffett, 73, in an interview before Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha, Nebraska. In the last few months, Berkshire has added ``more than a little bit'' to its foreign currency holdings, he said. They were last disclosed at $12 billion as of yearend. Foreign currencies represent Buffett's biggest purchase in the last two years."

"Buffett also said he has become an economic adviser to Democratic presidential candidate John Kerry. He criticized President George W. Bush's tax cuts as ``tilted toward the rich'' saying that they should have helped the poor and the middle class instead of rich people like him."

Mikal - Great post- thanks

Buffet continued add-on to the existing $12 billion bet against the US $ will shake some of those US $ bulls and gold megashorts

All Aboard The Gold Bull Express - Part ll

Buffett Says He Has Increased Bet Against U.S. Dollar (Update2)
May 1 (Bloomberg) -- Billionaire investor Warren Buffett said he increased his bet against the U.S. dollar on concern that the country's trade deficit will weaken the currency.

``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' said Buffett, 73, in an interview before Berkshire Hathaway Inc.'s annual shareholder meeting in Omaha, Nebraska. In the last few months, Berkshire has added ``more than a little bit'' to its foreign currency holdings, he said. They were last disclosed at $12 billion as of yearend.

Foreign currencies represent Buffett's biggest purchase in the last two years. The Berkshire chairman has built a fortune buying undervalued assets and today sees little opportunity in stocks. He bought currencies as the dollar began a 25 percent slump over 24 months and the U.S. current- account deficit ballooned to a record quarterly average of $137.7 billion in the first nine months of 2003.

Druid: Mikal, misetech and all, thanks for the great updates. I'm not quite sold on Buffet and his metal position given his political leanings and the fact that his solution to major financial problems involve creating more paper. More like a red herring to me. Buffet is a paper guy. This latest dollar move up might have been an attempt to shake the likes of him, Soros and others out of their dollar short positions.

Anyone else here have experiential knowledge about the virus that my Dell Techs informed me about today which likely crashed my new computer......I've been down since this time yesterday ...Had to clean out the old and start new with Tabula Rasa. I had some severe withdrawal this morning and in the vacuum realized how distracted I am; have to learn to " hold on loosely " in order to not let my life slip away . This , our cotemplated gold future will take care of itself ....time to launch out into the deep .........and my thanks to Warren for stepping up to the plate and making his voice heard....

All this jawboning about tax cuts, whether from the administration or political rivals is pure poppycock!

The tax cuts helped bouy the consumption binge - a little bit. A few hundred bucks in a year doesn't create "massive" spending for anyone, especially as the majority of the "middle class" was bumped up a tax bracket in the process. The media perception gained more than individuals did, rich or poor. As was suggested in Puplava's FSN today, 100% asset (confication) tax on the 10 richest Americas would feed the voracious Federal budget for less than a month.

The biggest disappointment is that NO ONE is seriously talking about SPENDING cuts anywhere, suggesting that NO ONE is interested in solving the government growth hormone syndrome. More likely, most have given up and just hope to profit from the market upheavals and the dollar "re-adjustment".

What a strange state of affairs. The path to hyperinflafla is being paved as we watch.

"Follow the yellow brick road."
- E. Y. (Yip) Harburg

Got gold?

Funny you should mention that, G'lox. I had been thinking the same this week. I've been listening to a quite interesting book which addresses the political and military goals (and, maybe more importantly, the differences between) the US and Europe. The author kept strictly on subject and came to the conclusion that the US would continue to be the only world superpower, while Europe would continue to flounder in post-imperial doldrums, mostly due to the oppressive burden of an ageing population.
About a third of the way through, I wanted to shout at him :-
1/ Who is financing the greatest armed force the world has ever seen ?
2/ Who is going to finance the boomer's retirement ?

I guess I was just left with the slight feeling of disbelief that someone intelligent enough to write as penetrating analysis as he, could possibly leave out the obvious - military power has given way to economic power on the world stage, and the US is living, literally, on borrowed time.

I feel your pain ! But I also feel a Black Blade moment coming on.....
Buy a decent firewall (hey, get a hardware AND software one while you are about it), install anti-virus software from the likes of Norton or McAfee, install anti-spyware software (I use Ad-Aware and Spybot, both free from www.download.com).
Sorry if I sound like I'm preaching, but I have just 'recovered' from a major, but luckily recoverable, virus attack on my home machine. I had all the right software, but had just let the subscription (with its updates) lapse. I'm a hardware guy myself, and I keep on forgetting that just because the hardware is getting cheaper doesn't mean that the software isn't important.

Good Luck !
C!

Re: "...suggesting that no one is interested in solving the government growth hormone syndrome." A bit of timeless Wm. Shakespeare helps explain human "growing pains". For example: W. Shakespeare, "Julias Caesar", Act IV, Scene III (Lines 63- 82)-

Cassius: Do not presume too much upon my love;
I may do that I shall be sorry for.

Brutus: You have done that you should be sorry for.
There is no terror, Cassius, in your threats;
For I am armed so strong in honesty[integrity]
That they pass by me as the idle wind,
Which I respect[heed] not. I did send to you
For certain sums of gold, which you denied me;
For I can raise no money by vile means.
By heaven, I had rather coin my heart
And drop my blood for drachmas than to wring
From the hard hands of peasants their vile trash
By any indirection[devious method]. I did send
To you for gold to pay my legions,
Which you denied me. Was that done like Cassius?
Should I have answered Caius Cassius so?
When Marcus Brutus grows so covetous
To lock such rascal counters[base coins] from his friends,
Be ready, gods, with all your thunderbolts,
Dash him to pieces!

The title of the thoroughly terrific "tragedy", the deeply drafted drama, the profoundly propitious play, is JULIUS Caesar!

@ Cometose, Mikal;

As I read of your computer troubles and we are speaking about sprawling government, there is a House hearing on Spyware reporting on C-Span right now (1:00 AM PDT - not prime time for sure)

It's interesting how they waffle on Spyware regs, as they discuss the merits of Spyware for reporting consumer information vs. teh potential for abuse.

Spyware, which assists SW manufacturers and commercial web sites in "better knowing" their customers, is also a great way to accomplish identity theft, by recording keystrokes and web locations.

I also recommend the protection methods previously mentioned. Cleaning out cookies regularly is a really good idea. It may mean re-registering for regularly used sites, but can be customized once you are more familiar with the programs.

From the tone of the questions, the legislators are seriously uninformed about how the web works.

Good morning everyone.

I've been thinking about something ever since the train bombings in Spain but have been reluctant to discuss it. Sinclair alludes to the issue from time to time but doesn't actually 'say it'. Today I won't 'say it' either, but I'll ask it and beat around the bush (literally).

From time to time I try to place myself in others shoes to gain perspective from the other side of the fence. With all that has gone on in the last couple years hasn't it been a scarey, messed up planet? How long has the (latest) Israel/Palestinian confrontation been going on, 3 years? The geo-political enviroment is a staggering, horrid affair, looking at the 2-3 year picture it has got alot worse.

Looking from the point of view of the 'other side of the planet' we know they (generally) are opposed to the Iraq war, some countries (generally) are opposed to anything the United States is doing and finally some specfic countries wish the U.S. harm. I am sure Mr. Bush's 'axil of evil' countries include alot more than 3.

Delving deeper into the countries that wish to see harm to the U.S. we see factions that (perhaps) intent to harm the US and/or its interests. So here is the question. With all that has gone on in the world and specifically abroad in the last 2-4 years, what is the probability that these 'terrorists', a term that I paint with a broad brush, will act on the US and/or its interests before Nov 2 to ensure that Mr. Bush cannot carry on his foreign policy? The 311 terrorist event in Spain, in respect to the election only days later, was surely planned as such, no? What about OBL's 'deal'? Baloney, hogwash, reality?

I don't want paranoia to dictate any decisions but recall 911 and the closing of SM's in the US for nearly a week. Imagine an event larger (much larger?) than 911. How would the ownership of 'Gold Stock ABC' be of any benefit? The ownership of pure 999 metal must be considered if one is considering the above, most scarey scenario. Does anyone think this is a possibility? Has anyone considered this? Has paranoia taken over my thought processes?

TIA.

http://205.232.90.194/editorials/temple/temple050104.htmlThis is an excellent editorial by a guy named Chris Temple. It is LOADED with common sense.

@ Ned:

General Tommy Franks warned that such an event might be more likely to produce martial law and suspension of the Constitution, so the political effects might be the opposite of what you suggest.

As to market effects, the redundancies built-in pre-911 brought it back to functionality in less than a week (an extra couple days were added to honor those lost). The current systems could withstand any similar attack much more robustly, so the psychological effects are by far the biggest unknown.

What terror warfare has taught us is that "terror warnings" can manipulate markets almost as well as events - a la Japan a couple months ago.

An actual event, in its horror, could be more mobililizing than crippling. 911 was a Pearl Harbor to some, but not as polarizing publicly, given the lack of easily definable enemy. A second event would garner more support for extended war against "anyone", as revenge is a red flag motivator of mass opinion.

. . . neither fun things to contemplate, nor simple to think through.

Yes, a powerful editorial. Here are the last couple paragraphs that I call....."the case for physical demand".


"A rapidly growing segment of the population which understands history, our current monetary predicament and the need to do something pro-active to develop an alternative monetary regimen would be a potent force! Further, as this growing number of people acquired a form of money NOT dependent on debt, NOT dependent on markets, and NOT dependent on whatever manifestation of Greenspan we are treated to this week, a true free market might actually break out! As many are already attempting and even implementing with other forms of trading regimens based on silver, gold and even community currencies not based on precious metals, people of good will can further what I have in the past called a "peaceful monetary revolution" that is way overdue.

This and more will become more likely as the day arrives when the precious metals community approaches the asset classes it is most passionate about with more strategy and sense, and less emotion (meaning, of course, the kind of counterproductive emotion and hysteria that time and again leads to major financial losses during debacles such as we've just seen.) If you want to be emotional, then be passionate-nay, driven-about the kind of portfolio you could have by changing your approach. More so, be driven about the kind of future your children and grandchildren can have if we break out of the mold so many have been in for so long, and look at precious metals as a greater means to an end we all hope for. No conspiracy or manipulations, real or imagined, could stop millions of awakened people who realize that-at the least-they need an alternative to Greenspan's fiat money. Those millions, grounded in truth, sound investment strategies and with a noble purpose even beyond their own investment success, can change society for the better. "


The day that gold (and silver) soars is the day when it is realized that supply cannot keep with demand. We are at a ponit where we know 'manipulated' supply fills the holes. When this breaks down it will be "katie, bar the door"!

Thanks for your message.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_pesek&sid=auv5_M2UjAqwSnip:

And it's no mystery why. Overheating in Asia's No. 2 economy is a clear and present danger to the global financial system, and it's not clear that enough investors realize it. Unfortunately, Greenspan's concerns about China didn't even make it into many press reports last week.

``If (the Chinese) run into trouble, they will create significant problems for Southeast Asian economies, for Japan and, indirectly, for us,'' Greenspan told the Senate Banking Committee on April 20.

........................................
Holding interest rates at current levels isn't the answer either. A hard landing in China's booming economy could cause even more problems for the Communist Party's progression from socialism to capitalism. It also could devastate Asia, which increasingly is relying on Chinese demand. Japan's recovery could falter without Chinese growth.
****************
Misetich

The "China Trail" continues -

It is interesting to note - how suddenly many "doom/gloom" experts are predicting a hard landing in China - yet few of these experts has forecasted China's rapid growth

It is also interesting to note how sudden the China bashing took place following articles on WS Journal - and Reuters Editor interview with Chinese Premier Wen Jiabao

From a recent IMF publication

http://www.imf.org/external/pubs/ft/weo/2004/01/pdf/chapter2.pdf

Snip:

China is now the sixth-largest economy (at market
exchange rates) and the fourth-largest trader in the world
....................

20In the 1980s and early 1990s, China exported mainly clothing, footwear, other light manufactures, and fuels. Since then, its share of world manufactured exports has
increased in nearly all categories, with especially rapid growth in office machinery, telecommunications, travel
goods, furniture, and industrial supplies, while the impor- tance of primary exports has dwindled. More recently,
China has made substantial gains in assembling and exporting more technology-intensive goods, including
automated data processing equipment. Indeed, electronic goods now account for as much as 20 percent of its
exports.
..........................
End of quote

Commodities and Price Inflation

Commodities have risen as a result of China's growth and demand - US military requirements - Global accomodative IR and flood of money supply - and rising energy prices - housing boom- automotive vehicles boom - India's economy growth

It is very doubtful that China's slowdown will have significant impact on its oil needs -

It is also very doubtful that US military needs will slow down anytime soon

Housing construction boom is continuing in the US

Feds accomodative stance will remain - as the Feds will continue to remain behind the curve for the forseeable future - even if IR are raised slightly later on in 2004

Investor's reaction (carry trade/speculators) this past week re: China were overblown

Where will this hot money flow to?
Stocks? Bonds? Housing? or will it sit on the sidelines waiting for a collapse? Or are they attempting to create a collapse?

Or was it a fakeout?

Hot money follows inflation -

Time will tell

All Aboard The Gold Bull Express - Part ll

http://www.imf.org/external/pubs/ft/weo/2004/01/pdf/chapter2.pdfSnip:

Active fiscal policies by the federal government to help restart the
U.S. economy, together with extraordinary mili- tary and security-related spending linked to the
war on terror, as well as the cyclical move from high to low growth, have resulted in a 7 percent-
age point deterioration in the U.S. ratio of budget deficit to GDP relative to FY2000�the
largest such deterioration over such a short time span since World War II and equal to about 6
percent of world gross savings. Interest rates, however, have remained low as monetary policy
has been accommodative and global investment tepid. The U.S. fiscal position is expected to
remain in deficit for the next several years.
................................
W hat are the consequences of the higher U.S. public debt, current account deficit, and net foreign liabilities for the U.S. dollar and, even-
tually, world economic activity?
........................
From an extremely strong position in fiscal year 2000, the U.S. fiscal position has deterio- rated rapidly (Figure 2.1). The U.S. federal gov-
ernment's unified budget has shifted from a surplus of 2!/2 percent of GDP ($236 billion) in
FY2000 to an estimated deficit of 4!/2 percent of GDP ($521 billion) in FY2004
........................
Foreign Debt and the Dollar
A U.S. fiscal expansion is generally thought to lead to an appreciation of the dollar, since it causes foreign capital to flow in in response to
higher U.S. interest rates, and leads to a weaker external position as some of the increase in
domestic demand is satisfied from abroad.10 In the medium term, however, the story is reversed
as the exchange rate starts depreciating to rebal- ance the current account deficit and generate
surpluses to meet the additional costs of the higher net foreign liabilities accumulated during
the fiscal expansion.
*********************
Misetich

The "China" story has been front and center for the past week OBSCURING the real global financial system threat - a collpase of the US $

The Feds mantra of pointing that the Government deficit as a % of GDP is lower than it was in the mid 80's HOWEVER
they forget to mention that the TRADE AND CURRENT ACCOUNT DEFICITS were not at those levels in the mid 80's

The Feds are too optimistic in their projections on deficits reductions going forward - thus far NOONE of those rosy forecasts have panned out

How can the US continue on attracting $2.7 billion per day? to offset these needs. It wasn't long ago that those needs were "only" $1.5 billion

That is the everday REAL FEATURE STORY

All Aboard The Gold Bull Express - Part ll

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

The ABCs of Gold Investing

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

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

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

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

http://business-times.asia1.com.sg/story/0,4567,115461,00.html?Snip:

STOCK prices plunged in Tokyo and in other Asian markets this week on fears that China's economic boom - the locomotive of regional growth - could be derailed by emergency measures Beijing is taking to curb bank lending and head off inflation.
....................
The South Korean government yesterday convened an emergency meeting of officials and experts to analyse the impact of any move by China to put the brakes on its overheating economy
..................
Japan is exposed to a double hit from any sharp slowdown in China. Chinese demand for Japanese machinery and other capital goods, as well as commodities ranging from steel to cement, has helped power Japan's economy to a strong recovery since last year. And Japan, like China, has become a magnet for imports from the rest of Asia.
......................
*****************
Misetich

On the China Trail -It get curiouser and curiouser

Recap of Events

Week of April 12

IMF suggests to US to alert investors re: increase IR's
Negative "gold" news appear in Financial Times/Bloomberg re: France, Germany gold sales - vaults are full

Gold prices in the $420's begin to drop

Week of April 19

Greenspan testimony - alerts markets of inevitable increase in IR
Greenspan comments on "China overheating"- high energy prices here to stay
US Central bankers - media blitz - Deficits don't matter

Gold prices drop to low $400
Gold stocks get pounded

Week of April 26

China story takes overheadlines in WS Journal, Reuters, Bloomberg
US GDP growth of 4+% - disappoints
Gold attacked again - intraday $377 before rebounding - Gold bull trend line remains intact
Sell-off in commodity markets- unwounding carry trades
Gold stock get pounded again
Asia SM react to China's development
US $ index weakens
US SM weakens
US Long-term IR increase
Gold community gurus more bearish than ever

The famed PPT has its hands full - and thus far most of the alloted physical gold of 400 tons yearly sale re: WA is gone-

So much ammunition needed - to maintain equilibrium - but the ammo of IR's have disappeared

Geopolitical events heating up - in Iraq and attack in Saudi Arabia

As Blackblade would say " We live in interesting times"

It never hurts to add a little insurance in one's portfolio - Physical Gold - get some!

All Aboard The Gold Bull Express - Part ll

@ misetech:

Your quote, "The Feds mantra of pointing that the Government deficit as a % of GDP is lower than it was in the mid 80's HOWEVER they forget to mention that the TRADE AND CURRENT ACCOUNT DEFICITS were not at those levels in the mid 80's"

reminded me of the tax activist on Puplava's FSN yesterday who said they are looking for a small government, fiscal Conservative of the Reagan mold. Gulp?

Most people. including many well educated types, are absolutely confounded by the rhetoric into believing there is a real difference between which party controls the White House. As long as the Congressional deficit spending continues unabated, the economic damage will continue to reflect their fiscal neglect.

It's the SPENDING, stupid! Deficits DO matter!

Got Gold?

http://www.gwb.com.au/gwb/news/banking/rothchild.html"Of the two major Rothschild Houses (French and English), the London House (New Court ), founded by Nathan Mayer Rothschild and operating today as N.M. Rothschild and Sons, is undoubtedly the most influential, especially as it pertains to gold and currency trading. Twice daily a Rothschild agent sits in a cloistered room "fixing" the price of gold in the world's largest bullion trading market: the London Bullion Market Association ( LBMA ). Historically, N.M. Rothschild was owner and operator of England's Royal Mint Refinery and was the primary gold agent to the Bank of England.

...Nathan helped finance Britain's conquest of Napoleon at Waterloo, and benefited in London's stock market from advanced knowledge (from his superb courier service using pigeons) of Napoleons defeat at Waterloo. Nathan helped finance the Duke of Wellington's army having bought 800,000 pounds of gold from the East Indian Company for $8 million then selling the gold to the Duke to help defeat Napoleon. Hence, Nathan became chief broker and pay master general to England's most important army; the Rothschilds were England's lifeline for getting paycheques to the English army. Nathan could single handily wipe out savings of many a competitor by dumping "consols" in London driving down their share prices, as he did with the advance news of Napoleon's defeat. Nathan's ability to depress stock prices, then buy them up after people panicked was legendary...He would use Rothschild agents to send false news which would be used by observers falsely leading the crowd astray, then he would buy up the same stock at ridiculous low prices...One should never underestimate the capacity of a Rothschild to influence markets, even today."
Morton (1962) noted that the Rothschild wealth was estimated at over $6 billion US in 1850. Not a significant amount in today's dollars; however, consider the potential future value compounded over 147 years!

Accounting for the Rothschild Wealth and Influence: Taking $6 billion (and assuming no erosion of the wealth base) and compounding that figure at various returns on investment (a conservative range of 4% to 8%) would suggest the following net worth of the Rothschild family enterprise:

$1.9 trillion US (@ 4%)
$7.8 trillion US (@ 5%)
$31.5 trillion US (@ 6%)
$125,189.1 trillion US (@ 7%)
$491,409.0 trillion US (@ 8%)

To give these figures some perspective consider these benchmarks: A little of $300 billion US buys every ounce of gold in every central bank in the world, U.S. M3 money supply August 1997 was $5.2 trillion, U.S. debt is currently $5.4 trillion, U.S. GDP (1997; 2nd Q.) is $8.03 trillion, George Soros' empire is worth an estimated $20 billion."

Waverider: Misetich - I add this article (1997) to complement your excellent summary below - don't forget that the Rochschild's pulled out of the London Gold price fixing around April 12, just beofre the negative Gold disinformation hit the airways and just before Gold dropped from around $420.00. What do they know that would motivate them to possibly manipulate the PM market to this extent - according to this article, it wouldn't be the first time. Cheers and thanks Misetich for all of your contributions here - they're appreciated!

@ L WaveRider:

Perhaps the Rothchilds' pullout is the some of the best corraborating evidence for Sinclair's assumption of rapid POG rise in the near future?

The fundamentals have been in place for a while, but what we've lacked so far is evidence of market movers.

Gold will break out of its doldrums soon, and the explosive run could be missed by anyone who blinks.

Waiting for the absolute bottom of this pullback could be dangerous.

Got gold?

....and U.N. Secretary-General Kofi Annan said he expected the Security Council to authorize a multinational force for Iraq.

"Quite frankly, it's in everybody's interest to do whatever we can to stabilize Iraq," Annan told NBC television, adding a resolution being considered by Washington would deal with Iraq's future after a planned U.S. handover of power on June 30.


For the Security Council to authorize use of force...it must be worse than we think.

Snip:

FRANKFURT (MktNews) - Eurozone harmonized consumer prices rose 2.0%
on the year in April, up from a rate of 1.7% in March and slightly more
than most analysts expected, according to the flash estimate released
Friday by Eurostat.

Eurostat did not provide a figure for the month-over-month HICP
change in April. However, according to Market News calculations based on
the latest available index levels, April HICP rose 0.4% from March, down
from a m/m gain of 0.7% in the earlier month
*****************
Misetich

Price inflation is soaring in EU -
EU keep on emphasizing - currency stability - they were screaming when the Euro hit 1.26 US

At the lower levels price inflation re: OIL is hitting them hard - thus it appears the optimum level of the Euro/US is between 1.18 to 1.25 US which would roughly translate to Newmont Lassande forecast of Gold between $380-430

In addition US corporate earnings & revenues were
improved due to currency flactuation - The US $ index spend most of the 1st qtr between 85-90

Thus if the US $ index moves up it would hurt earnings - hurt EU price inflation and hurt US exports

Gold megashorts have taken a short position between $385 to $395 -

Bon chance!

All Aboard The Gold Bull Express - Part ll

http://205.232.90.194/editorials/temple/temple050104.htmlEveryone ought to take a moment to read through Chris Temple's comments. He takes a good first whack at all this and it'll stand most casual readers in good stead. But, (you knew there'd be a "but") like many before me I've somehow gained a fuller appreciation for the all-important nuances that careful word selections can provide within the greater body of a presentation. So it's with that in mind that I'd encourage the veterans of monetary thought hereabouts to be generous in their interpretations. At the same time I'd encourage the novices to think deeply on these matters and find where they themselves still have need to come up to speed.

I especially like at the end where Temple talks about people of good will taking action toward a "peaceful monetary revolution." However, the road map from here to there is strewn with a great many challenges, making it all the more important that our various official and unofficial or would-be "trail guides" (my hat is off to the REAL one) don't muddle the path with a quagmire of uncertain and indefinite communication. What's in a word? Here's a small example from Temple's article:

"First, I suggest you come up with a modest, realistic amount of PHYSICAL gold or silver bullion you want to own, which you will hold in your possession. Buy or accumulate it, squirrel it away and forget about it. This is your "mad money" you'll be able to use as money in the event that Greenspan's skyscraper of cards suddenly does fall."

Veteran hikers of FOA's Trail will no doubt recognize what he's driving at, but we'd prefer to pass the message on to our friends in the following form -- by replacing the occurrences of "mad money" and "money" with less ambiguous counterparts. It may seem subtle and unimportant to the beginner, but it pays off in the end as you gain proficiency with the state-of-the-art in monetary thought and personal well-being.

"First, I suggest you come up with a modest, realistic amount of PHYSICAL Gold bullion you want to own, which you will hold in your possession. Buy or accumulate it, squirrel it away and forget about it. This is your SAVINGS you'll be able to rely on as WEALTH in the event that Greenspan's skyscraper of cards suddenly does fall."

Without belaboring the point, at a minimum it oughta be obvious to even the greenest new-comer that the term "mad money" is a very misleading synonym for the "savings" which is meant in Temple's context.

If it's handled in this way, where Temple next goes beyond beyond the position of "mad money" (i.e., what I would rather call core savings) to talk about investments, we're all in a better position to see exactly where we now stand and get a clearer view of where we want to go.

From here, he seems to favor mining stocks to provide the "core" precious metals portion (at 10%) of his diversified investment portfolio. That's probably fine and dandy for the typical gain-minded investor, but we well-informed Trail hikers are better inclined to see how a simple ADDITION to our core physical Gold savings will most likely provide the largest (and surest) source of true investment gains as the course of current monetary events continues to unfold.

So if anyone suggests that your position is overweight in physical Gold investments, you can ignore them as ill-informed. It just so happens that you are a VERY WEALTHY person with an enviably large savings, among which perhaps only a latest few of those "excessive" kilos having been specifically acquired as part of your "investment position" to diversify whatever portfolio of funds you've got in play.

Savings, or savings plus investment, any way you slice it...

Gold. Get you some. --- Aristotle

PS. For Belgian. Thanks for the whereabouts inquiry a while ago. Despite a seeming absence by my prolonged silence, I've in fact read everything, and especially liked your suggestion a couple weeks back that use of the term "credit" could eliminate the legacy of confusion that "money" brings to most discussion participants. Good stuff. It's a big stone, so we gotta keep chipping away at it.

I also wanna say I'm glad to see Druid's post last week that a certain Mr. Wallenwein has come largely on board and is spreading our dual-system money-AND-Savings message. But I gotta say, after personally enduring the weary endless backfilling of naysaying Gold Standard bugs during times of very lonely spadework in carving out the frontline trenches years ago along with the likes of Trail Guide and Miner, it'd sure be nice if the reinforcing well-rested gunners like Wallenwein, using our trenches, would tell his folks WHERE all this thankless groundbreaking work was done and let 'em all know how to join us diggers in its continuance and refinement of its delivery. Sure, we worked at it to get a message out, which W-wien is helping, but we also did this labor so that we might provide a much-needed rallying point in a sea of chaos to attract worthy allies in our human desire for supportive companionship during the exhaustive campaign. So c'mon, Wallenwein, keep spreading the word, but have a heart and drop the camouflage you've got between us. Do what's in your power to facilitate the supply line reaching your primary trench diggers!

http://www.economeister.com/reg/popup/popup_frameset.jsp?prod=62&disp=single_story&banner=mainwire_featuresSnip:

NEW YORK, April 30 (MktNews) - U.S. auto dealers say April should
wind up the best month so far this year but still tepid overall, with
imported vehicles selling anywhere from fairly well to great, while
domestic makes appear to be languishing.
........................
"March, April, May and June usually are our best months. I'm not
seeing that so far this year," he said. "We saw fewer people out there,
our closing ratio is down and we have fewer deliveries."
..................
--Concern Over Future Price Rises As Steel Costs Soar and Dlr Softens
***************************
Misetich

Auto inventories remain high - steel prices are soaring as is gasoline

With higher IR around the corner the auto industry will be challenged - affecting parts & mfg sector

Certainly not a positive background for job creation thus ANOTHER reason for the Feds to move very s-l-o-w-l-y in incrasing IR

In addition IR increase will be tempered due to bank exposure in emerging markets -

Thus a 'benign' low IR for the next few months will insure accelerated price inflation existing in the pipeline

All those would be gold hedgers are still stuck for a few years - assuring a good floor for gold prices as their balance sheet continue to bleed affecting their borrowing capacities with banks for new projects - thus encouraging these megahedgers to clean up their hedgebooks

All Aboard The Gold Bull Express - Part ''

http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=dmax&w=1&t=f&a=50
Looks like gold is crossing back and forth across 380. If
it goes down and returns, I would expect that would amount
to consolidation at around that level, perhaps preliminary
to moving above it more conclusively, at some future time.

http://quote.bloomberg.com/apps/news?pid=10000087&sid=adFYmvdcLnTE&refer=top_world_newsIf Bloomberg is any indicator, this is your last chance to get some cheap gold.

RAP msg:

Bloomberg.. okay. The statistical significance of 34 "traders" doesn't mean anything, but even if it did...

"Twenty-seven of 34 traders, investors and strategists surveyed from Sydney to New York on Thursday and Friday advised buying gold. Six recommended selling, and one advised ``hold.''"

That is far too much bullishness in such a widely-read publication. Being a contrarian.. this tells me Gold still has another $40 drop before we clean out all the weaklings, even the Physical weaklings at the random coin shops or Television coin buyers.

Clean them out ... let's take the pain all at once... bounce around flat for the next 6 months -- then start the next climb upward.

http://www.businessweek.com/bwdaily/dnflash/may2004/nf2004053_8928_db014.htmSnip:

Its revival has relieved the world's central bankers of a major worry. Sooner or later, however, they know the decline will resume
.......................................
Finance ministers and central bankers from the Group of Seven (G-7) industrial nations could barely hide their glee when they gathered in Washington on Apr. 24, on the fringes of the International Monetary Fund's (IMF) spring meeting. At their previous powwow in Florida, back in February, some of the monetary mandarins fretted that the dollar was heading into a free fall that could wreck the world economy
..........................
Treasury Secretary John W. Snow, Federal Reserve Chairman Alan Greenspan, and their fellow G-7 policymakers shouldn't get too comfortable, however. The dollar's recent recovery (it has risen 7.6% against the euro and 5.5% against the yen from its recent lows) is probably a temporary reprieve. With world trading patterns so lopsided -- the U.S. ran a record $542 billion current-account deficit in 2003 -- the greenback is likely to drop again after a quarter or two of strength.
..........................
LESS HEDGING. The two forces behind the dollar's bounce -- faster economic growth and rising interest rates in the U.S. -- will serve only to worsen global imbalances by pumping up American imports and increasing what Washington must pay its foreign creditors. Foreigners are likely to demand a steep markdown in U.S. assets via a further drop in the American currency. "The dollar will reach new lows in the next 12 months," says David Gilmore, a partner at consultants Foreign Exchange Analytics. That could complicate an already complex market dynamic for investors.

For the moment, though, the G-7 is basking in its success in halting the dollar's slide. At the Boca Raton (Fla.) meeting, the U.S. signaled that it was no longer eager for a dollar decline by joining its partners in warning speculators against "excess volatility" in exchange rates. The shift came in response to pleas from Europe that its economy was getting killed by the euro's relentless rise. Japan then hammered the message home to speculators with a buying spree, snatching up $20 billion-plus in bucks
...........................
But higher U.S. rates have raised the cost of that strategy, so this dollar hedging has fallen off. Data culled by State Street (STT ) from its institutional investors found that forward-dollar sales have sharply declined in 2004.
..........................
While the combination of growth speeding up in the U.S. and slowing in Europe is helping the dollar now, it will probably hurt the buck later. Fed research suggests that U.S. imports rise 1.8% for every 1% increase in U.S. spending, while U.S. exports shrink 0.8% for every 1% slowdown in foreign economic growth. The result: a bigger U.S. trade and current-account deficit.

Rising U.S. interest rates will also tend to pad the current-account deficit, notes former Fed official Edwin M. Truman. According to hedge fund Bridgewater Associates, foreigners own more than 45% of U.S. Treasury securities, more than 30% of U.S. agency debt issued by firms such as Fannie Mae (FNM ), and 20% of U.S. corporate bonds. Thus, as rates rise, so does America's debt service.
***********************
Misetich

The last line of defense has been reached - Central Bankers - are attempting to fight the market and laws of nature - by defending a losing cause

Each Central Bank intervention to stem the natural path - results only in a temporary reprieve - aggravating the situation further

Japan's obscene intervention in the 1st qtr of 2004 - which has Central Bankers gloating - resulted in keeping US IR artificially low - hence the Feds have fallen way behind the curve

Japan purchase of GSE's debt which the ECB got rid of - is adding ANOTHER nail in the coffin -

The Fed says they have defeated "deflation" yet the US, EU, Japan, Canada are maintaining outregeous low IR - facilitating speculation

An increase in IR - a China hard landing - a bust of the global housing bubble - stock markets - bond market and ASSET DEFLATION like no other will hit globally

Thus these egomaniacs have a choice - tighten and face the consequences OR HYPERINFLATE their way out

The FEAR OF ASSET DEFLATION is in Central Banker's eyes - never mind what they say publicly - thus their choice is simple

Golden dreams to all

All Aboard The Gold Bull Express - Part ll

@ Goldilox, Cometose and Mikal.

Here is a free utility to destoy spyware. Once you run it, you will be suprised on what's on you computer and what sited put spyware on your pc.

Cytek

Thank you. Good to hear from you.

@ Cytek:

Not applicable to my OS.

I use Aladdin's InternetClean for similar results.

It lets me save selected cookies before I zap the remaining ones.

The Net Blockade portion allows me to block third-party cookies altogether.

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=5007396Snip:

OMAHA, Neb. (Reuters) - Billionaire Warren Buffett warned of the risks of derivatives on Saturday, and said that the financial instruments could lead to a "huge problem" within the next 10 years
..........................
He said that despite Freddie Mac having intelligent board members, being chartered by the U.S. Congress, and being followed by dozens of Wall Street analysts, it couldn't get a hold on the complexity of derivatives transactions.

"With an auditor present, they managed to misstate earnings by $6 billion," Buffett said. "A lot of mischief can happen with derivatives."

He said that derivatives are so complex that many CEOs he knows can't figure them out.

"I know the people that run these companies and they don't have their minds around what is happening," he said.
..................
"Some time in the next 10 years, you will have a huge problem that will either be caused by or accentuated by people's activities in derivatives," he said.
******************
Misetich

Within 10 years? that is a very conservative statement. Derivavtives are weapons of Enroitis economy. Their increased use undermines and dislocates the real economy.

The vast majority of investors at large are ill-prepared for this expected derivative bust -

Physical gold is the ultimate currency.

All Aboard The Gold Bull Express - Part ll

http://www.federalreserve.gov/boarddocs/speeches/2002/20020111/default.htmSnip:

"Oil really does matter and oil prices have been the best predictor of recessions in the past 50 years. We are now getting into danger territory again," says Professor Andrew Oswald at Warwick University
..................
A sharp rise in oil prices, apart from hitting the profits of firms which are big energy consumers, also takes money straight out of consumers' pockets, particularly in the US,
.......................
Markets have been spooked by fighting in Iraq and growing unrest in Saudi Arabia, the world's biggest oil producer, as well as a lack of refining capacity in the US. So economic policymakers have also begun to fret, saying that oil prices are now a "downside risk" to the world economy, alongside the US current account deficit and slow eurozone growth.
...........................
but the oil market is a jittery beast and any signs of serious disruption, particularly to Saudi Arabia's 8.5m barrels a day, would send prices soaring.

While the rule of thumb is that a $10 a barrel rise in crude prices reduces global economic growth by 0.5% after about 18 months, economists like Oswald say the effect, particulary if oil prices jump to $50 or $60 a barrel, could be far more painful. The world economy is expected to grow strongly this year but higher oil prices could mean the outlook for next year is darker. Oil remains the most important commodity on the planet and we ignore it at our peril.
****************
Misetich

It is an interesting remark Sir Greenspan made on January 2002 regarding the effects of "dropping energy prices effect on the US economy

Snip

"The substantial declines in the prices of natural gas, fuel oil, and gasoline have clearly provided some support to real disposable income and spending. These price declines added more than $50 billion at an annual rate to household purchasing power in the second half of last year"

So Energy Prices Do Matter? What happened to the new economy"

Higher oil prices have always preceeded a recession

The FEAR OF ASSET DEFLATION - is in their eyes - Which way out?

Asset Deflation or Hyperinflation?

Physical Gold investments flourish in either scenario!

All Aboard The Gold Bull Express - Part ll

Here are three links to Sir Greenspan foray into energy-oil

April 27, 2004

http://www.federalreserve.gov/BoardDocs/Speeches/2004/20040427/default.htm

November 13, 2001

http://www.federalreserve.gov/boarddocs/speeches/2001/20011113/default.htm

January 11, 2002

http://www.federalreserve.gov/boarddocs/speeches/2002/20020111/default.htm

Issing;
"and when the bubble bursts, there is a dimension of strategic interaction that a prudent policymaker cannot ignore. This offers a rather strong argument in favour of symmetry in the central bank's behaviour in boom and bust periods. If a central bank were to react in an asymmetric manner, namely only with looser policy at times of asset price busts but not with tighter policy when asset price bubbles emerge, the central bank may create through its own behaviour a moral hazard problem among market participants. It is crucial for a central bank to avoid this, since a perception that it insures investors against the risk of large losses could easily contribute to the formation of new bubbles in the future... "

Unless of course if having the some big players of the market on board your strategy is half your aim. Having key big market players supporting your one world strategy makes them part of your "free market" muscle in implementing fed designs. The decision must be, are we going to spend our time having -overheating- as the problem, or have the problem of restarting the economic engines as the problem.
Or how long can we have the one before we have to have the other.

Thanks Cytek.
Buffett said; "He said that derivatives are so complex that many CEOs he knows can't figure them out.
"I know the people that run these companies and they don't have their minds around what is happening," he said.

Since derivitives are so complex, or rather, so illogical, arent they the perfect instruments for manipulation when push comes to shove in this new infinite debt model? Collapseing derivitives? The big boys can make up some new ones that illogically hold all the weakened ones as if they are strong. And on and on. Why 10 years? Why cant they play pretend for longer? Someday gold will seem sensible to the many. Right now, its a small group that sees all the mess.

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.

Your comments

Collapseing derivitives? The big boys can make up some new ones that illogically hold all the weakened ones as if they are strong. And on and on. Why 10 years? Why cant they play pretend for longer? Someday gold will seem sensible to the many. Right now, its a small group that sees all the mess.
******************
Misetich

The LCTM - Enron fiascos proved costly - The famed "Greensan put" was applied to LCTM by lowering IR's in the face of over heated stock market - The final result of that action was NASDQ raising ahead to the stratosphere - over 5000 mark - The market bust followed

US still hasn't recovered from that "minor" fiasco

Enron was ANOTHER example of using derivatives to give the illusion of grandeur - Enron was listed in the TOP 7 US largest corporations (!!)

The ramifications and loss of creditability is plaguing the markets


You indicated " Right now, its a small group that sees all the mess"

You may think its small yet billions if not trillions of $ are being managed by "this small group" - I don't think Warren Buffett is "small"
Neither is Bill Gross who manages over $700 billions at Pimco

Currency traders are all over the US $ - and it took billions and billions of Japanese intervention in 1st Qtr alone to temporarily pause its descend

I agree "joe public" as Bushi would say hasn't joined - though gold investment demand is rising and being accumulated by "those in the know"

The 'gnomes' are alive and well - and are jumping and piling on the gold bull express

All Aboard The Gold Bull Express - Part ll

Deadly for goldshares but not a big deal
IF you just slowly build up your nest-egg,
dropping a few coins into the kiddy and
enjoy the roller-coaster.
Whatever ELSE you might have ANYWHERE else
invested will give you more concern. So
let us use this least bothersome investment
and just watch the occillations like so many
waves washing up against the sandy beach.
It's best to stay away from hype and the
expectation of huge gain: It only causes
frustration and burn-out. When it will
happen, it will happen. OvS

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

The Character Of Slack...To suggest that the financial markets have been on heightened alert recently in terms of anticipating potential forward movement in the Fed Funds rate is an understatement.
................................
Despite a better tone to manufacturing oriented diffusion indices lately (ISM, Philly Fed, NY Empire State Manufacturing, etc.), the recovery in headline industrial production remains subdued for now. A few weeks back we saw an unexpectedly weak industrial production showing for March.
..................
And this sense of slack is completely corroborated by the capacity utilization component of the industrial production report.
.......................
For now, capacity utilization at 76.5% is below any initial tightening experience on record over the last four decades
..............................
If we had already lived through just average 3.03% payroll employment growth relative to the prior pre-recessionary peak in today's environment, we'd have 5.97 million more jobs than we now experience in the current economy. An overnight 4.6% increase from where we are today
..........................
Never in US history have average households been as levered as is the case at the moment. Fact: Never in the history of US wage and salary records has the year over year change in this measure hit the low that was just revealed in last weeks 1Q 2004 GDP report.
..............................
And only once (1986) has the year over year change in headline CPI been as low as we now experience when the Fed began to tap on the monetary brakes. In 1986, the year over year change in headline CPI was 1.28% when the rate tightening started, but importantly in that year, crude prices dropped over 50% and yet core CPI still expanded a year over year 3.8%
.......................
*****************
Misetich

ANOTHER great insight from our friends at The Contrarian-

So much ammunition has been spend - the world is awash with liquidity yet the FEARS OF ASSET DEFLATION abound -

The trend still remains for "accommodative" central bankers - regardless of their jawboning to the contrary - since actions speak lauder than words

GOLD is the barometer - which way do central bankers want it to point? Deflation or Inflation?

All Aboard The Gold Bull Express - Part ll

http://fidweek.econoday.com/reports/US/EN/New_York/napm/year/2004/yearly/05/index.htmlConstruction expenditures increased 1.5 percent in March after an upward revised gain of 0.4 percent in February.

Public construction jumped 5.2 percent due to a 9.8 percent
Nonresidential construction spending edged down 0.2 percent after a 1.4 percent hike in February.
.......................
The ISM manufacturing index inched down one tick to 62.4 percent in April after increasing in March to 62.5.
.........New orders inched down from the March pace, but remained at high levels. The production index actually picked up to 67 percent in April from 65.5 percent in March. The employment index also rose to 57.8 in April from 57 in March.
The price index, which is not adjusted for seasonal variation, jumped 2 points to 88 percent, a high in this cycle. There is no question that raw materials prices are rising as manufacturing demand improves.
***************
Misetich

Construction spending increased on government deficit increase -
Price inflation soaring - jobless recovery continues

...and most of the ammo has been used up...

Government Deficits are here to stay - for a little while longer -

All Aboard The Gold Bull Express - Part ll

http://urbansurvival.com/week.htmsnippet:

There are two stories today that are huge - and have massive implications for the economy, yet they are happening in slow motion so as to avoid gathering the attention of the markets.� One of these is the story of how oil and gas companies have vastly overstated reserves (estimates of how much oil or gas is still in the ground that might one day be recovered as useful energy).� No sooner had we gotten past Shell doing write-downs (and not just once) than we have a story beginning to unfold about parallel practices at El Paso:

http://biz.yahoo.com/rb/040503/utilities_elpaso_3.html�

Current management is not implicated.

Goldilox:

Not like we didn't see it coming. Look for more energy price increases.

Glad to hear that y're still on guard at the Golden gate.
I wonder where all those other fine posters have gone, now that Gold's price behavior is becoming much more interesting than ever before !? Regards, B.

I think most posters have in recent days taken a short vacation while the powers that be do their thing - throwing more gold at the market, at very attractive prices.

Let the powers that be have their little tantrum; they are refusing to obey the orders of the market, at all costs.

And speaking of COSTS, remember that quip: "deficits don't matter."?

COSTS don't matter, when you can shove them into the DEFICIT or to other debt by some entity.

Especially, when there is no intention of ever PAYING DOWN THE DEFICIT. Costs are immaterial, because they wind up in the DEFICIT, and the deficit is immaterial - it "doesn't matter" - when there is no intention of ever paying down the deficit.

The Banks don't care about debt or derivatives, because they know, already, they are going to be nationalized sooner or later, and wind up as part of the DEFICIT.

It's logical!

Also, entirely logical to get out of fantasy fiat and into GOLD. However long it takes, it will be the only sure monetary asset left standing.

The GAB

http://www.usatoday.com/money/economy/employment/2004-05-03-teen_x.htmSnip:

Teenagers are facing the worst summer job market in decades despite signs more companies are starting to hire.
The annual teen employment rate tumbled from 45% in 2000 to 37% last year -- lowest since the figure was first tracked in 1948, according to an analysis by the Center for Labor Market Studies at Northeastern University in Boston.

"Kids are doing worse this year than last," says Andrew Sum, the center's director. "The job growth hasn't filtered down. If anything like this happened to the adult workforce, you'd call it a depression. It's that severe."
***************
Misetich

Probably the March 300,000 "job creation" cut in to otherwise student part-time jobs

Billions of tax cuts - increasing government deficits - have shown little results thus far

Job creation is almost negligible in lieu of the incentives - corporate earnings have increased ( income tax receipts from corporations have declined) corporate spending has increased moderately - corporations are still cautions on hirings

Will they make those tax cuts permaently? If they do trillions will be added to projected deficits

All Aboard The Gold Bull Express - Part ll

Further media consolidation is partly to blame for bland uniformity in reporting real news
and embellished, subjective hype.
From today's CBSMarketWatch.com headlines, I was
struck that the spin strutted out today
is less genuinely interesting as a result of
turning inherently useful news into emotional entreaties to follow the bouncing ball of the day, and exploiting and misapplying the many good tools of the journalistic trade such as documentation, quotes, balanced details and sourcing, pro and con, cause and effect, analogies, real and practical definitions where appropriate, etc.
But today, editorials, feature stories, opinion pieces and letters generally still provide far greater value to me, often having less selectivity, bias
and subjectivity, and so filling some of the content void
endemic now in most journalism.
Long live internet!

http://www.usagold.com/DailyQuotes.htmlUS close excerpts:

Gold futures on the Comex division of the New York Mercantile Exchange put on a consolidatory showing Monday while the London market was closed, and settled the day unchanged.

Many traders were out of the market for a public holiday in London and Japan's Golden Week, which will keep its exchanges closed through Wednesday.

There was little incentive to trade before Tuesday's Federal Open Market Committee meeting on U.S. interest rates.

COMEX gold ended flat on Monday, seesawing in holiday-thinned trade after South Africa's Harmony Gold said it closed out the 515,000-ounce hedge book of a small mining company it had recently purchased.

Comex dealers said order placing was rather meek and designed to have as little effect on prices as possible. "We're not seeing any heavy bursts of activity, or if we are it's designed to take place in pockets of greater liquidity that can absorb it," said a New York-based dealer with a European investment bank.

June gold settled unchanged from Friday at $387.50 an ounce, trading to $390.00 after hitting $386.10 an ounce when the Harmony news came out.

-----(more at url)-----

http://www.cbpp.org/4-14-04tax-sum.htmSnip:

If the tax cuts the Administration wants to make permanent are made permanent, current relief from the swelling Alternative Minimum Tax is continued, as most observers expect it will be (the Administration supports continuation of AMT relief but has not yet put forward a specific AMT proposal), and the additional tax cuts the Administration has proposed are enacted, the future costs of these tax cuts will be extremely large.

Over the 10-year period from 2005 through 2014, the direct costs of the enacted and proposed tax cuts would total $2.8 trillion. The cost would equal 2.1 percent of the economy in 2014.
From 2005 through 2014, the increased interest payments on the debt that result from the tax cuts would amount to $1.1 trillion. The interest payments would grow steadily with each passing year and in 2014 would equal $218 billion -- or 1.2 percent of the economy. This amount alone is as large a share of the economy as the government now spends on all programs and activities under the Departments of Education, Homeland Security, Interior, Justice, and State combined.
Considering both the direct costs of the tax cuts and the associated increase in interest payments, the tax cuts would increase deficits by nearly $4 trillion between 2005 and 2014.
Over the next 75 years, the cost of these tax cuts -- assuming they are made permanent -- would be more than the combined shortfall in the Social Security and Medicare Hospital Insurance trust funds.
******************
Misetich

The much ballyhood jobless recovery and GDP growth of the last few quarters was artificially stimulated by temporary tax cuts

Little return has been obtained for these tax cuts - but government surupluses (ok we know they were not- but lets play along) into gigantic deficits

Linday-O'Neil-Snow forecasts have not materialized. THEY HAVE FAILED.

They have failed to ignite the real economy, the over 2 millions jobs lost during the "mild recession" have not comeback even though billions have been spend thus far and 11 IR rate cuts

Military defense spending show up as GDP growth yet its a drain on taxpayers.

The "promised future" of the last few years is here NOW! -

Will they increase IR? Will they convert temporary tax cuts to permanent

Greenspan did an about face last week saying deficits (temporary) don't matter - yet all the hopes and prayers are pinned in the famed and elusive economic recovery

With higher real inflation hitting consumers and corporate profits it remains to be seen if these temporary tax cuts will be eliminated. Odds are they won't thus the rosy projections of future years deficit reductions will not materialize increasing the dependency on foreign investment.

All Aboard The Gold Bull Express - Part ll

Five years ago, I moved silver held in Europe from one Swiss Bank to another.

This was time-consuming. It was weeks before the operation was finally concluded - and I had to pay a hefty tax for taking the physical out of one bank and putting it into another.

Ted Butler, at another site, says today: "The fact is there is little real silver in Switzerland or Europe."

I have to agree. I had to buy an additional amount, and it took weeks to obtain a very modest amount of silver.

Ted Butler is right, in my opinion.

Silver will continue to rise, is another opinion I hold.

The GAB

http://www.epinet.org/content.cfm/webfeatures_snapshots_04282004seSnip:

Of the 194 million Americans that live in the 100 largest metropolitan areas, three-quarters of them live in metropolitan areas that have lost jobs since the recession began. In fact, 28 months into the economic recovery, and a full three years since the start of the recession, 57 of the largest 100 metropolitan areas are not back to their pre-recession jobs levels. But it is the largest of these metropolitan areas that have been the hardest hit--nine of the top 10 largest metropolitan areas have seen job loss over this period. Of these top 10, only the Washington, D.C. area has more jobs now than when the recession began.
......................
Furthermore, most of the 43 metropolitan areas that have experienced some job growth are located in states with high population growth. The top five metropolitan areas in terms of job growth have something in common--they are all located in one of the top four states in terms of growth in their non-elderly population. As a consequence, strong job growth may not be a sign of especially strong labor markets in these metropolitan areas, because job creation still may be lagging the demand and need for jobs.
******************
Misetich

Lack of job creation is the US $ achilli - Corporations have been bestowed with generous stimuli -yet only a few have gained - inside sellers - though corporate spending has increased, hirings have been disappointing even though corporate earnings have increased - to make matters worse corporate tax revenue paid to goverments have further been reduced

Reality Check

The US $ would be much higher if the economy was as healthy as the spinmasters are saying

IR's would be much higher

Government deficits would be reducing rather than increasing

..........
Unless genuine jobs are created ASSET DEFLATION has not been defeated

Price inflation led by the energy sector will sap consumer spending and Central Bankers will do what they specialize in - jawboning, spinning and printing fiat

Thus the US $ will resume trending down

All Aboard The Gold Bull Express - Part ll

http://www.moneyfactory.com/newmoney/flash/interactivebill/50.cfmThese are totally cool.

An accompanying press release gives us a little something to chew on.

------"A sound currency, which this new $50 note will foster, is a pivotal factor in the strength of our economy," said Federal Reserve Board Governor Mark W. Olson. "It must be recognized and honored as legal tender, and those who use it and handle it must know how to verify its authenticity."

The $50 note will be followed later by a new $100 note. Decisions on new designs for the $5 and $10 notes are still under consideration, but a redesign of the $1 and $2 notes is not planned. Even after the new money is issued, older-design notes will remain legal tender.

Because counterfeiters are turning increasingly to digital methods and as advances in technology make digital counterfeiting easier and cheaper, the government is staying ahead of counterfeiters by updating the currency every 7-10 years.

"We have to stay ahead of technology, which is developing and progressing at an ever-increasing rate. Items like digital printers and higher quality scanners are becoming more readily available at cheaper prices," said Ferguson. "So we have to make our currency notes safer, smarter and more secure in order to stay ahead of the would-be counterfeiters."

Counterfeiters are increasingly turning to digital methods, as advances in technology make digital counterfeiting of currency easier and cheaper. In 1995, less than 1 percent of counterfeit notes detected in the U.S. were digitally produced. Since then, digital equipment has become more readily available to the general public, and as a result, the amount of digitally produced counterfeit notes has risen. Over the last several years, the amount of digitally produced counterfeit notes has remained steady at about 40 percent.--------

Think about this for a minute: Real WEALTH (real PROPERTY) can't *can't* CAN'T be counterfeited. It either *exists* or else it doesn't.

You either have wealth, or you don't. Unlike money, real *REAL* wealth can't be faked. Why? Because it isn't functioning to merely *represent* anything that it is not. Your tangible property always *IS* its value as a material thing (whatever it happens to be) and is determined by its usefulness in the eyes of a marketplace.

ANOTHER certainly knew very well what he was talking about when he said something to the effect that "Your wealth is not what your money says it is;" or to restate it, "Because your money is only a *representative* utility, the size of your account on any given day tells you nothing about amount of real things you could successfully exchange it for later that day or the next." Materially, so to speak, the only thing you "own" through the holding of money is an unproven perception -- unproven until such time as you actually convert it to real wealth by spending it.

An additional blurb from the Bureau of Engraving is also worth a look.

--------Confidence. Trust. Value. That's what the American dollar stands for, around the world. This is made possible through continuous improvements in currency design and aggressive law enforcement that protect the integrity of U.S. currency by guarding it against counterfeiting.---------

Frankly, I like the new fifties -- in the same way I like anything (such as modern trading cards with holograms and whatnot) that shows off this type of state-of-the-art printing technology. The point is well-taken that Confidence and Trust are important in maintaining the *perception* of Value that people mentally attach to their various accounts of money and its representative currency.

At the very least, we couldn't maintain our good perceptions towards our money if we couldn't trust that our hand-to-hand currency was in fact a bona fide "piece" of our vast and elaborate monetary (credit) system. That's why any representational currency for use in "cash" monetary transactions outside of direct bankaccount-to-bankaccount transfers needs to be maintained with a level of integrity at least matching the people's perception and confidence toward the integrity of the interbank monetary/financial system.

But that's just the tiny tip of the iceberg. The larger issue, assuming we've got our currency system in trustworthy order, is whether or not our vast underlying system of counterparty performance on credit and debt obligations and the elaborate accounting system that tries to keep track of it all is worthy of the fancy paper intended to represent the monetary units of the System's scorecard. Where profligate consumer and government spending is not attended with perceptions of matching energies of debt-service, the perceived value of the monetary system and its accounting units (i.e., dollars) is doomed to a discounting by the marketplace, regardless of the bona fide integrity of the representative currency notes being circulated in the same name.

If/when your money fails, your wealth (if you have any) will still remain, valued for what it's good for. Patio furniture for sitting, sandwiches for eating, and Gold for the enduring real wealth savings that your money couldn't be.

Gold. Get you some. --- Aristotle

http://www.gold-eagle.com/gold_digest_04/russell050204.htmlRussell On The Bear Market

Excerpts Reprinted With Permission Under Fair Use Doctrine of International Copyright Law:

"At the same time, the advance-decline ratios on the NYSE and the Nasdaq have been plunging. There have been many comments regarding the validity of the NYSE A-D ratio, since it now contains over 50% interest-sensitive issues such as preferreds and closed-end funds. My comment is that the A-D ratio is still useful, since interest rates have such a large influence on stock prices. Nevertheless, I run an operating-companies-only advance-decline ratio, and this index topped out on April 5. So any way you look at it, the majority of stocks on the NYSE (and the Nasdaq and the Amex) are heading down."

"As subscribers know, I pay a lot of attention to new 52-week highs and new 52-week lows on the NYSE."

"More technical evidence can be seen in the massive top and subsequent breakdown in my PTI, We also see Friday's new low in my Big Money Breadth Index.
On the April 9 site I drew attention to the very rare "double non-confirmation" that had appeared in the D-J Average -- with first the Industrials and then the Transports turning weak."
An study, IMO, here focusing on technicals and fundamentals in a unique and yet solid argument for portfolio insurance.
My asset allocation is heavily weighted to physical PM's.
Examining Russell's peers among investment advisors yields
only a select handful capable of corroborating and complimenting the focus of his work.

When a society borrows and borrows, and then goes to war to avoid the consequences, and prints money to pay for it, which is even worse than borrowing, what type of thing is it, exactly, that causes the cows to come home, the birds to fly the coup, the piper to be paid? I haven't seen the answer to this question, that I know of.

And since I am the person who is going to have to pay the piper, why am I not the one who is calling the tune?

And another question. What is it, exactly, that I would have to do, to become the person who calls the tune?

I can't go into what I am going to refer to, since to quote any substantial portion of it would violate copyright law, but if you have gone through the snips and comments and links contained on the web site over the past several weeks, you will know what I am talking about. I would specifically recommend familiarity with the details of the Rothshild event, Richard Russell's comments, Barron's touting of a bull market in stocks, currently bullish media pap, increased volitility in pog, and numerous other things. These are what I refer to in the following.

To me this all seems consistent with the pattern of publications touting a bull market, while knowing that insiders are selling heavily. They do this to keep the market up, so that the insiders, who make up the majority of those who can potentially bring pressure to bear against them, can continue to making profits until the last minute, at which time prices stand to plummet. The next phase will begin when a less knowledgeable (but still powerful) group becomes aware that stocks should not be held. These will sell less cleverly, and its effect will be more obvious. This second group will be larger, and more money will be invovled, probably much more, but they won't have as much clout with the media, and they won't be participants in the media. Perhaps they will be funds. And others. This may go on a while, as insiders and large movers frenzy feed, and media keep holding the bloody body high for them to devour, then, sooner or later, ordinary people will notice and sell. When this happens the shirt will hit the pan.

"...comments and links contained on the web site...,"

should read,

"...comments and links contained on this web site...."

What causes the shift to happen?
It has been called "An idea whose time has come".
Ideas can reach critical mass quickly or slowly depending on the innumerable complexities involved. Once critical mass is obtained, the shift is very rapid. The recent photographs depicting torture and humiliation of prisoners of war are good examples. One day, nobody knows, the next day everybody knows. Game over.

When do you get to call the tune?
You already are calling the tune my friend, and a lovely tune it is, however, like most pipers these days, the piper is deaf.
I think we need a new system for piper selection.
Perhaps a piper that plays for gold?
Yeah, that's the ticket.

Best wishes

That about says it. Things go on as they are, until the mistaken philosophies of the actors form a mass, which cannot continue, and some flea-like phenomenon happens along to upset the whole thing. Then new philosophies, which had been collecting in people's minds, as a consequence of dissatisfaction with the conflicts they saw arising, then has before it a blank field on which to exercise and grow itself. I do hope the ideas presently being born will be better, and not merely replacements.

Ps. If you know of a movement, let me know. I may join it.

"Liberty Head" (Gold was on my mind.)

Well, the piper may be deaf. But I'm still dancing anyway.

http://groups.yahoo.com/group/gata/message/2134... GATA Chairman Bill Murphy challenges Virtual
Metals' Jessica Cross to a debate.


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

gata-subscribe@yahoogroups.com

Nation of One -- "And since I am the person who is going to have to pay the piper, why am I not the one who is calling the tune? And another question. What is it, exactly, that I would have to do, to become the person who calls the tune?

Black Blade: Simple enough, we pass along the obligations to the next generation while plundering the Treasury. (Democracies -- actually we are a Representative Republic with Democratic principles -- close enough). True enough that the well is quickly running dry. The people of a "Democracy" soon enough realize they can vote themselves goodies and services seemly without consequences or by pawning it off on others. Note how Ku Klux Klansman Sen. Robert Byrd holds up legislation unless he gets to "bring home the bacon" as he calls it (his own words).


Mikal - Yes indeed! Notice how the equities markets rise dramatically on low volume days and sink heavily on large volume trading days. Perhaps some levels in the indices are held together with some help from "The President's Working Group on Financial Markets (aka PPT) and the need to buy for company pension plans. It's the beginning of the month and also an election year so some strange events are occurring in how data is collected and the methodology used by "official" agencies (BLS for example and the EIA for another -- note how the EIA said that oil and distillate inventories rose while the API said that there were declines last week in contrast).


Misetich -- Just don't count several large segments of the unemployed population and everything looks just "peachy" eh? The Department of Labor and Sec. Elaine Chow are really playing hardball with this one.


Townie -- As a former shareholder of Harmony (and Gold Fields) I sold out for a nice profit as the US dollar vs. the Rand was the telling story. With a strong dollar and costs in a weak Rand they were able to make good on some mines on razor thin margins. Now as the Rand strengthened against the US dollar I bailed out (that and the changes in SA law requiring 25% company interest by local black interests -- not reassuring in a country ruled by those with Marxist pasts). So far I am amazed that they have so far done OK given the problems next door in Zim. Still, Harmony CEO Bernie Swanepoel is a sharp cookie and the vertical integration of the company does help (mining, refining, jewelry making, retailing and bullion production). Still, as the dollar crumbles I took my cue and got out. (Now I only have GoldCorp, Glamis, and Meridian shares as small part of my paper investments with a larger portion in the "real deal" -- The solid foundation of my portfolio and "portfolio insurance" -- most of the rest in foreign and domestic energy trusts and energy related partnerships including pipelines and shipping, and a smattering of other investments). Still, mining companies are cleaning house by getting out of hedgebook problems and "consolidating" with a (very) slow growth in exploration activity. At current prices and any dips here -- buy, buy, and buy!!! For those with limited funds then "dollar cost average" into the physical.



Goldilox -- unfortunately many execs of commodity producers is that they are stupefied morons who don't realize that these companies are much different than the usual "new Economy" or manufacturing company. Some couldn't even tell ya the difference between "Reserves" and "Resources" (especially with changing costs of production and a lot of speculation of reservoir size -- same with many miners). Sad situation too.

- Black Blade

http://www.financialsense.com/Market/wrapup.htmSnippit:

When Wall Street and corporate officers executed on their motive to deceive the public and the world into believing the "New Economy" myth, Fed Chairman Greenspan joined the great game to give it legitimacy, despite his amateur standing in technology. During the fraud perpetrated upon the American investment community, the US Treasury conspired as a clandestine participant. Secy Rubin executed the gold carry trade, whereby vaulted gold bullion fueled a massive USDollar and USTBond rally. After the stock bust in 2000, the USGovt statistical elves joined actively in the collusion. They desperately wanted to continue and further the impression that the US Economy would respond well and emerge on a robust course. Their motive is to keep foreign investors committed, who supply 45% of federal credit and about 35% of mortgage agency credit. In order to manage the ongoing task of fraud and deception, Wall Street, the USGovt administration, and the Federal Reserve saw the wisdom in altering the language of the economy and financial markets. Their motive is to influence thought and to condition the behavior of citizens, consumers, and investors.

Black Blade: Too much info in the good article, but worth reading. Pretty well covers a lot of territory.

I appreciate your comments.

I would have to say that Senator Byrd -though he appears honorable- is not the best thinker or speaker, and that the poor quality of his talks reflects both the state of the quality of the men's minds who have gained control of our government, and perhaps also one of the reasons he hasn't been got rid of, if you know what I mean.

http://www.csmonitor.com/2004/0430/p03s01-usec.html
After years of stability, prices rise on key items, hitting pocketbooks and economy.

Snippit:

NEW YORK -- Many of life's necessities are becoming more expensive.
Let's start with breakfast. Eggs: up 5.2 percent so far this year. Butter for your bread: up 62 percent. A glass of 2 percent milk to wash it all down: It may rise as much as 50 cents a gallon next month. Time to head to work: filling up the gas tank now costs 30 cents a gallon more since January. After more than a decade of quiescence, inflation is returning - eating away at family pocketbooks and rippling through almost every segment of the American economy.

The latest evidence came Thursday, when the government reported that the first quarter Gross Domestic Product grew at a steady 4.2 percent rate, but inflation virtually doubled: from 1.2 percent annually at the end of 2003 to 2 percent now. The rate would have been much higher if it were not for some big-ticket items, such as automobiles and computers, which came down in price. In fact, in the category most families would relate to - food and gasoline - prices rose at a 5.3 percent annual rate. Those numbers echo the more widely watched Consumer Price Index, which shows inflation running at 5.1 percent annually. Those are the highest numbers since 1990.


Black Blade: Actually inflation is much higher but with the advent (or invention?) of smoothing filters like hedonic deflators, imputed income, etc. the real picture is not widely known to consumers. Actually for an inflation adjusted basis, petroleum prices are actually lower than past years -- it only looks bad because Americans view "cheap energy" as a right and not pure luck that the Third World has not until recently demanded their share and now depletion rates are just beginning to be felt as well as the "Peak Oil" production that hit the North Sea and the Middle East. It shouldn't be long now before prices really take off. As far as NatGas we have a good 20+ years of domestic reserves tied up in nonconventional sources (most is "off limits" due to Federal policy, land access restrictions (even on privately owned surface land with agreeable landowners), lack of drilling and pipeline building permits and the numerous bottlenecks of pipelines and infrastructure leading to major markets). BTW, I have said numerous times here to stock up for several months on nonperishable foods and basic necessities. OK, here goes once again: "Get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable foods an basic necessities".

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180231953&p=1012571727169
Snippit:

Japan's mammoth effort to curb the strength of the yen was abandoned in April when authorities ceased intervening in the currency markets for the first time in seven months.

The decision to end intervention sends out a strong message that Japanese policymakers believe the country's recovery from a decade of deflation is broadening from exports to domestic sections of the economy.

It also promises to remove a growing source of tension with the US, where manufacturers have accused the Japanese government of keeping the currency artificially low to boost exports.

However, the decision to halt purchases of US-denominated assets could have negative implications for US Treasury bonds, which have been boosted by strong buying from Asian governments, led by Japan and China.


Black Blade: Wanna bet that Alan Greenspan's threat to raise rates and slaughter US denominated debt in Asian central bank reserves have a "chilling" effect on Japan and China? It could get rather "Interesting"!

http://www.freemarketnews.com/
Druid: ANOO, for an excellent interview with Bill Murphy and G. Edward Griffin concerning "Is There Manipulation in The Gold and Silver Markets?", click on the link. Also, you might want to check into Mr. Griffin's grassroots organization at www.freedomforceinternational.org.

Tired of the lies?
No just tired of the loosers.

I think the evidence of the silver market (desperation) speaks volumes. It seems obvious that the loosers have lost. They've lost the war, it's game over, this is just noise, promises of "wonder weapons", and other nonsense to mask the obvious.

Just remember, they've lost, but they're not defeated yet. Dont get suckered into the last conflagration; dont get sucked into the undertow of the downfall of the false pillar of heaven. It may all be illusion, just dont get killed by it at the last.



auta i lome!
aure entuluva.

oooh! the waiting gives me the willies!

Misetich, I might have read it wrong, but when I read the book about LTCM, it made me think that greenspan had no compelling reason to adjust IR's because of LTCM. Maybe he needed something to blame his IR cuts on, and since LTCM seemed hard to understand, blame it on that.
The book at its core said that yes, LTCM made a bad bet, but it was sellable, and until they made the blunder of showing thier derivitive bet book to the wrong people, the owners didnt even want to give up control because they still felt they had a viable business. Once the derivitive bet book got out to certain elements of the trading community, they did a controlled bleed of the company. One bank let its traders bleed LTCM for the exact amount they had invested into LTCM. Those that came to the rescue of LTCM came to regret it because the traders decided to bleed THEM also but just to a certain point. It was all within a small derivitive trading world and they did a controlled vulture act on LTCM. The way the financial media talks about LTCM makes it seem like it was falling into some uncontrolled whirlpool derivitive marketplace.
Not according to the book. Seemed just as controlled as the dollar markets were the day they opened after 911.
What I would like explained to me is how the derivitive markets handled Parmalet, enron, worldcom, ect.
Even the twin towers and the adjoining buildings and all those financial businesses didnt implode the derivitive world. How do they handle all those things?

For what its worth, I still have hope for south africa. Admittedly not much hope: it may be a marxist funny farm, but compared to the rest of the governments its a libertarian paradise. They've had over 200 years to absorb notions of the rule of law, and they're not going to give up the stability that comes with that overnight (I hope, and maybe that's all it is).

If SA falls, the only rule of law will be Islam. Perhaps Egypt will bear the torch, perhaps Kenya. It will take many hands to hold it steady, and those hands will have to work in concert, amid the push and pull of events to come. They may not make it, but I think it is a mistake for the US to ignore them as a key partner. What other nation could be as effective an ally? The history of outsiders in that continent, (euros, arabs, greeks, etc) is a long tale, not for easy listening, regardless of what I think, the arabs have been active the longest, they have aclimated in a way that the west will only approach in another 200 years.

Druid: Thanks. I enjoy reading W-wien's and many others work but c'mon fellow bugs, show a little integrity and give credit and recognition where it is due. The FreeGold trail blazing body of archived intellect at this site should one day be mandatory reading here (good ole U.S of A) at some University Economics Department as a course on capitalism and the concept of free markets. Ok, I'm dreaming, now back to the cave to stare at the walls.

Small shops and businesses in Euroland, openly advertise that they don't wish to accept 50-100-200 euro-notes ! Counterfeiting (on a massive scale).

Soon, cash-settlements of more than 10,000 �, are illegal and those payments must be made through the bank.

Euroland banks are instructed to co-operate on tracing/identifying ALL trails of currency-confetti and other papers ! Something is "changing", drastically (and progressively), overhere !

We are heading versus the re-installment of the complete "WEALTH" notion. WHAT *IS* WEALTH, will soon become very clear, again !?

I was very surprised whan Greenspan pronounced the word "Wealth" in one of his latest speeches. I'll abstain from any comment about the (wrong) context in wich he used the word. Having used the word already said enough.

During the latest (recent) runup of the �-POG (11,000 �/Kg), more and new people (Eurolanders) were accumulating the tangible precious ! Many Gold dealers were surprised, but had no explanation (except the classical ones) for what was happening .

And then suddenly, kaboom,...and �-$-POG (the price !!!-exclamation) was knocked back into its old disciplinear containment. And so was the $-� exchange rate. Order,...order in the house !

But,...the POO goes on doing its own thing. The $-POO keeps firming and the �-POO is losing its advantage against the dollar-price, due to the status quo in $-� exchange rate !!!
Howhowwwwwww,...what's this ?

Suddenly, China is being pictured as "pivotal" on a broad range of things economical/financial! Yep, all of a sudden !
We had to buy the POG-knock as a "China"-effect ! How convenient.
BTW, why is it nobody answered/reflected on MK's thought about computer-programing !? WHO is *behind* those software programs !? And WHAT "purpose" are those programs surving !?

1/ OPEC (and Russia) are blowing cold and warm about their $-POO intentions. Will see what comes out in June (next meeting). POO is currently ate the pain treshold.

2/ The US is negociating (through UN) with France, Germany and Russia, about Iraq.

Put 1/ and 2/ together and analyse if this has something to do with those financial-software-programs ?

Fresh suggestions about a One World Currency, are here again, whilst maturing EMU remains ridiculed !

The globe is facing the possibility/probability of a "dollar-vacuum" ! The dollar debtberg causing an overnight *** liquidity crisis ***,...a global one. Many, if not all maneuverings must be considered against this ONE single background, thought. A DOLLAR VACUUM,...not if, but when !?

A dollar vacuum, after the rejection of the dollar-reserve-system, will cause a distortion in the "known" global power balances. Here comes the China & Co-factor in play and must already be anticipated by the dollar supporters. Oil flow and price are pivotal in this game. In many localities, the same power struggle happens around "water" (or land-food).

As soon as all the above reaches the general public's intuitive sensors,...that same public reaches for the Gold refuge, without fully realizing that it goes for Wealth.

In other words,...how does one presents a permanent, lala-show, as to continiously entertain the public and prevent the rise of harmfull "suspicion" !? Right,...by containing GOLD (its price-trend), as the most universal and undisputable alarm-bell. The major goldmines are collaborating (!!!) in keeping this show running and collude in keeping the goldmining business' profits very close to break even !!! Think deep about this, non coincidence.

Exchange rates/IRs/POG/POO,...*** TRENDS ***, are NOT managed/manipulated by software programs (distributed to the priviledged -leading- hedge funds) ...but,...by the competing/collaborating/colluding factions of the ruling powers ! And don't you dare to go "against" those trends,...or be crushed and excluded. And don't make the mistake of promoting the hypocritical (usefull) noise-makers (distractors-contrarians),as heros.
Document yourself about the notion of "liquidity-trap" (fall out) and how much effort is brought up, to avoid it (IR-rise).

Think deep about the purpose of the many, voluntary "over" and "under" financial valuations. The "markets" are being contained as the general "political"-content of almost everything is on the dramatic increase. If one accepts that Gold and oil are "politically" driven,...then goldmines and oil companies are also politico enterprises ! All our confettis are per definition a politico-numeraire and NOT Wealth. Play, speculate, gamble on the political imponderabile as much and as good as you can,...but consolidate the eventual fruits in untouchable wealth, before you are being placed back to square one, again and again.

The above is nothing less than the main reason WHY Gold must remain excluded from (Western) public attention, BY ALL MEANS ! In such an environment, it speaks for itself that those who favor the return of Gold-Wealth, must operate extremely "discretely" in anticipation of the aftermath of the dollar-vacuum. Gold-Wealth-Philes (former dollar-supporters) don't want to be blamed for having caused (?) the collapse of the globe's dollar-system.

FWIW and NIA !

Your comments

What I would like explained to me is how the derivitive markets handled Parmalet, enron, worldcom, ect.
***********************

Misetich

Here's a link from a famed Greenspan speech that may offer a partial answer

"A change in behavior, however, may already be in train. The sharp decline in stock and bond prices after the collapse of Enron and WorldCom has chastened many of those responsible for questionable business practices. Corporate reputation is emerging out of the ashes of the debacle as a significant economic value. I hope that we will return to the earlier practices of firms competing for the reputation of having the most conservative and transparent set of books. "

and also

"Market transactions are inhibited if counterparties cannot rely on the accuracy of information. The ability to trust the word of a stranger still is an integral part of any sophisticated economy"

"Trust still plays a crucial role in one of the most rapidly growing segments of our financial system--the over-the-counter (OTC) derivatives market. This market has played an important and successful role in the management of risk at financial institutions, a major element of their corporate governance. I do not say that the success of the OTC derivatives market in creating greater financial flexibility is due solely to the prevalence of private reputation rather than public regulation. Still, the success to date clearly could not have been achieved were it not for counterparties� substantial freedom from regulatory constraints on the terms of OTC contracts. This freedom allows derivatives counterparties to craft contracts that transfer risks in the most effective way to those most willing and financially capable of absorbing them. "

http://www.federalreserve.gov/BoardDocs/Speeches/2003/20030508/default.htm

Perhaps the answer that you are seeking is best explained in the last paragraph -

Translation: Ponzi scheme is alive and well and getting bigger - thus Buffett warning - within 10 years

All Aboard The Gold Bull Express - Part ll

Within a matter of minutes (!!!-minutes)...ALL dollar holders/users, outside the US, lost 1% in purchasing power !
�/$-1,20+ / $-POO:Brent $35+ (+1,8%).

Has China, suddenly reversed its stance on slowing down its economy ??? Or,...are the program traders adapting to the coming politico-message from FEDSpan, this afternoon ???

Now, the financial media, want to "connect" the POG with IRs. Another search for another convenient explanation.
Gold's $380$-$430 is heavely promoted as the ideal trading range. "They" want to keep telling "you", what "your" wealth IS !!!

Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense.

Gold rises in $-price, because Greenspan will suggest to delay the rise of IRs and therefore, Gold's paper-price can be raised awaiting the IR-rise where all "must" jump into the dollar confetti, again. And out of Gold, of course.

Is this, financial management-manipulation-intervention, or all 3 at the same time ? Viva the Free Markets !

Financial media start to feel increasingly at uneasy with their confusing (bogus) inconsistant explanations about the rising $-POO ! Whilst they were shouting that it is Euroland (!!!) that is suffering the most from $-POO rises, the dollar weakened with 1% against that suffering euro (and cable-humhum). One day, they will have to start suggesting that there is something,...yeah, something, between the euro and oil...and,...AND...Gold !?

When the oil-owners see and realize that their, and the globe's "finite" oil-wealth is less and less renumerated/appreciate as wealth, we have the reactions that we are witnessing, now. The same goes for those who continue to accumulate physical Gold. Gold, underground gold is quasi finite, also. But Gold isn't consumed (burned) as oil is. Gold, when accumulated, is taken out of circulation and awaiting its FREE MARKET, to circulate again as PHYSICAL WEALTH instead of its present, ridicule, paper, non-wealth form ! A good, very good, idea...imvho, of course. Temporary Oil-wealth being gradually replaced by ever lasting Gold-wealth. This must be achieved by overcoming the dollar vacuum. That is what is happening in a very subtle and discrete manner.

http://www.channelnewsasia.com/stories/afp_world/view/83121/1/.htmlSnip:

BERLIN : Chinese Premier Wen Jiabao and German Chancellor Gerhard Schroeder adopted a joint declaration boosting already strong trade ties and political links between their two countries.

At a press conference after their meeting in Berlin, in which they also watched over the signing of six major business contracts, the two leaders affirmed that they planned to boost trade significantly within the next six years.

"Trade between Germany and China is currently about 50 billion euros. We have fixed ourselves a goal of doubling that sum by 2010," said Schroeder, who is keen to tap into the huge potential of the world's most populous nation.
**************
Misetich

According to Roach-MS "fully 28% of total German export growth went to China" in 2003

and according to Peoople Daily

"The trade volume between China and Germany has amounted to 41.8billion US dollars, one-third of the total of China-Europe trade volume, said Wen, and "both China-German and China-Europe trade are expected to double by 2010". "

Europeans are tapping into China's vast market - The potential going forward is huge -

China currency reserves are primarily denominated in US $- however the prudent diversification and switch to Euro's - Gold is occurring and Euro's share will significant as a world reserve currency

All Aboard The Gold Bull Express - Part ll

Heavy euro-buying from the Middle East ! Give us more Gold and a higher POG, or...!?

Ari, one more word on the counterfeiting of confetti notes :
We shouldn't worry about the increasing scale and ease of counterfeiting. W're going completely digital, anyway.
Maybe that the relatively cool, official attitude towards counterfeiting, is an early sign of admitting that attitudes towards money-monetary affairs are indeed evolving towards a new Gold-association...with a modern FreeGold (+ euro-numeraire) market in mind.

http://framehosting.dowjonesnews.com/sample/samplestory.asp?StoryID=2004050407240000&Take=1Snip:

LONDON (Dow Jones)--The latest rise in crude oil prices is adding to the dollar's growing downside risks.

Not only do higher oil prices raise deflationary fears because of their damping effect on the economy and reduce the chances of an early rise in U.S. interest rates, but they will suppress portfolio appetite for both bonds and equities, making it that much harder for the U.S. to attract the investment flows it needs.

"It will be so much more difficult for the dollar to fund the (current account) deficit," said Hans Redeker, chief currency strategist with BNP-Paribas in London.

To make matters worse, the rise in oil prices is coming just when the U.S. currency faces a possibly negative shift in transatlantic rate expectations.

Although neither the U.S. Federal Reserve nor the European Central Bank are expected to change their rates when they meet Tuesday and Thursday this week, the former is already expected to scale back expectations of an early rate rise and the latter is seen reducing forecasts for an early rate cut.

In other words, said Michael Metcalfe, currency strategist with State Street Bank in London, "investors have got too bearish about the euro and too positive about the dollar.
...........................
"The balance of risks for the dollar and interest rates are skewed one way and U.S. data aren't going to be enough to justify expectations," he said.
******************
Misetich

The impact of Madrid's bombing and subsequent effect on its political process - outstanding Azner and electing Zapatero-and changing of Spain from Pro US to Pro France/Germany cannot be underestimated

2004 Presidential election and oil disruption fears

In recent days oil facilities in Iraq and Saudi Arabia have been the target of attacks -which has resulted in the oil market fears of production disruption and hence skyrocketing prices

The US economy is fragile. The dollar rally is fragile. Oil and energy prices are sapping consumers and its effect are in the economic pipeline

What can the Feds do?

Increase IR? Make tax cuts permanent?

PPT has its hands full

- the oil market -
-commodities market (China is still red hot - regardless of the nonsense - project are still ongoing)

-The US $

-The gold market suppression scheme
-the SM
-LongTerm Interest Rates
-FEAR OF ASSET DEFLATION

The PPT is being challenged on all fronts

...and the employment report is very much expected - Job creation needs to be genuine...

All Aboard The Gold Bull Express - Part ll

http://www.crbtrader.com/data/quote.asp?sym=CLM4&mode=iThis O/$ is an interesting liason, Futures have been in Backwardation now for several weeks which says to me the pressure is on for current supply, yet all reports indicate a dimunition of same. Oil can only go much higher if this continues. DX pressure intence this AM as a slight drop in Oil translated into a freefall for 'ol Buck ... NOBODY wants a higher Dollar ... and thats the rub!

http://www.nytimes.com/2004/05/04/politics/04TAXE.htmlSnip:

WASHINGTON, May 2 � States across the country are reporting stronger tax collections this spring for the first time in three years, fueling hopes that the bleakest budget-cutting days of the economic downturn are over, state officials and fiscal experts say.
..........................
"Our economy has bottomed out and is improving slightly,"
......................
But most of those surpluses are small and a dark cloud remains: tax revenues are not growing fast enough to offset the rapidly rising costs of Medicaid, pensions and education, which account for most state spending.
......................
As a result, 33 states faced projected revenue shortfalls in their 2005 budgets, and about 20 are still struggling to close them, the survey, released last week by the conference, said. Most states' fiscal years begin on July 1 or Oct. 1.
........................
Most states compensated for the lost revenue by cutting programs, raising tuition and fees, or borrowing, experts said
.......................
**************
Misetich

The economic rebound is very fragile - health cost are rising, price inflation rocketing higher - the shenanigans of govenrment falsified accounting reporting - assist politicians to stay in power - yet the taxpayers is burdened with reduced services, increased pay-as-you go fees, higher costs

An additional snippit from the article

"Though the recession was short-lived, tax revenues have been down in most states partly because hiring and the stock market � an increasingly important factor in state revenues � have not returned to their peak pre-recession levels."

Unless energy prices abate and genuine jobs are created its going to get interesting

All Aboard The Gold Bull Express - Part ll

Here's my take on Belgian's and MK's comments about hedge fund software.
When the Fed stepped in to save LTCM I believe they saw the need to orchestrate the hedge fund computer programs that create the ebb and flow of speculation. Knowledge about the hedgefund software allows the Fed to simulate changes in the variables that drive these programs and determine what tune gets played under various scenarios. The Fed then manipulates the variables under its control, acting as an orchestra leader, to create the "proper" investment waves. By this means they marshall the resources of large pools of supposedly independent capital to achieve their objectives.

http://www.nytimes.com/2004/05/04/business/04debt.html?pagewanted=2Snip:

Household debt climbed at twice the pace of household income from the beginning of 2000 through 2003, according to data at the Federal Reserve. Enticed by low interest rates, Americans took on $2.3 trillion in new mortgage debt during that period - an increase of nearly 50 percent. Consumer credit, from zero-interest auto loans to the much more expensive debt on credit cards, climbed 33 percent, rising to $2 trillion in 2003 from $1.5 trillion in 2000.
.................
Responding to lower interest rates last year, homeowners refinanced $140 billion worth of mortgages in which they borrowed additional money. Mortgage lenders, in the meantime, rolled out scores of new kinds of loans, allowing people to borrow far more than they might have contemplated a decade ago.

The new loans go well beyond adjustable-rate mortgages. They include interest-only loans; "no document" loans, which allow people to borrow money at higher rates without proving their income or assets; and "no ratio" loans, which simply ignore a person's monthly income.
.....................
According to data compiled by the Mortgage Bankers Association, the share of people who took adjustable-rate mortgages jumped to 32 percent in March from about 13 percent last July.
..................
"There are an incredible number of loans that get approved now that would have been way out of bounds a few years ago," said Ruben Ybarra, president of the Chicagoland Home Mortgage Corporation. "I may think a person is being allowed to borrow too much. But if the computer tells them they're approved, what can you tell them?"
.................
Alan Bubes, owner of a linen-supply service in Washington, is refinancing a mortgage of more than $1 million on the home he and his wife own in Georgetown. By switching to an interest-only mortgage that adjusts every month, Mr. Bubes expects to cut his monthly payments and reinvest those savings.

"It's a gamble," Mr. Bubes acknowledged, saying that he could make more by reinvesting his savings than paying down his debts
*********************
Misetich

Incredible - "But if the computer tells them they're approved, what can you tell them?"

So the much touted economic recovery has been fuelled by consumers taking additional debt - additional risk- and government spending,

The switch to interest payment only and reinvest those savings strategy is very interesting - where exactly are those savings have been/being invested?

It would appear marketmania is alive and well - the stock market burst has not dented the avaricious appetite of a risk taking investor - even though trillions of perceived stock market vanished

Much hope is pinned on a stock market recovery not only by homeowners but by corporate and government pension plans.

The late 90's stock market mania fuelled greed - and it appears that most are one side of the same boat

How prepared are these reckless risk takers for ANOTHER stock market bear raid?

The scary part is that even with all these inflows the SM has not performed well.

A little insurance to one's portfolio with PHYSICAL GOLD in this over abundant risky times is very prudent strategy.

All Aboard The Gold Bull Express - Part ll

POG showing some life again. But only $1 to go before the capping cuts in ?

The writers of those articles you are posting, are (imo) simply filling blanc spaces of paper with ink.
The economy is for 2/3 a consumer affair. Commodity prices' impacts on this economy are much less than than the signal(s) that are given, by these commodity price rises, on the state of the currencies. Oil in particular is devaluing the (hyperinflating) dollar more than it is devaluing the (inflating) euro. A "HYPER" bit of difference between the two competitors. Whilst IRs on $-� remain very low in regard to the hyperinfla/infla growth of $-� money creation,..."general" price-hyperinfla and infla are awaiting to break out. Remember the story of the two runners ($-�) in the desert and the hungry (flafla)lion.

Boilermaker : Watch the $-POG chart on the period around 1992-1995. (before LTCM) : It is in this period that M3 started its para(hyper)bolic rise and it is here that POG-containment was fully organized and the Dow surge as well.
In other words : When more confetti is created, everybody must do its share in making that confetti "circulate" and by preference at the desired speed/velocity, as directed by the confetti creator.

Yes, indeed Sir..."orchestration" !

ORC ESTRADE?
orc = as in ogre(hideous giant who feeds on human flesh).
estrade = a throne of state
In times like now we need more of your imput, Sir Belgian.
Are you metamorphosing out of FOA? OvS

http://fidweek.econoday.com/reports/US/EN/New_York/challenger_report/year/2004/yearly/05/index.htmlSnip:

The Challenger job cut report revealed that 72,184 layoffs were announced in April, up 6.1 percent from the March pace
*****************
Misetich

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

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

Yes, something like Orc Estrada.
No I'm not metamorphosing out of the A/FOA-group. I was rather extremely critical (or confused) when first reading their thoughts.
But time and time again, the factual events can only be explaned consistently, with taking their far reaching thoughts in the background.

According to the 8 yr Gold(paper-price) cycles (top to top or bottom to bottom), that seemed to have some consistancy since the 1971 event, Gold should top in 2004 (see LT charts Aden sisters). We already had 4 of those $-POG tops ('74-'80-'87-'96-'X ?). But today the $-POO went through a strong ceiling with gusto. Most probably, strong factual evidence that something IS changing with the (orchestrated) ritme of the past 3 decades. As is the geo-political constellation. Will see OvS...will see.

http://nation.ittefaq.com/artman/publish/article_8519.shtml
Please check out this article. Note the size of the human figure. Is this some kind of joke? If not, it is totally mind-boggling.

USAgold, please excuse the interruption. This must be seen!

The GAB

Sorry about that.

The GAB

Luckily, no apologies are necessary, because of the GOLD ring she was wearing (it's a little difficult to make out from the angle of the photo, but I can assure you .....)
C!

Good Grief ! Now it's my turn for the profuse apologies !
C!

@ GAB:

I always wondered what happened to the actor from "Gulliver's Travels" and "Jason and the Argonauts".

"Market Wizards", Jack Schwager's book on the living legendary traders, is where I met some public information on mechanical trading systems. Richard Dennis appears to be one of the pioneers of the system. He proposed that trading could be taught.

The underlying mathematics of mechanical systems is identical to the underlying mathematics of casino gambling. The aim is to construct a system that has a "positive mathematical expectation", and then use this system with a good bet sizing method. According to Ralph Vince, "when it comes to casino gambling , the only time you can find a positive expectancy situation is if you keep track of the cards in blackjack, and then if you are a very good player, and only if you bet correctly". One can Google with "Ralph Vince" or "bet sizing" for more info. However you look at it, this is not investing but gambling.

See the story of Turtle Traders.
http://www.originalturtles.org/story.htm

The original Turtle System has also been released.
http://www.originalturtles.org/system.htm

The system is somewhat complicated, but a summary can be tried. It is a trend following system. It goes long after the highest high of last 55 days is penetrated. Closes the long position when the lowest low of last 20 days is violated. This is the so called "channel break out" system. Similarly, it goes short when the lowest low of last 55 days "breaks". The long position is closed when the highest high of last 20 days is penetrated

Since the distance between the entry and exit points can be too much, protective stops are placed. 20 day Average True Range (ATR) is the average of the daily bar heights of last 20 days, where opening gaps are added to the bar height. For long positions, stops are placed 2*ATR below the entry point. Similarly for short positions, they are placed 2*ATR above the entries. Bet size is selected so that the dollar volatility of the contract is not greater than 1% of the equity. There are also upper limits to the bet sizes. . I have skipped many other details. See the above link for a complete description.

The ideal account size for using this system, is said to be >= $1,000,000.- Otherwise, mathematically, the probability of losing all the money is high. See the forum;

http://www.turtletradingsoftware.com/forum/viewtopic.php?t=238

So do not try this system if you do not have $1 million to bet!

Lately, Jim Sinclair's description of an un-named fund manager in the Comex suggests that, the fund might be using a similar system. It was as if they went long after a breakout and were then stopped out. As the price fell, another breakout signal might have been triggered, as Sinclair says that they then shorted the market.

Mind you, the above description of the trading system may look very scientific, but Sinclair was very amused with the fund's methods and commented that the guy very badly needed help on timing, as the commercials fleeced him. He is of the opinion that his short position is now a sitting target for Asian and Islamic interests.

----

Well, if "everyone" acts, say, at 20 day breakouts (as some shorter term systems say) and if "everyone" had account size of $1 million or greater, then, this could be like watching a herd of excited elephants, running at the same direction.

http://cbs.marketwatch.com/news/story.asp?guid=%7B24815EF1%2D5367%2D4C80%2D9B94%2D94DFA75CE7BB%7D&siteid=mktwThe Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period indicates that output is continuing to expand at a solid rate and hiring appears to have picked up. Although incoming inflation data have moved somewhat higher, long-term inflation expectations appear to have remained well contained.

The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. Similarly, the risks to the goal of price stability have moved into balance. At this juncture, with inflation low and resource use slack, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured.

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

News from fantasy land:" At this juncture with inflation low -"

Meanwhile in the real world Oil tops $39 to tap a fresh 13-year high

...as expected it will be a gradual rise as "hiring appears to have picked up"

Translation: will increase rate very little and very slowly UNTIL re-employment takes place


All Aboard The Gold Bull Express - Part ll

http://www.nytimes.com/2004/05/04/business/04gas.html?pagewanted=2&thSnip:

Iraq exports about 500,000 fewer barrels of crude a day than it did before the war, and Venezuela's output is still about 500,000 barrels a day short of where it was before the general strikes that rocked the country in early 2003, said Roger Diwan, managing director at PFC Energy, a Washington consulting firm.
...........................
Several times in the last four years, gasoline prices have briefly spiked over $2 a gallon in parts of the country, only to fall back. But today's fuel prices are no spike. For nearly a month, the national average has been around $1.79 a gallon, the highest on record.
....................
Many Americans have done little beyond grousing about the cost of gasoline because they do not believe fuel prices will linger at such levels for long. "No one really believes yet that these high prices are here to stay," said Mark Zandi, president of Economy.com, a research firm in West Chester, Pa. "They are used to seeing prices go up and down so much over the last 10 years."
****************
Misetich

Consumers and business are in for a surprise - as energy prices keep on climbing

China's energy demand - refinery capacity/shutdowns- geopolitical tensions - antiquated electrical grids-

Lookout if its a hot summer- natural gas prices, electricity prices etc will go through the roof

All Aboard The Gold Bull Express - Part ll

http://biz.yahoo.com/rm/040504/minerals_china_demand_2.htmlHEADLINE: China's appetite for metals seen largely intact

excerpts:

LONDON, May 4 (Reuters) - China's hunger for raw materials will drive further demand for commodities such as metals despite worries that the country's economy might overheat...

Metals prices fell sharply last week, with China seen as the chief cause amid increasingly stringent measures being implemented by Beijing to stop the economy overcooking after it grew 9.1 percent last year.

But the panel said last week's losses were no cause for panic, and rather proof that the country was in a substantial economic cycle lasting more than 15 years.

"There are only a few sectors in China that are truly overheated...there are very large sectors of the economy that are not overheated at all,"... "It's very hyper, extremely bullish...that the Chinese prevent a bubble and there's absolutely no doubt that they will be able to do so."

Frank Holmes, chairman of fund manager U.S. Global Investors, said talk of a bubble in China was premature.

"People are calling everything that goes through a dramatic turning point a bubble," he said.

...China's rapid growth was driven by large-scale industrial production, which marked a major transformation.

"China is going through another transition...They are doing everything to build up the rural community."

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

The 'Phrase of the Day' Award goes to our very own Belgian, who said, regarding the perception painted by the financial media,

"Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense."

Bravo! I mention this observation in the context of this article because it should help make it apparent to skeptics by thinking/seeing how the (hopefully peaceful) growth and emergence of much of rural China from third world status can usher in a whole new perspective on the true value of tangible assets.

That is to say, you can't make a brick wall or a leak-free roof out of merely counterparty promises. You need the goods, in hand, to stand out of the rain.

R.

http://www.financialsense.com/editorials/fekete/2004/0503.html
"Backwardation in gold has a perverse effect. In the case of agricultural commodities backwardation provides a powerful incentive for traders to sell the cash commodity and buy the futures. Not so in the case of gold. Rather than bringing out deliverable supplies of gold, backwardation tends to remove them. The more the gold basis falls, the less likely it becomes that owners will exchange their cash gold for futures. Please remember that you have seen it here first. This perversion of the gold basis constitutes the self-destroying mechanism of the regime of irredeemable currency. The longs tend to take delivery on their gold futures contracts in ever greater numbers, and refuse to recycle cash gold into futures, regardless how low the gold basis may go. As it is not set up to satisfy demand for delivery on 100 percent of the open interest, the gold futures market will default. Exchange officials will declare a "liquidation only" policy to offset long positions in gold. At that point all offers to sell cash gold will be withdrawn. Gold is not for sale at any price. The shorts are absolved of their failure to deliver on their gold futures contracts."


Druid: I do enjoy reading the good Professor but he needs to walk the "trail" here at www.USAGOLD.com.

http://www.somc.rochester.edu/Snip:

Inflation has completed a virtual 4-decade "roundtrip", receding to levels not seen since the early-1960s.
......................
It is noteworthy that Phillips Curve-type NAIRU frameworks and GDP- gap
models,
unvarnished by ex post revisions of estimates of the natural rate and potential growth, failed to accurately predict either the sharp acceleration of inflation in the 1970s or the
disinflationary trend of the 1980s-1990s.
............................
Monetary policy remains very stimulative, as reflected by the negative real federal funds rate, the steep yield curve and money growth, and points toward sustained rapid nominal spending growth. The money stock, which declined slightly during August-December 2003, presumably associated with the sharp fall-off in mortgage refinancing activity, has reaccelerated. In the first 15 weeks of 2004, M2 has resumed its prior growth pace of just above 8 percent annualized, while MZM and the monetary base have also resumed their earlier growth rates. A negative real federal funds rate should generate continued money growth, while money velocity has begun to rise in response to the recent backup in interest rates, the rebound in household wealth and a reduction in the uncertainty that had previously inhibited spending
...........................
The consequences of even moderate increases in inflation and inflationary expectations may be significant
.....................
Federal Reserve Behavior During Presidential Election Years
.................
The exception year was 1972, when Federal Reserve Chairman Arthur Burns seemingly maintained a more accommodative monetary policy than economic and inflation conditions required presumably in an attempt to aid President Nixon's re -election bid (White House transcripts confirm President Nixon� s request to Burns that the Fed remain accommodative,
but they do not include Burns's response). Real GDP growth accelerated to 7.1 percent from 1971Q4-1972Q4� by far the fastest of any recent Presidential election year� and the unemployment rate receded� as aggressive monetary and fiscal stimulus policies stimulated robust aggregate demand growth (11.75 percent in 1972, while wage and price controls imposed by President Nixon in August 1971 constrained measured inflation to 3.5 percent.
******************
Misetich

The "strong" US $ - low energy prices - of the late 90's are now history
Import prices are rising as are commodities - Asset inflation is skyrocketing

Inflation expectations are rising! as individuals "short the dollar" further by borrowing and spending

Gold - physical gold - is the ultimate storage of wealth

All Aboard The Gold Bull Express - Part ll

http://www.usagold.com/DailyQuotes.htmlexcerpts:

Gold futures end at a one-week high...

The most-active June contract settled $4.30 higher at $391.80 per ounce.

The U.S. currency dropped as speculators redressed expectations that a rise in U.S. interest rates was in the bag after the recent climb in oil prices to multi-year highs threatens to hinder economic recovery, and signs of inflation in the Eurozone lessened its chances for an interest rate cut....

"Gold is back on the table for value investors and those who believe the Fed will be concerned that inflation is the main risk to the economy now," said John Person, editor of newsletter The Bottom Line. On Tuesday, the U.S. dollar retreated sharply against European currencies, sending investors back to the metals market as a means to hedge against losses....

Bernard Hunter, a director at bullion dealer ScotiaMocatta in Toronto, said gold has also had support from strong physical demand after the sell-off last week. June gold bottomed at $377 an ounce on Thursday.

"A lot of the pressure has been taken out of the market," he said. "It's likely that the weaker longs have been taken out of the equation and the bullion market still seems to be friendly toward gold. Certainly other economic conditions are consistent with that view at the moment."...

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

http://www.somc.rochester.edu/Snip:

................
But now a second front has emerged on recognizing the burden that Fannie and Freddie could impose on our economy -- and that risk is interest rate risk. For some time now, Fannie Mae and Freddie Mac have taken the rather unusual step of buying back their own securities and issuing long term debt. This fact has been established by Professor Dwight Jaffee of the University of California, Berkeley, who calculates that Fannie and Freddie have been annually repurchasing approximately 50% of their newly issued mortgage backed securities. So they purchase mortgages, repackage them into bundled securities and then buy back their own created securities, which seems strange until you look at the evidence of how much money this has made Fannie and Freddie.
.....................
This unusual portfolio strategy, though profitable, has exposed them to interest rate and pre-payment risk. And the strategy seems unusual since doesn't it re - introduce the exact type of risk that the GSE's were supposed to sell-off? However, given the size and nature of their portfolio, and the likely forthcoming change in interest rate policy by the Federal Open Market Committee, these risks are large. Now financial institutions are in the business of balancing risks, and Fannie and Freddie have some talented individuals who can help them hedge this risk, but they don't play by the same rule s as everyone else. Indeed, private financial institutions are regulated and supervised to hold a sufficient amount of capital (i.e. safe assets to cover liabilities in case of a deterioration in their risk assets), but Fannie and Freddie are not required to satisfy these high capital standards. Instead, they have a remarkably reduced level of capital viv-a-vis their regulated competitors, and Fannie and Freddie use their presumed implicit guarantee to offset whatever penalty the market would place in terms of a higher cost of raising funds on their risky behavior.
...........................
So the general policy thrust towards these GSE's has been to recognize the risks, and to help avert a financial crisis that could impact the entire housing market. What is the GSE's response? The first is to lobby harder.
..............
In 2003 Freddie Mac was rocked by an accounting scandal that forced the restatement of earnings from 2000-2002 and led to the exit of the CEO, CFO and COO. Not to be outdone, the OFHEO reported in early April 2004 that its examination of Fannie Mae suggests that they may to restate past earnings.
.......................
Hmm. Excessive lobbying, accounting scandals and excessive pay. Sound familiar? Let me connect the dots for you. These are the three pillars of a looming financial crisis, a combination we have grown too familiar with during the days of Enron, WorldCom, etc� But in those cases we learned to late. But not so in this case! Fannie and Freddie can be brought under stricter oversight and regulation as well as improved capital standards. And the implicit backing by the Federal government they receive can be explicitly removed. Let's hope that our Government can deliver these key policy ingredients, and avert the financial crisis that awaits us if they don't.
***************
Misetich

GSE's are an accident ready to happen

All Aboard The Gold Bull Express - Part ll

You say you "enjoy reading the good Professor, but he needs to "walk the Trail" here at usagold."

Please explain what you mean by that comment. Your tone appears snide.

The GAB is interested in reading what you have to say.

The GAB

Is it true that the picture was a hoax?

There have been reports of gigantic skeletons having been found all over the world for centuries. But the physical evidence seems to quickly disappear.

Would it make a differene to your analysis,
Sir Belgian, if this world is already a
de facto One-World, dominated by New York,
which for years calls itself the Capitol of
the World?
Is the fact that the USA has troops in 140
countries around the world an indication?
Is the fact that it can dispatch its agents
to humiliate the Sterling or devastate Malay-
sia with currency raids at will an indication?
Or, have other agents, major New York City
trading houses, wait for clearance to enter
the Japanese market as brokers and traders, and than within no time smash a roaring stock and real estate market into submission, an indication? Or brutelize the major continental markets with
bear raids that still have them below half
their original value? To show, who the boss is.
So, there are a few Roman, oops, I mean American
provinces violently opposed to the New Holy Roman,
oops, American World Empire. So what. The major
Continental Powers, against all appearances, are
in collusion, the Chinese are, the Russians were
made to, Japan of course is, and the rest really
doesn't amount to much at the moment. So a few
Provinces are on fire. They are being contained.
The American Soldier is the Universal Policeman
and the rest of the world has to pay tribute by
accepting ever increasing dollars. Just a form
of paying taxes for the police-function.

Sir Belgian. Let's assume that you agree with this
proposition. How does that impact your gold theory?

Well, the board is quiet. If this doesn't get them
coming with replies, I'll call the coroner...OvS

This one is larger than the ones I read about who were buried with many gold objects. There was a special on TV a few years ago and I think something on the net a couple of years ago about "giants". It seems like they were 12 -18 feet tall. Don't remember much abou it but I have never read any thing to dispute it. This is nothing new.

Are you a big bone conspiracy man?
My theory is the Chinese black market
gobbled them up. They can turn any
bone into very valuable medicine. Try
your Chinatown. And take a look at
their thriving gold retail and whole-
sale market. Something to behold.

Sorry if this is not allowed. Please feel free to delete if so.
A web site for Giants is www.stevequayle.com.

ATHENS (Reuters) - Three timebombs exploded outside a central Athens police station early on Wednesday but caused no serious casualties, a police official said.
Authorities had cordoned off the area around the station in Kalithea after an anonymous caller warned a newspaper about them, the official said.

"The first two explosions went off in a span of five minutes. The third exploded half an hour later as bomb experts were still looking for it," the police official told Reuters.

http://abcnews.go.com/wire/US/reuters20040504_554.html While I agree with your numerous pro-gold statements today,
including the premise that gold's worth is entirely independent of geopolitical tension, I feel the following breaking news is useful to us in signalling a breakdown
of old security assumptions as well as further transitions in international strategic alliances. The actions against Greece today for example, if they continue, could lead Greece to various actions, including greater reliance on Gold and Euro vs Dollar investments as well as less dependency on Nato and/or US "security" arrangements:
According to ABC and Reuters, 3 blasts today hit a central Athens police station. As the Olympics is scheduled for August in Greece, many are increasingly concerned
that the games will attract political violence.

I think that in the coming storm that will hit the financial markets your post concerning GSE's will be looked at as a warning that too few paid little attention to what is happening as we speak. Two or three years ago I posted on this forum concerning the Real Estate Bubble and what it would mean when it crashed. I would never have imagined that it could possibly grow to the size it has but then again I never considered the thirst for debt that TPTB needed to keep the whole thing going. Rising interest rates will be a disaster for the Real Estate Market I don't really have any more info than anybody else concerning these things but I do know what a Lender of Last resort has meant to all the scoundrels con men and easy buck guys out there busily cobbeling up all the cash they can before the bottom drops out. The scandel will be great and of course GWB will be blamed. The rest of us will get little or no warning except perhaps this very important post by Misetich. White Hills

http://www.guardian.co.uk/worldlatest/story/0,1280,-4054795,00.htmlSky news and Bloomberg report that one man was slightly injured. This is good news. Another story from the Guardian gives some perspective on past incidents:
Bombs Go Off Outside Athens Police Station
Wednesday May 5, 2004 3:46 AM
ATHENS, Greece (AP) -Excerpt:

"Police believe the bombs at the southern district of Kalithea were intended to injure people despite the tip to the newspaper. Greek media reported that the damage was extensive. Authorities cordoned off the area. Greek authorities claimed they crippled domestic terrorism following the convictions in December of 19 members of the group, blamed for 23 killings and dozens of other attacks since 1975. The victims include four U.S. officials, two Turkish diplomats and a British defense envoy. But smaller groups have continued to carry out bombings and arson attacks in Athens and other cities, but most are against cars and commercial targets and rarely cause injuries."

Re: "This is good news." It is not good news that someone was injured. It is good news that it was not worse.

Quit smoking that stuff it will stunt your growth. White Hills

"Druid: your post 120662, with a snippet from Fekete's essay...

You say you "enjoy reading the good Professor, but he needs to "walk the Trail" here at usagold."

Please explain what you mean by that comment. Your tone appears snide.

The GAB is interested in reading what you have to say.

The GAB"
**********************************************************
Druid: GAB, you are very correct in that I should have elaborated a lot more but due to time constraints fell very short of the mark.

First off, I'm a Fekete fan as I have been reading his work for about four years now. So if I came off a little snide I certainly apologize for doing so.

His article was an incredible read and in that particular paragraph I previously posted, he commented that...

"Please remember that you have seen it here first"

as he alluded to his preceding commentary. If I'm not mistaken, I am pretty sure that FOA had already covered what Prof. Fekete had described some three years earlier. In fact, I believe FOA went into great detail describing the events that would lead to a "paper market" default in the gold futures market, as the longs would actually be the catalyst to such an event. Below I have posted a couple of quick comments by FOA that suggest such an event.

If I botched this one all up, I apologize to you and all of the rest of the knights.
*************************************************************
FOA (08/06/01; 09:37:25MT - usagold.com msg#91)
Gold Mobilization

"The nature of the current dollar based gold market, outside US borders, is perhaps leveraged 1,000+ to one and will require ever greater physical gold shipments, at ever higher values, to maintain dollar credibility. This failure process will draw US gold stores out in the form of "currency
defense"; not as gold sales aimed at keeping the price down. A purely legal defense use of politically owned gold.

Still, gold shipments will always be far behind the price curve and only be done as last resort crisis operations. Further, the rise will be so intense as to provoke a complete cessation of all derivative gold trading within US borders. Long before this occurs traders, both foreign and local, will bail out of our gold derivative markets even as physical prices rise. A spot physical gold market will be all that remains. Something local citizens will cherish and paper brokers will deplore!"


FOA (08/31/01; 16:03:51MT - usagold.com msg#106)
Off the trail and on the road! (smile)

"I expect gold to do a sky shot, not because of coming us inflation, but first because of a paper gold market abandonment. Then, super dollar price inflation will only drive it higher."

Whatever it takes, when I can rouse you
from the dead, it's SUCCESS. Cheers. OvS

http://quote.bloomberg.com/apps/news?pid=email_us&refer=us&sid=aSw8M2FceX9s
Smippit:

May 4 (Bloomberg) -- California regulators may declare the first motor-fuels emergency in 15 years amid concern the rupture of a Kinder Morgan Energy Partners LP pipeline may cause shortages of gasoline and diesel, and further price increases.

Black Blade: Interesting article and meanwhile oil just popped $39/bbl tonight too. It would not be surprising to see oil bounce to nearly $60/bbl by next year and then rise further (Ditto for NatGas). No wonder Alan Greenspan is talking energy over the last few months. No fear though as it is not counted in the "core rate". ;-)

http://www.financialsense.com/fsu/editorials/2004/0504a.html
Snippit:

The job of a dollar is to chase something you need or want. We can't make more oil, but we can make more dollars to chase and capture our quarry. So the more dollars you make to chase oil, the faster it will run (inflation) or be completely overwhelmed. To say otherwise, violates Newton's Third Law of Motion. Every action has an equal and opposite reaction. All we are experiencing right now is a little TURBO lag. Oil should be much higher. The Saudis will not let anyone check their reserves. Monkey business is a given, so take the worst-case scenario x10. Venezuela is the forth largest oil exporter to the U. S. and have already threatened to use an oil embargo to achieve some leverage over the U.S. Iraq is a big question mark at this time.

Black Blade: Take my word for it (and several others in the biz) - Saudi oil production has already peaked. We need an increase of 3.3 million bbl/oil per day increase each year to just keep pace in worldwide demand growth and guess what? - It ain't happening!

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180253133&p=1012571727207
Snippit:

High oil prices over the past five years are dampening the global economic recovery and causing inflation and fiscal problems in oil-importing countries, a report from the International Energy Agency said on Monday. The report follows a chorus of warnings from policymakers in Europe and the US about the impact of high-energy prices on global economic prospects.

Black Blade: And just a couple of years ago Alan Greenspan said that high energy prices were unimportant and just a small part of the economy. Uh huh. ;-)

Better get Gold and Silver for the rapid surge of inflation coming down the road.

http://www.goldisfreedom.com/Archives/feketearchives.htmIf I may jump in here. I find Mr. Fekete's writings are very informative and he has devoted a lot of effort. I agree with a lot of his findings. His essays on bonds and interest rates are profound. I do feel that he has taken Another trail though. Free gold is not part of his teachings, he wishes to include gold in a "monetary system".
The url posted lists many of his essays, its been a while since I have read them and shall refresh myself with his works.

http://money.cnn.com/2004/05/04/markets/oil.reut/index.htm
Snippit:

OPEC oil ministers, who control around 40 percent of world exports, have said that the price surge is driven by forces out of their hands. The group cut production quotas by four percent to 23.5 million barrels per day (bpd) from April 1. Kuwait's oil minister said Monday that high oil prices would encourage the cartel to keep pumping above official output limits. Fellow Gulf producer, United Arab Emirates, said OPEC might raise official output quotas in the third quarter to replenish stocks. OPEC ministers are due to meet June 3 in Beirut to review production policy.

Black Blade: Sorry but the UAE and Oman have BP consultants and others struggling to reverse a precipitous decline in reserves and falling production. The article and OPEC claims are laughable. Besides, with a weaker USD they cannot afford to lower prices or increase production (even if it were possible). In short - "Game Over"!

BTW, oil is tipping toward $40/bbl now. No or low inflation according to US officials. heh heh. Get some PMs for "portfolio insurance" soon!

OvS : World dominance ? Some 60 years ago, we had something like a Third Reich thing, overhere. Those times still put everything that happens today, in the shadow, for the time being.
And you know how this Reich imploded and what came out of it. Old Europe morphed into the new Euroland working on one major characteristic : STABILITY !

I am not impressed (worried) by any AA ambitions for world dominance/one world achievements for as long as this planet evolves with counterbalancing forces. There are enough reasons to remain a realistic optimist about global affairs.

The Gold theory : Is in essence an extremely simple one : Currencies have a limited lifetime ! Whatever the events may be, during that lifetime.

Mikal : I don't see what the turbulence in Greece might do to Gold (or euro). These (minor) events are not going to affect the mainstream trends that are already in evolution.


Euroland (& Co), as a willing stabilizing force, wishes a smooth transition from a probable dollar-vacuum.
All those who see advantages in "de-stabilization" of any kind, will always encounter cool heads, who have much to lose with general destabilization (terror-antiterror).
All these different forces make the shifts from chaos to order and backwards.

In the mean time, the Gold theory keeps evolving, anyway.
Pro and contra Gold forces, remain,... change as time goes by and old habits die/alter. The world,... life, is cyclic and not linear.

The above 2 cents philosophy always brings up that same old question...WHEN will it happen !? I remain convinced it IS happening, now ! 999,9% of goldwatchers see nothing and keep considering goldmatters as they have done for the past 25 years. The management/manipulation/intervention of the "price" of Gold, makes it all in-visible. The same is being done with oil. But here the POO is managed by other forces who are shifting away from the dollar and leave it to the dollar as to find 1001 explanations (tensions) for oil's particular price-trends. The $-POG is, for the time being, not of such a nature that it attracts general suspicion. There is not an open-visible, confrontation, on Gold, yet ! The struggle on/about Gold is happening rather subtle with deep underwater currents. This in sharp contrast with the war(s) on oil and its price.

The same subtle struggles are taking place between the 2 competing currencies. Here we have very little explanations from the $ and � camp as well.

The accumulated cosmic debt-load on the dollar is irreversable and the reason that the dollar nears the end of its lifetime in its function as global reserve. No minor/major events of whatever nature is going to change this inevitability. The rise and fall of the former "sterling" empire is illustrative of how the decay process of a (any) currency takes place. The major fact that Euroland (ECB-BIS) has everything in place to anticipate the final outcome of this dollar-process, speaks for the euro and EMU.

I'm repeating this, as to point that very little does change, alter, ongoing major processes. The Red Shields, recently, gave a strong message about things golden. I am not a fish in their bowl and leave the correct decodation of their message to other speculators. But there was "a message"...and that's enough confirmation for me, the shrimp.

Another event to decode correctly is the recent, sudden $-exchange rate decline versus the �, whilst hearing the financial media stressing on and on about how dynamic the US economy is, in contrast with the lame Euroland activities !? Look for the awakening Gold-factor in this "systemic", deceptive, perception building.

_ _ _ _

Canal Plus (France) is showing some shocking images of atrocities in Iraq. The quartet is involved in Israel, again. The Arabian desert oilreserves, a blessing or a curse,...$-�-Gold...global economy... !?

Goodmorning Belgian,

In reply to your msg#: 120650. How "orchestrates" the Fed the money velocity ?
Suppose that every oil-producing country immediately converts its dollar oil revenues to euros ? I suppose this happens already. Why doesn't that cause a sharp decline in the $-POO/$-POG ?

Normally, I don't post on small comments like these..perhaps I might mention that I don't like to intervene as well.

Feteke espouses the exact opposite of Another's theories..I personally thought this obvious. Government gold, or free gold. I personally as well as the others in my small circle of opinion(some may consider large) have thrown our opinion as well as our wealth behind the free gold concept. Of course this is after many years of research.

We weren't whole-hearted until we read Ari's speech last year...(and I will mention, Ari is not given enough consideration for what his mind carries). Then we realized, although we could take delivery of all contracts. The realization is we couldn't. Perhaps you might take this into consideration, and thank Ari for exposing the myth. Yes, the game is ours, but the truth in physical is not. This is the discussion and the game that goes around this table for the last few....years.

I assure you Feteke's ideals aren't worth the discussion...it's typed on. Personally, I've seen no written opinions placed other than Belgian's that has been willing to further discuss the trail we find ourselves on.

At this stage of the game...

Until the trail guide returns I don't see any reason to further my THOUGHTS, or anyone elses.

Thoughts from Omaha...

The CoinGuy

BB : About the ever remaining (and altering) controverses of the known/unknown (proven-probable) oil-reserves : IF,...IFffff, there should exist the slightiest consensus, that we are going to run out of sufficiant oil within the next 50 years,...all the possible alternatives, would already be running full steam ahead, wich is NOT the case !

It is the *CHEAP-DOLLAR-OIL* era that is over ! Remember that I mentioned the LPG-thing as existing alternative + existing infrastructure, here in Euroland.
The remaining oilreserves wish to be correctly VALUED ! That is a much bigger problem for the global economy and its rapport de forces, rather than the question of how much reserves there remain. Once the remaining vital/essential energy resources are generally correctly Valued and paid for, then the oil/gas flow will be rich and abundant. We have been shrewdly "stealing" (maybe a somewhat wrong wording...?) those resources and made ourselve prosper with these fundamental basics of our Western economy.

We succeeded in over-valueing our achievements whilst at the same time extremely under-valueing those basics that made it possible to become wealthy. Isn't it amazing that all those areas, rich in natural resources, are still living like the Flinstones ?

Double, triple... the gas price at the US gas stations and in no time, Americans consume half the present amount of oil. Then the lifetime of the remaining oil reserves must be reviewed, again.

The "new oil" is undermining the dollar's status and that is a much bigger problem, today, than the probable decline of the proven oilreserves. If one's oil is not correctly Valued, one obstructs the flow of it, up until the correct Valuations come to oil. Who is permanently going to "give away" his "wealth", certainly when the owners of that wealth are becoming more "conscious" about that wealth ?

See what's happening today in oil rich Nigeria (300 deaths)!? What was the meaning of Libya's Khadaffi visit in Brussels, recently !? Have you (others) any idea about the oil reserves in Libya or Sudan ?

It seems to me that everything is pointing towards staying on the oil course, for the time being. I personally don't worry about the remaining reserves or the supposed problems in oil flows, that can be resolved in no time on condition we just pay for what it is worth . Eurolanders know the cost (luxus) of energy.



OM : Indeed Sir,...Prof. A. Fekete, hasn't yet beeing considering FreeGold to my knowledge. He seems to remain rather silent about the idea. But so does everybody else.
As if FreeGold should mean "complete disasterous collapse" on wich I totally disagree. The globe's monetary affairs kept on running with a fixed goldprice of $35 from 1933 to 1971. The world didn't collapse in the aftermath of 1971 or with a POG of $850 in 1980 or with $253 in 1999.

...The world isn't even collapsing with almost zero % IRs ! Aren't we an extremely adaptive human specy !? And yet, something BIG is changing, because we are steadily mutating into a financial/monetary, ugly troll ! Amen.

First : The dollar IS still the world's currency !!!
Those who wish to "gradually" (!!!) leave the dollar, and gradually shift into the euro...still do have to settle their oil-trades, in dollars first !
By leaving the dollar for the euro, one is in fact depreciating the dollar in favor of the euro. This first step in (systemic-planned) depreciation, becomes visible in
in the $-� exchange rate AND of course in the $-POO, wich must rise (not decline as you suggest), because of the depreciation of the dollar-currency in wich one settles the oil trade.

When this dollar depreciation by oil, becomes more wide spread (broader support) and the euro gives evidence of permanent stability under all circumstances,...the next step can be executed : oil for euro, without having to go over the dollar. We are talking about a "process" here, Unimog...not about a war-mission accomplished and no peace for the foreseeable future.

All big "transitions" do take time, if one wishes to have it happen smoothly.

Once one believes that this major transition is on the rails, irreversable and gaining momentum,... one has no problem in making the choice of constantly buying/accumulating the POG-dips (Gold Wealth), wich are taking place at an obscene low price-level.

After the constant period of declining $-exchange rate comes the breaking point where a low/lower-weak/weaker dollar gets fully translated in domestic general price-inflation, wich will speed up the ongoing process of dollar depreciation up until a point where there is a massive dollar flight and the dollar loses its status and any further support from outside (the process).

The dollar is in the impossibility to organize a reversal of this process. It is only the speed of its decline that can be managed to some extend. Twin deficits and the debtberg !


are taking place

Woke up yesterday to the highest EVAR! gas prices in these neck of the woods.

Gold stocks definitely 'lead' yesterday. Hopefully an omen that POG is to cross back over $400 shortly.

POG is asserting itself again this morning (hope I didn't jinx it), perhaps the traders have seen the light!

Have a golden day.

http://www.virtualmetals.co.uk/Pages/other/THBQ403pr.pdfSnip:

She said that, probably before the first quarter of 2005, if President Bush was re-elected, US interest rates would be raised while European rates were likely to be lowered. ?This will strengthen the dollar, weakening the dollar denominated gold price. Even if things don?t go so smoothly, it would be a risky strategy to base your gold price forecast on such doom and gloom scenarios.

?It is our view that for the next 16 months the gold price is at the mercy of currency movements, especially the dollar, while the underlying fundamentals weaken.?

Virtual Metals was forecasting dollar prices ranging between $375/oz and $450/oz for 2004, with an average of $405/oz. ?If we were pushed into making projections for 2005 they would, at this stage, be lower. We are not saying that higher prices are impossible, only that they are, as things stand, almost entirely dependent on the world failing to continue to bankroll US debt.?

Among the other gold market uncertainties was the fact that de-hedging ? which is supportive of the gold price ? is easing off. On a rolling 12-month basis the contribution to demand from de-hedging had slowed from a peak of more than 20m ounces in the year to first-quarter 2003, to about 12m ounces in 2003.

Cross added: ?No matter how supportive and welcome de-hedging might have been, demand of this sort is artificial, technical, temporary and therefore unsustainable.?"

Above snip from:
John Disney (jess cross angers goldbugs ) ID#24387:
********************
Misetich

Ms Cross who considers herself an "expert" in the gold market believes the gold price is at the mercy of currency movements (on the other hand she says "the long term signal delivered is that the central banks in fact no longer regard gold as a core reserve asset" ) presumable relating to supposed BoF sales

The "gold negative" posture of Ms. Cross - whose employer has been retained by Mitsui - "Hello Andy Smith" is very interesting

Ms Cross "bearish outlook" on gold and bullish on US $ is contrary to those that believe the US $ has been/is overvalued.

Jessica Cross vs Warren Buffett

The market is speaking loudly and deciding the worth of the US $ (Todate the US $ index has fallen roughly 30% from its
peak - and investors such as billionaire Warren Buffett are still "betting" the US $ value will further erode

Since Ms Cross admits Gold prices are inversely correlated with the US $ movement she believes Mr. Buffett is pursuing a risky strategy

Jessica Cross and Hedging

In the book entitled "The hedge book" Ms. Cross states
Snip:
"It suggests that the gold world is poised on the brink of a renaissance in hedging, �n�nwith new, smaller companies starting to hedge forward positions, albeit in relatively small amounts at this stage" and she furthers states "��We think the gold hedging world is entering a third phase in which derivative sobriety is likely to prevail.�� says Jessica Cross,
End of Snip

Jessica Cross the "gold bear"

In her attack on gold, Ms. Cross passionately asks " Putting all our eggs into that one basket is a high risk strategy.?"

Ms. Cross is correct ! however if she entered the world of currencies and economics - which is not her area of expertise - she could perhaps ask ASIAN CENTRAL BANKS the same rhetorical question regarding the massive reserves of US $

Is that sustainable Ms. Cross?

All Aboard The Gold Bull Express - Part ll

http://www.lbma.org.uk/publications/alchemist/alch31_ghi.pdfSnip:

What do we expect of the future? The factors driving the contraction in producer hedging show no signs of going away � at least in the near term. What impact will
this have on future hedging trends?
For the near term the hedge book seems set to decline further, but before extrapolating that too far into the future we should explore the underlying motivations more carefully.
One factor behind recent de-hedging is that a number of large mergers in the gold industry have seen some heavily hedged Australian producers acquired by North American or
South African producers, who either have non- hedging or lower levels of hedging as basic strategies.
Once these consolidated entities reach their objectives, the pace of hedging declines will slow significantly. Furthermore if gold prices remain firm, gold exploration and, hence, discovery rates should pick up from current low levels, and projects currently on the shelf due to the gold price will get dusted off. Financing anticipated new discoveries and more leveraged projects may well require hedging to assure cash flow and fund debt repayment
........................
Over the last decade producer hedging has ebbed and flowed as the outlook for bullion and the industry changed and, although the current decline clearly has "legs", no trend is forever.
*********************
Misetich

Ms Cross whose stipend-remunaratiion is derived from analytical studies/research/consulting on hedging-derivatives wrote "although the current decline clearly has "legs", no trend is forever"

The trend is not only to "dehedge" but is reflective of gold investors ANTIHEDGE policies.

The gold price suppression scheme of thousands of upon thousands of producers/speculators of leased and corresponding gold dumping (thus increasing supply)has hit a brick wall

Hedging was a successful gold price suppressing strategy as it was favored by past world economic financial environment -

The trend has changed because the LEVELS OF INDEBTNESS make it impossible for high levels of IR without triggering a systemic risk

The "wealth" effect that Sir Greenspan has lauded many times as a counter argument of unsustainable trade deficts, current account and budget deficits is derivived by ASSET INFLATION primarily in stocks and housing.

Whilst an argument can be made for stocks being able to function normally in a high IR environment the same cannot be applied to HOUSING

Housing perceived wealth and its corresponding level of mortgage debt - GSE's IR leverage has not yet passed the "test of time"

In addition the recent accelerated levels of foreign debt has not passed the "test of time" which has also benefitted from a low IR environment

The obstacles to a return of gold hedging are insormountable

Rothschild KNOWS! Jessica Cross is in denial.

All Aboard The Gold Bull Express - Part ll

Rohatyn's Warning on America's Indebtedness by Gary North
Tuesday, May 4, 2004
Another angle on bubbles by North.
Ties together NYC bailout, debt(personal, corporate and gov't) and housing bubbles.

http://www.lewrockwell.com/north/north271.html Here's a clickable link ^

As I write gold is down 20 cents on the day, but the Euro is up a half cent and the the Yen is up, as a percentage, about the same.

http://www.nytimes.com/2004/05/05/business/05sales.htmlSnip:

Over all, auto sales were lower than expected in April, up less than 1 percent from a weak April 2003, coming in at a seasonally adjusted annual sales rate of 16.4 million vehicles.

Discussion of gas prices is a touchy issue among automakers, who reap the most profits from sales of S.U.V.'s and other light-duty trucks, which are less fuel efficient than cars.
*********************
Misetich

Auto inventories are still high - the article mentions a survey taken shows consumers are concerned about gas prices - weight of automobiles has increased -

IF gasoline prices remain high as Greenspan indicated it could get interesting for the auto industry - a mega labor force employer

All Aboard The Gold Bull Express - Part ll

http://www.mineweb.net/events/conferences/2004/global_mining/320132.htmSnip:

LONDON (Mineweb.com) -- Investors in these troubled days are not reacting to international geo-political uncertainties as they did in the past by scrambling to buy gold bullion.
....................
He said the Platts news agency accurately described the way the world was becoming de-sensitised to increasing and widespread terrorism when it pointed out that "people are used to seeing situations like these get worse."
.....................
On another topic of the moment, central bank gold sales, brought into focus by the recent renewal of the European central bank gold pact, Smith pointed out that in 1985 only Canada was selling off official gold holdings. Today those countries that had shown "zero gold tolerance" by selling off all their official holdings included Norway, Oman, the United Arab Emirates, Israel and New Zealand.
....................
He suggested that bullion banks have been struggling to survive for a long time, something that has come into focus with N M Rothschild's decision to give up trading gold. "Much of the recent aversion of banks to gold can be attributed to the shrivelling of their staple diet � mine hedging business," Smith added.

"But if miners refuse to treat gold like money (by prudently borrowing to hedge against price risks) why should banks? And if neither does, why should central banks? Or investors?"
******************
Misetich

Andy boy is losing his punch - after admitting he was out of touch with the gold market in 2003 and thus far off the mark with his prediction of gold prices in 2004 - Andy boy is PROMOTING HEDGING

Good luck Andy - your clients are going to need it- those that followed Andy's advice gained for a few years and are NOW GETTING OUT OF THE GOLD BUSINESS as they lost money and thus "not profitable any longer"

Andy does not mention that those holders of US $ in the last few years LOST IN EXCESS OF 30% from their portfolio whilst PHYSICAL GOLD HOLDERS saw their portfolio insurance function as it should - protection against devaluation of the US $

Andy is a one act play. Gold hedging is finished.

All Aboard The Gold Bull Express - Part ll

Belgian-

I have to take issue with your statement that:

"IF,...IFffff, there should exist the slightest consensus, that we are going to run out of sufficient oil within the next 50 years,...all the possible alternatives, would already be running full steam ahead"

We had such a consensus in this country during the 1970's after the first oil shocks that culminated in the Carter energy policies ," the moral equivalent of war" as it was called at that time. Everyone from the janitor on up knew the truth and sensible policies were put in place to encourage a gradual transition to fuel efficient automobiles and to develop alternative forms of energy such as solar power.

All of this was disbanded when Reegan and his minions came to power and turned public policy over to the corporate oligarchs ,the proverbial fox guarding the hen house. Who benefits from higher oil prices ? Those that have oil in the ground, the oil industry which has spent billions over the last 25 years lobbying against fuel efficient automobiles

You underestimate the capacity of these people to do evil. If these policies had been followed through this country would be prepared for what is to come. There would be no pricing power in OPEC because gasoline consumption in this country would be half of what it is today, and vast quantities of irreplaceable resources would not have been squandered.

It's not just greed that motivates these people though, its a malignant, malicious intellect that when it hears the truth , does just the opposite, out of spite. This is what motivated Reegan and this mindset still prevails in his proteges Cheney and Rumsfield.

Every so often you still see someone trying to blame the environmental movement for a shortage of oil . Thats like blaming the Sierra Club for a shortage of buffalo meat. The accounts that I have read say that only about 50 buffalo remained standing in the continental US before the shooting stoped. The only reason there are any buffalo left at all was because there was one isolate herd way up north in Canada that they couldn't find.

This is the kind of people that are running the show.They wear business suits now instead of buckskins , but they smell just as bad.

Apres Moi Le Deluge

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

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Though gold did not do as well as the Euro of Yen today, it acted well at the close. June Gold is up about $2 on the day.

http://www.commondreams.org/views04/0503-09.htmsnippet:

In a page torn straight out of President Bush and Vice President Dick Cheney's playbook on government secrecy, Schwarzenegger's aides have refused to disclose the names of individuals who helped the governor draft a plan to retool California's energy market, a plan that appears to benefit the very same special interests Schwarzenegger said he wasn't handcuffed to during his campaign. Moreover, for the energy proposal to work, it relies heavily on piecemeal components of the state's old deregulation law that sparked the energy crisis and wreaked havoc on consumers three years ago.

Refusing to identify the governor's energy advisers is identical to the stonewalling tactics employed by Vice President Dick Cheney, who, three years ago rounded up a handful of individuals, including Ken Lay, the former chairman of disgraced energy corporation Enron, to help him draft a National Energy Policy for President Bush. Cheney's team of advisers became known as his energy task force.

When Cheney released President Bush's National Energy Policy in May 2001 it turned out to benefit major energy corporations at the expense of the environment and consumers. Cheney has since refused requests from Congress to identify the people he met with. The vice president was sued by conservative watchdog group Judicial Watch and environmental group The Sierra Club in order to force Cheney to reveal the people he met with while drafting the energy policy. The case made it's way to the Supreme Court last week and justices are expected to decide later this summer whether Cheney should be forced to release the names of individuals on his energy task force.

Goldilox:

It looks like the USA's "energy policy" will continue to come from the likes of Ken Lay and others who, thanks to Scalia and other judges who respect government "privacy" over reporting of potential conflicts of interest. Too bad Scalia couldn't understand the law against judges standing in cases where their personal friends benefit while overturning Florida's Bush vs. Gore in 2000.

From our perspective, it looks like we can expect the oil cartel to continue running the country from "behind closed doors".

Calling Republicans malignant, malicious intellects?
With a masterstroke you define yourself, Camel.
Why don't you settle down and call it a "Power" game?
The trouble with the 60's and solar energy and other
alternatives was, that this movement was infested with
extreme leftists, druggies, alternative sex orientation,
and assorted grooves. A standard mainstream person just didn't want to sacrifice his selfimage in exchange for saving the world down the road so many years.
It's interesting that you wound up in the gold-camp,
which is "infested" with neo-conservatives. It must be
some other affiliation that grounded you here, because
most of these 60's persons still don't know a gold-coin
from a hole in the sky...all right, all right...just
want to get your bile count up...I actually enjoy your
contributions...cheers...OvS

More power to Schwarze negger, he obviously
wants to distance himself from the overbearing
teddybear hug of his uncle. Now we have to get
him into the gold camp...OvS

The FED's refusal to raise interest rates as the nominal economic numbers have improved and longer rates rose reveals the post stock market bubble pop recovery is wearing no clothes. Real fear will grip the markets once participants realize the FED is protecting the credit bubble they have created rather than the economic recovery. The pin moves ever closer to the ballon, once credit growth reverses, the jig is up. Folks will begin the process of deleveraging, selling assets to pay down debt, and elminating excess capacity from the system.

@ OvS:

Your quote:

"The trouble with the 60's and solar energy and other
alternatives was, that this movement was infested with extreme leftists, druggies (like Limbaugh?), alternative sex orientation (like J Edgar Hoover?), and assorted grooves. A standard mainstream person just didn't want to sacrifice his selfimage in exchange for saving the world down the road so many years."

. . . suggests that you find it preferable to risk ruin by myopic dependence on a declining resource like oil than be potentially associated with "left-wing kooks" like R. Buckminster Fuller, Einstein, Tesla, TT Brown, and the like. Image is everything?

Before you scream "Better dead than RED", it might be useful to look more closely at Welfare, Social Security, Medicare, IRS, FDIC, SLDIC (Bush's favorite watering hole), and closed door energy policies. They're HERE!

If ANOTHER's analysis of gold for oil is on target, TPTB MUST continue manipulating gold as long as they can, as their policy requires dependence on resources owned by other cultures.

AS I have previously remarked, the only reason solar and other renewable resources are more expensive than oil is because the governement/oil cartel has commmandeered a few "borrowed" trillion in military subsidies over the last couple decades to maintain control over all energy sources to keep the appearance of cheap prices at the pump. This is not working well right now. The pump price is rising along with the accumulated borrowed TRILLIONs of subsidy.

It seems that TPTB also do not dare sacrifice their postitions of power to allow any serious strides in energy R&D, as they refuse new patents, lock up all discoveries at Area 51 and throw away the key in the interests of National (oil cartel) security.

@ OvS

Yeah, and maybe Arnold will bring Ken Lay along to show us how to REALLY run a gold market! ROTFLMAO!

http://www.futuresource.com/charts/charts.jsp?s=CL&o=DX&a=D&z=610x300&d=LOW&b=LINE&st=Apart from the SM saving dip at the end of March, the Dollar and Oil have been waltzing along merrily these last few months ... and now we see a separation.
Oil futures are indicating a demand driven drop in Oil from here, Fundamentals tho suggest a supply driven increase.

The next few days will be VERY interesting!

http://www.usagold.com/DailyQuotes.htmlExcerpts:

COMEX gold closes higher on weak dollar, oil jitters

June gold settled $2.00 higher at $393.80 an ounce, reaching $395.30 overnight...

COMEX gold got a lift Wednesday from a weak dollar and the Federal Reserve's decision to hold interest rates at 45-year lows a while longer, keeping the cost of investing in zero-yield gold affordable.

[Randy's note: what they are trying to say here, in other words, is if we force ourselves to completely ignore the capital appreciation/depreciation aspect of metal and/or alternative currency holdings, the very low interest on currency makes for a low "opportunity cost" in terms of the nominal yield of the currency which is forsaken for holding metal instead. But in light of the potential for sizable appreciation and/or depreciation risk of each of these two types of asset, it would be foolhardy to let the notion of merely nominal "opportunity costs" of currency yield call your investment tune. To that end, see the article's next phrase...]

"Most notable, the dollar weakness is adding a little support to metals here," said David Meger, analyst at Alaron Trading in Chicago.

Also factored into gold purchases this week was the surge in the price of crude oil toward $40 a barrel, which was last seen in October 1990 after Iraq invaded Kuwait. Gold is used in portolios as a hedge against inflation. "It's significant in my mind," said Meger, "I have yet to determine how much the market is talking about it. When we hit $40, I'm sure it will be all over the news, then that will be the reason (given for gold's rise)," he said.

[Randy's note again: case in point... in the same light, why don't the media bums ever strive for consistency in their reporting -- namely, why don't they try to reconcile why equally zero-yielding oil can so easily jump through pricing hoops that zero-yielding gold apparently cannot?]

The euro rose to a one-month high at $1.2179 Wednesday after the Fed stood pat at Tuesday's meeting...Holding the benchmark federal funds target rate at 1 percent, its lowest since 1958, the Fed's accommodative stance produced a strong U.S. recovery and cushioned the economy against geopolitical fears and the risk of deflation. Fed easiness led to the dollar's fall to a record low against the euro this year. At the same time gold rose to a 15-year high last month at $433 an ounce, basis June...

The [gold] contract has now gained a total of $6.30 in two sessions. ..."with physical demand from India soaring, and with a growing realization that higher inflation and higher interest rates are actually quite a powerful recipe for higher gold prices, the long-term looks quite bullish"...

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

R.

Through these two members (J & A), the gold-(financial)establishment (brotherhood) wishes to send a message/hint to candidates wishing/tempted to join the gold-public !? The content of both statements are nonsense. Allow me to skip the argumentation. I'm trying to get their message.

Ingredients : $-�-IRs + exch. rates-geotensions-goldmine forward sales-POG-US elections.

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?

- Bond traders have six months time to get prepared for telephoned rate hikes.
- Goldmines will be encouraged (hum) to restart a second big round of forward sales.
- All hens on deck for dollar support.

Pure intuition and FWIW !!! They are going to call the anti-dollar's bluff !? Thoughts anyone ? TIA.

Your comments

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?

Misetich

It will be very difficult to achieve unless they get oil under control and the likelyhood of oil under $30 is slim and none

OPEC claims to be overproducing by 1.5 barrels per day as prices hit 13-year highs-
China's demand for commodities-energy is hitting the whole global economy - many members of OPEC are Anti-Bush -
The US economy is much weaker than being reported re: chronic unemployment - no genuine jobs

The powers to be have already rolled "their plan" reminiscent of the good old days - as the anti-gold campaign has been put in full gear using Bof and Germany's as the anchor re: gold has demonitized - but things have changed -as the US stock market is vulnerable post election -
In addition far too many "enemies" both politically and geopolitical this time around - a lot of people worlwide are put off by their disagreements with current US policy

The likelyhood of a major terror strike within US borders is very high between now and November, if Madrid is any indication

Whatever ammunition they have via physical will be bought - as the US $ is too weak and would need at least 6-12 months of rallied strength to change the current trend and perception -

Time will tell who is really "orchestrating" this - things are never as they appear

Thanks for your participation in this Forum - it is welcomed, valued and appreciated as you lead through the Trail

All Aboard The Gold Bull Express - Part ll

IMHO, if you want to deliver a serious message, you don't use a clown like Andy Smith to do it. Besides, what's the novelty in anti-gold pitches from him and La Cross. They've always been anti-gold. Period!

http://www.jsmineset.comsnippet:

"Don't Blame the Deficits for America's Rate Hikes"

The US Federal Reserve is expected to hint more strongly at the interest rate rises in its post-meeting statement today. With the growing likelihood of higher US interest rates ahead of November election, one of the surest calls in economics is that the twin deficits in budget and trade will be blamed.

Before that happens, it is worth taking a reality check. The much needed increase in interest rates when it comes will have little to do with deficits.

The primary factors will be the strong economy, job growth, the weaker dollar and rising inflation."

Jim Sinclair's Commentary:

Where in the world do you think the "strong economy" came from? Where in world do you think the modest job growth has come from? What do you think caused the lower dollar? What do you think has given rise to inflation? The triple deficits of US Budget, Current Account and Trade brought on by poor management are the cause of the economic recovery.

The US is on a war footing while implementing major tax reductions and monetary easing of historical proportions. The cost of this present economic situation is clearly on the backs of future generations.� This article places the cart in front of the horse in a world class fashion.

This is the type of thinking that would sell the soul of a nation for a strong equity market and strong business conditions while Americans and their coalition allies pay the price on the battlefield. It will also produce long term inflation and decimate the dollar beyond recognition. This is truly the creed of Daddy Warbucks and is a formula that has led the USA to its present decline while being in a terminal state of denial as it wages war everywhere.

Goldilox:

Yeah, the deficits don't matter, and TPTB have a really "big bridge" for sale. Demonizing gold continues in the media, as they strive to keep the public as far off balance and vulnerable as possible. The dollar is being trashed and readied for replacement simultaneously, but it must not appear so.

"Advisers - can't do with them and can't do without them, darn!" No wonder they all want their real advisors to remain "anonymous".

***It's interesting that you wound up in the gold-camp,
which is "infested" with neo-conservatives*****

I'm a little surprised myself, but I have really learned a lot from you'all for which I am very greatful. What we need now is a Roosevelt, but rather than a "chicken in every pot", a solar collector on every roof.

Camel:

Probably not until there is a utility to sell us the sunlight, an El Paso clone to sell it to the utility, and a Halliburton to explore for more sunlight!

Ensuring three or four middlemen is part and parcel to making it "economically feasible".

http://www.reuters.com/newsArticle.jhtml;jsessionid=Y0MC3RVG1MMZECRBAEZSFEY?type=topNews&storyID=5052236Snip:

Bush Seeks $25 Billion More for Iraq, Afghanistan

WASHINGTON (Reuters) - President Bush on Wednesday asked Congress for an additional $25 billion for military operations in Iraq and Afghanistan, breaking a pledge not to seek more money before the November election
******************
Misetich

US poorly planned post-invasion is hitting taxpayers. The $25 billion is emergency funding required as most funds are spend - the forecast for 2005 is ANOTHER $25 billion - which is a drop in the bucket - totally being underestimated

Reportedly a vast majority of military equipment in Iraq is in bad shape - and requires heavy maintenace/replacement

Recently the US announced 135,000 military personnel will be stationed in Iraq till the of 2005

The change-as-you-go Iraq "democracy" plan - costs are rising beyong expectations

Mass confusion reigns - as the State Department battles the Pentagon - the CPA has little control over the army/marines - and marines have on ground jurisdictianal authority which adds to mass confusion

Add the inside battles of Iraqi and the pandora box which many have warned about is wide open

Supposedly budget deficits are slated to decline in 2005 and beyond - it remains to be seen - the likelyhood is NOT!
- thus continued pressure on foreigners to fund the shortfall

All Aboard The Gold Bull Express - Part ll

Bush Asks Congress for Additional War Funding
$25B Needed for Contingencies in Iraq and Afghanistan, President Says
By Jonathan Weisman and William Branigin
Washington Post Staff Writers
Wednesday, May 5, 2004; 5:21 PM


Driven by unanticipated combat, higher-than-expected troop levels and rising political pressure, the White House reversed course today and asked Congress for an additional $25 billion for the wars in Iraq and Afghanistan for the fiscal year that begins in October.

Thanks for posting that FT snippit and J. Sinclair's reply.
From the FT quote and it's converse, J.S's basic and straightforward pointers for gold investors, it's seen how easily mainstream shills exploit the handful of today's important and
fundamental financial trends- to selectively censor and rearrange the otherwise plain and obvious events of today into an argument for confusion and consequently, disinterest, complacency and inaction.

Greetings Goldilox.Thanks for all the great posts these last number of months. Truely a prodigious effort.

I agree, "the dollar is too weak".
It's already weaker than it's outwardly and publicly presented to be.
Weaker than it's paper price too, maybe giving more value to toilet paper down the road or else exchangeable for
a gold-backed successor in the mold of the euro,
which may then buy cheap Mexican "imports",
without having to convert them to Pesos anywhere in the world, under an American Union like the EU.

Jim Sinclair has dealt with his illogic handily as well
pointing out that his arguments don't have teeth ....

I remember in the late 80's that I read one of Prechter's books.
He was extremely bearish and I was convinced by his discourse . I discussed his work with my Stock Broker at the time and his response was derrogatory of Prechter indicating that Prechter was a permabear....and he had been bearish for years.......

His theory may have been right but his timing was not.....
I don't think he makes a living putting his money where his mouth is but rather recieving money for writing books and mimicing his handlers.

I wish we could go back in time two years or whatever it was and that we could buy gold again at 253.......It's a great hope and dream that I fear will remain vapor of GAS .
We may never see 250 again in our lifetimes....

The issues that confront the Global economy are enduring relative to commodity supply issues and they are also enduring relative to Spiraling deficits and Ceaseless Money Creation; they are enduring with regard to Geopolitical change ...which is related to OIL , another enduring issue worthy of its own mention.. ....The only people in the world that are blind to these issues and the systemic nature of these issues are the ones in the western hemisphere that have been blinded by the sold out MEDIA TROLLS..and the continuous SPIN in DISNEYLAND. EVERYONE THINKS THAT EASY AL HAS SPECIAL POWERS TO WAVE A MAGIC WAND and make everything PEACHY.....THAT FANTASY MAY ONLY come off in DISNEYLAND...The real world will have to come to grips with REALITY .....and deal with it....REAL MONEY WILL BECOME PARAMOUNT WHEN THE REAL FIREWORKS BEGIN ....On that day Faries won't Fly and Fantasies will cease to hold the hopes and captivate the imaginations of the bewildered.

Cavan Man (5/5/04; 16:37:56MT - usagold.com msg#: 120718)
..................
Misetich

Jessica specializes in research and certainly not an expert in currencies

The argument - disinformation - misdirection- posed by both Ms Cross and Andy Smith is treating gold as a commodity when in FACT gold has been acting as a CURRENCY - recognizing global economic problems - specially the US $

Things have changed and getting worse. Here's an update on US Debt to the "penny"

05/04/2004 $7,124,773,711,006.15
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62

When the gold shorts such as Andy were successful in persuading unspespecting producers to hedge during the mid 90's to 1999 it was a DIFFERENT SCENARIO thus the caper worked

Many things have changed -

US economy is much much weaker
Level of debt at all time high
IR being held at emergency rate
Derivatives at astronomical levels
US trade deficit at all time high and growing
US $ foreign holdings by Asia's Central Banks are in the stratosphere
US budget deficit estimated at $425 - probably its more like $700 billions for 2004
Current Account deficit is growing
Gold hedging is dead
Threat of retaliation actions from Arabs/Muslims
Iraq/Afghanistan Post Invasion Costs

IF IR increase to the 4-5% the amount of service debt interest to foreigners will reach at somewhere between $150-300 billion annually

Jessica cannot be right about the $USD..simply NOT

All Aboard The Gold Bull Express - Part ll

Belgian, I've been hearing about how the euro would never get off the ground due to the economic weakness of 'Old Europe' all the way from 83c. It was BS then, and it still is.

Similarly, this 'forced debt liquidation causing a surge in the dollar' argument that is currently doing the rounds is even more intellectually half-baked. No politician in their right mind is going to bring the economy screeching to a halt in an election year. In 2005, maybe, but not now. Dan Norcini did a nice rebuttal, but he overlooked an important point: just look at the balance sheet of most investment banks to see just how much fixed income they hold. This kind of policy would massacre Wall Street. Not surprising that Easy Al didn't tighten, is it?

Only if one reads economic history can one begin to appreciate just how clueless the US economic �lite is about the rest of the world. It's as if the part of their brain that works out how others may respond to their actions has been surgically destroyed.

Try Van der Wee's book 'Prosperity and Upheaval: The World Economy 1945-80' which is dry but has a nice overview of the breakup of Bretton Woods in 1971.

This chapter makes an interesting point re 1970 and 1971.

'A reduction of the rate of interest in the US, which was designed to stimulate the domestic economy, accompanied by an increase in European interest rates to prevent the importing of American inflation, led to a massive repayment of loans by American banks on the Eurodollar market. The increasing trade deficit in the US made the situation still more precarious'. (VdW p. 476)

Sound familiar? Granted Europe's politicians of today are far more spineless than they were in the early 70s, but we can conclude from this that they will follow the path of least pain. As Misetich correctly points out, unless POO comes down, the path of least pain is a higher Euro. It may have appeared to be a lower Euro last week, but a rising POO concentrates the mind wonderfully, and we have seen the Euro break its downtrend since then.

As such, while it's not a given that US companies would 'rush to repay loans in the Eurodollar market', the deflation argument assumes that the rest of the world stands idly by and takes their shafting from the US in the form of a big hike in their commodity bill and a massively disgruntled electorate. History suggests otherwise - namely that the current drift of US monetary policy and the likely European reactions to it will tend to increase the supply of dollars in the market place rather than reduce it.

Even when he sees his career has been invested in a dying industry (i.e., bullion banking) he keeps his good humor right to the bitter/glorious end.

A long, long time ago, in a galaxy of forum archives not so far away, I recounted in a longish and frequently sloppily-worded commentary the wonders of the ex-Bretton Woods world (post-1971) in which certain (and not so obvious) mechanisms allowed the market price of Gold to be reined under control after the runaway gallop to $850 in 1980. The broad message was that bullion banking and derivatives took over where Bretton Woods left off in the continued effective monetization of Gold, although in a floating regime rather than a fixed one.

The main point to walk away with out of all of that was that through the multitude of Gold loans, forward sales and various swaps agreements -- as Gold was thus being "monetized" as a non-national currency, its market price in terms of the other, national, currencies was brought into check.

Through the wonders of bullion banking in continuation of the Gold Standard ploy, the essence of "owning Gold" remained detached from the physical realm as the prevailing counterparty obligations and accounts of "future Gold" were brought (im)materially on par in the newly modern world with the similar banking obligations and accounts for the various monetized national currencies. When obligations are merely netted against other obligations, its all the same -- credit is credit, no matter which way you slice it. For as long as the monetary system of accounting functions, an "IOU Gold Ounce" can be discounted against real things as effectively as an "IOU Peso" or an "IOU Dollar."

So, it shouldn't surprise us to see that the market price for generic Gold (either on account or in hand) was brought low during the heydays of Gold derivatives, miner hedging addiction, and bullion banking to orchestrate the show.

It also shouldn't surprise us to see the countermeasure of that effect. With the steady decline of LBMA clearing volumes publicly known since 1997, plus the European CBs' caps on Gold leasing participation since the 1999 Washington Agreement, plus the corroborating evidence of several prominent bankers to quit the bullion banking scene (Credit Suisse, Rothschild,) we can conclude that Gold these past recent years is becoming less and less "paperized/monetized" than it was, and look how its slightly-more-reality-based price has climbed nicely off its papery $250 lows!

I say, let's have more of that trend, and how!! (FreeGold, baby!!)

Let's keep all that in mind, and then let's look again at Andy's comments from the Mineweb article, shall we?

-------[Smith] suggested that bullion banks have been struggling to survive for a long time, something that has come into focus with NMRothschild's decision to give up trading gold.

"Much of the recent aversion of banks to gold can be attributed to the shriveling of their staple diet � mine hedging business," Smith added.

"But if miners refuse to treat gold like money (by prudently borrowing to hedge against price risks) why should banks? And if neither does, why should central banks? Or investors?"---------

My goodness!! Is it possible that even ol' Andy is preparing to throw in the towel on the socialization/monetization of Gold???!

Does he give us any more clues about his state of mind? How about this:

----------...on the topic of gold investment, Smith made clear he was not particularly enthusiastic about the World Gold Council's promotional efforts with its stock exchange traded securities, called Gold Bullion Securities.

He pointed out that, after 13 months in existence, the Australian version of GBS had attracted about 9 tonnes of gold demand, "equivalent to one-and-a-half-hours worth of large speculator liquidation on COMEX in the week to April 20."

Smith said: "Attempts to place gold on the institutional stage, almost unrecognisable in heavy make up (you don't have to own it, it's paper and you accept counter-party risks common to commoner investments) supposedly to attract an audience who otherwise could not enjoy gold entertainment, risks an unnecessarily very public humiliation."------------

Holy cow! He's beginning to sound like me!!!

What are you driving at, Andy? Are you preparing to join the ranks of the physical FreeGold Trail-hikers here at USAGOLD? There's always room for one more, especially someone who's funny and cracks me up as much as you do!

The institutional ship is sinking and the rats are swimming to solid ground. (I'll leave it to others to decide whether or not Andy is among 'em.)

Gold. Get you some. --- Aristotle

"....The trend has changed because the LEVELS OF INDEBTNESS make it impossible for high levels of IR without triggering a systemic risk..."

CHECKMATE!!!!!!!

BINGO!!!!!!!

YEAH BABY!!!!!!!

TO THE MOON ALICE!!!!!!!

"....the driving force for gold is not the dollar nor nominal interest rates but real interest rates. This means if inflation rises faster than interest rates, then real rates can actually decline although nominal rates are rising...."

Ha! Ha !

Here's the BIG PICTURE BABY, Mr. GreenGoof is behind the curve SO severely and as Misetich points out he can't raise rates without blowing the DERIVATIVE SEWER sky high. Nominal rates will not catch up to inflation EVAR! and REAL rates will continue to fall behind and the FED will grasping at straws for a long, long time.

As inflation accelerates (because the dollar continues to fall) GreenGoof will fall further and further behind the GOLDEN (HA!HA!) curve.

hahahahahahahahahahahahahah...................

Sorry Alan, hate to break it to ya but that knighthood thingy was a joke, PAL! See ya at POG $10,000.

Later, much later.

Ned , May I say that.....

WHEN YOU ARE RIGHT , YOU ARE RIGHT!!!!

Looks like we owe Mr Greespan thanks all around for the
situation he has masterfully lead us into ......
from which there seems only one way out ........

Here is another (far) left-winger who owns PMs for when TSHTF. There is much that the left, the populist and libertarian right can agree on with respect to TPTB.

Pog is not likely to reach higher than 460 before December.

http://www.nytimes.com/2004/05/05/business/05PENS.html?thMeanwhile, down in Houston...

Snip:

"...
When their monthly pension checks start coming, some will actually have higher incomes than they did when they were working.

The city pension fund cannot support the payouts and has about $1.5 billion less than the benefits it owes the work force.
..."

Sundeck: "Houston, we have a major malfunction." The public sector stikes back... Yet another reason why inflation is a necessity to balance the books of the future...

Creative accounting will be needed to mend earlier actuarial "creativity" in puting together these super packages. Still, not much at stake here...only a few tens of billions of dollars across country...not what you would call "real money".

:-)

Jim Sinclair is right about a lot of things, and I feel pog will go to 480, maybe next year, or in late December. It could happen differently. But with that, late December. The key to this, it seems to me, is public opinion. If the 300 million US citizens all think that gold is only worth 430, gold won't go above 430 in the US, no matter what else happens. And what I see right now is an absence of public sentiment in gold, sufficient to cause its price to rise that quickly to 480, among other things. But that's the main thing. People tend to gather steam, the use it, then, collapse. Then they gather steam again, use it, and collapse again. Before it goes to 480 there will be lot more steam, and right now there's just a lot of hot air. In fact, if you look around, just about the only place you get bullish information about gold is on these pages, and the links related to them, and on other web generally. I am not saying the information at these places is incorrect. I think it is true and correct, very much of it. But we aren't able to talk sufficiently loudly that the 300 million will hear us. They aren't listening. Somebody's got to grab them by the neck and shake their heads, before they'll listen. And it's only after that happens that a significant number of them will ever start thinking. That's what will make the price of gold go up. That and other things. But it's the buzz that's faded. Are people waiting, and one day they will all wake up? Probably. Well, when? Soon enough, my friends. Soon enough.

Don't worry about those left behind. It's already
too late to even begin to educate the masses.
Gold's price is not determined by Americans but by the world market- largely big money, funds and CB's.
Gold's price will be as Belgium, Michael(Kosares), Ari, Randy, BB, J.S., MarkeTalk(George), Miner, Misetich, Sir Douglas(Trail Guide), Another, Aragorn, Gandalf, Anduril, Smeagol, Sundeck, Coin Guy, Caradoc, Waverider, R. Powell, Boilermaker, Cavan Man, Paper Avalanche, Mr. G., Goldilox, Slingshot, Cometose, Topaz, Henri, White Hills, White Rose, Ten Bears, Great Albino Bat, Chris Powell and a hundred others here recognize- underived, self-sustaining, free.

FYA- For your advice (or amusement or attention)
FYI- " " information
FYEO- " " eyes only
FCFS- First come, first served
FEA- Federal Energy Administration
FDROTFL- Falling down rolling on the floor laughing
LBMA- London Bullion Market Association
LOEL- Lowest Observed Effect Level
LOAEL- " " Adverse Effect Level
LSAT- Law School Admissions Test
LOL- Laughing out loud (or Little old lady)
Comex- [New York] Commodity Exchange
LFL- Lower Flammability Limit
GWP- Global Warming Potential (or Gross World Product)
L.S.D.- Pounds, Shillings and Pence
LTMSH- Laughing 'til my sides hurt
lts- Laid on Table in Senate

Re: "When will people wake up? Soon enough."
Yes. A few will be the early birds catching the elusive golden worm(yum!) and the rest,
spectators.
Now let's pray
the noise of any crash isn't loud enough to wake the dead.
We're all having enough of a time salvaging our lifesavings, without having to save our SKINS! ;)

Thanks for the strong underbuild (expert)responses. Just wanted to point out that by discussing a not to be excluded strike back of the dollar,...that same dollar will add more weight to its ballast that is already suffocating it.

And indeed, Sir Ari,...everything is unmistakingly pointing to the shift from papergold to the precious Physical.
All outings that add in one way or Another to the goldsale-hysteria, are undermining the existing papergold-market and straithening the path to Physical Gold.
All those who made a living(fortune) with the papergold, see their (future) business going up in smoke.

Socrates : Couldn't get one of my postings (J & A) through, yesterday and lost it. You said the essence of it in your latest posting (book).

All : Isn't it amazing how extremely subtle, but energetically, we have been... and are being totally "over-paperized" !? The modern paper-cult replaced the ancient golden calf worshipping.
If,...IFFFFFFF, the dollar-paper would succeed to stage a serious (sustained) come back and flush away the growing dollar-scepsis (aversion),...I would be very surprised but not puzzled.

Note that nobody is analysing (questioning-argumenting) if Oil and Gold at today's prices are "cheap" or "expensive" !!! Simply because the whole *scale of Valuations* has been completely distorted by the (Western)paper-mania. < Consumer-ism > instead of genuine prosperity (happiness).

It is a very beautiful, sunny morning, here in Antwerp. A very Goodmorning to all.

Goodmorning Belgian,

According to you, which oil producing countries are in the ECB-BIS (euro)influence, and which are in the Fed-IMF (dollar) influence ? I see Saudi Arabia getting good (oil) connections with the Russians. How important will Russia be in the changing process towards the euro (and Freegold) ? You talked about oil reserves yesterday. I remember a except from Anothers thoughts where he writes :"Don't underestimate the oil reserves, there will be plenty of oil, even for our grandchildren." Of course the problem will be how (in what currency) will they pay for it ?

You're both right. Yes, Mikal, it's too late to educate the Joe Sixpacks of North America. And, yes, the international market can/will take gold hundreds of dollars higher without them. But ANOO hasn't underestimated the importance of the American buyers in determining POG.

There's a heck of a lot of buying power in North America that is currently going toward big screen televisions, SUVs, and overpriced McMansions that will be prohibitively expensive to heat with natural gas costing what it will within two years. Between now and then -- whether at $500 or $850 per ounce -- there is a price level at which North Americans will become "self-educated" on gold and begin to climb onboard with whatever remains of their decimated assets.

Speaking of "decimated" (reduced by factor of 10)... With gasoline at $5 per gallon and purchases limited to 10 gallons after waiting in line for an hour or two, the typical owner of a $50,000 Cadillac Escalade will be glad to sell it for $5,000 if he's lucky enough to have paid cash for it. If he still owes $45,000, he'll just walk away from it. Same goes for the big houses, TVs, and portfolios of paper. The losses will may well be greater than 90 percent, but just take the guy who unloaded his Escalade and has 5,000 greenies in his pocket. If he and a few thousand like him are desparate to preserve whatever they have left, what happens to the "price" of gold? (I put "price" inside quotation marks because it becomes a joke to think of dollars defining the value of real wealth.)

Note two things:
(1) There's less than one ounce of gold per person on this planet and substantially less than an ounce of silver.
(2) Even after being decimated, the Joe Sixpacks of North America -- in pursuit of an ounce or two or ten or twenty ounces -- will still have enough buying power to drive the dollar-denominated price of precious metals higher than any number that has been guessed at on this board.

Hint: I'm not sure I'd swap an ounce of gold for an SUV even today unless I had time available to sell the vehicle for cash to buy more ounces. And when times get tough, I'll hold onto my ounce of gold even if offered two or three useless vehicles.

Just how I see it....

Caradoc

PS for Mikal: Great memories! I miss the wisdom of Ten Bears.

Maybe Mr. Greedspan is our knight in shining (golden) armor !! LOL.

Have a golden day!

.....I was watching CNN for awhile last night. Not too many are happy with this Iraq prisoner abuse business.....more heads to roll. Next year (2005) 135,000 troops are expected to remain in Iraq at a phenominal cost...forget the number, $XX billion.

More pain.

Not to throw out sadistic numbers but I believe there are now nearly 700 fallen US soldiers, 100 (+/-) in April. I have said from the beginning 1,000 by Nov. 7 will spell trouble for Mr. Bush.

4 digit fallen soldiers = 5 digit gold? We shall see soon enough.

http://www.smallinvestors.com/gold/Intermarket.htmInteresting chart.

Excuse me, I posted the chart already without commentary. Whar worries me the most is the link on the bottom left, the chart of the Money Zero Maturity Supply. How much longer will it continue to rise ?

http://www.macon.com/mld/macon/news/opinion/8597144.htmSnip:

"...
Looking through a handful of change that I had been carrying around for a while, it was obvious that these coins, while useful, were just plain ugly, and worse, boring.

....

But our coinage, as well as our paper currency, has a long way to go before it becomes what I would consider attractive. The money we make now is durable and adequate. It isn't, however, the work of art it used to be from the late 1700s until the 1960s.

During that period, our coins not only had real value - some were made with silver and gold - but also reflected the talent and skill of the master engravers who produced them.

While our first official coins, struck in 1794, were a little rough, it was only a matter of several years before copper, silver and gold-alloyed coins sported majestic seated or soaring eagles along with patriotic-inspiring versions of Lady Liberty, (including one daring quarter struck in 1916 and 1917 in which Liberty had a bared right breast. I'll show you a photo of her).

...

In any case, much of our later-date coinage, such as the Susan B. Anthony dollar, first stuck in 1979 and arguably the ugliest U.S. coin ever produced, and the Sacagawea "golden dollar," first minted in 2000 and still in production for some unknown reason, were politically correct failures from the word go.

Many people have never seen a "golden dollar" - which, by the way, has no gold, just copper with a little manganese, zinc and nickel thrown in to make it hard and give it color. This dollar bears a figure representing the Shoshone Indian woman Sacagawea, who, along with her husband, Toussaint Charbonneau, played a role as a translator in Lewis and Clark's northwest expedition.

There are, however, stunning but now obsolete examples of U.S. coinage. My personal all-time favorites include:

The flowing hair silver and bust silver dollars, first minted in 1794 and 1795; the Indian-head nickel, first stuck in 1913 and which featured a bison on the reverse; the Standing Liberty quarter, struck in 1916 and a contender for one of the most beautiful U.S. coins; the Saint-Gaudens $20 double eagle, first struck in 1907 and also considered one of America's most attractive coins; and my personal favorite, the Walking Liberty half dollar, first minted in 1916 and displaying, on the obverse (the heads side of the coin), Lady Liberty with an American flag, striding forward with a rising sun in the background. A powerful eagle graces the reverse.
..."

Sundeck: Yes...I understand what he is saying...same is true in Australia. At least in America you have coins of sensible size. Here we have a fifty-cent piece that you could anchor a boat with - completely out of all proportion to its "value"; and to add insult to injury, it is not even round, but has a dozen or more corners to wear holes in your pocket more rapidly. The twenty cent piece has almost no value (unless your kid wants an all-day-sucker from the local vending machine, or a thirty-second bone-shaking ride in the imitation puffing-billy in the mall...oops, they take a dollar these days. However, you can still use them in most parking metres, if you want to stay an extra five minutes...

Give me the good old days with daring, golden ladies that believed in Liberty and had the courage to bear their breasts (well, one anyway) for public scrutiny. (These days such a "liberty" appears to produce a furor - if recent events are anything to go by: "Storm in a teat cup!", one of my friends was heard to say...


Alas, alas...in these days of rampant, pervasive tokenism, our money leads the fray...

:-(

Sundeck

http://www.msnbc.msn.com/id/4901881/Snip:

May 4 - Only days after the State Department praised Saudi Arabia for its "aggressive" and "unprecedented" campaign to hunt down terrorists, Crown Prince Abdullah�the country's de facto ruler�has startled Bush administration officials by blaming "Zionists" and "followers of Satan" for recent terrorist acts in the kingdom. "We can be certain that Zionism is behind everything," Abdullah told a gathering of leading government officials and academics in Jeddah as he talked about the weekend attack on oil workers, which killed six people, including two Americans. "I don't say 100 percent, but 95 percent."
..........................
But Walker added that the Saudi rulers "don't feel they owe this country or this administration much of anything these days. They were terribly disappointed in the 100 percent support of Sharon � Maybe this is their way of making their disappointment clear. It's also a way to blunt the edge of public opinion which is very much opposed to what we are doing � We have a horrible situation in the region."
............................
***************
Misetich

Little media coverage has been given to Saudi's strong stand on the Palestine issue -

Oil prices commenced rising with Saudi Arabia disagreements with various solutions proposed by Clinton (- The Saudi's submitted various peace proposals relating to Palestine/Israel)

The increase in oil prices along with natural gas/electricity problems in Y2000 was the catalyst in busting the Stock Market bubble as corporate earnings were hit by rising costs

Saudi's were not to fond of Saddam - they funded the 90 Bush Sr./Iraq war - they did not support the current Iraq invastion

US spin that the Saudi's couldn't support the Iraq invasion publicly but doing so privately doesn't stand to actual known events

The Saudi's have made numerous contractual energy deals with Russia/China at the expense of US corporations

Further the Saudi's prohibited the US from using the military bases constructed in the 90's and kicked out the US forces

In addition OPEC have flexed their muscles throughout the last 4 years citing a rise in "inflation" as the reason for higher oil prices -

POO prices have average at the higher level of the band and upwards to today's $40.00 mark

Current events in Iraq/Palestine have inflamed and heightened tension in the Middle East - as Arab countries are resisting the "reform" agenda of the US

The continued strained relations of most Arabs countries- vs US foreign policy -in light of Bush endorsing Sharon- cannot be underesimated

The OIL card is being played - OPEC is "overproducing" however the overproduction is NOT GOING TO US SHORES - but elsewhere in the world

Is it the 70's d�j� vu again? Will gold price reach/exceed $850?

All Aboard The Gold Bull Express - Part ll

http://moneycentral.msn.com/content/p82403.aspSnip:

For the next three months, Belkin was dead wrong. The market continued to shoot straight up, and readers e-mailed repeatedly to ask why we had given him any credibility. And yet now, with the passage of time, his views don't look so dumb after all
......................
The recent setback is nothing, however, compared with what's coming, he says now. In an update interview this week, he said his research suggests that the market will revisit its October 2002 lows, and he is sticking to his prediction of a "high-volatility dislocation" -- you might call it a crash -- en route. He still singles out semiconductors as likely victims, but has now added emerging markets to a long list of investment areas he expects to get clobbered; meanwhile, he still likes consumer products companies and energy as potential hedges, though he doubts they will provide positive absolute return.
........................
By allowing the official overnight federal funds rate to lag well behind the inflation rate, he says, the Federal Reserve made the worst of all possible central bank mistakes -- encouraging as much unproductive speculation in the past year as it did in 1999, when it flooded the world with dollars in anticipation of trouble from the Y2K bug. For this handiwork, he labels the men around the Fed board table "worse than the board of Enron" for their obsequious obedience to Chairman Alan Greenspan.

"They're all total wimps; the board is all yes men, academics who just rubber-stamp their boss. And they've now given us the biggest bubble in everything that I've ever seen," he said. "Through 2000 it was mostly the tech stocks, but now it's everything."
.......................
"When capital is fearless, when investors feel bulletproof, they put money into the riskiest areas," he said. "That has pushed emerging markets into the worst extremes in my experience of about 20 years, including the periods preceding the big collapses in the �90s of Russia, Latin America and Asia. The Fed has essentially bubble-ized the whole world." He estimates that the Nasdaq, S&P 500 and German DAX have about 42%, 30% and 45%, respectively, to fall to revisit their 2002 lows, but the Brazilian market could fall as much as 58%.
**********************
Misetich

Richard Russel has also predicted that we have seen the SM top.
How will Greenspan respond? What type of ammunition does the Fed have left to respond to possible crisis and/or erosion of perceived wealth?

The US consumer/pension plans are highly leveraged to SM prices than any other era

How will a continued bear market affect gold prices? How will a "mini-crash" of sorts affect gold prices?

It could very well be that even the kitchen sink will be thrown to avoid gold from "getting away" however the now/then suppressed coil spring will spring lose

PHYSICAL GOLD the ultimate currency that has always passed the test of time

All Aboard The Gold Bull Express - Part ll

I think we need to file a missing security report on Gold Bullion Securities Australia.

For weeks there was a press releaase on the WGC's Australia site claiming that it was going to be delisted and all of its 9t of gold sold into the London AM fix on May 5 (or was it May 7 - I think it was the 5th, but perhaps someone can correct me). Obviously part of the WGC's strategy to force prices higher.

Now I go back to the site, this press release has vanished without trace. So if we see the gold market being divebombed over the next day or two, I think we can make a highly educated guess as to where the metal is coming from.

Or are these just the feverish ramblings of a gold conspiracy nutcase? Comments?

http://www.tocquevillefunds.com/press/archives.php?id=64Snip:

While a rise in interest rates might be presumed in the popular media to be theoretically bad for gold, it is more important to ask and answer several related questions before jumping to any particular conclusion. First, is the prospective rise in interest rates the beginning or the end of a process? Second, are the increases in nominal interest rates identical to real interest rates? Third, and most important, will the interest rate increases be favorable or adverse for the returns on financial assets?
.............................

A core deception of the moment is the notion that a few up ticks of 25 to 50 basis points in short term rates will be sufficient to arrest the forces of inflation set in motion by the most aggressively accommodative Federal Reserve in history. Real interest rates, defined as the 90 day T-bill discount rate less trailing twelve months inflation, are negative by approximately 100 basis points (see chart below). This is, no doubt, a very gold-friendly statistic. A few hundred basis points of rate increases over the next twelve to eighteen months raises the possibility that this measure will no longer be so friendly. On the other hand, if measured inflation rises in lock step with the rate increases, the environment will remain positive for gold.
........................
Finally, what collateral damage would arise from a multi-year rise in interest rates sufficient to quell gathering inflation? The policy choice will come down to whether it is preferable for the US consumer to pay for $3.50/lb. copper or 10% mortgage rates. Which is more visible and which is easier to hide? Since the days of Volcker and Reagan, the sensitivity of the US economy has shifted dramatically away from the price of copper and other raw materials and towards the price of money. The Fed has said as much in numerous speeches. With the interest rate on 56% of sub-prime mortgage loans calculated the adjustable way, unprecedented carry trade leverage, and the stock market "wealth effect" a beacon of policy, a political Fed seems likely to opt in favor of glossing over substantive issues versus Volcker-style tough love.
..................
The gabby Greenspan Fed has failed to communicate to those offside in junk bonds, overpriced equities, interest rate swaps, emerging market sovereign debt, and all other unfathomable reaches of the carry trade of the stark choice between tolerating a further buildup in inflation or aggressive rate increases that would choke the economy and collapse the carry trade. To preempt inflation fostered by four years of aggressive ease, the Fed must drive a sustained and politically untenable rise in real interest rates. Rate increases cannot be tepid or token. Once inflation becomes entrenched in the industrial economy, financial structure, and public expectations, it is notoriously difficult to root out. The longer the Fed waits, the more severe the market pain. The Fed's policy dilemma contains the seeds of a prolonged bear market in financial assets. The unwillingness of political leadership to address the fiscal issues surrounding the open-ended financial aspects of terrorism in conjunction with generous entitlement programs is a recipe for expanding debt issuance, which the Fed will be called upon to accommodate. The Fed may continue to bark but it cannot bite.
***************
Misetich

The "gold war" continues with paper pushers on one side topping their Ponzi pyramid schemes-
US-EU-Japan have flooded the world with liquidity during the last couple of years -

What have they achieved?

Yes global economy growth is showing - primarily due to China's expansion -

EU economy is laboring - and the US growth is overstated and propelled by non-reproductive spending - housing - military

Why the sudden attack - counter/attack on gold in 2004? Each time the line of resistance is higher and higher - CB's are getting desperate -

UK and Swiss gold is half-gone,
Argentina, Australia, Canada, Norway, are no longer in the game as their vaults are emptied
Armenia was the latest casualty

WHO IS BUYING ALL THIS GOLD?


All Aboard The Gold Bull Express - Part ll

http://www.cboe.com/micro/vix/introduction.aspBelgian posted this morning :-
All : Isn't it amazing how extremely subtle, but energetically, we have been... and are being totally "over-paperized" !?

C! : I just happen to spot a link to this page - it leaves me gobsmacked (er, that would be 'speechless' for the uninitiated).

"On March 26, 2004, the first-ever trading in futures on the CBOE Volatility Index� (VIX�) began on the CBOE Futures Exchange (CFE). The VIX Index is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility."

So, if we play that 6 degrees of Kevin Bacon game, we could have an option on a futures contract on a relative measurement of the trading history of an index of the S&P500 (which, after all, is a list of paper values). If that's not papier mache, I haven't being paying attention while helping in my son's art class ! I'm not sure which aspect of this that amazes me the most - that someone would think to offer this sort of contract, or that anyone would put money into it !

C!

PS. Actually, the literal meaning of papier mache fits nicely here - chewed paper. (Yes, that got groans of 'Ooh, that's gross!' the class !)

we are witness to some of the most reckless economic and foreign affair policies since the Johnson and Nixon adiministrations. Washington and the FED nearly destroyed the US economy in the 60 & 70's. Volcker righted the ship with tight money, we finally departed Vietnam, but only aborbing the huge aftershock pain in the early 80's. We have a Fed chairman trying to restore his fogged over luster and gain another 2 year term, and a President who is trying to get re-elected. As such they have pumped up the economy with ever economic stimulus trick invented since Adam Smith. In so doing, they have emptied the tanks of monetary and fiscal policy and should we have a set back now, talk will be cheap, and the ability to take action non-existent.

http://story.news.yahoo.com/news?tmpl=story&cid=580&e=3&u=/nm/20040506/bs_nm/retail_sales_dcSnip:

CHICAGO (Reuters) - U.S. retailers' April sales could not keep up with the torrid pace set in the first three months as shoppers took an after-Easter break, but higher prices protected profits, the companies reported on Thursday.
......................

Bill Dreher, retail analyst with Deutsche Bank, said April's results show that high-income consumers continued to spend, but lower-income families pulled back after showing signs of recovery earlier in the year.
**************
Misetich

April auto sales disappointed
Retail april sales disappointed
Energy prices soaring
Price inflation is rocketing
Labor numbers based on anectodal reports is moderate

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

http://www.economeister.com/reg/popup/popup_frameset.jsp?prod=62&disp=single_story&banner=mainwire_featuresSnip:

In the hard-pressed information technology area, there are further signs of renewal but the main driver is government work, with private sector hiring improving but lagging, most say
......................
"We saw a strong continuation in April, and we're projecting staffing payrolls (mostly temporary) to be up 10% in this quarter," he said.
......................
Marjie Peterson, president of Macrostaff, an I/T staffing firm in Bellevue near Seattle, described a brisk April but lacking the energy that she saw just two months ago.

"We still had quite a few new orders coming through and placements were good," she said. "April was good. I don't think it was as strong as what we saw in February, but it seems to be relatively steady."

She credits state and local government for elevating the demand for I/T workers, but notes that non-government clients "are finally getting around to implementing technology projects that they've been putting off
for a long time. Even though a lot is going offshore, we're seeing a lot of domestic demand for analysts and project managers."
.......................
Mike Ziman, CEO and president of Global Commerce & Information an I/T-based staffing firm in Columbia, Maryland, saw an "upsurge" in government hiring in April, although the commercial side remained essentially flat.

Because government hiring is growing, that's where his focus
remains, he said. He hasn't noticed much change on the permanent hiring front
....................
*****************

Misetich

Based on this and other anectodal reports job creation remains tepid at best - with hirings being part-time in nature plus GOVERNMENT HIRINGS, which is consistent with March's report

Who knows what numbers are going to be released tomorrow - guess not too strong - not to weak - say about 150,000-170,000 tops as it includes striking grocery workers going back to work

The number of genuine - non-government - full time jobs is probably in the 30,000 range

Jobless recovery continues

All Aboard The Gold Bull Express - Part ll

Allow me to rephrase your question : In wich currency-camp are the oilreserves !? You see the answer to this question evolving, daily. Oil is maneuvering out of the all embracing dollar sphere towards the euro umbrella. I'm using this funny wording as to pull your attention on the fact that this is an evolving "process" that is taking place.

Think about the places (oil + its corridors) where EU-US are cooperating. Afghanistan/Georgie/Balkan, for instance.
EU and US, temporary co-operate for different reasons. Take a closer look to what is happening in Georgie-Adzjarie.
Putin's Russia has chosen to come much closer to the EU and distancing itself much further from the US, on oil and oil related matters.

The EU is in a very dual position, at present : EU supporting more rapprochement between the ME (Saudi Arabia) and Russia, means that the US is getting isolated in its geo-oil-policies. It is a dangerous (risky) policy to push the US (the dollar) into some kind of vacuum, by supporting oil's shift away from the dollar !!!

Trichet at Helsinky : Oil producers (owners) should act (behave) responsibly !!! In other words,...don't execute the dollar (too soon) with your oil-weapon. A slow and steady suffocation is more than enough.
Look at all this with a political view, Unimog.

Haha, there was a WAG-question to Trichet. But he (the ECB) is NOT showing his cards !!! But the camera was so nice to picture some funny smiles on the faces of Trichet's entourage. Liked this sequence very much.

The ECB is imvho, still supporting the dollar to a certain convenient, selfisch extend ! Politics, folks,...damned politics.

Evidence : POG was allowed to take another $6 of its paper-price, at the open. I even suspect that the ECB will give the FED ($) some breathing space with a little IR-advantage.
A matter of adding some more ballast to the dollar's deficits.

But the oil farmers are nicely requested not to devalue the euro as much as they are depreciating the dollar.

Conclusion : We all see how the $-POO- politico maneuvering is "changing" the global rapport the forces (balances of powers). Don't swallow the offer/demand blablabla, anymore.
The same will happen with GOLD, dear forumers !!! Take this oil-example as a model and extrapolate. And BTW, remember the old equation of 1 barril of oil = 1 gram of Gold !

Unimog : Nobody is going to tell you/us/them, what the proven and probable oilreserves, exactly are. How oil/gas reserves are there hidden under the vast Russian permafrosts !? Russia almost equals OPEC now and is in concert with Saudi Arabia, whilst the US is liberating (?) the ME ! China is having a discrete (for the time being) role in this ongoing power-shift. They are in Brussels, today,...with an embarressing question (armement embargo).

Socrates : GBS-Australia (other) > I never have been buying this shrewd maneuver (initiative)! Members of the dollar-establishment (WGC & Co) are never going to do something that could possibly harm the dollar or its support ! On the contrary.

Out of stocks and back into dollar cash !?

Everything >>> FWIW !!!

About 6 months ago, I read a book called "The Mystery of Capital" by Peruvian Hernando de Soto. His main supposition is that third world countries suffer much by not having strong legal property rights.

He has just been announced by CNBC as winner of the Milton Freidman Freedom Award.

Their latest spin on his work is that the lack of property rights supports "terrorism" by obscuring property accountability and tracking.

Why should only the "developed" countries risk their homes in derivative banking Ponzi schemes? Let the poor countries in on the "homeowner roulette" game, too.

To me, it just sounds like a scheme to increase the "connectivity" of the third-world dictatorships to their Word Bank/IMF overlords.

@ Belgian and Unimog

Given the itchy trigger fingers of the Cheney/Rumsfeld/Wolfie power structure, oil isolation is truly a dangerous policy, as illustrated by Pearl Harbor in 1941.

http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=d12&w=1&t=f&a=50
What is going on with gold is this: Since the beginning of September, through today, it has passed through, and returned to, 380. It has gone above that of course. And it started out below that, certainly. But it has returned to it and has touched it again. I would not be surprised if it fell below it further, at this point, and what happens after that could depend on a number of things. Consolidating above 380, at this time, seems second-most-likely. And going up from here, third-most-likely. As knowledge of the true facts gain strength, and if gold's value really is more than it is presently valued at, then an upward movement could begin to show some time around the middle of May, or some time later. This is barring unforeseen events, that could cause it to do differently. Buying interest seems to have retreated, or faded, at the moment. The forces appear to be poised to act, and look about equal to me, from what little I can see. If economic realities continue bleak, these facts will eventaully emerge. When people begin understanding this, then pog will probably go higher. For several reasons, I expect this potential to become actual no sooner than the end of summer, if it becomes actual, given no jolt occurs, which of course cannot be predicted at this time. One other likely probability, in my view, is that pog could noticeably acquire new strength in mid-May and start climbing decisively, judgeing from similar situations that have occurred in the past.

Evil must be stamped out. But before we do that, we learn for sure what is evil and what is not.

"Evil must be stamped out. But before we do that, we learn for sure what is evil and what is not."

That line should read,

"Evil must be stamped out. But before we do that, we must learn for sure what is evil and what is not."

http://www.federalreserve.gov/boarddocs/speeches/2004/200405062/default.htmSnip:

The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our yawning fiscal deficit. Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances.
..................
Among the limits we have been pressing against are those in our external and budget balances. We in the UnitedStates have been incurring ever larger trade deficits, with the broader current account measure having reached 5 percent of our gross domestic product (GDP). Yet the dollar's real exchange value, despite its recent decline, remains close to its average of the past two decades. Meanwhile, we have lurched from a budget surplus in 2000 to a deficit that is projected by the Congressional Budget Office to be 4-1/4 percent of GDP this year. In addition, we have legislated commitments to our senior citizens that, given the inevitable retirement of our huge baby-boom generation, will create significant fiscal challenges in the years ahead. Yet the yield on Treasury notes maturing a decade from now remain at low levels. Nor are we experiencing inordinate household financial pressures as a consequence of record high household debt as a percent of income.
.......................
Has something fundamental happened to the U.S. economy and, by extension, U.S. banking, that enables us to disregard all the time-tested criteria of imbalance and economic danger? Regrettably, the answer is no. The free lunch has still to be invented

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

Sir Greenspan is not concered regarding housing bubble, household debt as he sees very little risk in housing prices collapsing -

Increases in IR he says will not affect the majority of consumers

...but he's concerned about the "yawing budget deficit" -

Sir Greenspan believes HE HAS successfully coped with deflating stock bubble. Has he?

The declaration of victory is far too early as the stock market are still in a bear market.

Under his reign Greenspan allowed a marriage between the stock market/economy.

Individual wealth that Greenspan bases his counter arguments to accumulated debt levels are based on valuations of assets - primarily stocks, bonds, and housing

It remains to be seen whether:

The much trumpted economic recovery is sustainable
Whether the stock market valuations can be maintained
Whether the engine - consumer spending - can keep on going now that REAL price inflation is hitting them, genuine job creating is laboring at best

In a recent speech Greenspan acknowledges energy prices are rising and will change the landscape of the US economy -

Just as a true banker Greenspan figured the individuals which lost their jobs in the manufacturing industry would be able to re-educate and find alternative employment- THEY HAVEN'T

Interestingly enough the budget surpluses turned to deficits as SM valuations fell and jobs disappeared.

...oh those "yawning government deficits" - were probably caused by the loss of tax revenues -

Sir Greenspan Mr. Market has knews for you - your victory declaration was a bit premature

All Aboard The Gold Bull Express - Part ll

IS PLAYING PIN THE TAIL ON THE DONKEY TODAY >>>>>>>>>>>
NOT NAMING NAMES more than to say the donkey is THE ZIONISTS and THAT THEY WORSHIP THEIR GOD WHO IS SATAN making them (the participants ) SATANIC.....

He must have been reading some of the same material that I have......

THIS IS VERY HEAVY POINTED AND SEVERE RHETORIC that has pretty far reaching implications for COOPERATION IN THE MIDDLEEAST FALLING APART and for THE ENDURING PROBLEM OF OIL AND ITS LIMITED SUPPLY Add to that the failing image of LEGITIMACY OF US AUTHORITY and we move further into the court described by Another and Friend of Another....

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

The ABCs of Gold Investing
by Michael J. Kosares

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

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

Misetech got it

Ned has got it

DON'T listen to what they say ......

messing with interest rates now is not an alternative ..

It's CHECK MATE>............

As the months go on this will become evident....
THEY MAY NOT RAISE as fast the discount rate as Inflation and Real interest rates surge higher

Apprehension of the conditions as they exist and comprehension of the Feds predicament will send GOLD and perhaps silver merrily on their way higher ....

Tomorrow and Monday may be perhaps the last opportunity to buy at the lows.....

I feel that we are going to be having CHRISTMAS IN JULY this year maybe June...

Happy Prospecting.........

http://biz.yahoo.com/rf/040506/economy_fed_olson_3.htmlCHICAGO, May 6 (Reuters) - The extent to which some banks, including smaller community banks, are playing the steep Treasury yield curve to seek out higher profit margins is "definitely a concern," Federal Reserve Governor Mark Olson said on Thursday.

...Olson said that some financial institutions are "creeping out" on the yield curve.

"To improve their margins they may be compromising their asset liability management."...

The kinds of yield curve strategies alluded to by Olson -- borrowing short-term and lending long-term -- were a factor in triggering the savings and loan scandal of the 1980s.

Recently, because the Fed has kept interest rates so low, banks and other investors have been able to borrow at extremely low rates and buy high yielding longer-term debt that can yield two to four times their original borrowing costs.

...some analysts worry about the potential for market turmoil as participants exit similar positions en masse.

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

The Fed shall step lightly in any real battle against inflation because banking system is too big and important to our way of life to be brought down like dominoes.

Therefore, expect more in the manner of lip service than any meaningful adjustments to the target fed funds rate.

"We shall have the hyperinflation."

R.

Does the following snippit qualify as sufficiently
meaningful to satisfy the public's curiosity?

U.S. stocks hit by rate worries
Thu 2:00pm ET - CBS MarketWatch
U.S. stocks were in free fall Thursday as renewed interest rate worries following another round of positive economic data prompted an indiscriminate sell-off.

If so, then they accept contradictory news stories:
"Stocks rise on positive economic data" and "Stocks fell on positive economic data". Symptom of PTB on a CWS- Compressed Work Schedule and stress meds?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=Throughout April and continuing this mth PoG looks to be struggling against it's alt currency counterparts as the slo-mo deflation continues.
@92 DX we'd expect to hear a swaithe of lowering guidance which could sound the death nell on SM's. Another pivot point now on the horizon is 5.4% Long Yield.

We watch!

LOEL= Lowest Observed Effect Level:
This isn't supposed to be the purpose of the news, pandering to the LCD- lowest common denominator, unless
the old capitalist, free market in news has
in large part been usurped by monopolistic,
state-supported indoctrination.

http://www.usagold.com/DailyQuotes.htmlexcerpts:

Gold for June delivery, which traded at an intraday low of $387, closed down $5.40 at $388.40 an ounce on the New York Mercantile Exchange.

"The gold market continues to react negatively to stronger U.S. economic growth on the assumption such growth leads to higher interest rates, which in turn leads to a higher U.S. dollar," said Peter Grandich...

Appreciation in the dollar against the major currencies "can only be bad for gold," he said. Earlier, the Bank of England lifted its key interest rate by a quarter of a percentage point, citing concern over the potential for inflation due to the momentum in the global economy as well as in the U.K.

[However,] the move follows the Federal Reserve's decision Tuesday to leave its policy on U.S. interest rates unchanged [as did the European Central Bank today].

But "higher inflation is ultimately the best supporter of higher gold prices and the killer of any currency," said Grandich.

"While gold can remain under pressure until the market recognizes the inflation angle, to me it's only a question of when, not if, it does," he said.

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

http://www.iht.com/articles/518609.htmlSorry, it's been a tough month. I've been blabbing for years about OTHER people taking a financial hit, and then my own sanctuary gets raided, so I'm empathizing. EMPATHIZING. My seasoning as an investor proceeds apace, and my only consolation is that I am still a SMALL DOG! I cannot lose the great fortune that I do not hold. woof!

Anyway, I still think Social Security's shakeup will put the firecracker under POG, when people realize they really need to SAVE, and here is the harbinger (besides Greenie's speeches -- anybody got EARS out there???) in the NYT (the IHT link doesn't require sign-in) today, about Japan:

"A Tough Sell: Japanese Social Security
By JAMES BROOKE
"TOKYO, May 5 - With almost 40 percent of young workers skipping out on their social security payments, Japan started an advertising campaign featuring a popular actress, who sternly lectured subway riders: "So you don't mind crying in the future? Pay now. Or later, you don't get paid."

"Then, enterprising reporters discovered that the 20-something actress, a self-employed worker, had neglected to pay into the national pension system for years.

"But as Parliament prepares to vote Thursday on legislation to increase pension contributions gradually by 35 percent, other enterprising reporters have uncovered that seven ministers, a third of Prime Minister Junichiro Koizumi's cabinet, also have neglected to pay into the National Pension Plan. [G: Sounds like Congress, doesn't it?]

"With the ministers of economy, of finance and of trade and industry on the list, the opposition thought it finally had an issue to take to voters in elections this summer. Then, through more enterprising reporting, it was discovered that Naoto Kan, leader of the opposition, had neglected to pay into the plan for 10 months in 1996, when, as health minister, he was in charge of the national pension system..."

G: And so on, and so on. Hey, we educate our kids to be smart, as do the Japanese. They can do the math, and we teach them to look forward. They can see a Ponzi unwinding...

http://www.ecb.int/key/04/is040506en.htm6 May 2004 -- ECB President Trichet's press conference in Helsinki on behalf of the ECB Governing Council
(excerpts):

On the basis of our regular economic and monetary analyses, we continue to expect that price stability will be maintained over the medium term. Accordingly, we did not change our assessment of the monetary policy stance and left the key ECB interest rates at their current low levels....

On the external side, the adverse terms-of-trade effects of recent rises in oil and other commodity prices pose risks at shorter horizons, while the persistence of global imbalances implies some uncertainties over the medium term....

Our outlook for price developments is in line with available forecasts and projections. However, at the current juncture, the increase in commodity prices in general, and oil prices in particular, may pose an upside risk to price stability. It will therefore remain important to pay close attention to inflation expectations....

On the basis of the latest Commission forecasts, the average euro area budgetary position is not expected to improve much this year or next. A growing number of countries are likely to report significant imbalances, while fiscal consolidation efforts might fall short of commitments. It is essential that all countries concerned undertake credible measures to address these concerns....

We are now at your disposal for questions....

Question:
...on the recent rise in oil prices, you have mentioned this and you have said that maybe for the short term there is a certain upside risk to inflation � I would like to ask you if you have had the chance to think about the new inflation forecasts ... because of the rise in oil prices?

Trichet:
As regards inflation, as I said one, two, maybe even three months ago, we expect a hump in inflation in the months to come. We are seeing this already now, with the latest information, and I mentioned that we probably would have inflation over 2% in the next months to come. ......... It is clear that oil prices are exerting an influence. They are also very volatile. I have already said that I was expecting, as were a number of other institutions in the world, that the partners that have an influence on the price of oil would exercise their responsibilities. Because it is a matter of great importance.

Question:
Mr Trichet, you have mentioned that oil prices have risen strongly and you have noted that they are nudging up price pressures. How concerned are you that oil prices also pose a serious risk to growth at a time when the recovery is still quite weak in the eurozone?

Trichet:
At a global level � because we have to analyse this at a global level � I would say that the overall consensus is that we are experiencing an episode of rapid and confirmed growth, and of course this diagnosis has not changed with the most recent events. That being said, I have mentioned � and I am not the only one to have done so � that each partner has to live up to its responsibility. And this responsibility is not to be neglected as regards the price of oil. That is clear.

Question:
Let me change the subject. I understand that the ECB keeps track of the quota which the countries would like to have under the new gold agreement. So far we have Germany and France. Would you be so kind as to give us the quotas and the names of the other countries that would like to sell gold?

Trichet:
No � I would say that I am very happy that we have this gold agreement, which has certainly been very, very useful at a global level.

As you know, it is up to each particular national central bank to say what they want to say. There is a collegial, collective commitment which has been made public by the signatories of the accord and it is up to each of them to say what they want to say.

So, as you have been mentioning, perhaps the Bundesbank said something, perhaps the Banque de France said something. But it is not for me to [say] their position.

What is sure is that the market, external observers and the entire world know what the ceiling is for the sales of gold year after year, period of twelve months after period of twelve months.

Question:
... I would like to know whether the Council is more concerned about the possible negative effects on inflation or about the effects on growth, which could be lowered by high commodity prices.

Trichet:
Well, again, I do not want to comment on the day-to-day evolution. It is not the way we operate. So, we will see what happens. ......And, as I said, every partner has to live up to its responsibility, but I do not want to comment any more on that. Again, our diagnosis is clear and it incorporates the price of commodities and the price of oil.

Question:
Some of your colleagues on the Council have questioned the link between interest rate cuts and spurring domestic demand in the first place. Would you agree with the idea that it is a questionable link between the two or, likewise, would you say that having no bias means that you disagree with that view? In other words, do you think that an interest rate cut could have a stimulating effect on domestic demand at this point?

Trichet:
I think it is a very good question which permits me to remind all of us how we proceed according to our concept of the monetary policy strategy.

We have an objective, which is price stability. We have to deliver price stability and we have to be credible in delivering price stability. This is not only our mandate as defined by the Treaty, but it is also something that is fundamental to the favourable financial environment of Europe as a whole.

As I have already said and I emphasise the point, we have a yield curve today for 306 million inhabitants which is the best yield curve that was available in the euro area before we merged the various currencies. And this is necessarily based upon inflationary expectations and price stability expectations that are the best expectations which were available in the euro area before the merger of all currencies. So, as I speak today, we are very credible on delivering price stability, according to our own definition of price stability. This is proved by the market rates that we have been and are observing on a two-year, five-year, ten-year or thirty-year basis.

So, by having the needle of our compass pointing to magnetic north, which is price stability, we not only are implementing our very clear mandate but we are meeting the necessary conditions for creating and persuing a very favourable financial environment for all maturities of loans. And that is a major contribution to growth and job creation in Europe.

------(see url for full conference)------

R.

First, a flashback of excerpts on Tuesday:
_________________
Belgian (5/4/04; 04:00:53MT - usagold.com msg#: 120641)
...the financial media, want to "connect" the POG with IRs. Another search for another convenient explanation.

Gold's $380$-$430 is heavely promoted as the ideal trading range. "They" want to keep telling "you", what "your" wealth IS !!!

Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense.
~~~~~~~~~~~~~~

ALSO...
__________________
TownCrier (5/4/04; 13:15:59MT - usagold.com msg#: 120663)
The 'China factor'
LONDON, May 4 (Reuters) - China's hunger for raw materials will drive further demand for commodities such as metals despite worries that the country's economy might overheat............Frank Holmes, chairman of fund manager U.S. Global Investors, said talk of a bubble in China was premature. "People are calling everything that goes through a dramatic turning point a bubble," he said. ...China's rapid growth was driven by large-scale industrial production, which marked a major transformation. "China is going through another transition...They are doing everything to build up the rural community."
-----(from url)-----
The 'Phrase of the Day' Award goes to our very own Belgian, who said, regarding the perception painted by the financial media, "Gold's price must, ad nauseum, remain connected with global "tension" ! More "tension" makes you wealthier...what an utterly nonsense."

Bravo! I mention this observation in the context of this article because it should help make it apparent to skeptics by thinking/seeing how the (hopefully peaceful) growth and emergence of much of rural China from third world status can usher in a whole new perspective on the true value of tangible assets.

That is to say, you can't make a brick wall or a leak-free roof out of merely counterparty promises. You need the goods, in hand, to stand out of the rain.
R.
~~~~~~~~~~~~~~

NOW, rolling forward to TODAY, in his press conference Jean-Claude Trichet echoed clearly these sentiments.

Question:
Most nations seem to be exporting jobs to China: do you think that there is a danger that the inflation in this high-growth area, China and India, will be exported back to Europe?

Trichet:
Well, these are two different questions, of course. One is how the distribution of growth the world over will operate and how the division of labour and the optimisation of the division of labour will proceed in the global economy. The second question concerns inflation. I have already said what our judgement on inflation is and how we judge the situation today...

As regards the question of the division of labour and of the comparative advantage in the sense of Ricardo, I would say that we are living through a period of time when a large part of the emerging world and of the world in transition is catching up.

It is of course what we have wished during the last fifty years.

We wished that the so-called developing world would progressively improve its position. It is now improving, obviously, and when we look at global growth, we see that the emerging world and the world in transition are improving and are growing rapidly. This is good for global growth, it is good for the entire world.

Of course, it also calls for adaptation in the emerging world and in the industrialised world, and this is the reason why we mention the importance of structural reforms, which would permit our economies to be more flexible and precisely to adapt more efficiently to these new opportunities. Because global growth is an opportunity, and we recognise this.

Growth in the emerging world is an opportunity, and it calls in the industrialised world for flexibility and the ability to adapt. We all agree on that. Because as you know, the Lisbon agenda is based on a consensus. We all agreed on the Lisbon agenda. Executive branches at the level of heads of state and government approved it. And of course the Commission presented diagnosis and the ECB has always backed it.
~~~~~~~~~~

Bottom line: Read the USAGOLD forum and stay ahead of the trends, ahead of the news, and ahead of the game.

R.

"We're all having enough of a time salvaging our lifesavings, without having to save our SKINS!"

This is true. But we may need to save our skins as well.

What better evidence than - a canvas rag with some paint on it, making a perhaps not unpleasant visual effect, sells for $104,000,000 U.S. Dollars because it has the signature of that lousy human being and lousy painter Picasso?

Also evident is the great inversion of values that exists in our civilization - on its way out, by the way - the best proof of which is that this "great work of art" was handed over for the amazing sum of over 8 tons of pure gold bullion.

John Morley, economist and writer: "At times, a great many stupid people with a great deal of money make a great many stupid mistakes." Or words to that effect. This is one of those times, and it has certainly run its course in full.

This is more than mistakes. This is the complete falsification of values, wholesale, top to bottom; everything you can think of is falsifiedd.

A few - or perhaps we are not so few, but really the majority, just waiting for the moment - hold fast to experience and principle, no matter what the madness.

Gold is the North Star of the value investor.

The GAB

http://story.news.yahoo.com/news?tmpl=story&cid=578&e=1&u=/nm/20040506/ts_nm/security_iraq_binladen_dcDUBAI (Reuters) - A purported statement by al Qaeda leader Osama bin Laden (news - web sites) offered rewards in gold for killing U.S Iraq (news - web sites) administrator Paul Bremer or U.N. Secretary-General Kofi Annan (news - web sites), an Islamist Web site said on Thursday.
The statement posted on the Web site said the 10 kg gold reward would also be given to anyone who kills other officials including Bremer's deputy or U.N. envoy to Iraq Lakhdar Brahimi.

comment; If you're looking for a reason to demonize gold here's a good one. No fiat, no Picassos, nothing that can be traced just 10kg gold.

http://biz.yahoo.com/rf/040506/economy_fed_banking_1.htmlFed's Broaddus: Large banks not "too big to fail"

CHICAGO, May 6 (Reuters) - Policy-makers need to change perceptions that large banks will be bailed out if they get into financial difficulties, Richmond Federal Reserve President Alfred Broaddus said on Thursday.

The issue has taken on greater urgency with the consolidation in the banking industry of recent years that has produced ever bigger mega-banks.

"Most banking analysts would agree that depositors and creditors of the largest banks are more likely to be protected in the event of financial troubles than their counterparts in small banks," Broaddus told a Chicago Fed banking conference.

"Promptly resolving large, troubled banks and imposing costs on uninsured creditors, even at the risk of some short-term financial disruption, is in my view the only means of eliminating the market's perception that large banks will receive special treatment should they become troubled," Broaddus said.

Recent mergers, including the JP Morgan Chase/Bank One and the Bank of America/Fleet mergers, have created institutions with close to $1 trillion in assets and fanned fears of a risk to the entire economy if one large bank were to get into financial difficulties.

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

I've never heard of an ounce of gold that failed.

(But maybe that's only because they're CONSTANTLY being... saved. Baadda-BING!!)

;-)

R.

http://biz.yahoo.com/rf/040506/economy_fed_moneysupply_table_1.htmlLatest stats on the moving four-week average of U.S. money supply for the week ended April 26th:

M-1 up $26.7 billion to 1,338.8 billion

M-2 up $26.2 billion to 6,233.7 billion

M-3 up $45.4 billion to 9,110.3 billion

When you pause to appreciate the speed and ease with which these new quantities can swell the ranks, especially given the Fed's key focus in preserving the banking system's ability to remain adequately liquid to clear transactions to preserve the functioning of our economy, any remaining dyed-in-the-wool deflationists must sure be kept awake at night reconciling how, in their world, (hyper)inflation is not indeed the greater force to be reckoned with.

Think of it this way. The Fed stands ready willing and able as the lender of last resort and our government (in bipartisan concert) stands ready as borrower of last resort. In the macro picture, as credit-worthiness falls to zero, there is simply no way that the dollar-denominated prices of tangible things will decrease rather than increase to reflect the inferiority of the credit "asset" (dollars) being used in payment.

Just one simple man's view.

R.

...and you got it too pal!

These paper trading boneheads just DON'T GET IT! If the SM and job market are so good, and if the economy was perking along so well why did Greenscam elect to leave rates untouched?? We are at 45 year, repeat 45 year lows, base metals have, for sake of debate, near doubled, oil & gasoline again for discussion sake have near doubled and Greenscam HOLDS?

Greenscam wants a lower dollar (no rate increase) and he wants inflation (no rate increase) and he dares not kill the supposed SM & job market rally (no rate increase) and he dares not flirt with the derivative timebomb (no rate increase). HELLO!

Gold had a stellar, stellar day 2 days ago because of the 'no rate increase' but already, ALREADY the paper pushers have forgot and are talking rate increase, rate increase.

WHEN WILL THEY GET THE DRIFT! These morons will watch and at the first 1/4 or 1/2 point increase will boast and brag that they were right but Greenscam will still be 'behind the curve' and accelerating further and further behind.

When the day arrives that some of these blowhearts realize (is this possible?) that real interests are turning more & more negative will be the day that we laugh:

hahahahahahahah!

Paper and physical will separate and CRIMEX will seize up and we will extend a warm and hearty hand gesture to them.

Just call me One-Finger Ned.

Re: "This is true. But we may need to save our skins as well." I was just waiting for you to say that, glad you brought it up, albeit, grudgingly ;).
I may not have made myself clear. So here is my original post and a follow-up. This may not alleviate your fear,
but is covertly intended to be a subliminal aid
in erecting a fortress of certainty in your golden
forward outlook, OUR FUTURE,
and prevent the "beasties" from obscuring or distracting, nay, even entering your field of vision:

"Re: When will people wake up? Soon enough."
Yes. A few will be the early birds catching the golden worm (yum!) and the rest spectators.
Now let's pray the noise of any crash
isn't loud enough to wake the dead. We're all
having enough of a time salvaging our life savings,
without having to save our SKINS! ;)"

The "noise of any crash" CANNOT wake the dead,
but imagining or fearing it,
expecting or anticipating it,
reenacting or fretting it,
is inviting a self-fullfilling prophecy.
By not expecting the government to keep it's mitts
off their gold (and some say silver), some have
turned to paper instead; FRN's(Floating Rate Notes),
Derivatives, Stocks, Money Markets, etc. or
drastically limited their metal investment.
But the "noise" of ANY FINANCIAL crash, such as
bonds, equities, mortgages, currency(s), consumer spending or any combination of these and others should be
music to our ears, acknowledging that all things must pass,
like the seasons and cycles and phases and balances
Nature consists of, a symphony even if the living dead(zombies) should walk past. Folk tradition in some
parts of the world directs villagers to merely
take a different path on that special night,
to "save their skins"-
yield the zombies the right of way!

In a world where everything is falsified, as I just said, zombies are a falsification or counterfeit of life.

Lots of 'em around. Start with every single commercial bank in the world - they are, every single one of them - bankrupt.

Not one of them can, at the order of stockholders, decide to wind up the business. Ceasing to do business and collecting and paying out assets would instantly reveal their insolvency.

They are condemned to go on as if alive - but really dead!

Take gold - symbol of everlasting life.

The GAB

Some smart people are picking up a lot of cheap gold these days.

Good for them!

The GAB

There was an interesting exchange on CNBC a few years back between Jimmy Rogers and Maria Bartiromo. Mr. Rogers was a guest commentator. He said that he felt that commodities was the place to be in the next few years and that although he wasn't a gold bug, he felt that gold prices would move higher in concert. Maria countered with a certain amount of incredulity. Who would want to own gold, because the central banks were selling theirs? Jimmy replied, if the central banks are selling, that must mean that someone must be . . . . . His voice trailed off. The puzzled look on Maria's face slowly vanished as she caught on that someone (silly fools no doubt in Maria's mind) must be buying the stuff. Jimmy suggested that the more interesting story was to find out who was buying.

It seems to me that the media is full of stories about gold sales, but rarely mentions the details about the other half of the transaction. This creates the (desired?) impression that holding gold is a loosing proposition. Is it possible that a lot of the gold is simply being shuffled around between (banking) entities to sustain the illusion of permanent sales? For example, bank X announces the sale of 100 tons of gold. It sells the gold to bank Y. Six months later, bank Y announces the sale of 100 tons of gold. It sells the gold to bank X. The same 100 tons of gold have now been sold twice. The media dutifully publishes the story about the gold sales, but makes little attempt to track the transactions. Add in a few more banks and the track gets even more blurred. Is this scenario possible? Does anyone have any information on who is buying all the dumped gold? Is it really being dumped?

This is a question that has been raised frequently on the forum. Never satisfactorily answered as far as I can remember (perhaps - I am relatively new here). There is a lot of opacity confronting the question.

A broader question might be:

"What is the distribution of net ownership of gold in the world at any one time and what are the time-rate changes therein?"

As with other things, there will be (with gold) phenomena like "churning", where agencies of one kind or another turn over some of their gold assets in exchange for cash as they perceive of opportunities/risks. "Momentum" trades, arbitrage, leveraged paper deals of a hundred kinds, swaps, etc, etc..., but at any one time, where does the physical gold lie - all 150,000 tonnes (or thereabouts) of it? Some lies on the bottom of the ocean; some hangs on ladies ears, bangles on their arms and encircles their fingers (men too); more lies in CB vaults; some lies in the vaults of mining companies awaiting sale; still more lies in private ownership securing permanent wealth for the owners; still more again lies in land-fills as part of industrial-age/consumer relics....

Where does it all lie? Has there been a definitive study of this question?

(Perhaps the forum has addressed this in the past? Can someone point me - and others - to the "definitive" study - if one there be...)

TIA

:-)

@ barely, et al

Very interesting proposition. With all the purchasing power of the PPT, there is plenty of ammo for playing "pump and dump" in any given market, especially with overwhelming press support on top of it. I think GATA investigations are essentially pointing at this possibility. Manipulating trading may be illegal, but so is much of what takes place in CRIMEX. Spitzer's got a full plate chasing more "PUBLIC" issues like Grasso's golden parachute.

Trading roles as buyer and seller is a good way for the CB's to "support" their Bullion Bank and COT buddies.

This might be a good question for a more sophisticated trader like JS. Reading the trading patterns might reveal this activity.

I like your description of CBoX sells to CBoY, who reverses the transaction six months later. Not only is the buyer "invisible", but so is the price.

As misetech surmised, we only see the "tip" of the corruption iceberg.

Most of these so-called CB "gold sales" rarely if ever make it to the market. It's a nice ploy, but it is more of a transfer from one bank to another. Even those caught short on Gold Loans" got caught short (including mega-hedgers) have relieved themselves to some degree but not by repayment in got but rather with currency or assets. Remember when some banks tried to give a "Margin Call" on Newmont over an acquired mine from the Normandy deal and Newmont offered 50 cents on the dollar "take it or leave it"? One bank balked but caved in when Newmont and others pointed out that the mine in question was "ring-fenced" financially and the banker had to cave in and take the deal? It was also revealed that the mine sold more gold forward than was recorded in reserves. It is not an entirely isolated case. Also rumors of increased Chinese CB gold buying persists. I can't wait until the next reserve listing from the Peoples Bank of China is made public.

- Black Blade

@ BB

I don't think the picture issue is really about which group of fighters is more savage or deviant. It's a draw. The more important political fallout is that Joe and Jane viewing public are squeamish and expect "war" to be like a good clean John Wayne walk in the park.

It's harder to manage public support if the TPTB are losing control of their dog wagging contest. Remember, public VietNam concensus changed when the Johnson publicity machine was discredited. Official response to that gaff has been "in bed with" journalists.

It's no different than their "necessity" to diefy Sir AG's "erudite" comments to the great unwashed. If the lumpen-investorate believe the words coming out his mouth, the context remains irrelevant.

"The Media IS the Message".

"Oil is the ONLY economically feasible energy source (if we continue to subsidize it with $Trillions in military expeditures}"

"If we can't buy it on OUR terms, we will take it on OUR terms"

"You're either with us or again' us"

"Gold is the currency of terrorists"

As you so eloquently remind us, "It's getting interesting!"

The point I was trying to make is that we often (too often) get only one side of the real picture(s) of what's happening in the world. As far as oil we still have "cheap oil" (adjusted for inflation of course). However, since the ME controls about 40% of the world's remaining economically viable oil, it becomes not only an economic issue but a national security issue as well. Now will increased demand and falling world production we will see some hefty price moves that will catch up and surpass the "cheap oil" we have enjoyed for many decades. Meanwhile we continue to hear the incessant cry "all is well" by the Wall Streeters who have no clue and cries from motorists who so far see "cheap energy" as a right and not pure luck on our part. Soon enough those who are unprepared will feel the pain. That's why having PMs as portfolio insurance becomes evermore important.

- Black Blade

http://www.atimes.com/atimes/Global_Economy/FE07Dj01.html

What a maroon,the guy's a lawyer no less.Living in a country that manipulates every market on the globe with it's printing press,debt-based money that will inevitably spiral in worthlessness.

Back to school for you,the school of hard knocks.

Sundeck -

I agree that our circulating coins (here in the USA) are quite boring. The Roosevelt dime is the most uninteresting coin ever made, I think.

At least some of the state quarter designs aren't bad. I like the Rhode Island quarter - but I'm biased :)

The St. Gaudens' obverse on the US Gold Eagles is nice - too bad the reverse is UGLY ! Same for the Silver Eagles.

The Platinum Eagles are a nice all-around design - probably my favorite of the modern US coins. Too bad they've stopped putting the "reverse proof" finish on the platinum eagles as of the 2004 issue.

Regarding the Fed's current predicament -

Greenspan is out talking about how serious the budget deficit is. And notice how he hasn't condemned the trade deficit like he has the budget deficit.

Cheney said "deficits don't matter". Actually, he was partially right. The TRADE deficit doesn't really matter (trade deficit = cheap labor = PRODUCTIVITY !). But the BUDGET deficit is another matter.

Greenspan doesn't like the thought of having to buy all those Government bonds coming down the pipe. Doing a lot of that, above all else, is highly inflationary.

If the Fed holds rates steady, "inflation" heats up (as a result of ongoing Federal deficit spending). If they start raising rates, the interest payments on the national debt increase, putting the government deeper into the hole, forcing it to issue even more bonds at righer rates ... and so on ... in a vicious circle !

Greenspan knows this. He desperately wants to raise rates, but he can't escape the vicious circle unless the budget deficit is curtailed first.

Barring the government getting it's finances in order, the Fed has NO choice at this point other than to stay way behind "the curve". I believe that they are fully aware that the only possible exit strategy is to inflate and then strangle later - like 1974-1984.

2004 is shaping up a lot like 1974. This coming period of inflation will last, at least, until most of the cheap available labor in Asia is utilized. The one thing the Fed can't stand is seeing the average Joe get too much take-home pay. But that won't happen as long as there is slack labor available elsewhere. Once the slack is gone and wages are rising strongly (along with income tax revenues), the Fed will raise rates aggressively to try and catch up to the curve.

@ BB

I am a great fan of your analyses, but how "cheap" is "cheap oil", anyway?

At a cost of $2 Billion a day for "security" of Iraq alone, added to the other 700 foreign soil bases in 130 countries, $39 per barrel doesn't begin to describe the price. The number of lives sacrificed in both cultures for control of decomposed dinosaurs is now reaching obscene proportions.

Add in the cost of alternative energy supression (I'm sure Searle, Hutchison, Reich, and the solar and nuclear communities wouldn't call it imaginary), and the tab just keeps multiplying.

True oil prices are no more transparent than gold prices, and if I read FOA correctly, the similarity is more than coincidental.

What was FOA's hypothetical equation? $10K gold for oil?

All this must be relegated to the realm of disinformation so that Joe Sixpack believes the price of oil to be "cheap", not unlike the belief that a 5% mortgage on volatile real estate is a "cheap investment" - or 100 PE's are "growth stocks".

The "rules" of investment remind us that larger returns are accompanied by higher risks, as bubble specs are about to find out again.

Those speculating on paper gold (especially margin) are trembling with each day's increasing oscillations. Those buying and holding physical and are like the "old bull" on the hill watching the herd. Let's walk down and . . .

Your post #120773 + Hathaway : The US$ would never be able to do, what it is doing (debauching confetti supply) without the many different degrees of (selfish) support by those who circle around the dollar-system.

There is a suspected (known) dissident in this whole $-melting pot : The ECB and its President, Trichet...with the discrete BIS in the background !

When I'm adding up all the statements by the hired financial commentators, it boils down to a very simple conclusion : Keep supporting the $-system or...many are going to regret for not having done so ! The tone of this song is getting harsher (more threathening).

All of you, be happy and gratefull about the FED's policies and master, Sir Alan ! The ECB is now bluntly quoted as "stupid". Whilst The FED is doing everything it can, for "saving" the world's economy... the shortsighted ECB can't think about anything else than its euroooooohhhh !
Enormous conflict that will not go away.

Put 3 charts ('90 > now) on one page : M3 - $POG - Real IRs : Watch what happened in the period '93 > '95 !
The euro was coming and was going to challenge not only the dollar but also the global dollar economy. POG's "behavior" (and the $-exch.rate) in this specific '93-'95 period, is suggesting that the dollar's only defense, against the upcoming euro, was unbridled "supply" of it. Fill all the holes with dollar-paper so there is no room left for that euro, possibly gaining dept. The dollar trap !?

And since the world's economy IS about "currencies", we shouldn't be surprised if this amateur-theory, is close to reality.

Today, we see this process proceeding and already guessed the most probable outcome, unfortunately without a firm clue of the timing.

CNBC-morning : Interview with P.Holodny (London based Norimet-Norilsk).
CNBC's question : Do you think the goldmarket is "manipulated" !?
A. : Manipulation is an ugly word, yadda yadda...

Has anyone, ever asked, if IRs-exchange rates-POO-stockmarkets...etc, are being manipulated !? No, that's clean and nice "intervention",...and "the markets"...oh yeah !

The message : You, the crazy goldbugs,...stop accumulating that precious (manipulated by us for the general well being) and get (stay) into the metal stocks (gold-derivatives) as to generate income/profits for you and us .

Isn't it amazing that (authoritive)financial media are purposely being deceptive on such important matters for individual savers !? But it all happened before on the gold matters, during the runup to the 1971 event. We are going through something similar, today... !

Of course, Holodny was asked his opinion on POG : A. : One never knows...(with a positive undertone of course).

Holodny stated that people will continue to go into metals (precious) for as long as "uncertainty" is there to stay.

We, here at the CPM-forum, have our idea about the degree and very nature of that so called uncertainty.

Total will get its 25% stake in Russian Sibneft.

Conclusions FWIW, as usual.

http://www.tocquevillefunds.com/press/archives.php?id=64snip

"The willingness to hold the stock of gold depends on the rate of return available on alternative assets. We assume the alternative assets are physical capital and bonds."

http://www.nytimes.com/2004/05/07/business/worldbusiness/07yuan.html?pagewanted=2&ei=5065&en=8866873fa418fe0e&ex=1084593600∂ner=MYWAYSnip:

Others, like Liang Hong at Goldman Sachs, are more sanguine. They suggest that the government can slow some industry sectors, including real estate, without harming consumer confidence too greatly, and without cutting back on investment in infrastructure to address the economy's bottlenecks.

The most crucial bottleneck is electric power. Shortages have become so severe that the Chinese have begun importing power from Russia for the first time, according to a report from the official New China News Agency on Wednesday.

Multinational companies, which do not depend on the country's banks to finance their projects, are still building factories in China at a brisk pace: Volkswagen and DaimlerChrysler each announced plans for additional assembly plants this week.

"We're still seeing a lot of activity," said Michael G. W. Adams, head of Chinese business development for Gammon Skanska, one of Asia's largest construction companies. "In fact, our prospects have increased in recent weeks."
****************
Misetich

Many "experts" are predicting doom/gloom for China, primarily due to an overheated investment in fixed assets which rose 43 percent in the first quarter-and fears that the Chinese goverment will step on the brakes causing a hard landing

The impact of China's growth - commodities demand - energy demand and the prospects of its continuation MUST be putting INFLATION FEARS world wide

It is interesting to note how Sir Greenspan aptly sees an overheating Chinese economy YET remains myopic to its created bubbles - first the economy then SM then housing - debt bubble

Why the China concern? Could it just be that "they" are attempting to INSTILL FEAR and stem the flow of funds of foreign corporations and their capital

China is NOT ATTRACTING HOT MONEY (stock market) -but attracting foreign investmenst, who seek an opportunity to tap into a vast market

The "wrench in the cheap commodity wheel" that the west has taken advantage of, by using derivatives products is casuing havoc - hence the ATTACK ON CHINA

Some hope/wish for a CHINA hard landing for a variety of reasons - Someothers are threatened by China's ascend as an economic power

Some like Sir Greenspan recognizes China is HERE TO STAY - thus the increase on energy demand worldwide

The China effect worlwide from a positive impact on Asia's economies, including India's to attraction of foreign investments to increase pressure on commodities and energy is changing the political/economic landscape - as the Orient takes over being the world locomotion as their citizens gain from their countries wealth and the WEST loses as their consumers who have been BURNING THE WORLD ENERGY require to "live within their means"

CHINA and JAPAN are going head to head in assuring energy needs in both Russia and the Middle East making it a seller's market

EU is expanding - the growing pains of integrating poor country's into the fold will appear as an economic slowdown by some - whilst it is the REBUILDING OF A NEW EUROPE - more powerful, more dynamic, less dependent on foreigners-

US - Anglos are playing its military card to maintain status quo and attempting to enlarge their Free Trade zone from N to South - and getting resistance from their neighbours who are offended by the "dictated to" condonscending attitude of the US - thus slowing down the process - and seeking/pursuing other alternatives

Arabs? - How do they position themselves to avail from the change in the NEW ECONOMIC LANDSCAPE - and escape the exploitation of their resources and exploitation of western influence who have bribed -aided ruling class- sabotaging their citizens

The economic chess game is getting more interesting....

How will these changes affect the GOLD MARKET - in particular the PHYSICAL GOLD MARKET

...to the moon Alice...to the moon!

All Aboard The Gold Bull Express - Part ll

http://www.schaeffersresearch.com/commentary/observations.aspx?ID=10085Snip:

The media continues pound their bearish mantra on the auto sector. A recent Wall Street Journal article titled "Head On" opened with "That new-car smell soon might not be so sweet." The article focused primarily on the auto manufacturer's heavy reliance on rebates in April. A New York Times article derided GM for poor quality control, stating that "In less than four months, the company has recalled more than 7.5 million vehicles, more than it did in all of 2003."
.......................
*************
Misetich

The auto industry REMAINS the hub of the US economy as millions are directly/indirectly employed. Inventories remain high -
Gimmicks such as rebates, IR incentives have spurred sales in recent years but with increasing fuel costs - increased IR's - increase material costs and a tapped out consumer the prospects are dim

A slowdown in this sector translates to a continuation of the jobless recovery

Stagflation?

All Aboard The Gold Bull Express - Part ll

http://www.msnbc.msn.com/id/4917449/Snip:

WASHINGTON - Members of the Federal Reserve's monetary policy panel expressed concern at their March meeting that keeping interest rates low for so long could cause problems, meeting minutes released Thursday showed.

"Some members were concerned that keeping monetary policy stimulative for so long might be encouraging increased leverage and excessive risk-taking," the minutes said.

"Such developments could heighten the potential for the emergence of financial and economic instability when policy tightening proved necessary in the future."

At its March meeting, as it
.....The FOMC generally saw the danger from inflation as minimal."Despite the rise in energy and commodity prices and reports of increased pricing power in some sectors, many Committee members commented that persisting slack in labor and output markets would keep inflation low."

The panel "continued to see conditions in place for further solid economic growth," the minutes said. It also noted that the panel foresaw "vigorous growth" in investment spending by businesses, aided by productivity gains, high profits and favorable financial markets.
.................
****************
Misetich

Sir Greenspan a few years ago lauded the effect of lower energy prices as having added $50 billions annualized to consumer spending -

The Feds by citing "persisting slack in labor and output" to curb higher inflation fears implies LOWER CONSUMER SPENDING - due to lack of jobs

Both the Feds and EU see higher energy prices as being "cyclical in nature" and a short term phenomena - thus higher inflation is only "temporary"

What is the definition of "temporary" - High Oil prices HAVE ALWAYS translated to a recession

The longer oil prices stay at these levels and higher - the higher the impact on inflation and higher impact on consumer spending- corporate earnings

IF corporate earnings slowdown and IF consumer spending slowdown the employment situation it will get even WORSE - translating in HIGHER GOVERNMENT DEFICITS - lower stock market valuations -higher defaults by consumers on their debts -

OIL - JOBS - ASSET DEFLATION are the key.

The masters are attempting to avoid ASSET DEFLATION from occuring -

How will they succeed?

By:
Remaining behind the curve IR
By making tax cuts permanent - thus increasing Government Deficits (see Greenspan main fear!)
By INCREASING FED NOTES PRINTING PRESS CAPACITY AND UTILIZATION

The prospects/risk of a US $ crash has increased!

All Aboard The Gold Bull Express - Part ll

http://www.bls.gov/news.release/empsit.nr0.htmSnip:

Nonfarm payroll employment increased by 288,000 in April, and the unemployment rate was about unchanged at 5.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The April in-
crease in payroll employment follows a gain of 337,000 in March, and job growth again was widespread. In April, employment rose substantially in several service-providing industries, construction continued to add jobs, and there was a noteworthy job gain in durable goods manufacturing.
................
Persons Not in the Labor Force (Household Survey Data)

The number of persons who were marginally attached to the labor force was 1.5 million in April, about the same as a year earlier. (Data are not seasonally adjusted.) These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey. There were 492,000 discouraged workers in
April, also about the same as a year earlier. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. The other 1.0 million marginally attached had not searched for work for reasons such as school or family responsibilities. (See table A-13.)
........................
Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls was unchanged in April, at 33.7 hours, seasonally adjusted.
The manufacturing workweek declined by 0.3 hour to 40.6 hours. Manufacturing overtime edged down over the month to 4.5 hours. (See table B-2.)
******************
Misetich

According to the BLS - substantial growth took place in the

Goods-producing p42
Construction p18
Manufacturing p21
Service-providing p246
Retail trade p23
Professional and business services p123
Education and health p31
Leisure and p36
Government p8

The report appears a little odd - since hous worked remain stagnant and the manufacturing workweek declined as did OT

Typically one would expect hours increasing prior to incurring the costs of procuring/training new employees

The 1.5 million who were available/ready for work are not counted as being unemployed.

He writes the laws/published stats rules!

With this buoyant April report in addition to the March report one would expect increase TAX REVENUES to increase multifold - consumer spending increase significantly and GOVENRMENT DEFICITS TO BE REDUCED

April retail sales disappointed - Auto sales disappointed - yet more people are working - uuhm!

We wait and see....

All Aboard The Gold Bull Express - Part ll

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

The "boys" knock again with their $6 hammer and push up the dollar. A drop in the POO (-10%) must "normally" follow...will see ! Roll over Beethoven....

http://www.morganstanley.com/GEFdata/digests/20040507-fri.html#anchor0Snip:

Notwithstanding this great rhetorical flourish, the Fed, of course, did nothing. The policy rate was left unchanged for the 11th month in a row at an astonishingly low 1%. There were hints of glacial ("measured") changes to come -- but merely hints
.....................
The road to normalization can be a perilous one. That was certainly the case in 1994, as the Federal Reserve was forever "behind the curve" in its efforts to take the federal funds rate up from 3.0% at the start of the year (or "zero" in real terms) to 6.0% some 12 months later. The ensuing carnage at the long end of the curve marked the worst year in the modern history of the bond market. That was seemingly the last hurrah for the bond market vigilante -- or at least so we thought at the time.

A decade later, however, there is a striking sense of d�j� vu.
........................
While 2004 is not 1994, I fear that today's Fed is in danger of making an equally serious tactical blunder. By stating with great clarity that "policy accommodation can be removed at a pace that is likely to be measured," the FOMC is virtually assuring investors and speculators that it is not about to change the allure of the carry trade in any short order. And so the impacts of an extraordinary monetary stimulus will continue to provide great support for higher-yielding, longer duration assets. Morgan Stanley's fixed income strategy team believes that today's carry trades span the gamut of assets -- from credit and mortgage markets to commodities and high-yield securities. Yet the Fed couldn't care less. By going out of the way to stress that it is going to be measured in withdrawing its extraordinary stimulus, the US central bank is doing as little as possible to discourage this folly. And so the carry trade morphs into ever-expanding asset bubbles.
.................
****************
Misetich

IMF signalled Greenspan ought to notify markets in advance re: emergering markets

Who exactly provides funding to emerging markets? Who has borrowed at the Feds discount rate: - Banks

Who does the Fed protect: Banks and banking systems

In essence Greenspan has followed through and has given banks time to put their house in order - thus the 'measured'
since they KNOW these banks in search for profits have build up enourmous carry-trade - borrow at short-term rates and maximize earnings by lending long term

... in the meantime as the Feds keep their emergency rate at 1% - it fuels bubbles everywhere

It is interesting to note that the Stock Market HAS NOT responded positively given the ameliorated reported corporate earnings and increase inflow of funds

Thus where was this "free money" invested in? and more importantly where will it go? and who will get stuck when the bubbles bursts?

All Aboard The Gold Bull Express - Part ll


All Aboard The Gold Bull Express - Part ll

http://www.morganstanley.com/GEFdata/digests/20040507-fri.html#anchor0Snip:

For some time, we've held the view that crude oil prices in particular and energy product prices in general would remain significantly higher for longer than the consensus expectation. If anything, however, we've been too pessimistic. Once again, therefore, we are marking our prognosis to market, and raising our crude oil price baseline forecast. We now see Brent quotes rising to USD $38/barrel and WTI to $40/bbl. in June, instead of easing to $29/bbl. in our previous forecast.
********************
Misetich

Revisions upon upward revisions on oil prices -

Far too many - (hot money - producers) - have a vested interest is seeing higher oil prices - even for a short term- thus the speculative "disruption" stories

On the other had the stark reality is that demand is increasing - OPEC and Russia hav teamed up and whenever Russia is involved in commodities - prices hedge HIGHER

The pipeline are aimed at the west - but "they" control the tap and their economies thrive on higher prices - and US, EU etc are paying the price for claiming "non-existent" inflation and growing economies

Of course the threat of a disruption is very REAL

All Aboard The Gold Bull Express - Part ll

http://www.usagold.com/AMK/MK-gold.htmlThe following editor's note appears at today's News & Views page as an introduction to this weekend's recommended reading -- "Interest Rates and the Death of Gold."

Recommended weekend reading:

"A core deception of the moment is the notion that a few up ticks of 25 to 50 basis points in short term rates will be sufficient to arrest the forces of inflation set in motion by the most aggressively accommodative Federal Reserve in history." John Hathaway


Editor's Note: Tocqueville's John Hathaway says both the linkage between interest rates and gold and the much bally-hooed death of gold are greatly exaggerated. In this timely article, he joins a chorus of top-notch analysts who conjure the 1970s as a reference point and comparison to the present era. If he's correct, and we think he is, today's selloff, blamed by financial pundits on a possible rise in interest rates, seems to be a short term over-reaction to and over-simplification of a very complicated set of circumstances.

Once again. we are reminded that more can be learned from a well-directed review of history than the shoot-from-the-hip day-to-day analysis commonly seen in the financial press. Hold the course. . . Buy the dips in gold, and sell the rallies in stocks and bonds until you achieve the proper balance - between 10% and 30% of your overall portfolio in gold.

That strategy worked exceptionally well for the 1970s, it is likely to work now. Don't let short-term market events undermine your long-term sensibility. Little has changed over the past several days with respect to the big picture. In fact my reading is that the international currency situation is even more threatening now than it was a week ago (Please witness the dire warnings from our Fed chairman on the budget deficits.) All the seemingly good economic news of the past several days is more the result of worldwide monetary inflation than it is an enduring change in economic fortunes, and any interest rate rises that do come will be meant to chase inflation. In this go around, there is a difference however: Now all currencies are suspect and likely to depreciate against goods and services. The ghost of John Law has come to haunt the international dollar-based economy.

We invite you to consider:


"Interest Rates and The Death of Gold"


_________

Today's Headline Story:

Looming oil crisis
will dwarf 1973

Paul Erdman says geopolitical crisis could topple House of Saud, thrust world economy into crisis . . . (More)

___________


We invite your visit. We do expect some dip-buying at the office this morning. Please call if you have questions, need quotes, etc.

http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=8&u=/afp/20040507/bs_afp/china_auto_output_040507053102Snip:
BEIJING (AFP) - China's burgeoning auto industry produced 1.3 million automobiles during the first three months of the year, up 25.63 percent from the same period in 2003, statistics showed.
........................
Of these, 1.28 million were sold, a 28.98 percent rise on the previous period, the China Automotive Industry Association said
....................
China surpassed France as the world's fourth largest vehicle producer last year with output of sedans, trucks, vans and buses hitting 4.44 million.


Boosted by an explosion in urban middle-class wealth, it is expected to surpass Germany as the world's third largest maker of automobiles this year, with production forecast to hit 5.15 million units.

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

Analysts including the Feds, Moodys are 'warning' of an overheated chinese economy - and the chinese have conceeded "some areas" are and are taking selective steps to curb those areas: primarily steel, cement

The market overreacted to the China story - giving Banks the opportunity to carry out a raid on commodity speculators

However the underlaying COMMODITY AND ENERGY DEMAND is untouched - thus physical meets paper - and higher price inflation is in the West economic pipelines

Very bullish for gold! physical gold! as bets have been placed the wrongway agains China and energy demand

All Aboard The Gold Bull Express - Part ll

http://finance.myway.com/jsp/nw/nwdt_rt.jsp?section=news&feed=bus&src=202≠ws_id=bus-n07313201&date=20040507Snip:

Stocks on hand at wholesalers grew by 0.6 percent in March, well below the 2.7 percent gain registered by wholesale sales.
.....................
Metals sales and inventories both posted record gains, with sales in that sector surging 14.4 percent in the month.
***************
Misetich

Very bullish report as ratio to sales are a declining low. However to rebuild those inventories to match sales growth the replacement costs are MUCH MUCH HIGHER due to commotities and energy price increases thus plenty of fuel in the INFLATION PIPELINE

All Aboard The Gold Bull Express - Part ll

http://www.china.org.cn/english/2004/Apr/93946.htmSnip:

China's Foreign Trade to Reach US$1 Trillion
China's foreign trade this year is forecast to reach US$1 trillion, up 17 percent on a year-on-year base, according to a report released in Guangzhou recently by the Ministry of Commerce and the International Trade Economic Cooperation Institution.
.....................
and here's ANOTHER snip from the Chines Bank Governor Warning the West on rise of IR

"Zhou also warns of prime risks to global economic growth. The international community should clearly recognize the prime risks to global economic recovery and all countries should actively participate in policy coordination and cooperation and strive to maintain sustained global growth, he said.

According to Zhou, the vulnerability affecting global economic growth since the Dubai meeting in last September has by no means been entirely eliminated. Geopolitical confrontation persists, and the debt remains a very conspicuous problem in some emerging markets.

Although the global economy shows obvious momentum toward recovery, it is still true that the global economy relies excessively on condition in certain individual countries, he said. Therefore, great uncertainty remains as to whether the US economy has entered a period of stable growth.

Zhou also said that uncertainties in the timing and magnitude of macroeconomic policy adjustments by the major industrial nations are putting the world economic trends at increasing risks.

If an interest rate hike is not well timed, or if it is not executed with proper intensity, the result might be a short-term upheaval in financial markets, which would in turn adversely affect the global recovery, he said.
End of snip
**************
Misetich

Orient is growing multifold - the West is growing slowly (real growth)amidst of emergency IR, government stimuli, housing bubble and higher debts

The west warns China on "overheating" whilst China warns the west be careful "how timely you increase rates"

In the meantime the INFLATION pipeline is gathering strength and steam

All Aboard The Gold Bull Express - Part ll

http://www.china.org.cn/english/features/93992.htmSnip:

Experts believe that it is the global industrial transfer that enables an increasing number of things labeled "made in Asia" to become world crazes today.
..........................
World major manufacturers of computers, electronic products, telecom devices and petrochemistry have already transferred their manufacturing centers to Asia, including such trans-national giants as Microsoft, Motorola, General Motors, General Electrics, Dupont, P&G and Siemens.

At the same time manufacturing had undergone reshuffle within Asia, Magarinos said.

Traditional manufacturing enterprises in Japan, the Republic of Korea, and China's Taiwan and Hong Kong were now transferring at an amazing speed to other places of Asia, in which the Chinese mainland benefited a lot.

Onkar Kanwar, president of India's Apollo Tyres, said taking over a considerable part of western manufacturing, Asia had won itself a favorable position in world competition within a short time by making full use of the vast international market and exerting its own advantages.
...........................
In 2002, the purchasing centers spent over US$30 billion on China's commodities and experts predict that it will grow to more than US$50 billion by 2005.
.....................
The integration of western capital and Asia's cheap labor force since the 1980s had created a number of world famous manufacturing bases in Asia. More and more goods in the world market were seen labeled "made in Asia", said Kanwar.
******************
*****************
Misetich

The "disinformation campaign" which Greenspan has commented upon - inflaming - and which has led to a raid of commodities trading - does not stand up to scrutiny

Growth and development are ongoing in Asia whilst the US fiddles in the ME imbroglio

US government reports show recent job creation yet government deficits are growing due to a shortfall in taxation revenues

EU is struggling to maintain deficits at the 3% treshold -

What has really changed in the last 2 weeks?

Nothing! absolutely nothing! but the attempt to create a false perception of actual events - and capitalizing with devious means to support those manufactured concepts

Asset Infaltion is soaring
Energy prices are soaring
Commodities prices remain high
Price inflation in service industry is soaring
Emergency Rates are being maintained in US, EU, Japan
Government deficit is soaring
Stock Market has been unable to pierce the 11,000
Bond Market vigilantes are becoming active - Mortagage rates are rising

All Aboard The Gold Bull Express -Part ll

Bob Pisani just said "This is the FIRST time I've heard the 'bears' add deficits to the list of their arguments.

GEEEZ. . . where has he been hiding, and which "bears" is he talking about?

Another diefication of The "Word of AG"?????

Three to six months ago, investors were led to believe that the US markets were teetering, and analysts sent billions of spec $$ into Chinese IPOs as a new "miracle economy".

As market makers are wont to do, fleecing the early specs to make money on the volatility is a normal component that keeps the SM machine rolling in the dough. Now that the Chinese miracle IPOs have shed about 30% of their perceived value, watch for Wall Street to effect a second reversal in hype at some Fib number, so they can get a second round of sheeple to chase their losses.

What can really hurt the Chinese economy?

US retail markets must stop buying their output. . . this would mean:

1) Massive inflation strangling the US consumer market, or
2) Trade restrictions from a nit-wit Congress scrambling to protect their pet special interests
3) Increased hostility risk in the shipping markets (for $ Bill) l:^)

A nice secondary reaction is being realized by the COT in commodities markets. The hammer has created new opportunities to frighten the specs out and recreate the commodities bull with all the "right players" on board.

Notice no one is mentioning the job reclassifications and multiple job holder skews any more. If 288, 000 workers finally got a burger flipping gig, we now have a lot more "manufacturing" jobs. If 144,000 got two part time jobs each, well, you get the picture. . .

A lot of hype lately about retail automation. No more strikes by retail clerk unions will be tolerated, as they will be replaced by machines.

Got gold? Not paper gold, silly, but the kind that hurts when you drop it on your foot.

Sinclair is still right. Timing is the only issue, which is always critical.

I think we should quit trying to prop up the POG and just watch the train slow down enough to quietly, comfortably get on board. It's going to roll, but "non-paying" customers must avoid the notice by the conductors, or actions will be taken to throw them off the train.

What's the alternative to the US Bond? Gold, of course.

So...got to take down gold strongly. Wouldn't want a few people to get the wrong idea...

Won't work for long.

The GAB

http://urbansurvival.com/week.htmsnippet:

"The latest Unemployment and Productivity numbers are out today and contrary to what the Fed has been selling, inflation is not as tame as they'd like you to believe, not that you'd be fooled anyway after buying milk, gas, and $14/lb steaks: http://biz.yahoo.com/rb/040506/economy_productivity_4.html �This might just be a setup day for the markets, which might take a real pounding tomorrow, that is, if you read John Crudele's spot on piece in the NY Post this morning...his analysis of the jobs report coming tomorrow is a fine example of uncommonly clear thinking about government numbers and what they will mean to us little guys: http://www.nypost.com/business/20217.htm My expectation?� I expect the market to drop 75 Dow points today - or less - with a miraculous last hour rally" by the PPT.� Then tomorrow a big decline of maybe 150 points if Crudele is right.� But you make your own trading decisions, this is not advice...just a guess.� Crudele's "big picture" sounds oddly like what you've been reading here:

"First I have to start out by saying that I continue to believe the economy is really only growing moderately - less than 4 percent - despite heroic and historic efforts by the Federal Reserve.

And no matter what the Labor Department numbers may say, I think job growth (especially quality jobs) is much smaller than it should be in an economy that is growing moderately.

I also think that the quality of the Labor Department's statistics sucks and that one month's data is only useful for placing bets on how the various financial markets will react, not for determining how the economy is actually doing.

Right on again, Crudele...

Goldilox:

Not a bad piece of predicting as the Dow is sitting at -105 as I read this. More comments on the BLS data skew in the full daily piece.

Another "analyst" on CNBC just said "28 months of decline versus two months of job growth . . . which is the trend and which is the bounce?"

Not all main stream analysts are playing the bull role as fervently as expected.

BLS=Golden Arches

CPM=Golden Assets

Got gold?

http://www.goldensextant.com/
Snip:

"Today The Golden Sextant introduces a new section to the website: a Library. Its purpose is to try to make more accessible to the public various important and useful materials dealing with the subject of gold as money, especially since many of them are either out of print or otherwise quite difficult to obtain. It would be hard to find a more appropriate initial work for inclusion in the Library, or one where the copyright laws present less of an obstacle, than the Report to Congress of the Commission on the Role of Gold in the Domestic and International Monetary Systems delivered in March 1982 and described more fully in the following commentary. Although a portion of this material has been published previously, until now the entire Report has been available in only a handful of libraries worldwide. We post it here as a public service."

End Snip:

DryWasher Comment:

I know that most readers here are very familiar with Reg Howe and his Golden Sextant web site, but if anyone is not familiar with it, you should become so because it contains some of the best information available anywhere on the Gold and Money situation. I would classify this one as an advanced course of study for serious goldbugs.

Warning: Be prepared to spend considerable time when you visit the new LIBRARY. We are talking about hundreds of pages of information.

Enjoy.

Kerry is coming on quite effectively. In his boast yesterday, "...I will not be unaware of what is going on in my command," he sounded more like a competent commander than Bush, whom almost half the nation feels is not just wrong for the country but very wrong. Public euphoria can be brought by such rhetoric alone. Many of us don't need to be reminded that prior to WWII a nation was transformed by just that kind of exhilarating speechmaking. Talk does motivate more people than do most types of substance. It isn't possible -yet!- to tell for sure whether Kerry will ever become a dictator. But the scene is certainly being set for one. Many authoritarian rulers have gotten their authority from the fact that the public adored them. And we should know well enough by now, that the man we vote for, and the man we get, are not always the same man.

Public euphoria has the ability to change this nation as well now as any other, both profoundly and in unexpected ways, particularly since the quality of our public's ducation has so significantly declined over the past ten decades. Such euphoria is based on faith however, and, like all faith-based effects, it must at some point come into tune with reality. Nothing has improved in the nation's economy, in real terms, that I am aware of. The dollar has not become stronger as a result of anything of substance. The very real dangers I have been learning of for the past several years are still in place. Therefore it appears most reasonable to conclude with caution, and to think that what we knew before -that the material elements of what matters economically- will either change (sooner or later), in ways that agree with the faith, or that will come undeniably to light in a more jarring form, even to those who now refuse to see them. If and when that happens, those market movements -which have so recently been of concern to us- will resume.

......FROM A LARGE NY DEALER (LARGE).....BUYERS OUTNUMBERING SELLING 5:1. HAVE A NICE DAY....CM

General share markets getting hammered....oil UP.....gold down....Have a Guinness and relax....CM

$24 Billion More in ME and 1000's dead (more)..what about the rest of the defense budget?.....Surely these markets jest?.......BUY....CM (house of NM laughing all the way to the(ir)bank)Yeah....they're out of the "commodity market"..that's a good one...CM

BUY. While the herds are rushing over the cliffs I am happy to stand aside and watch. Hope UR2...CM

...and who alone has the physical to manipulate? A CB. There's a lot in the market now which suggests the POG should be rising. To me, this means a CB is dumping to suppress the POG, to suppress an inflation signal perhaps. When will it end?

Hey, Belgian...
Right at around the time of the A.Smith and J.Cross comments a few days ago you gave us some pretty strong hints that you saw this bout of dollar-strength and Gold-price-weakness coming.


------------Through these two members (J & A), the gold-(financial)establishment (brotherhood) wishes to send a message/hint to candidates wishing/tempted to join the gold-public !? The content of both statements are nonsense. Allow me to skip the argumentation. I'm trying to get their message.

Ingredients : $-EURO-IRs + exch. rates-geotensions-goldmine forward sales-POG-US elections.

There may be plans to strengthen the dollar, going into '05...or at least slow/halt its ($) declining exch. rate ? Ordering/commanding a halt to all dollar shorting ?

- Bond traders have six months time to get prepared for telephoned rate hikes.
- Goldmines will be encouraged (hum) to restart a second big round of forward sales.
- All hens on deck for dollar support.----------------


I salute you for your most prescient read on the situation!!!

I also read somebody here this past week wishing they'd bought Gold back when it was at its $250's low. Ya know what? Lot's of Gold-minded people were probably too busy scratching their heads at that time to take action, but not this fella. I was able to maneuver some of my affairs around and come up with some fair cash to add a *significant* stake to my personal Gold savings.... at the price of $254!!!!!!! So I hope that person can take this small lesson from someone who's done it. It isn't hard. The only difference between wishing and not-needing-to-wish is the simple act of *doing* !!!

Oh sure, I probably looked quite the fool at the time -- crazily chasing the bottom, buying my Gold at $310, then at $291, at $285, at $266, at $254, at $268, at $280, and so on, so on...

But hey, that's the breaks of having a Personal Gold Standard of Savings -- a regimen in which you get into a monthly or quarterly routine of converting your excess dollar earnings into cold hard Gold. You simply end up getting your Gold at prices through time that are all over the map. And of course, along the way you do indeed keep your eyes open and allow yourself to deviate from your routine to try to seize these extra attractive opportunities if and when they briefly arise.

I'm happy to say my pile has grown a bit since then, and with an eye at the far end of the Gold Trail, I'm eager to have this latest Goldprice downswing run its course. I won't be watching merely as an idle observer!!! It's such a treat when the "Big Paper Boys" decide it's time for Ari's pile to grow by leaps and bounds -- or should I say, heaps and pounds?!!!

Does anyone care to mark the difference between my approach and that Jim Sinclair fella I keep hearing about? Challenging the paper Gold goons like he does.... on their own turf. Sheeeeeeeesh! What's that all about???! Look how it's workin' out for him. He needs to get with ANOTHER program. Does Jimbo still believe he can corner a printing press? One contract, two contract, three contract.... four hundred thousand contract, etc... and Jimbo's gonna make 'em sweat???? Do they even notice?

Forget corners, baby...

Gold. Get you some nice round edges. --- Aristotle

Timing is problematic when investing :>(. CB dumping tells me higher prices as in (much higer prices) ahead. Remember the London Gold Pool! FOA is right.

You're right bro.. Hold the metal and have a nice day...CM

Rising long interest rates have pumped up the dollar hurting gold. IMHO this is an unsustainable trend. Rising rates will cripple demand in this consumer bubble economy and eventually the yields will drop down again.

Its been tough watching gold decline, but the fundamentals favor a long term rise remain the same: reckless face saving policy makers who wear blinders and tell white lies, rising US government and trade deficits, a titanic consumer credit bubble, expansive and aggressive foreign wars.

"You're wealth is not what you think it is".

http://www.cross-currents.net/charts.htmSnip:

As amazing as it might seem, despite the steepest decline in prices since 1973-1974, stock mutual funds are still finding sponsors in significant fashion. In the four years since prices peaked in March 2000, a NET of more than $433 billion has flowed into funds (assuming $20 billion net inflows for April)!
........................
The Arizona Republic recently carried an article by Russ Wiles citing investment regulator concerns that investors are using home-equity loans or refinancing cash to invest, "imperiling their homes in the process." Given that some of these players may be also utilizing the temptation of margin loans as well, we'd say "imperiling" is a very apt description of the risks at hand.
........................
Saddest of all is that there appears to be little or no recognition that the mania is still very much in place. Who's going to admit it? The major brokerage houses? Mutual funds? The SEC? The Federal Reserve? Total stock market capitalization probably peaked somewhere around $18.65 trillion and cratered to roughly as low as $9.18 Trillion at the October 2002 low. Meanwhile, at the peak, spending by governments, corporations and consumers were all predicated on the $18 trillion in stock market wealth and continued growth from that level! Close to $9 trillion in lost wealth says it all. The Greenspan and Bernanke Fed are desperate to get the money back into stock accounts. Given the amount of debt now in the system assumed by governments, corporations and consumers, we're absolutely screwed if they don't. Then again, we may be screwed if they do, since a reflation of the bubble would play out valuations somewhere way beyond absurd, wouldn't they? An interesting predicament, no? But the Fed doesn't care since they have consistently argued that they can "address the consequences" after the bubble bursts again.
.....................
**************
Misetich

Bubbles..bubbles ...everywhere - The scary part is consumers borrowing on their housing values and investing the proceeds in the stock market

Margin loans are hedging higher - $175 billions -

Undoubtedly the Feds will attempt to support the SM as 60-70% are directly and/or indirectly affected by stock market valuations

Yet price inflation is rising and the bond market responding - whilst Sir Greenspan is taking baby steps

During the past few weeks the SM did not respond to extremely good earnings reports -

Consumers are confident, CEO's are confident, investors are confident - the Feds are cheerleading economy and job growth yet the SM is not reacting to reflect the outward exhuberance - its been stuck in a trading range between 10,000 to 10,700

The good news has been priced in - just as the bad news is priced in gold and commodities

Where to from here?

The fear of Asset Deflation, bonds, stocks and housing is staring in the whites of the Feds eyes - Price Inflation is providing the sweltering heat...

All Aboard The Gold Bull Express - Part ll

Excellent analysis.
@CM- Happy 5 yr. anniversary! As a contrarian,
you're probably not going to get a much better
anniversary gift than this setup with gold.
Alos, the lower it goes, the higher and faster
any correction(s).
Here are today's closing prices and volumes
on the major indices and the 10-Yr Bond:

Dow 10,117.34 -123.92 (-1.21%)
Nasdaq 1,917.96 -19.78 (-1.02%)
S&P 500 1,098.69 -15.30 (-1.37%)
10-Yr Bond 4.766% +0.164
NYSE Volume 1,651,815,000
Nasdaq Volume 1,623,964,000
(Data by Reuters)

http://www.usagold.com/DailyQuotes.htmlexcerpts:

Gold Walloped by Stronger US Dollar

The most-active June contract settled $9.30 lower (2.4%) at $379.10 per ounce... their lowest level since October 2003 on heavy fund selling sparked by the sharply stronger U.S. dollar...

July silver was crushed in the landslide of fund selling as well, dropping 23 cents (4%) on the day to $5.60. The predominance of speculators versus genuine consumers in the market made silver prices prone to wilder movement than gold....

"Gold is getting close to a technical target on the downside close to $376," Rinehimer said. "A lot is going to hinge on the implications of the data relative to interest rates. I'm still thinking the upside is limited for the dollar and the downside limited for gold." ...

Momentum-following funds also waded in on the sell side of the equation, as did some funds who recently established short positions in the market, to keep the pressure on gold through most of the day.

* * *However, physical demand from players based across the Middle East and elsewhere remained intact throughout, and managed to steady June futures prices for the last hour of action in a $378-$380 range.

The dollar was buoyed by a surge in U.S. jobs that fueled expectations that a rise in U.S. interest rates was approaching...

But gold has been a popular portfolio hedge against inflation and could benefit from any perception that the central bank is worried about economic overheating...

"Certainly, the expectation for the Fed to move is increasing. Markets are pricing it in and gold is trying to determine what that means for it," said Paul McLeod, a precious metals vice president at Commerzbank Securities.

"There is quite a debate as to interest rate changes and the impact on metals prices," McLeod said.

------(see url for access to full text)-------

R.

http://biz.yahoo.com/rm/040507/economy_russia_gold_2.htmlMOSCOW, May 7 (Reuters) - The value of gold reserves held by Russia's central bank was $3.760 billion as of May 1, unchanged from the previous month, the bank said on Friday.

The bank values its gold reserves at $300 per troy ounce. It gave no figure in ounces for May 1. A month before it held 12.5 million ounces of gold.

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

At what point, I wonder, will the Russian bank adopt the 'best management practices' (similar to the European banks), marking its gold reserves to market values?

R.

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

@Federal Reserve...what you are witnessing is the fall of the price of paper gold...all the good paper has been cashed in...the rest is beginning to reveal itself as bets on a losing proposition. OK the dollar moved up today maybe somebody needed some $ to cover a big gold short and had to buy on the open market. Once you start going under you wonder who put the lead in your shoes.

We now must look for a scism in the paper vs spot market for gold. Spot up paper down. The opening of the cash only gold market would be welcome at this juncture. And wishful thinking also for a schism in the pricing of gold share vs paper gold as well (but only because I am holding shares) Sure they are paper but at this point they have got to be worth more than comex paper.

In spite of the accomodative stance the Fed took in not raising interest rates, several sectors got creamed today besides the metals....

Among them are the following:

Banking INdex
Retail Holders INDEX
Housing INDEX
Real Estate I Shares INDEX
Morgan Stanley REIT INDEX

BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH

RIDDLE: IF todays action in the above indexes is indicative of SELLING HIGH then what activity in today's markets would correspond to BUYING LOW .?????????????/

WHat has been a bear market for 20 years prior to 2001 ? Metals

What has been in a bull market since for the same two decades prior to March of 2000.....Equities

Which one of these markets represents relative value ....
Which market can one today buy undervalued compared to the other one....?? Metals

Which market has been cyclically hammered 30% in the past four months...HUI

Which market has been hammered 36% in the last month? Silver

What causes paper to be unnattractive............Debt excesses throughout the system
at Unsustainable levels......

What do all the indexes (except Retail Holders )above represent ? Markets represented by huge excesses of Paper....(DEBT)

WHat happens in a LIQUIDITY CRISIS???
What dissapears (is LIquidated ) burns up in a CREDIT CRUNCH????

WHat SHINES in the Same SCENARIO...??????
What is it that causes people to run to the EXITS.....

in a CHANGE OF SCENARIO...........

PERCEPTION ..........

ARE today's actions in the above indexes a function of changing public perception relative to what is the "INSIDER'S KNOWN (BEHIND THE SCENES) REALITY"

Is there a sector rotation occuring today where managers are dumping paper backed assets to buy metals investments that have been in a managed downward spiral for 4 months?

BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH BUY LOW SELL HIGH ............

That's what I would do, too, if I were a manager.

http://www.futuresource.com/charts/micro.jsp?s=CL1%21&s=GC1%21&s=TYXY&s=DX1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOW5.4% Bond Yield, 40$ Oil ... next cab off the rank will be DX92. A Deflationary collapse is brewing here and Gold advocates need to be aware of the implications for PoG. While you'd expect Gold (or the price thereof) to outperform it's alt-currency counterparts in a race to the bottom, REAL Gold, at some point will become unavailable.

I'd be loath to wait too long to acquire yours!

Michael,
In the subject message you stated "Hold the course. . . Buy the dips in gold, and sell the rallies in stocks and bonds until you achieve the proper balance - between 10% and 30% of your overall portfolio in gold."

Having been a goldbug for many years my portfolio contains more than "10 % and 30% gold". What do you recommend that I do? Sell gold? I'm very reluctant to sell gold now and hold US$ or other paper products.

If I sell my gold to your recommended range where shall I invest my remaining 70% to 90% portfolio? "Confused goldbug hoping for illumination."

Perhaps you could reveal your own position vis-a-vis gold as % of your portfolio and what makes up the balance.

This challenge is meant to smoke out what you do vs. what you recommend, an exercise in full disclosure. Please understand that I am your customer and admirer. I suspect that you are espousing the defensible "rational" position as opposed to the personal "heartfelt" one.

TGIF!! Can't take another Comex session this week.

The call is a free one:

1--800-869-5115

And further, on the topic of percentages, I found Aristotle's May 2nd commentary #120591 a real keeper. I've got it saved as a file on my desktop. Read the part where the line is (or isn't) drawn between the majority portion of your gold being held as real savings, versus any "extra" (maybe 10-30%(?)) gold earmarked as an investment.

R.

Now if the price could just stay here for a week until payday...

http://groups.yahoo.com/group/gata/message/2152The gold mining industry contemplates more jewelry promotion.

Latest GATA dispatch.


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

gata-subscribe@yahoogroups.com

Friday, May 7, 2004

BY CHRIS CHRISTOFF
FREE PRESS LANSING BUREAU CHIEF

LANSING -- National security adviser Condoleezza Rice said Friday the U.S. can mend its damaged image in Iraq by dealing openly and firmly with those responsible for the abuse of war prisoners.
In an interview with the Free Press, she acknowledged the revelations of prisoner abuse are ``very disturbing''(especially if you were the victim) and a setback for the Iraq campaign.


Turning Japanese?....CM

http://www.cbpp.org/4-26-04ui.htmSnip:

The number of individuals exhausting their regular state unemployment benefits in March without qualifying for any additional federal unemployment assistance eclipsed the record high that was set just two months ago, in January 2004. New Labor Department data show that in March about 354,000 jobless workers exhausted their regular benefits without being able to receive additional federal aid. In no other month on record, with data available back to 1971, have there been so many "exhaustees."

Further, from late December, when the federal program designed to help the long-term unemployed began phasing out, through the end of April, nearly 1.5 million jobless workers will have exhausted their regular unemployment benefits without receiving additional aid. For a period of this length, this is also a record number of exhaustees. (This analysis includes state-by-state data on the number of exhaustees from late December through April.)
........................
****************
Misetich

Today's excellent job report (if it true and refers to quality jobs) is a shot in the arm for those long-term unemployed

Whilst the above report is an analytical study following the March report (not today's) it is an indication that the unemployment is ACTUALLY RISING and not standing still at the 5.6 to 5.7% that the BLS shows

As a result Tax Revenues continue their shortfall and Government Deficit rise

Further consumer spending is constrained by the large number of unemployed which is MUCH MUCH HIGHR than the BLS shows.

The jobless recovery continues.

All Aboard The Gold Bull Express - Part ll

http://groups.yahoo.com/group/gata/message/2157Most of the new jobs in today's U.S. jobs
report were not really counted at all but
simply contrived.

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

gata-subscribe@yahoogroups.com

These are just thoughts. I cannot assert that they are true or correct. All I know is that they seem to make sense to me. I might be crazy. I don't know. But thoughts like these have seemed to have some validity in my actions. Since I can't just sit here and say nothing, I would like to share them with you.

Today the dollar has been reaching for its April high. I don't think it will make it. I could be wrong. But so could the dollar. These are the beginnings of tumultuous times.

In gold, we have seen quite a lot of selling lately, perhaps first for profit-taking and then for speculative shorting, or some combination of those. But what these shorters are actually selling is not gold. They are placing bets. And they have the Gambler's Mentality. Furthermore, they are committing their actions with debt that is inherently many times larger than the money that is actually employed in their so-called trades. As long as men can write as many contracts as they want to, instead of only being able to write contracts for what can actually be delivered, there need be no end of such activity, and there need be no end to its influence on the price of real gold, although the real value of gold may be very different from its price. But the end of this speculation will be when their risk-taking appetites become satisfied. That is not rationality. Not reason. It is emotion. It is gambling activity based primarily on narcissistic attempts to fulfill the distorted perception of one's own ego. Therefore its motive and means are not primarily related to anything having to do with the real value of gold, but comes into existence, and takes action, as a result of the way a man sees himself. In this, men are often mistaken. And actions based on it are typically mistaken as well. When they have played out their desire and loaded up on vacuous agreements ostensibly written on paper, other men, who, fearing for their own welfare and safety, and who therefore seek protection, will have little recourse but to move into gold as a refuge. This will be real money, not debt, buying real gold, not paper contracts. The sellers will stand agog, with their mouths open, like turkeys drowning in the rain, not daring to fight it. At some point they will have to realize that to cut their hysterically acquired loses, they had better cover, and this will contribute to the buying, and to the increased price of gold. Of course this is an oversimplified picture. Human activity is much more complex than this. But maybe this is not a too-bad understanding of a number of aspects of it.

Another thing that might be happening, either in combination with this, or more on its own (I theorize in my secluded -but I hope not-too-ignorant-tower) is that someone, who appreciates the market as it presently exists, and knowing that in a crises gold will go up, and also knowing of an impending future crises, and wanting to exploit the rise in gold which that would probably cause, could be using this tactic, or contributing to it, by employing or manipulating third parties, in order to buy anonymously at a low price, hoping that when the crises occurs, they will be able to sell and reap profits. This doesn't seem too paranoid from my view, although it certainly is paranoid in some degree. But you know the crazy man said, "Just because you're paranoid, that doesn't mean they aren't out to get you." The election is coming up, and we have already seen, in Spain, terrorist action that influenced a national election. That was no coincidence. It was deliberate. Kerry is coming on strong. And he is known to support certain types of objectives. Bush is being run over by events out of his control, but nonetheless on account of the nature and quality of his control, and this is being made the most of by the media. Forces are not merely gathering. They are already at work. Greenspan, the media, political sentiment, the release of the torture pictures, the decline of Bush, the rise of Kerry, the present quite period in the gold market, these all make sense together. They all add up in ways that are consistent with what I am saying. If it looks like a duck, walks like a duck, and quacks like a duck, get out your knife and fork. Because of this, I have formed the opinion that one or the other of the following eventualities could play out, or some combination of them.

1.) Sellers satisfy their egoistic appetites for taking their gambling risks. Therefore they stop selling. Immediately, or after a time, various types of buyers begin to exert their influence, either quickly or slowly. The media contribute to this. Events also contribute to it. Pog goes up. The strength of the buying becomes stronger than expected. The shorters choose to cover. Pog goes even higher.

2.) Taking advantage of the lull in the general perception that the price of gold should be higher than it is, the price has been made to fall, during which time anonymous entities are acquiring gobs of it, or are committing to long speculation, knowing that it will be likely to go much higher, on account of future events which they alone know of. Then some terrible calamity happens, either suddenly or gradually, depending on whether it is overt terrorism or economic consequences, or a combination, and people become frightened, a significant number of them buy gold, and some of them, like us, already owning gold, buy even more. The price of gold goes up. The anonymous entities either sell or sit pretty.

This is the present state of my pathetic understanding. If it isn't correct, I hope I will learn better. Don't base your actions on my perceptions. It's bad enough that I do.

Oh. There is something else that could happen, which could be described as being something that I presently have no idea of.

Evil must be stamped out. But before we try to stamp it out, we need to learn what evil is, and what it is not.

http://www.tocquevillefunds.com/press/archives.php?id=64BTW, John Hathaway IS a physical gold advocate.

PS: Rather than reading your month end statements; weigh your gold. Cheers...CM

http://www.financialsense.com/stormwatch/oldupdates/2004/0507.html"Watch the currency and bond markets. Watch the price of real estate in your neighborhood. Pay close attention to the prices all around you. And for goodness sake, take out an insurance policy--not on your life, but on your wealth. This means buy gold and silver bullion; buy gold and silver equities, while their prices have temporarily pulled back. Buy it, while you still can afford to. Buy it, when it is still available for delivery. After a flood, insurance becomes expensive. You need insurance before the earthquake or flood occurs. We are getting closer to the point of battening down the hatches--a time when we say, "'Thar she blows! Look out below!"

Waverider: Another excellent update from Puplava.

Sorry but I am fed up with this senseless tragedy. US Army imitates life...CM

I've been looking at a lot of opinions , observations and posts about the debt liquidations that are going to cause a run to the dollar.......but I am also looking OUR IRAQ FIASCO and seeing all of the bad press the US IS GETTING as a result as a perfect excuse for FOREIGN OWNERS OF US BONDS TO DUMP US SECURITIES.........and that sucking sound you may be getting ready to hear will be the sound of sales of US BONDS and conversion of U S DOLLARS into foreign currencies leaving the country ......albeit in a very orderly fashion .....and perhaps being converted into EURO DENOMINATED SECURITIES OR AUSSIE'S OR going into Japanse YEN to support NIKKEI....

What an interesting maze our world is becoming..

And God saw that the wickedness of man was great in the earth, and that every imagination of the thoughts of his heart was only evil continually.

Fellow Goldmeisters!

The "Boy" by Picasso went for $104,000,000 US Pesos.
When (so-called) art goes up and up, that's one of the clearest indicators of inflation. Art thrives in inflation.

So now, interest rates are going to start going up - and if you feel we had a long period of 1% rate, get set for the coming period of high and higher interest rates. The US will be unrecognizable after high interest rates get through with it. Messy busines!

The wheels are now coming off the economy.

As Bill Bonner says, get some logs for the fire, get some wine, sit back, relax, and watch this thing fall apart, secure in your gold holdings - in jewelry, NOT!

Let the games begin!

The GAB

PS And yes, Prestige is invaluable. The dirt out of Iraq is no way favorable for the US in any sphere, financial included. That Iraq goose is just about cooked, IMO. PLus for gold - maybe that's why it has been smashed?

Not on topic, but - please forgive - another "terrorist" attack may be necessary to galvanize the US into accepting the draft. Had to say it. GAB.

All those who, perhaps unconsciously, feel the intuitive urge to keep on "accumulating" the physical precious, at the most favarable moments,...are *- understanding- * Gold, rather than guessing about it. And more precisely, the Gold-situation in wich we have landed and whereto it will lead.
New, accidental Gold explorers on this forum will find a very "physical" atmosphere overhere with plenty of alternative argumentation. Slowly but surely, one by one,...individuals will start "feeling" Gold !
Ari,...I'm sure you don't mind that I was having LOL with..." ...think he can corner a printing press..."

Randy : Russian (or other non EU) goldreserves, mtm : When enough euro-reserves are in...goldreserves are there to neutralize the loses in dollar-reserves. One can switch to the mtm-system in no time...
It might give us an indication on how close FreeGold is or isn't ? The Value-factor of FreeGold being that Goldreserves are "permanantly" appropiately priced in a Gold friend currency.
Russia's (and ME) wealth are its enormous resources and China's wealth is its ant-capacities. Holders of real Value (worth) will evolve to the appropiate timing as to see their wealth (worth) exchanged for something much closer (associated with) a forever thing.

Your quote: "Russia's (and ME) wealth are its enormous resources and China's wealth is its ant-capacities"

is so true.

Every conqueror since Genghis Kahn has coveted Russia's massive resources in one form or another - first the breadbasket, later the minerals and oil. So far it has been the undoing of each one who bit off more than he can chew.

Short term, the Reaganites like to boast of undoing of USSR, but the financial damage done at home is roosting in Pyrrhic victory. It seems by "borrowing" the fall of the USSR, the "winning" superpower accelerated its own financial demise.

The Russia emerging from the Phoenix ashes has much greater potential then the USSSR, as its administration (corrupt, perhaps) is much less cumbersome than the the old Lenin Party.

China is emerging in a way that demonstrates a new appreciation for its massive human resources. Jim Rogers says they are "great capitalists".

Let's hope the USA that emerges from 90 years of FED insanity is more nimble and capable, as well. Perhaps loosening the yoke of dollar supremacy is just what the doctor ordered to bring back an internal perspective of the USA as a nation among nations and abandon the role of "global gunslinger"

http://www.nytimes.com/2004/05/08/business/worldbusiness/08bank.htmlHONG KONG, May 7 - The health of China's already troubled banking industry may deteriorate further if Beijing is successful in its effort to brake the issuance of new loans, but a financial crisis is unlikely anytime soon, analysts at credit-rating agencies and other experts said on Friday
.......................
Ryan Tsang, the director of greater China financial-services ratings at Standard & Poor's, agreed. "The banking sector is vulnerable," Mr. Tsang said, and slower growth "could present another challenge to a sector which is trying to reform," though probably not deliver a crippling blow.
********************
Misetich

How/where do Moody's and Standard & Poor obtain their information?

IF investors/individiduals are openly deceived by the so called "free enterprise" system - one can imagine the cover up and shenanigans going on in China who is attempting to be recognized as "a free market economy" by a Centrally controlled regime

In the US the Enron scandal revealed the con-game being played by investment banks in aiding fraudlently activities by circumventing rules and laws.

Rules and laws which they influence in design and application through powerful lobbying process and through direct/indirect participation (conflict of interest) in regulatory overseeing agency.

However, there's no denying China's centrestage emergence in the world economy. Banking problems exist everywhere - from US- (hidden in derivatives, non-disclosure, off-balance sheet items) to Russia, EU, Japan and indeed the whole fiat system worldwide.

It is China's growth that has put the squeezes on commodities - and it is China's continued growth putting on the squeeze on oil demand and consumption.

To summarily dismiss China's emergence (jawboning of Greenspan, Wallstreet, and planted news media articles)to soften up - cool off - speculative hedge funds that brought commodities prices even higher) is nonsense.

China led Asia economic recovery is dependent on export market - such as the US - as billions of cheap priced products flood the likes of Walmart

The US is dependent on these Asia imported goods - as Asia has become the "US manafacturing centre" - thus the exporting of manufacturing jobs

Imports from Asia have continued at a healthy pace, even through the mild recession of a few years ago.

The bottom line is nothing has changed in China - Sir Greenspan is concerned on the impact on commodities prices (even went to the extend of suggesting China -stop steel imports and work off their inventories- to cool off prices)

So here we have the US Fed who is unable to manage its own economy - (bubbles, bubbles everywhere) dictating to a growing emerging economic power had to run theirs- because it impacts his

Asia's strong re-emergence led by two vast populated China-India is throwing havoc into western economies who have availed on cheap energy and commodities prices at the expense of natural resources producers.

The power of markets is stronger than the power of conniving, deceitful central bankers -

As the vast populated Asian economies grow - consumer demand grows - putting additional strain on dwindling natural resoruces who have been primarily consumed by a small percentage of the world's population

Natural resouces rich countries such as Canada, Australia, Russia stand to benefit greatly from these seller's markets.

The oil rich Middle East is in the center of continued pre-meditated turmoil designed to obtain oil at prices that benefit their economy. As the world awakens - the tactics become bolder - aggressive - without limits.

It is interesting to note how Japan has swung completely and is supportive of the US $ - Iraq invasion as they're threatened by China's emergence

Will they succeed? The overwhelming consensus is yes - however the West is not united this time around as one faction tries to impose and dominate whilst the other seeks to be an equal partner -
This rift/disagreement causes diminished western economies influence as they compete against one ANOTHER

It remains to be seen as the Orient grows and competes for these natural resources

We follow the Trail on the footsteps of giants -

All Aboard The Gold Bull Express - Part ll

http://www.nytimes.com/2004/05/07/opinion/07KRUG.htmlSnip:

Those who expected big economic benefits from the war were, of course, utterly wrong about how things would go in Iraq. But the disastrous occupation is only part of the reason that oil is getting more expensive; the other, which will last even if we somehow find a way out of the quagmire, is the intensifying competition for a limited world oil supply.
........................
Even if things had gone well, however, Iraq couldn't have given us cheap oil for more than a couple of years at most, because the United States and other advanced countries are now competing for oil with the surging economies of Asia.
.....................
Since then, however, world demand has grown rapidly: the daily world consumption of oil is 12 million barrels higher than it was a decade ago, roughly equal to the combined production of Saudi Arabia and Iran. It turns out that America's love affair with gas guzzlers, shortsighted as it is, is not the main culprit: the big increases in demand have come from booming developing countries. China, in particular, still consumes only 8 percent of the world's oil � but it accounted for 37 percent of the growth in world oil consumption over the last four years.

The collision between rapidly growing world demand and a limited world supply is the reason why the oil market is so vulnerable to jitters. Maybe we'll get through this bad patch, and oil will fall back toward $30 a barrel. But if that happens, it will be only a temporary respite.

In a way it's ironic. Lately we've been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition � the scramble for oil and other resources � poses a much bigger threat to our prosperity.
***************
Misetich

The Feds played the "China Card" to raid speculative funds and cool off commodities rising prices

It is interesting to note comments by Dines on "China's boom bust"

Snip:

"We might go into this in the next TDL, but the collapse of
the China boom having coincided with Vice-President Cheney's recent visit to China arouses no little suspicion in our minds that the April decline was engineered by the government. "

End of snip

What did Cheney give the chinese in return to obtain 'chinese co-operation'in this disinformation campaign?

What assurances do the chinese have that Cheney can deliver whatever he promised since the upcoming presidential election race is close/slugfest?

What is boiling/burning underneath that the Feds are trying to hide?

A cool off of commodities prices favor the chinese as they can acquire needed material at cheaper prices -

So in a sense the Feds have succeeded in cooling off prices and trying to thwart rising price inflation which is showing in the PPI (delay upon delay of truthful prices) -

So what? Funds that have capitalized on rising commodities prices on the back of flooded reinflating accommodative central bankers policies worlwide -

Is this the end or a temporary lull in the commodities bull?

Is real energy/commodities demand slowing? According to natural gas, gasoline, electricity, oil prices DEMAND is going higher not lower

IF US growth is 1/2 as good as the Feds project and the IMF project then consumption will rise worlwide

IF consumption rises then DEMAND - supplies constraints will propel commodities higher and higher propelling PRICE INFLATION through the rooftop

IF consumption vanes in Western economies and the FED needs to increase IR to support the US $ - it will add pressure on the stock market which is highly leveraged to the economy
re: wealth effect

Even in the latter scenario China led Asia will still keep on growing as they essentially produce most of the products consumed by the West - thus energy demand will stay robust

The US military campaign worlwide is also providing a bust to commodities as countries infrastrures are devasted and being rebuilt. Military spending is rising - arms production increasing burning much needed energy

Iraqi resistance - Arab anger - to US forces in the ME will add ANOTHER measure of instability and high probabilities of disruption

Billions are being spend to protect Iraq's oil pipelines for security reasons - yet production is lower than pre-invasion

On a side note - its interesting to note that oil industry and its infrastrure was not damaged during this invasion whilst the rest of Iraq infrastrure was decimated including mosques- directly by hits or subsequent sabotage

Iraq's oil production is the key to lower oil prices and based on continued resistance to US occupation - the latest "pictures/video horror story" is still unfolding adding more fuel to the fire- the likelyhood of Iraq's oil productions levels to significantly impact oil prices is slim and none

Pandora box has been opened - resulting in HIGHER OIL PRICES rather than the counted upon and anticipated drop in prices - hence Sir Greenspan comments that energy prices are here to stay

The other shoe to fall - is China's continuation of its economic growth - energy and commodities demand- which will discredit the present disinformation campaign

All Aboard The Gold Bull Express - Part ll

"Such declines are always discouraging,
which is why it's difficult to buy near Bottoms, so
please keep in mind Dinesism #42 ( DITER ) in which the very function of declines in a Major bull market is to keep investors out until the Top. "

http://news.xinhuanet.com/english/2004-05/08/content_1456814.htmSnip:

BEIJING, May 8 (Xinhuanet) -- China is looking to diversify its foreign exchange reserves out of US dollars, according to its top foreign exchange manager.

China's chief forex regulator, Guo Shuqing, said in a recent Financial Times interview the make-up of the country's US$440-billion forex cash pile was being altered to include more European and Asian bonds, given concerns over a weaker US dollar.

The mere thought of China offloading some of its vast US Treasury holdings is enough to send shivers down investors' spines, risking a further deterioration in the already-bloated US current account deficit and more dollar weakness.
.................................
"Aggregate IMF (International Monetary Fund) data from 2002 showed a clear shift out of dollars into euro- and sterling-denominated instruments. They are doing this on an ongoing basis, and only an abrupt change would have major implications
.......................
"It is easy to get carried away with how much they are diversifying. Certainly they are, but we are talking about a very conservative central bank, and they will only be doing it very gradually," said James Malcolm, foreign exchange strategist at JP Morgan in Singapore.
.....................
"They have been shifting in this direction for some time," said Mary Davis, currency strategist at CSFB in London
....................
"There is a strong incentive for the central bank to hold some forex reserves in the most liquid currency, as they want to be able to react quickly in the forex markets if necessary," analysts at Goldman Sachs wrote in a research paper earlier this year.

That means Chinese authorities are likely to maintain a large portion of their reserves in the world's most liquid currency, the US dollar.
***************
Misetich

Very interesting timing of "news release" from Official Sources in China

So what is really going on behind the scenes? Why this announcement in the view of Sir Greenspan, Wall Street "China overheating"?

The US $ has been supported by this massive accumulations in recent years - by Orient central bankers -which cannot go on forever

Do these central bankers continue their $ accumulation inspite of a depreciating US $?

The US $ is being challenged on all fronts - Supporting and friendly allies are being caught in the squeeze of all squeezes

EU has been reducing their US $ reserves
Russia has been divesifying their reserves
OPEC oil prices reflect a depreciting US $

Is Asia Next?

GOLD - PHYSICAL GOLD IS THE ULTIMATE CURRENCY (according to one - Alan Greenspan)

All Aboard The Gold Bull Express - Part ll

(AB) A spokesman for Queen Elizabeth announced today that the queen would be jettisoning the royal crown of England in favour of a model "More in keeping with the times."
The new crown will be fashioned entirely from high value British and American paper currency. The Queen was finding the old model a bit heavy and welcomed the move to the new lightweight crown in sympathy with modern British monetary policy.
The heads of the IMF, BIS, and the Central Banks of the G-7 all lauded the move and called for similar action by monarchs in their respective nations. A Fiat-Wear party for the Crown Heads of Europe has been scheduled for July 4. President Bush and Alan Greenspan have invited, and will, of course be suppliers of the main ingredient for the new head gear.

"have been invited........"

http://www.businessweek.com/magazine/content/04_20/b3883043.htmSnip:

That said, there's little margin for error. Bill Greehey, CEO of Valero Energy Corp. (VLO ), the third-biggest U.S. refiner, says U.S. refineries will be unable to produce all the gas needed this summer, so imports will have to fill the gap. Indeed, imports now satisfy about 9% of U.S. demand, up from about 5% in 1998. But this year foreign refiners have had trouble meeting new U.S. formulation requirements. If problems hit, spot shortages could develop and prices could leap again.

Where is the greatest risk of shortages?
In California, because it is a gasoline "island." The state has to produce about 90% of the gasoline it needs because of its special gas formulation rules. Markets are so tight there that a relatively minor event, the Apr. 27 rupture of a refined-products pipeline in Northern California, triggered a low-level alert. Gasoline supplies in California through Apr. 30 were 9% lower than a year earlier, according to the California Energy Commission. One or two large refinery outages could cause major trouble.

How much damage are the higher energy prices doing to the economy?
The problem is twofold: High energy costs suppress consumer spending on other items, and they increase the rate of inflation. That's an unpleasant combination. David A. Wyss, chief economist at Standard & Poor's (MHP ), estimates that each $10-a-barrel increase in the price of oil subtracts 0.25% from the economy's growth rate. Worldwide, the International Energy Agency recently estimated that economic growth would have been at least half a percentage point higher in the past two or three years if prices had remained at mid-2001 levels -- around $25 a barrel for New York Mercantile Exchange-traded crude. Still, the Federal Reserve remains optimistic that energy prices won't knock the recovery off track.
***********
Misetich

"Joe Public" is being alerted - High energy prices are here to stay a little longer than planned or anticipated

IF weather temperatures rise in the summertime - higher natural gas and electricity prices will be ANOTHER factor to contend with..adding additional woes

Though rest assured Sir Greenspan will soon make an announcement - carried by the Financial Times - that higher climate cooling will be provided by Bernake's fiat dispensing helicopters - which will cause funds/investors to rush to dump their invesments in energy related commodities investments

...and the toad remained tranquil as the temperature rose...

...wiser ones added Physical Gold to their insurance portfolio - just in case the overflooding of fiat dispensed by Bernacke's helicopters caught fire...

Gold is indistrucable! Gold is money!

All Aboard The Gold Bull Express - Part ll

http://www.usagold.com/AMK/MK-gold.htmlWe a special treat for you this weekend at the News & Views page -- an analysis of current Federal Reserve policy from our long-time favorite Fed watcher, Adrian van Eck.

More recommended weekend reading.

Hope that you are having a relaxing weekend.........

I like NONE of your white space. What's the point of it? It's bad manners, like a fart in an elevator. I don't think anyone comes here expecting to exercise their scrolling muscle.

I know when posting that the white space may show up unknowingly becaue it has to do with where the cursor markers are - most times I don't know where they are because they're illegible (except in Word) to the naked eye. If I may kindly suggest Sir - after you've completed your post but before submitting your message, place your cursor just after the last letter at the end of your post, and then press the "delete" button for a few seconds - you will delete any unwanted white space. Cheers, and thanks for your contributions here.
Waverider

Ag Mountain (05/08/04; 11:06:07MT - usagold.com msg#: 120858)
I'll second that.

@ misetech

One commendation on your white space.

You finally found something AgMountain and I can agree on! LOL

My scrolling muscles find them unpopular, as well.

http://www.netcastdaily.com/fsnewshour.htmToday's FSN second hour is a really pointed analysis of oil supply and demand issues and their relationship to overall health of the economy.

One of Puplava's best guests IMHO. Check it out.

http://www.usagold.com/gold/special/TwentiesAlert.html

Client Alert /Purchase Recommendation
 
United States $20 Gold Pieces
A diversification within a diversification

Over the past two years, as indicated by the USAGOLD Index of Historic U.S. Gold Coins chart, U.S. $20 gold pieces have been in a bull market.

A longer term index chart is also provided to show:

1. This bull market, if anything, is in its infancy and,

2. The potential upside given the long term chart's highs could be multiples the current level.

The purpose of this advisory is to alert our clientele about this opportunity and to provide some guidelines for your possible participation. The current down-tick, in our opinion, should be viewed as a buying opportunity to be capitalized upon quickly before the market resumes the primary uptrend.

Rationale:

The all-time index high occurred in 1990 at 5250. Currently, the index is trading in the 1750 range...(More)

From your post, "Evil, what it is"

"And God saw that the wickedness of man was great in the
earth, and that every imagination of the thoughts of his
heart was only evil continually."

Of course that's from the Bible. And if you want to
believe it, go ahead.

But when that was written, the God of the Ancient Hebrews had not yet learned about me.

The most shocking aspect of this situation,IMO,is that 50% of all gasoline produced is burnt in the US,fueling an economy that really isn't producing much of anything other
than "services" and storytelling.

Mr.Market will correct that imbalance,if he's allowed to,by the protectors of "free" markets.However'since those protectors of free markets are also protectors of the American "right" to a free lunch at the expense of the ROW,this unpleasant reality may take a while to surface.


Inevitably,he'll just move those protectors out the way,forcefully.They will fight back,they deserve to lose on ethical,moral and economic grounds.They will use any means necessary to forestall this fate,including using more killing,coercion,fraud, military occupations and the T-factor .

It's just the American way,or is it?

Hopefully,the people of America will say no,I really don't expect it though.

http://www.futuresource.com/charts/charts.jsp?s=CL&o=DX&a=D&z=610x300&d=LOW&b=LINE&st=This comparason chart seems to be indicating a shift from a front-running Dollar, (Oil moves lagging DX by days) to an Oil leading situation.

A good comparitor going forward will be the DX/Oil futures situation. DX (in contango) and Oil (in B'ation)... if Oil "IS" leading (as above) and, given the tight correllation that exists, (DX/OIL) a move to B'ation in DX futures could be expected.

Game Over!

@ Topaz:

These words are new to me. Can you re-explain what you mean?

As I have used ' = oldi, you might try translating Topaz like this:

' = ackward

R.

Contago is essentially the opposite of that. That is, somebody is willing to pay a premium to receive a future delivery and not to hold whatever it is today.

R.

The normal market situation in an inflationary environment is in "contango" ie: the price of an item will be more expensive in the future. Backwardation is the reverse ie: an item will cost LESS in the future.

Oil backwardation has, in the past been regarded as an indication of oversupply (a demand driven phenomenon) and has usually preceded a drop in price. I feel these current Oil/DX markets (cronic "B" in Oil futures) are supplier driven BUT Dollar denominated ie: Your Dec04 Oil is NETT the same price as your Jun04 Oil. If we witness a move to "leading" Oil in the DX/Oil equation we are effectively moving from a Dollar denominated Oil price to an Oil denominated Dollar price ... a subtle change with profound consequences imvho g-lox.

No it isn't the American way. You are linking the run amok politicians, corporations and bankers with the hard working Americans that have always provided the money and blood to maintain the America, that so many of us cherish.
I don't think that the average American has ever expected a "free lunch." I have had ancestors and relatives that have fought and died in every major conflict, that the U S has been involved in, starting with the Revolutionary War. One died at the battle of Kings Mountain, the turning point of the American Revolution.
My turn came as a combat veteran of the unpopular Vietnam War.
About the next time that the situation warrants that the U.S Supreme Court is the deciding factor again, as to who will occupy the White House, is the time you will see that the American people have had enough of the trashing of the constitution. IMHO, the second American Revolution is not that far off. If you are an American, I sincerely hope that you have enough faith in what the real America stands for, to stay the course. If you are not an American, please don't let a few power hungry misfits sway your feelings toward millions of honest, hardworking Americans that want the same thing for themselves and their families, as other honest and hardworking people in the other parts of world want. Best wishes, goldquest

http://quote.bloomberg.com/apps/news?pid=10000103&sid=azWE5boGHO3w&refer=usHEADLINE: U.S. 10-Year Treasury Has Longest Slide Since 1994

May 8 (Bloomberg) -- The 10-year U.S. Treasury note fell for a seventh straight week, its longest losing streak since 1994...

Investors [selling bonds] pushed the note's yield to its highest since July 2002 amid growing expectations the Fed will raise its target for the overnight lending rate between banks at its next meeting on June 30 to keep a growing economy from causing faster inflation. Inflation erodes the value of fixed-income payments.

``You're going to see selling on any kind of market rally'' in coming days, said Thomas Connor, head of interest-rate swap, Treasury and agency trading at J.P. Morgan Securities in New York.

Since mid-March, the yield on the 10-year note, which is a benchmark for consumer and corporate borrowing rates, has soared from 3.65 percent. An index of Treasuries due in 10 years or more has returned a negative 4.73 percent the past month, including reinvested interest, the worst of 154 indexes tracked by the European Federation of Financial Analysts Societies.

An investor who bought $10 million face amount of 10-year notes at the year's low yield would have lost about $896,900.

The rise in yields comes as the government is preparing for its quarterly sales of three-, five- and 10-year notes next week. The Treasury will auction $24 billion of three-year notes on Tuesday, $15 billion of five-year notes on Wednesday and $15 billion of 10-year notes on Thursday.

In the most recent quarterly 10-year note sale on Feb. 12, the Treasury sold $16 billion of notes with a fixed interest rate of 4 percent that will cost the government $6.4 billion in interest over the life of the notes. If next week's smaller auction were held today, it would cost the government $7.13 billion in interest, because of the rise in yields.

--------(see url for full text)------

As great as bonds might be during the bull period where prices are rising and therefore today's yields are larger than tomorrow's, they are the opposite of that, giving you a doubly-bad whammy when the turn comes. Investors looking to sell have a hard time finding willing buyers because the sidelined buyers expect they can get them at lower prices and higher yields if they simply wait it out.

So the question for those people becomes one of where to invest their money in the meanwhile. That's where they must weight the relative attractiveness and value-opportunities in and among equities (stocks) and tangibles (gold).

In that vein, it becomes helpful to look at the big picture, to see if anything special is brewing on the horizon that might tip the scale in favor of one over the other. Arguably, a retooling of the international monetary system's supporting framework away from dominantly national reserves (U.S. dollar), to something decidedly less national, potentially gives gold an epic advantage of historic proportions.

We can only cast about guesses for the timing of the ribbon-cutting, but on such a day, you will either have your gold (and your outsized rewards), or you will have no gold (and equally outsized regrets).

To be sure, "The possession of gold has ruined fewer men than the lack of it." --T.B.A.

R.

@ Old Yeller, goldquest

I agree that this is NOT the American Way, but with the advent of the NSA in 1948 removing "security" concerns from Congressional oversight, post WWII operations have been run as covertly as possible. The unfortunate evolution of this is bifurcation of public and private motives and execution.

The Viet-Nam debaucle collapsed when the media control was lost and many Americans saw the need to rein in the obvious cross-purpose dealings. When Ollie North was indicted for lying to Congress about "drugs for arms" deals out of the White House, his pardon closed the investigations into MidEast and South American covet policies. This is right when Saddam was "parading around" on camera with Rummy.

Foreign policy has devolved further from lack of oversight and lack of checks and balances ever since, prompting one German cabinet official to opine that they had seen those tactics once before.

"Wag the Dog" was not a novel idea. It was the details which came from the imagination of the film makers.

If manipulation works so well to maintain foreign policy support, why not adapt it to market manipulations and give the PPT a full time job? The ENRON billions and other "lost" funds have disappeared to the Caribbean banks and are quite active in Bond market action, as suggested to AG by one lone Senator in the March testimony. The PPT have way deeper funding than what's "on the books".

Unfortunately, as we are witnessing, "social engineering" involves too many variables to be pulled off without any glitches.

The tapestry of Pax Americana is unraveling. What's next - got gold?

P.S. Thanks Topaz and Randy for the further explanation of contango and backassward'ation. (:^)

I don't mean to be critical of persons, but, at the link,
several days ago the price objective was 516. Now it's
320. If 320 is correct, 516 cannot have been correct. If
516 is still correct, 320 can't be correct. So, which is
correct..., neither. When I was looking into these point
and figure charts and learning to make my own, and
learning about how to figure the price objective, it
seemed to me made up mostly of snake oil, or witchcraft.
It didn't seem to be based on anything predictable. I like
the point and figure chart idea, but there are some things
it can't do. I think price objective is one of them. Now.
Watch it go down to 320. And then up to 516.

Since the evolution of "..the GOLD BULL EXPRESS - Part I" to " the GOLD BULL EXPRESS - Part II" you have become this forum's # 1 poster IMVHO.

if you do not believe in the "God of the Ancient Hebrews," what do U believe?
if you lack the faith to believe in Bible Doctrine, we obviously have no basis of dialgue.
on the other hand, if U know
tell me, when and how,, was "it written."
what exactly is the language of God (of the Old and New Testament?
who is Jesus?
what is the significance of His Word?
on another topic, yes gold will move up from the next base.
that low will be higher than the last low.

All this religious #@#$ ... in jest or not... not good for the Forum.

Gold is good.

"Gold is NOT a religion" -Harry

We had DanDruff proselytizing here about a year ago, and boy, it gets old fast!

There are lots of well educated folks here who have read the various versions of Christian Bible, Torah, Koran, and various Asian works. We are quite capable of fomenting our own opinions on such topics without soapbox evangelism.

One who posts "If you do not believe what I believe, we have no basis for further discussion" should consider heeding his own advice.

Let's talk about gold and judiciously apply analysis of current events and financial trends to the topic at hand.

Hey Randy ...
...in a similar vein, did you catch Rick Santelli on CNBC Friday arvo? Just before the cross Maria was talking to an "expert" about Bond yields. He (the ex) was predicting a 5% yield on the 10Yr by years end ... they then crossed to Rick who, grinning widely, said the way things were going we'd see 5% by the end of next week!!

I think Rick does a great job, but in this case reckon he's a tad optimistic ;-)

http://custom.marketwatch.com/custom/earthlink-net/mw-news.asp?guid={8A89E36B-0E79-44B0-A790-DFFCDBE4BA21}snippet:

"HEALDSBURG, Calif. (CBS.MW) -- As the price of crude oil keeps rising toward $40 a barrel and beyond, it has become increasingly clear that the world is heading toward a major oil crisis -- in terms of both price and supply -- that will dwarf that of 1973.

For many of us who have been observers of global energy trends for what now amounts to decades, this has become not a matter of "if" but rather one of "when." We are facing a convergence of three forces that will have a potentially explosive effect on the market for crude oil.

They are:

1. A growing geopolitical crisis in the Middle East, which is now threatening to spread beyond Iraq to Saudi Arabia, the world's largest producer and exporter of crude oil.

2. A surge in global demand for energy and particularly crude oil and its derivatives, fueled by the recovery of both the American and Japanese economies and the unprecedented growth of China, which has just replaced Japan as the world's second largest consumer of crude oil.

3. A structural deterioration of the world's oil supply. What is involved here is nothing short of an imminent peaking out of production of crude oil on a global basis -- known by energy industry insiders as "Hubbert's Peak" -- which would turn a cyclical supply/demand crisis into a structural energy crisis of unprecedented proportions."

Goldilox:

LOTs more warnings on oil supply issues in the mainstream press of late. The article goes on to discuss the potential for interruption if the Saudi Kingdom experiences increasing unrest.

http://www.reuters.com/newsArticle.jhtml;jsessionid=NUTIXC1WTKVSWCRBAE0CFEY?type=businessNews&storyID=5081051Snip:

Fed Board of Governors economist Wayne Passmore said on Friday Fannie Mae's and Freddie Mac's congressional charters -- which grant them several advantages, including the ability to tap the Treasury for $2.25 billion each in an emergency -- is worth billions to the companies because of the erroneous perception of government backing it fosters among investors
....................
But Passmore's study, and one by Atlanta Fed economist Scott Frame saying the enterprises may engage in riskier behavior as they seek to sustain their growth rates, add to a chorus of central bank warnings about Fannie Mae and Freddie Mac
......................
Poole called on Thursday for repeal of Fannie Mae's and Freddie Mac's Treasury lines of credit to send a signal to investors that the government does not guarantee GSE debt.
........................
Treasury Secretary John Snow told the same conference that while no there is no immediate risk to the financial system from the companies, they should be supervised more rigorously
********************
Misetich
A week does not pass by without a Fed governor sounding the "lookout alarm" - How can Treasurer Snow, KNOW if there's a risk to the financial system -
GSE's an accident ready to happen

All Aboard The Gold Bull Express - Part ll

(thanks for the tip on the whiteouts)

I like your whiteouts as well as your pointed and frequent commentary that keeps us appraised on so many facets of economic fishnet that surrounds us . Thank you for both.

@ misetech

It's difficult to ascertain what Snow "knows", as his public responses have all been highly scripted. He functions in "yes man" administration according to O'Neill.

This says nothing about his ability to understand, but publicly, his hands are obviously tied quite tightly.

http://groups.yahoo.com/group/gata/message/2164... over manipulation in the silver market.


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

gata-subscribe@yahoogroups.com

http://www.financialsense.com/stormwatch/oldupdates/2004/0507.htmlsnippet:

Inflationary Expectations Rise�

I return once again to the issue of inflation. If a central bank prints sufficient quantities of paper, then deflation in the domestic economy can be avoided�but at a cost. That cost is either the depreciation of the currency against other less inflated currencies or depreciation against gold, silver, oil, commodities and other hard assets. That is what we have seen over the last few years in the price of gold, oil, and commodities in general.

What we have experienced over the last decade in the financial markets is continuous asset inflation from stocks and bonds to real estate. When investors pay 68 times earnings for NASDAQ stocks or are willing to accept negative interest rates in the bond and money markets, this is evidence of asset inflation. As long as assets keep rising, everybody is happy and the system holds together. This is another reason why the natural proclivity of politicians is to inflate. Nobody likes deflation.

For most of the last two decades, the inflation rate has been moderate. However, recently, inflation rates have begun to soar and spill over on to Main Street. The butcher, the baker, and the gasoline maker are all demanding and getting higher prices for their services and goods. Food prices are up as is gas at the pumps. Airline tickets are up, trucking companies are adding surcharges to their bills, household furnishings, cars, and apparel to cab fares have all moved higher. While analysts, anchors, economists, central bankers and politicians speak of moderate inflation rates, the Average Joe knows better.

Goldilox:

This entire article is well written. My choice for which section to post changed twice as I read deeper into it. JP is hitting on all cylinders lately.

http://www.prudentbear.com/creditbubblebulletin.aspSnip:

Moreover, I do not at this point expect a major reversal in sentiment that would see a return to King Dollar speculative flows into dollar financial assets. Yes, the dollar is today gaining some lost ground as various bets are unwound. But this is a much different dynamic than the previous flight to play (Fed-induced) inflating U.S. financial asset prices. The prospects for enduring U.S. asset inflation are, these days, especially poor. Yet until our Credit system eventually buckles, unrelenting government and mortgage finance excess may very well finance ongoing massive current account deficits. This will work to support global system liquidity � offsetting liquidity lost with deleveraging. And while rates have risen meaningfully, they are not at this point sufficiently onerous to significantly restrain the U.S. mortgage finance Bubble or Asian growth. But it is reasonable to presume that these two respective historic Bubbles are in the process of experiencing their best days.
************************
Misetich
A recent consumer poll indicated - low wage earners are said to increase their debt load. The odds are they're borrowing from paul to pay peter
IEA warned of an oil shock if oil prices remain at this current levels for the next few months

Shortly we'll find out whether the "massive jobs created" in March & April - BLS reports are for real or phantom of the "software model"- in the form of increased consumer spending and higher tax inflows to the US Treasury

The odds are higher price inflation will overwhelm consumer spending and the Feds will remain in an "accomodative stance"

OIL prices - Job Creation hold the key to Asset Deflation and a bust of the debt bubble

All Aboard The Gold Bull Express - Part ll

http://www.latimes.com/business/la-re-lumber9may09,1,1226784.story?coll=la-headlines-businessSnip:

First the run-up in gasoline and milk prices. Now lumber and steel.

Homeowners planning to add a second story or a deck or, heaven forbid, build a new house are in for some serious sticker shock, experts say, as soaring prices of construction materials � from plywood to plumbing products � force contractors to raise prices along with the roofs.

Record demand for construction supplies amid shortages is creating a pricing nightmare, just as home building approaches peak season.

The price of framing lumber is up 58% from a year ago. Oriented strand board � the plywood substitute used for walls, floors and roofs � costs 158% more than a year ago, according to Random Lengths, a market- and price-reporting service that tracks lumber prices.

Steel scrap prices are up 100% from last year, making steel studs, reinforcing bar, nails and other products more expensive, according to the National Assn. of Home Builders.

In California, the steep price increases could add about $8,000 to the cost of building a 2,100-square-foot house, said Michael Carliner, economist for the builders' trade group.
.......................
"I've never seen anything like this," said Jeff Birch, a Dana Point builder in business for 27 years. "I looked at plywood two to three months ago and it was $10 a sheet; now it's $20."
.....................
La Ca--ada Flintridge contractor Bob Rhody, reacting to the high cost of raw building materials, raised his price $2 a square foot to $91 per square foot in January, when prices started climbing, and will raise them again this month for new contracts, allowing him a small cushion against price increases. A decade ago he charged $60 a square foot
****************
Misetich

Price infaltion is soaring - little wonder the PPI was delayed through a "glitch"

Price increases are occurring in base materials - job creation in these industries are insignificant -

All Aboard The Gold Bull Express - Part ll

http://www.financialsense.com/fsu/posts/dancy/diner.htmlAn interview with oil analyst Michael Simmons in DC on 4/27/04. Conducted by Julian Darley.

Simmons discusses his concerns with Suadi Arabia's lack of transparency in reserves reporting, especially noting that Shell's recent scandal increases suspicions throughout the industry.

#5 on the articl list over at Joe's Diner.

#7 is Simmons slide presentation referenced in the interview.

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

http://www.usagold.com/GoldTrail/archives/GoldTrailOne.html"...My choice for which section to post changed twice as I read deeper into it...."

Although I haven't visited your link, I'm willing to go out on a limb and agree that you selected the best excerpt.

The threat of deflation can be fought with the sacrifice of the national monetary integrity -- a drive toward higher prices though increasingly indiscriminate debt monetization and its concomitant depreciation. Market prices tend not to fall if the currency is made to always be easier to get and similarly valued less and less.

The price of gold is often suggested to be the most important indicator of the relative level of inflationary tendencies in the economy. I would suggest, however, that the price of a gallon of gasoline is more important -- simply because it is so much in the public eye (more so than a barrel of oil from which it is refined) because nearly everyone buys gasoline a couple times a week and its price is posted on gas station signs, highly visible in every town of the nation.

For everyone who maturely lived through the 1970's, the rising price of gasoline for their cars surely left an indelible association between that and the depreciation of the currency; inflation in general. And the more economically aware of those Average Joes will also likely associate those events with the remarkable run up of the price of gold to the $800 level.

I would therefore tend to think that if "TPTB", such as may be, wanted to manipulate the public's inflationary expectations, they would do it through whatever means would be required to affect the price of a gallon of gasoline as the bottom line.

And to chase that threat to its knotted end, we know that the cheapness of gas can only come from the cheapness of oil, which in turn depends on both the ability and willingness of the oil suppliers to provide it at any given price to the market. And if, for example, the 'willingness' part of that equation can be lubricated through guarantees of access to moderately-priced gold to the price-setting swing producers of oil, then there you have your chain explaining why there would exist among the dollar's controlling monetary authorities an incentive to engender an obfuscation of the value of our very scarce gold among the many potential customers for this most precious, cheap-gasoline-assuring resource.

That is to say, these potentially competing gold investors -- the ones who don't provide us with cheap oil/gasoline -- are to be kept disinterested in gold through an unattractive investment environment of ugly price performance -- low and lower prices brought about by the appearance of ample (pseudo)gold via the system of bullion banking and gold derivatives. This helps ensure that the limited supply of physical gold will go primarily to only those important few (selling cheap oil) who truly want the physical gold for longer-term reasons that transcend the illusion of today's price.

Through our efforts here, hopefully a growing number of you visitors are joining in that most prudent acquisition of physical gold for all the RIGHT reasons. Because, as a good friend said to me in the past week, if people don't have a correct understanding of money, they may seemingly do the right and necessary thing at this moment, but they are doomed to die a thousand deaths of financial missteps down the road when it will matter most.

For more background and details, we can turn again and again to the Gold Trail.

R.

You're right. I don't come here to read about religion either. And even my own reflections on current political goings-on haven't really contributed anything worthwhile, at least on the face of it. So I'll stop. Here is a point of view relative to gold.

We might be wrong about a housing bubble. If materials cost more, houses will cost more. And materials going up. Maybe these prices aren't too high, but maybe the dollars that it costs to buy them are simply very low. If Kerry gets elected, I look for public euphoria to lift the dollar. That seemed to happen last week. It might cause housing prices to stumble. But the dollar is not strong fundamentally. And inflation is coming on. With gasoline up, and not likely to come down, everything is changing. Gold is one real choice that people will have. Whether they will know it or not, and when, are two other matters. But many will recognize it. And these will be enough to move the price. What matters most, in my opinion, however, is that big cities are obsolete. What terrorist would be likely to blow up a bar in Biloxi, Mississippi, or a Cafe in Missouri City, Missouri? But in just a few minutes, by doing something horrible in New York, Los Angeles, Chicago, Atlanta, Dallas, Houston, Boston, Philadelphia, or San Francisco, they could bring the whole nation to its knees, psychologically, morally, and emotionally. The only difference is, and it's an important difference, the people in the bar in Biloxi, and in the cafe in Missouri City, would simply watch, though quite traumatized, and then go home and go to sleep as usual, thanking their lucky stars they don't live in those other places. I've moved out of Houston for this very reason. It doesn't make sense to live in a nation's energy capital during a war. My house is still there, but I'm not. I can get another house. But it would be hard to replace me. Other people might start realizing this too. It might affect housing costs in unanticipated ways.

Lumber and plywood...hmmmm...how are we going to blame those on the Chinese?

a nation of one, your post 120840 didnt seem off topic to me. Ole man, I would choose another qoute from the bible if I wanted to make a comment about evil. My favorite is...."the devil knows not for whom he works". I cant imagine god being surprised by the evil us humans struggle with. It is his design that we have this struggle, and no one can escape. No matter how good you try to be, you are still subject to troubles and personal flaws. Actually, that is a really good thing. Otherwise, some joe blow, here on the forum or anywhere in your life could lord it over us going "hey, I got it together, you slackers should try harder, or be as smart as me or ....."
That would be intolerable. All those eastern guys that claim to have gotten to this or that "spiritual attainment"
would have a shot at actually fooling us. Luckily, "evil", in its more everyday forms, makes sure none of us become god. None of us can avoid making the occasional flawed post!

Corrugated box prices have risen 9%. There is Another price increase coming shortly. All paper grades are moving.

URL: sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/05/09/MNGOU6IK1J1.DTL


With troop commitments growing, the cost of the war in Iraq could top $150 billion through the next fiscal year � as much as three times what the White House had originally estimated. And, according to congressional researchers and outside budget experts, the war and continuing occupation could total $300 billion over the next decade, making this one of the costliest military campaigns in modern times.

As a measure of the Bush administration's priorities in the war on terrorism, it has spent about $3 in Iraq for every $1 committed to homeland security, experts say.

That divide may be growing.

The Pentagon says its monthly costs for Operation Iraqi Freedom shot up from $2.7 billion in November to nearly $7 billion in January, the last month for which ithas provided figures. Since then, the number of troops has jumped by 20,000 to 135,000, and the bloody insurgency has grown.

Defense officials initially said the troop increases were temporary, but last week they changed course and said they planned to maintain the higher levels through 2005, along with increased numbers of tanks and other heavy military equipment. The tempo of military operations has increased sharply in response to a wave of lethal attacks, suggesting the costs still may be climbing.

Both Democratic and Republican lawmakers have started to express deep concern over the costs and the way in which the Bush administration is choosing to cover them.

The inflationary tide raises all boats. . . .

(American boats)

(Chinese boats)

(European boats)

(Even. . . .Japanese boats)

. . . . .and the cost of the wood used to build them.

I heard today that mortgage rates jumped .75% end of week. Let's not forget that boat either.

International John Lawism -- the epicycle of our time.

Gold shall prevail.

Bill Murphy had an interesting quote from Alan Greenspan tonight in his report:

"We have statutorily gone onto a fiat money standard and as a consequence of that, it is inevitable that the authority which is the producer of the money supply will have inordinate power."

-- Alan Greenspan, House Financial Services Committee, February 11, 2004

I will add perhaps what Mr. Greenspan might have were he not the chairman of the Fed:

Such power in the history of money has been fleeting, and almost always the progenitor of economic disaster. As Duncan points out, we've never been in this place before, and we do not know or understand the potential outcomes. That alone is a powerful argument for hedging with gold - the one asset detached from the madness.

Investment analyst, Hugh Hendry:

"What's happening today happened 300 years ago in the French economy when John Law, another Scotsman, was allowed to launch the first government-sanctioned bank, which replaced coins with paper money. Commerce boomed. Politicians recognized this correlation between issuing more money and people liking you. They issued more and more money, but it was a false promise. Nothing intrinsically was being added to the economy except promises, which could never be redeemed. Selling by speculators caused the stock market to correct. The correction encouraged the authorities to print more funny money. Ultimately, the continued pumping of liquidity destroyed the economy, the stock market and France's currency."

And John Law was stopped at the French border with a wagon full of gold and silver coins.

Let us not forget how the milk prices have affected ice cream boats!

$5.00 banana splits are here! Ouch!

Almost 25 years ago, Gold was priced more than double its today figure. The financial and monetary communities, live happily and very complacent in their almost perfect, non-Gold, fata morgana.
Very complacent,... because none of the projected catastrophies (by goldphiles), during the past 5 years, have been materialized, so far. One should be complacent for much less achievements, than what has been engineered in the past decade.

But, as time goes by,...and more prices are going to reflect what currencies are worth,...that "old" question ...WHY DOES GOLD REMAINS SO INCREDIBLY CHEAP FOR THAT LONG...will come back, again and again ! Those same repetitive, nonsense answers will not remain satisfactory,...recomforting, anymore. All of a sudden, "they" will get that feeling of,...WE HAVE BEEN FOOLING OURSELVES !

The coming weeks (months), are of some major importance :
What will the $-POO do !? And if the $-POO consolidates above the $40,...will the euro take action and succeed in easing the increasing oil-pain with a higher �-exchange rate against the $ !?
What if the november US-administration decides it's time to put Saudi Arabia (the POO) under pressure !? Watch the mounting pressure on the Putin front (Grozny today).

What if,...cheap Gold-flows, lose their intended effect on the cheap oil-flows !? Those that still continue to deny any "relationship", between oil and Gold, are the same ones who try...keep on trying to paint Gold as correctly priced.

Also note that rising IRs means nothing less than that the currency is losing worth (purchasing power) at a higher speed ! That's WHY POG, "must" be increasingly re-paperized as to lower its "signal" function. Watch if oil is going to let it happen, once again.

Druid: Due to many years of conditioning, the managing of expectations is an extremely difficult task to consider when analyzing our current economic and financial environment. In my opinion, the picture that seems to be coming into focus, at least for me, is that higher priced oil will be sold to the public as a good thing resulting from a soaring economy that's hitting on all cylinders, while owning gold or silver a very bad and "unpatriotic" act.

This will be consistent in taking us down the hyperinflationary road. You see, we can all rally and come together as "Americans" around oil but I don't believe we are quite there yet as it pertains to gold and silver.

Should it become necessary, and it will, the selling, marketing and managing of "perception" here at home concerning any link or association between Euro/Gold/Oil and the concept of "FreeGold" will be a much easier task for the monetary authorities to "frame" and pull off then continue to fool the rest of the world.

Old ingrained expectations can be easily destroyed and replaced with new perceptions.

While the concept of "FreeGold" is in the development and transition stage throughout the world, it will be called everything but that here at home.

Is there a possibility that the next interest rate move made by the Fed., could be to LOWER interest rates?

I know-- consensus says that market pressure will pull Fed short-term rates upward, kicking and screaming. However, the markets look to be saying that we ARE entering a crash phase�right now! And if so, Treasuries are THE popular safe haven, regardless of how fond you and I may be of Gold and Silver. Speaking of Gold and Silver, I believe the charts show that the metal stocks are in a crash! [Physical isn't doing that hot, obviously, either.] This will spread to other markets-maybe as soon as this week?

The Dow Jones has experienced a terrible two-week downward run, and now approaches it's 200 day moving average on the way down, the transports and financial index, likewise. The bond market has sold off deeply and in a crash may look over-sold and therefore the place to stash cash after a Waterfall event, thereby actually allowing the Fed. to lower short-term rates.

We will turn on the news someday soon with the general stock market down 200 points and heading down�500 points by days end. This inflation is taking its toll on consumers. The market knows it. Soon we will face the deflation of financial assets, as long term interest rates take down the mortgage and re-fi industry, and the higher cost of driving to work and putting food on the table takes every spare dollar left in the pocket. I believe that is what the Gold market is telling us right now! At some point, we will see if we are correct about Gold and/or Silver being the ultimate safe havens for our savings, as the market eventually questions the safety and integrity of the Unites States Government. ---Gdome

During the past decade, a lot of Gold has been reshuffled and has "landed" in the "right" hands !!! These, relatively new Gold-hands are the ones that accumulated for nothing else, but FreeGold.
Simply add up, again, all the Gold-management-tricks, we have been witnessing. All these efforts, together, do evidence the extreme importance of Gold and NOT the opposite.
"Important" for those who are pro-contra, Freegold..."Insignificant" (boring) for the general public (goldbugs).

See (analyse) how the coming rises in IRs are being sold to the financial public. The public happily and ignorantly swallows all tricks that go with the "permanent" depreciation of currency-confetti. Depreciation and not devaluation, simply because the currency has NO VALUE !

The Gold-accumulators, know and see that price-inflation, always reflects the extend of past currency depreciation and at the same time know and see how Gold's price, arrogantly goes the other way ! One can obtain cheaper and cheaper Gold, whilst everything else is already carrying its coming, evolving (hyper)pricerise. One should adore this manifest-blatant, upside down situation. Just accept that only an absolute minority is doing so (adoring).

What is happening, today...can only mean ONE thing : THE WORLD'S DOLLAR IS WORTHLESS ! As shocking as it is.

http://biz.yahoo.com/rm/040510/economy_taylor_china_2.htmlSnip:

BEIJING, May 10 (Reuters) - U.S. Treasury Under-Secretary John Taylor pressed China on Monday to adopt a more flexible currency regime to cool its overheating economy.
........................
"We stressed that flexibility of the exchange rate was an important policy to have in place to prevent the overheating and to prevent inflationary pressures," Taylor said.
.....................
In response to questions, Taylor said Chinese officials pledged they would alter their current policy of pegging the yuan to the dollar but gave no timetable for doing so.

"They've always said that there's going to be movement on the exchange rate and that was repeated today," he said. "There's never been a specification of the time and even if I knew the time I couldn't talk to you about the time, it wouldn't be helpful to the markets at all."
......................
"There's an economy-wide overheating...but there's also some more in some sectors than others," Taylor said. "There's some bottleneck possibilities in steel, in electricity and in transportation
.....................
"If anything, economics says the opposite," he said. "To stop an overheating economy or stop inflationary pressures, you need to have some monetary action.

"It's true of every country and part of that action means somewhat higher interest rates and somewhat higher interest rates means pressure on the currency (because it) makes the yuan more attractive, so if anything the overheating is another reason to move toward greater flexibility," Taylor said
........................
"They realize that this is a global matter, this is not a matter simply between the U.S. and China, and this is something that they're looking at very carefully," Speltz said.
****************
Misetich

Interesting how concerned the US is about "China" and the constant pressure to China to adopt a flexible currency regime -
It is expected that China will do little on that front - additional quote from the article

"China was taking necessary actions to curb bank lending and credit use but said this was not the time to put off currency reforms for fear they might further complicate China's situation"

Mr. Taylor would be well advised if he dedicates his time to resolving the US $ woes as the World Reserve currency has/is being challenged by the Euro who is rapidly gaining market share as 1) ECB lightened up on US $ reserves 2) as Russia diversified their currency reserves 3) as China and Asia are poised to diversify their massive unsustainable accumulattion of depreciating US $

All Aboard The Gold Bull Express - Part ll

"Simply add up, again, all the Gold-management-tricks, we have been witnessing"

I just saw Another one springing up...

Goldpaper IS burning now...it might be driven down further,until the first delivery failure gets public (and it will be made public this time!).

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180380603&p=1012571727085Snip:

Japanese stocks on Monday suffered their biggest daily loss since the 9/11 terror attacks as investors took fright at the prospect of a rise in US interest rates
....................
The losses followed a slide in Wall Street stock prices on Friday triggered by an unexpectedly big increase in US employment figures, which raised the likelihood of a rise in federal interest rates to calm inflationary pressures
*********************
Misetich
The campaign of disinformation continues - Full court press is on as "they' spread the gospel of a "sudden job creation"
Students, college kids are having a difficult time in finding summer jobs totally opposite of "the software model job creation"
However, "it is the management of perception" that is being played - and being "drilled in" and being "cashed in" during this "job creation euphoria"

Interesting to note little movement in the US $ index
All Aboard The Gold Bull Express - Part ll

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5088857Snip:
DUBAI (Reuters) - Lead OPEC producer Saudi Arabia on Monday called on OPEC to boost its production ceiling by a minimum 1.5 million barrels per day (bpd) to prevent high oil prices from harming global economic growth.
...........................
The Saudi oil minister blamed the "unwarranted" fears of supply disruptions for record high oil prices. He said the concern had arisen "at a time when only the kingdom and probably two or three other countries have spare production capacity."

Naimi's Gulf colleagues -- the oil ministers of the United Arab Emirates and Kuwait -- have already said publicly that the group should keep pumping beyond its official limits to stabilize markets.

The influential Saudi oil minister said the cartel must turn up the taps to help meet growing demand from consumers in Asia.

"It is apparent that demand, especially that of Asia, has and will continue to increase in the second half of this year."
*****************
Misetich

"Disruption fears" is a misnoamer it would be more aptly described as DISRUPTION " . Here's ANOTHER snip from Reuter's today's news

"Sabotage Hits Iraq's Southern Oil Exports"
Continued oil supplies disruptions in Iraq is a primary cause of market uncertainty and it doesn't appear it will be resolved anytime soon. The odds are it will intensify.

All Aboard The Gold Bull Express - Part ll

http://times.hankooki.com/lpage/biz/200405/kt2004051016362211870.htmAn outflow of foreing investments from Asia's markets has been taking place steadily in recent sessions -

Whils the US $ has "rallied" some in recent days - the rise appears weak

During the late 90's a "flight to safety toward US $ investments" was trumpted again and again - yet the US stock markets are not responding - they're following Asia's lead

This onimous trend spells danger for the US $ - since its not responding as it should given these "inflows"

The same pattern can be detected in US stock markets as it did not respond to an avalanche of good news - but started a descend on a symptum of "bad news" re: IR

"Paper gold prices" make it attractive for wise investors to capitalize on these artificial "gold market intervention" and ACCUMULATE PHYSICAL GOLD

All Aboard The Gold Bull Express - Part ll

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.

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

Adrian van Eck on inflation and China
Bloomberg article says gold to rise on inflation

More. . . .

What is it going to take, for the citizens of the U.S. to
finally get fed up with the FED fiddling around with their
currency?

http://www.reuters.com/newsArticle.jhtml;jsessionid=FE5CMOKNEUUNSCRBAE0CFEY?type=businessNews&storyID=5090711Snip:

NEW YORK (Reuters) - Citigroup's (C.N: Quote, Profile, Research) shares eased more than 2 percent on Monday ahead of the open after it said it would pay $2.65 billion to settle a class-action suit.
The lawsuit had been brought by holders of WorldCom securities who alleged that the bank had been a participant in the massive fraud at WorldCom through its dealings with the phone company, now known as MCI.
*****************
Misetich

Whoops! investment banker caught with hand in the cookie jar!

Could be the tip of the iceberg - as investment bankers constant and corrupt practices come to light -

All Aboard The Gold Bull Express - Part ll

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5089839Snip:

Citigroup, which admitted no wrongdoing in the settlement, said it also has increased its reserve for other pending class-action suits against it to $6.7 billion. That figure excludes the WorldCom settlement costs.
****************
Misetich
More to come!
All Aboard The Gold Bull Express - Part ll

http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm#nowSnip:

If the bond market continues to play out as in our original discussion from last year, then bonds should continue to fall, with rising interest rates (inverse relationship to bond prices), and a break below the lower red line should at least raise the likelihood of a substantial crash scenario to another notch. Using the analogy of the security warning alerts, this should raise the warning from a yellow to orange status.

Since the Fed has already said that higher rates will eventually come - although no mention of when - we know that a break of the lower red line is inevitable... it is all a simple matter of "when".
*****************
Misetich

CyclePro believes there are a numerous similarities between 1929 and now

The odds are slim - yet are rising - unless Oil prices, gasoline prices, natural gas prices, electrical prices can be brought under control - something major is bound to happen - as Asset Deflation takes hold worlwide - The RISKS are rising

All Aboard The Gold Bull Express - Part ll

This morning on CNBC, we had a nice show with two opposants.
A technical chartist, interpreting a dollar runaway-UP and a HSBC no-nonsense analyst putting that dollar-positive interpretation in serious question, using some very strong language.
The flight into dollar cash, a dollar rising exchange rate and the POO knock down, looked rather desperate. Big efforts are organized to get the dollar exch. rate up 10% and POO down 10%. Saudi Arabia was quick to add some "verbal" (!!!) assistance. What a show !

Lot of TA-TI is brought into the picture as to highlight we are very close at some major "breaking" points.
The undertone is become more obvious : hide the dollar weakness through artificial strength. Rising $-IRs are NOT bringing dollar-strength ! On the contrary. Rising IRs are a currency-defensive modus.

The general management of the Big paper-circus is going to become real tuff in the very nearby future. How does one "unwind" properly ...what has been entangled like a Gordian knot !? We watch together with discrete fascination, aren't we Knally.

What's your guess as to the likelihood of history repeating itself and the ECB raising rates? When's the next meeting?

Surely this is a golden opportunity for the Bank of Japan to unload some of those surplus dollars (probably for euros, and in any case, for anything but yen, of course).

I'm sure I'm not one of the wise men, but I'd like to
describe my part of the elephant. I'm not blind either.
Not yet anyway. So here goes.

Commodities have formed a head-and-shoulders pattern and
have gapped down. The dollar is forming what could be a
head-and-shoulders pattern, and if the Kerry euphoria is
over, it might head lower. Or not. Other things are
happening besides just these little things that I am
talking about. The DOW is falling right now, and has gone
below 10,000, which, as everybody knows who has watched
their car's odometer turn over 10,000, means absolutely
nothing, except that everybody nonetheless thinks that it
does mean something. To me these ridiculous opinions of
theirs mean that the DOW will go lower. Perhaps much
lower. Pog is breaking eggs all over the place. I will
probably have to send my commodities broker a check to
cover my contracts. I am prepared to hold all the way
down. Since you can't put an omelet back together again,
what we are likely to see is something else besides what
we started out with. In my view this qualifies
as "TURMOIL." Moreso than ever before in my lifetime. And
that's more than just a couple of years. In fact it might
be more than three or four years. Turmoil is a well-known
sign of dramatic change ahead. Now watch nothing happen
because I said this.

Some have said that cash is good right now. And it might
not be bad to buy something of value. Gold comes to mind.
I own some. It's still where I put it, and hasn't changed
value in my estimation.

"We watch together with discrete fascination..." Only to a few is it given to comprehend the magnitude of events which are passing before their very eyes. We are in the process of "gybing", as in sailing. No more downwind. Now, we are going to be beating to windward - up against increasing force of winds - Force 10!- of interest rates. We are gybing! Dangerous manouver!

Nasty weather ahead! "Gentlemen do not sail to windward". Well, gentlemen or not, we cannot get off this boat.

Oh! To have some cash at this moment, gold going for a song. But, principle dictates: do not borrow, not even to buy gold. Cash only!

This opportunity will pass in an instant. Grab the yellow, if you can!

The GAB

Take a few days off and see what great things happen in the markets.Depending on your point of veiw. Another buying opportunity for both gold and silver. Stock Market taking a beating. Gasolene price at the pumps up and so are the supermarket items. U.S. Dollar steady 91-92 and that keeps gold in a tight range $370-$380. Will China still service our debt and will the Fed raise Interest Rates. ME oil down some from $39 but far from that $15/ barrel. Osama paying in Gold for the heads of state in Iraq and the Dinar to come on line soon in the Arab World.

Great Posts everyone.

Need to have POG to stay down for a few more days.
There, that should get it to move higher. ;0)

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

The Straits Time on 10 May 2004

KUALA LUMPUR - Malaysia's just-retired prime minister has not lost his taste for cooking up controversial views.

Now Tun Dr Mahathir Mohamad is calling on Arabs and Muslims to withdraw their US-dollar deposits from the United States, and to use oil as a weapon against the world's only superpower.

Advertisement

He said Palestinians and other groups should cease suicide bombings as this method of attack has only brought about world anger and stronger retaliation from Israel in the disputed territories.

In an interview with Mingguan Malaysia, the Sunday edition of the biggest-selling newspaper Utusan Malaysia, Tun Mahathir also charged that President George W. Bush of the US and his challenger John Kerry would not dare to stand up against Israel for fear of losing political ground.

Asked how the Muslim world could gain a more sympathetic ear from the US government, he said: 'We have other means to fight them rather than attacking them blindly, but we didn't want to use them.

'I have spoken about using oil as a weapon. Apart from that, the Arabs keep a lot of money in the US. If we pull out the money, the US can immediately become bankrupt.'

This is believed to be the first time he has suggested Muslims withdraw their funds from the US as a tactic.

'If we use this strategy, I believe it will be more effective than tying a bomb to your body and blowing up people,' said Tun Mahathir, who retired last October after 22 years in office.

His previous suggestion that Islamic oil-producing countries use oil as a bargaining chip had fallen on deaf ears in a divided Arab world.

With Muslims angered by the United States' strong support of Israel and its attack and occupation of Iraq and Afghanistan, Tun Mahathir had angered many by saying suicide bombers had not helped the Palestinian cause as they did not discriminate between killing soldiers and civilians.

In the interview, Tun Mahathir also asked why Muslims should keep billions of their oil money in US dollars, and why global trade should be done only in that currency.

Despite debts amounting to US$4 trillion (S$6.8 trillion), the US remains the richest country in the world due to these deposits, he said.

'Aren't we stupid? The amount is not small as the oil-producing countries keep their petroleum money there,' he said.

He also said he did not think 'Bush or Kerry are brave enough to oppose Israel' in the US presidential election campaign.

Then, repeating what he said during one of his last speeches as premier to the Organisation of Islamic Countries, he said: 'This is why I say that Israel rules the world by proxy.

http://straitstimes.asia1.com.sg/asia/story/0,4386,250146,00.html

http://www.cnn.com/2004/TECH/05/05/electronicvoting.ap/index.htmlsnipet:

WASHINGTON (AP) -- A computer science expert criticized electronic voting systems planned for the November election as highly vulnerable and flawed, saying on Wednesday a backup paper system is the only short-term solution to avoid another disputed presidential election.

"On a spectrum of terrible to very good, we are sitting at terrible," Aviel D. Rubin, a computer science professor at Johns Hopkins University, told the U.S. Election Assistance Commission. "Not only have the vendors not implemented security safeguards that are possible, they have not even correctly implemented the ones that are easy."

Other experts said electronic voting offers advantages over paper balloting, including increasing access to the blind and people who do not speak English. They contended that backing up electronic systems with paper ballots could be costly.

Goldilox:

"Costly" to whom? All stops are being removed to assure TPTB maintain oligarchic control. Populism cannot be allowed to interfere with the extraordinary measures being taken to "fix" this world-wide economic mess.

"Follow the Yellow Brick Road!"
The wizards are working overtime behind their curtain.

I'd like to recommend "A Short History of Financial Speculation", by J.K. Galbraith.

I think Galbraith still lives - now has a son who also writes about economics, if I'm not mistaken.

This book by Galbraith is short, amusing and wise. Too little of it, it's a thin pocket book.

One of the important points he makes, is that:

a. People who have made a lot of money, think that that indicates they are of superior intelligence, which qualifies them to discuss and judge matters of which they are totally ignorant.

b. People who have made a lot of money, are regarded by those around them, as having superior intelligence. Thus, those who accompany wealthy men, reinforce the belief that these men have in their extraordinary intelligence and ability.

As a consequence, wealthy people are liable to commit the most tremendous blunders as a result of misplaced confidence in themselves.

We are destined to see many a "millionaire" - in micro-Dollars - reduced to penury. Soon.

The GAB

If they ever get their act together.

Withdraw their investments in the markets.
Keep the POO high.
Demand Gold in payment for oil.

The West is Toast.
Slingshot----------<>

The Toaster is already warming up. We now have the Shites and Sunnis thinking alike and fighting as brothers, thanks to Bush. Only Bush's arab royal cronies in Saudi Arabia are standing by him ... but not for too long now.

Mahathir has alot of clout amonst the muslim world despite his stepping down as PM of Malaysia.

http://business.timesonline.co.uk/article/0,,8210-1104852,00.htmlSnip:

Late last month, the Atlanta Fed � a regional branch of the US central bank � put out a study of recent inflation trends.

It concluded that about two thirds of the drop in core inflation measures between 2001 and 2003 was driven by unusual movements in just two sorts of prices: residential rents and used cars.

In both cases, the price falls appeared to have flowed from the very low level of interest rates and so will almost certainly prove temporary.

The drop in residential rents was triggered by the move from renting to owner-occupation that resulted from repeated falls in mortgage rates.

The fall in used car prices was caused by the surge in demand for new cars, which in turn stemmed from the rash of zero interest finance deals (a direct result of the ultra-low level of Fed rates).

According to the Atlanta Fed, once you accounted for these two categories of price falls: "The recent downturn in the business cycle appears to have had little impact on the path of overall core inflation." In other words, Fed worries about deflation were almost certainly overdone.
***************
Misetich
The constant manipulative massaging of statistics distorts the realities of the economy and measurement of performance, risks.

In a market economy, the power rests with the market along with goverment policies, and the Federal Reserve. By reporting and publishing false and misleading data, such as the CPI, it undermines the whole financial system as decisions are based on those reports.

The "cover up" of REAL data is demonstated in what former Treasurer O'Neil said $44 TRILLIONS OF DEBT

Decisions are being made daily based on this erroneous data, compounding the problems.

With energy supplies being challenged by world demand - the livewire act may come to an abrupt end

All Aboard The Gold Bull Express - Part ll

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

http://www.suntimes.com/output/novak/cst-edt-novak09.htmlSnip:

The Bush administration has been alerted that Chairman Alan Greenspan will guide the Federal Reserve Board to a small interest rate boost before the presidential election, and President Bush is reported to be satisfied.

According to these sources, the central bank this fall will raise the federal funds (interbank lending) rate from the current historic low of 1 percent to 1.25 percent. The Fed is expected to push the rate to 1.5 percent later this year after the election, and up to 2 percent early next year.
***************
Misetich

Novak seems to be "plugged in" - a few months ago he broke a story which comprimised a CIA agent (case ongoing)

Sir Greenspan has not been officially reconfirmed by Bush - though if he follows through as Novak says then wink'wink Sir Greenspan is set to return for ANOTHER 18 months

All Aboard The Gold Bull Express- Part ll

In the future, fresh water will be a valuable commodity, if it is already. Unfortunatly the USA has a poor energy plan and relys on CRISIS Management to get anything done and the solution is to throw vasts amount of money at the problem.
In Florida, the population growth has taken its toll on the aquifer and salt water intrusion has been talked about for years. Being a pennisular, water is abundant all it has to do is be desalinated. Atlantic on one side and the Gulf on the other. How many desalination plants in the pipe line? Oil like water is not a problem.
Time has been squandered. Land put off to drilling for oil could have developed and been envio-safe. Same as Desalination plants could take the pressure off the aquifer.
We will pay more in the future for both.
A problem over the horizon. If the government holds true to form,the printing press will roll into the night to pay the inflated price.
Gold to purchase Water?
Slingshot----------<>

Notice the reservists about to be tried are all enlisted personnel with NO training in prisoner handling. Who supplied them with their "tools of torture"? None of the 27 civilian intelligence "contractors" are implicated. In fact, the lead defendent is the soldier who took the pictures.

Are they shooting the messenger? Whistleblowers are very unpopular in Washington these days. Caca rolls downhill. Loyalty>honor>truth

CNN just interviewed a recently retired colonel who said the general who conducted detainee interrogation at Gitmo was in Iraq counseling the prison guards just prior to the abuse events. What is his role in all this mess? Is Gitmo sponsoring the same garbage, but just not as publicly?

Look for another whitewash from the masters of the political paint brush. Rumsfeld "made" Saddam and now gets the credit for spending $150B and 600 American lives to remove him. Kissinger gets a "Peace Prize" for his and George the First's covert assassination wars in South America. Spitzer goes after Grasso's $Million pay package and completely ignores the $Billion CRIMEX, even when GATA sends him "irrefutable" evidence. Citibank is paying $2.6B in penalties for it's ENRON participation, as usual, with NO admission of guilt. The PPT now has about $2.5B more ammo, after the courts take their cut.

Gold debasement will continue as long as the lumps "believe" the paper asset stories. AG's words will be "gospel" until the trap is sprung, and then he will fade into lucrative retirement, having done everything "humanly possible" to "spin" the issues.

Come clean? These guys don't know the meaning of the words. They just continue to weave their tales to the media lackeys and wade deeper into the FIAT caca.

The DX is rising on "expectations of interest rate rises". The SM and CRB are getting jack-hammered. Gold sits silently in the wings, having already been heavily suppressed since January.

Follow the Yellow Brick Road! TSHTF as we watch.

A Texas friend with good credentials, is proposing the revival of the Parson's Co. plan of some forty years ago, in which were invested 10 years' of research, for a massive public works plan which would employ some 4 million in a project to bring Canadian water which flows into the Arctic, down through all the Mid-West USA and down into Mexico as well.

In the slump which threatens, this would be a vastly prefereable alternative to employing young men and women by drafting them into the military.

A public works of permanent value. That is a project worthy of Presidential attention.

Inflationary? Possibly, but preferable to civil breakdown.

FWIW

The GAB

@ Slingshot

Do not think this is being ignored by the corporate world. Recently GE and Tyco have made public statements touting their investment activities in water treatment.

Not only is water necessary for life, itself, but the resurfacing fears about oil reserves are renewing demand for well injection technologies.

See the Michael Simmons report I posted on Saturday. He says that well technology has evolved from three phase to two phase, and ais now employing injection at the outset of production.

The ECB has already alluded some months ago that �-IRs will be raised at Q4-'04. At that moment, I concluded that ECB and FED are in concert to some extend.
I am always coming back to that little story of the $-� running together in the desert and both trying to escape from the chasing lion. Both currencies "have" to stay together, because if they split, the lion will take them one by one. That staying together ($-�), is the selective linkage between FED and ECB (policies).

Question is : to what extend is the exchange rate between $ and � important ? Is it only because of the oil-matters !?
I think it is.
And after all, the �-IRs have followed the $-IRs, much further (down) than was opportune. Maybe thanks to oil-support for the euro ?

http://biz.yahoo.com/rm/040510/minerals_emirates_gold_2.htmlHEADLINE: Dubai gold trade up on price, seen rising in June

DUBAI, May 10 (Reuters) - Sliding gold prices have boosted jewellery sales in Dubai, and demand may rise in June...

"Business has been better in May because of prices, and we expect even better sales next month with the shopping festival and sales before holiday trips home," one trader said.

Many expatriates from the Indian subcontinent traditionally buy jewellery and coins to take home on their holiday trips.

Dubai's 10-tola (TT) bar was quoted at between 5,195 dirhams ($1,414) and 5,200 dirhams, down from about 5,880 dirhams in early April. A TT bar is 3.746 ounces of 24-carat gold.

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

On another note, Belgian, I think we're definitely singing from the same page. Our posts yesterday and today have dovetailed very nicely. Thanks for the input. I hope people take the chance to read them this morning, and to visit the Sunday archive

R.

King Canute, the British king, is derided for having gone to the seashore and forbidden the tide to come in, by royal decree.

His action was misunderstood. He wanted to show his courtiers, that he was NOT almighty, that there were things he could not do, even as King.

Today, most expect Greenspan to do what Canute knew he could not do - control the laws of Nature. There was more wisdom then, in the recognition of limits. We have lost the knowledge that there are limits, and that is fatal.

The whole point of gold, is that it marks limits. We do not have gold in our monetary systems, fundamentally, because humanity rejects limits. Or should I say, "democracy" cannot stand limits - its votes go to those who will ignore limits.

Gold is like the tide. You can build levees, but the sea remains there, rising and falling. You can prevent the tide flooding a PART of the land, but the sea will always have its way elsewhere. The sea will always be there. Like gold, it can be stopped at times, in places. But not everywhere, and not forever.

"Si fractus inlabatur orbis, impavidus ferient ruinae." Horace. "If the universe should collapse upon me, the ruins will find me unshaken."

The GAB

http://www.jsmineset.com/snippet:

The dollar has not launched into a bull market and I do not believe it will. That market is simply too big to be manipulated except in the very short term.� What the Exchange Stabilization Fund cannot do, cannot be done on a listed US Exchange even by billionaires. Yes, gold is a tiny market but that is a double edged sword which favors the bulls as much as the bears.
This little market, however, is truly global and therefore the ultimate test of fundamentals versus TA.

So the action of gold right here and right now if it can be held under $400 is to define gold as just another casino entity and no longer a currency. I believe gold is a currency and that as soon as the dollar recognizes its true bear condition gold will put $400 behind it on the way to and above $480.

If I am wrong and gold is pure casino, no longer a currency, then I will present conclusions to you concerning what a victory of paper money over gold via TA will mean for the future.

97 Days to go!

Goldilox:

Sinclair holds his line!

Saturday I posted, in part,

"As great as bonds might be during the bull period where prices are rising and therefore today's yields are larger than tomorrow's, they are the opposite of that, giving you a doubly-bad whammy when the turn comes. Investors looking to sell have a hard time finding willing buyers because the sidelined buyers expect they can get them at lower prices and having higher yields if they simply wait it out."

And now we have this appetizer of that meal from today's news...

HEADLINE: U.S. Treasuries in lull after frenzied sell-off
+
NEW YORK, May 10 (Reuters) - U.S. Treasury prices were narrowly mixed on Monday as investors took a breather from the frantic selling that followed the latest upbeat employment figures and left yields at two-year highs.
+
"The blood bath was very heavy," lamented Mary Anne Hurley, vice-president of fixed-income trading at D.A. Davidson & Co. in Seattle, Wash.


"We shall have the hyperinflation."

R.

http://www.usagold.com/DailyQuotes.htmla mixture of excerpts:

Gold futures on the Comex division of the New York Mercantile Exchange bounced back Monday from an early swoop to near seven-month lows of $372 per ounce to end the day just shy of $379 and intraday highs....

June gold settled off 40 cents at $378.70 an ounce, trading up from $371.30, its cheapest since Oct. 17....

...as mounting confidence that the U.S. economic recovery will last tarnished safe havens and raised the prospect of richer dollar yields..........[COMEX gold contract] bulls have frantically neutralized their longs, waiting for news from Iraq, Israel or the currency markets to provide cover for more buying(?)....

Dealers reported physical buying on the way down from the Middle East, where there appears to be a shortage of bullion, and political tensions have fanned demand for gold...

... prices remain prone to wild movement and may yet plumb fresh multi-month lows on additional liquidation and fund short sales. Potential downside targets include $370 and $368, sources said. "It's a dangerous game trying to pick bottoms, so I'm not going to play. But I will say that we've come back extensively and are definitely due a bounce or turn higher at some point. I'm also confident about saying that we're nearer the bottom than the top of whatever range we're going to start trading in now," said John Tyree, analyst at Rosenthal Collins Group...


[Rare gold insight just glimpsed in mainstream media]
...Gold futures fell below $379 an ounce Monday to close at their lowest level in seven months, but mining shares headed higher... "The mining equities are forecasting a recovery in the gold price," said Brien Lundin, editor of Gold Newsletter.
+
Still, there's a deeper meaning to the current divergence in metals futures and mining shares, he said.
+
"I think we are seeing signs of how much today's investment demand is split between those who speculate in gold through futures, and those who buy physical gold and mining equities," he said.
+
For some traders, the prospect of higher interest rates, which should boost the value of the dollar in foreign-exchange markets, immediately translates to lower gold prices, he said. But Lundin points out that "investors in physical gold and mining shares -- a constituency ranging from middle-class Indian citizens to die-hard gold bugs in America -- are intimately familiar with the evolution of a gold bull market."
+
"These investors understand that higher inflation is on the horizon, which is one factor putting upward pressure on interest rates," but they also "understand that rising inflation and interest rates are both hallmarks of a classic gold bull market, and therefore see much higher gold prices over the longer term," Lundin explained...

------(click url for a more nicely formatted presentation and access to full news)-----

R.

http://www.morganstanley.com/GEFdata/digests/20040510-mon.html#anchor0Snip:

There can be no mistaking the powerful upturn in the global business cycle that began in mid-2003. The key question all along has been one of sustainability. In retrospect, the old policy multipliers worked after all � certainly better than I gave them credit for. But, then again, the Authorities injected a stimulus the likes of which of the modern-day world economy had never seen. Alas, now it's payback time. For a still unbalanced global economy, that payback could be especially severe. Put oil, China, and the Fed into the equation � all deflationary forces � and the endgame starts to look downright treacherous. The rapidly escalating undercurrent of geopolitical angst only compounds the problem. All that leads me to conclude that this confluence of global wild cards could make the current rebound in the global economy one of the shortest on record.
****************
Misetich

"Put oil, China, and the Fed into the equation � all deflationary forces � and the endgame starts to look downright treacherous"

Which way out? Odds favor the Feds to be a "little more supportive of higher inflation"

All Aboard The Gold Bull Express - Part ll

http://www.futuresource.com/news/story.jsp?i=i4457582659041820736(excerpts)

London, May 10 (OsterDowJones) - Current gold price weakness and the
prospects of U.S. interest rate increases this year are not yet sufficient to
convince major gold producers to return to hedging, according to market
players.

Major gold producers continue to be bullish on gold, and would rather take
opportunity from possible price gains than to sell forward their output, as
they see current gold price weakness and the dollar rebound against major
currencies as temporary, they said.

"There is a short-term pressure on gold prices but we still think the
longer-term fundamentals are very supportive," Canadian gold producer Placer
Dome's spokesman Greg Martin told OsterDowJones, citing the U.S. deficits,
strong demand for gold, and geopolitical concerns that normally boost safe-
haven buying in gold.

Net speculative long positions on Comex gold futures at 54,663 lots as of May
4 were the lowest since August 2003, and 62% lower from a peak of 144,253 lots
as of April 6.

With price weakness and a sharp reduction in speculative longs, there have
been trader reports of some physical demand returning to the market.

The consolidation trend among gold players has reduced the numbers of
hedge-inclined producers, with any hedging likely to be for project-linked
financing only, Martin said.

Although there have been indicators of possible U.S. interest-rate hikes,
major gold producers need to see a continuation of gold price weakness amid
sharp interest rate rises to switch back to hedging, one market source at a
major bullion bank told OsterDowJones.

"In my opinion, a shift (to hedging) in the short term will be very, very
small. There's still very much pressure from shareholders (of gold producing
companies) who want greater volatility and open this (gold prices) to the
market movement," he said.

"At the moment the contango isn't there. I think the modest change in rate
expectations is not sufficient to make people in the mining companies change
their general hedging policy," the source said.

-------(see url for article)-----

And if you read it through to the end, you will come away with the distinct impression that UBS is probably working their way out of a positional jam which they likely facilitated. It makes me smile a little at the fact the U.S. Federal Reserve today officially slapped that bank with a(n unrelated) $100 million civil money penalty.

R.

http://news.goldseek.com/SilverInvestor/1083940930.phpsnippet:

Let us develop further what this means for the precious metals investor, and why certain bureaucratic forces would want to paint a picture of a world awash in gold and terrorism.�

Gold is first and foremost a political metal in that it is fungible and leaves no tracks. Cash can be "laundered" � but, heck, gold is a virtual Laundromat. It is malleable, untraceable, easy to transport and extremely valuable.�

You and I know that once upon a time, not so long ago, there was one currency, worldwide, and it came in the form of the yellow metal � gold. (Silver, my favorite, was a close runner-up.) But that wasn't good enough for the internationalist crowd. They want a fiat money � paper � global currency, preferably not backed by gold at all. They want the flexibility� to create as much debt-money as they want, when they want and to charge governments (you and I) massive amounts of interest for printing that money.

In the 1970s, they tried to control the price of gold and it got out of hand. They tamed the price and then instituted what some (correctly in my opinion) have termed a "conspiracy" to keep the price of gold down through the 1990s. This was accomplished through massive short selling of the metal, through the "carry trade" and by simply talking the price down. (For a while, in the late 1990s when the price of gold was threatening to rise, you couldn't get through a month without one central bank or another announcing a phony "sale" of their gold assets to be held in the not-too-distant future � a future that often, unsurprisingly, did not come.)

There's no gainsaying that gold has been on a tear these last few years, a powerful uptrend. Even though the short term technical picture looks blurry right now, gold very obviously has not lost its allure, especially not for Asia's growing and powerful economies.�

I can only imagine the frustration of those who want to stomp on the price of gold. After all these years of price-fixing the "barbaric" metal, shorting it, selling it, damning it regularly in the press, gold just keeps popping back up like some kind of fiendish, glittery jack-in-the-box.�

They just don't get it. Gold's allure is not the product of some irrational, historical hiccup. It's the end result of thousands of years of money competition. It's won its place because people liked to trade it better than salt, beads, sugar, spices and all the other things that have been tried through the ages. The marketplace chose gold� (and silver). And what the marketplace chooses cannot easily be undone.

This has to be the latest gambit. They can't fix it, short it or talk it down any longer. So make the link between gold and terrorism. Just come right out and tell people that those who own gold, trade gold and pay in gold are apt to be terrorists.

Goldilox:

Perhaps they DO GET IT, David. "You're either with us, or again' us!"

"Separatists" of all varieties: political, religious, educational, and monetary have been regularly demonized a la Waco, Ruby Ridge, Philly MOVE and eventually physically attacked and eliminated. Even your own web site carries links to Franklin Sanders' tale of woe with the IRS, Arkansas, and Tennessee state persecutors. Franklin is alive today because he was sophisticated enough to run for "legal cover" and spend most of his savings on lawyers.

Yet so many gold bugs continue to mutter "It can't happen here!"

Is that coffee I smell?

Goldendome (120900), interesting idea! I'm not the most knowledgeable about such matters but I had decided from what I have read and what I could understand of that...that the Fed. would not be able to raise rates without hurting stock market prices and the economy. Higher rates will also put a heavier load on those servicing debt, consumer, states, corporate and federal debt, no?

The notion that there is and has been no increase in the cost of goods and services is just about gone. I doubt if even Larry Kudlow could try to sell this misconception any longer. We've seen an inflation of money, now the results are becoming blatantly apparent even to those who are not watching for them.

Inflate or die? Now, how does the Fed. deal with the inevitable consequence? How will the economy react to the "kill inflation" medicine?

G.A.B.... I wonder if Taleb has read Galbraith's book? He presents the same suppositions and does an interesting job supporting them.

Metals today....were all down, (although gold made a nice comeback) except silver. Silver was very strong on a day when palladium, platinum, copper and gold were down. Imho this bears watching. I believe the silver market could (has the ability to) start back up at any time. It might even return to the +$8.00 level in a heartbeat. Or, she may not. If silver reacts to fundamentals, I've never seen it or have YET to see it but we've now seen what even a small speculative silver mania can do!

FWIW, I've been increasing my long side exposure to gold. What fundamental economic force is not now backing higher gold prices? Perhaps only the danger of a deflationary liquidity crisis but with so many other avenues available, I'll chance this one. Where's the 200 day moving average for gold that Hamilton watches so closely?

I do not expect any market to always act rationally, all the time, certainly not gold, but....eventually they must, even gold. Imho that time is near and that's where my money is now parked, waiting, patiently. If this is not the bottom, it must be close and close is always good enough for me. I wonder but only time will disclose...
rich

G'lox/Morgan -- "This has to be the latest gambit.... make the link between gold and terrorism. Just come right out and tell people that those who own gold, trade gold and pay in gold are apt to be terrorists."

Gold's not rowing that boat solo.The reason UBS got slapped today by the Fed was for unseemly dealings with certain parties using DOLLARS.

Privacy issues are far down on my list of good reasons for owning gold. Tangible value is uppermost, and the fact that it comes in a convenient, portable form is part of that.

R.

@ TC:

I certainly don't think privacy is a very good reason to choose gold as an asset, as "privacy" is illusory in the current PA environment anyway. If I gave that impression, I did not make my point well.

Persecution of gold itself is rampant in the NYMEX and LBMA, and singling out some gold owners (like Franklin Sanders) is just an exercise in muscle flexing from a government who has consistently demonized dissenters over the last few decades.

I DO agree with David that gold will acquire a "bad rep" if no other manipulation techniques can bear fruit. This will be just one more "cross" for gold owners to bear, as we hold the potential as "monetary dissenters" to be labeled as something much more frightening to the masses. This is taking shape as we speak.

TPTB are expert at spinning a "bad apple story" to make a point when it suits their purpose, but also at protecting an ENRON cesspool when it it is their greatest single campaign contributor.

The Media IS the Message.

It was the worst of ideas, it was the best of ideas.

R Powell says, "I've been increasing my long side exposure to gold."

Ari says, "I've been buying Gold."

Sheeeeeeesh, Rich, I know what mine means, but what the hell does yours mean.... " I've been increasing my long side exposure to gold."?????? It sounds about as unfulfilling as facing a stiff wind with your mouth open instead of having a more conventional lunch.

Maybe you can set me straight on this. Let's say I built a new house and my thoughts now turn toward having a driveway. Would I be completely satisfied if I made a phone call and increased my long side exposure to cement?

Maybe this is a better question: What have I (or you) got when it rains?

Gold. Get you some. --- Aristotle

Someone correct me if I am wrong ; THe stock market indexes are leading indicators of where the economy is going ...The stock market is forward looking .....

Today, according to Dow Theory, something significant transpired . Someone over the weekend who keeps an eye on 38 industry indexes (groups)..said that 35 of them had broken down significantly and 14 or 17 of them had penetrated their 200 day moving averages.....
10007 was a critical resistance level on the dow which was penetrated today and the critical resistance on the S&P was also penetrated. I thought the NASDAQ would be the first to go but it is waiting but it did lead the way down from the recent high....THis is all bad news for the Stock Markets.....

So if these indexes are forward looking then the people that are selling know something about the economy that indicates that the ECONOMY is NOT near as strong as the PUNDITS in the SOLD OUT MEDIA or JOBS REPORTS or any of the Statistics they have been using to spread disinformation would indicate.

SOMEONE HAS TO BE LYING ; EITHER THE LEADING INDICATOR (STOCK MARKETS) is right or the REPORTERS, REPORTS, and the STATISTICS ARE RIGHT......BUT SOMEONE IS LYING.......

Martin Wiess published an article today in which he stated that Bonds and Stock Markets all over the world are crashing. Here's a Snippit

"Treasury notes and bonds have just plunged to the lowest level since July 2002.

Mortgage bonds are falling even more quickly, driving mortgage rates through the roof ... sending mortgage company stocks into a tailspin ... and raising serious questions about the viability of the entire housing market.

Bonds are also crashing in Latin America, Europe, and Asia: Brazil's 2040 bonds just plunged 3.4% on Friday. Turkey's bonds did even worse, down 4.8%.

The world's stock markets are falling in tandem. On Friday alone, the Dow Jones World Stock Index plunged a whopping 2.71%, the equivalent of 277 points on the Dow Jones Industrials.

In the U.S., the stock market decline was not quite as deep, but it was certainly broad-based:

Elliot Wave International points out that, on the New York Stock Exchange, a whopping 3,135 shares fell on Friday while only a meager 255 rose -- the third-worst ratio of advances to declines since October 16, 1987, the Friday before Black Monday.

Bank stocks have gotten smacked -- down by 4.3% in the last four days, or more than double their rate of decline over the past month."

SO if our economic recovery is an illusion , then we don't need to raise rates.............unless we need to buoy
the dollar until all this selling starts in BONDS AND STOCKS and that itself perpetuates dollar strength to a degree and for a time....until the selling abates.....

But as you have seen today large blocks of sellers are being encouraged to trade in their dollar holdings and repatriate their money or transfer it to some other market.

and Goldilox this morning also aptly pointed out that the Fed still has room to lower rates since the economic recovery is an illusion ....I heard 50 basis points by the election but .25 by August at the earliest....according to a hot tip someone shared last night from a newsletter in which we were informed Alan Grenspan knows inflation is 8% now and he's going to open up the spigot to try to bring us to 14000 dow by election time.....

Lies cannot exist without the truth ....Cheap counterfiets to sell ...from " our insiders in WASHINGTON ....
Oh Incidentally this Newsletter editor also said we were going to get good returns on our gold and our silver.....850 and 12 respectively in short order.

There may be parts of truth in this letter but there is some big smell coming from it as well.....

THE leading economic indicator of the Stock market says the Economy is in trouble....

Martin Wiess in his letter that I quoted also said todays stock market looks a lot like Oct 87 in three ways ....

the bond market is getting hammered as rates are moving up

because interest rates are moving up and inflation too ,
earnings prospects of wall street firms are going to get discounted by a greater degree and producing the same level of profits in the future will be unsustainable...

Insider selling in the Bear Market rally we have just witnessed has been setting some records in specific dynamics.

The war and its after effects is souring.....

All of the stimulus that the Bush administration and the Fed have introduced into the economy is wearing off .....
now we pay ..........

If everyone sells US BONDS at the same time and the money goes back to Europe , Japan , Asia , India .....Is that going to be good for the BOND MARKET OR THE DOLLAR ?????
We can put the money in T BILLS and SIT ON IT AND COLLECT the discount rate , right???

Any one here think that the smart money that is selling BONDS and STOCKS knows as much as we do about what the future holds or what a good value looks like......?

THEY ARE GOING TO VALIDATE YOU SOME MORE AND MAKE YOU LOOK LIKE GENIUSES......after they get finished shaking the tree.

WHERE IS THE BEEF....WHERE DO YOU PUT YOUR MONEY when paper markets begin to burn ..?????????THEY used to call the Swiss Franc the safe haven currency because it was backed by gold and whenever there was a crisis , you could count on the Swiss FRANC TO GO UP .

Now with the dollar on the ropes because of the twin deficits and POWER PRINTING PRESS activity ....and now the BOND MARKET AND THE STOCK MARKETS IN REAL TROUBLE , I wonder where people are going to turn to as a SAFE HAVEN ?????? WHERE THEY ALWAYS HAVE ....for the last 5000 years.....GOLD


I think that this thing that David Morgan brought up is way overblown .......because if you get rid of GOld , you have to close down the comex .....Then they will have to outlaw Mining companies. They may have to shut down all those Exchange Traded FUNDS that are GOLD AND SILVER BASED that are cropping up all over the world....

I don't think so ..........Gold and Silver have been money for 5000 years and that's probably not going to change....
hopefully not in my lifetime....So if it becomes a problem , you are free to move about the globe ...
You may be able to afford to do so if you can learn to travel light and produce value whereever you go....

There is a lot of Drama around these volatile moves in the GOLD AND SILVER MARKET ; it's interesting but it doesn't change the inevitable....(we all have to die and pay taxes, NOT) I used to have a friend named VINCE STEWART; He and I and a couple of others lived in TRENTON in 75-76* (incidentally , at the time 75 % of the world's population lived under Communist Regimes/ my how times change) Vince used to say you can't put NIAGRA FALLS IN A TEA CUP and YOU CAN'T STOP GOD......

I think of that now because I think that GOD CREATED THE GOLD and I think that in times like this , GOLD IS here Because people need an outlet at these times of Man's GREED, STUPIDITY, GROSS NEGLIGENCE, as a Safehaven to tide them over while mans consequent FINANCIAL SAND CASTLES WASH AWAY IN THE Enduring SURF of SOUND economic principles and practice....

GOLD naturally flows in TIMES OF MANS GREATEST GREED and CONSEQUENT STUPIDITY. THIS IS ONE OF THOSE TIMES.

And a good evening to you.

Sheeeesh Ari, where have you been. I've been here for going on five years now and never once have I hid the fact that I trade both commodity futures and options. Perhaps you heard of this? Some call it the paper game but..

Oh yes, I forgot, you only buy physical metal and disdain any other type of "exposure" to gold.

How could I have forgotten, after all, you have repeated this matra over and over and over and...but you get the idea, right? Have you said anything else that I may have missed? Not for years that I know of. You'll have to forgive me if I've missed anything from you. I tend to read only enough of your words to satisfy myself that you are, as always, in your trance repeating your matra..."Buy physical only...buy physical...buy physical... Was it somehow wrong of me to have made some fiat money in silver? I mean, it wasn't physical but it sure works fine to pay a lot of bills. I suppose you don't have any of them.

Frankly, I have spent enough of my time on your narrow minded focus. If you don't mind, Ari, I'll say good buy (physical only of course!) to you. I have better, more profitable and more intellectually stimulating ways to spend my time.
Shall I sign off with the name you gave me? I don't know if I remember it word for word....
The Evil from the Dark Side

http://host.wallstreetcity.com/wsc2/Autoflag.html?Button=Get+Story&DB=SQL&SID=131r6191&Symbol=TIDEMay 10, 2004 (financialwire.net via COMTEX) -- (FinancialWire) The recent lawsuit filed by Nanopierce Technologies (OTCBB: NPCT) alleges that the Depository Trust and Clearing Corp. has a lot of reasons, almost one billion of them a year, to keep illegal naked short selling in operation. It was the proverbial shot across the bow by the legendary Houston law firms of Christian, Smith, Wukoson and Jewell, and O'Quinn, Laminack and Pirtle, whose notches already include environmental targets, the breast implant industry and the tobacco industry, all brought to their knees.

The names caught up in StockGate keep getting bigger and bigger. Already those named or sued in association with the massive scandal include some of the biggest brokerages: Goldman, Sachs & Co. (NYSE: GS), Charles Schwab (NYSE: SCH), and A.G. Edwards, Inc. (NYSE: AGE), among them.

The full story is at www.investrendinformation.com

In comments to the U.S. Securities and Exchange Commission, C. Austin Burrell, who is providing litigation support and research for the law firms, said that StockGate is more massive than anyone may have imagined. "Illegal Naked Short Selling has stripped hundreds of billions, if not TRILLIONS, of dollars from American investors," and have resulted in over 7,000 public companies having been "shorted out of existence over the past six years." Burrell said some experts believe as much as $8 trillion to $17 trillion has been lost to this practice.

He stated that the restrictions on short selling were deliberately put into the Securities Acts of 1933 and 1934 because of the first-hand evidence then available that the "sheer scale of the crashes was a direct result of intentional manipulation of US markets through abusive short selling by a massive conspiracy."

Burrell noted that the 65-lawyer team presided over by lead lawyers Wes Christian and John O'Quinn has uncovered more than 1,200 hedge fund and offshore accounts working through more than 150 broker-dealers and market makers in a joint cooperative effort to strip small and medium size public companies of their value.

Druid: Speaking of cesspools. Here are some numbers that are off the charts and as usual, the usual suspects are involved.

Maybe its just me. Maybe I have a funny way of looking at things. Take this news article, for example.


-----------May 10 (Reuters) - U.S. business and labor groups said on Monday they would give Bush administration a few more months to persuade China to revalue its currency before renewing demands for a formal trade investigation.

David Hartquist, an attorney representing the Fair Currency Alliance, said the upcoming visit of Chinese Vice Premier Huang Ju to the United States in July "would be a perfect date" for the two countries to announce progress on the issue.

In the meantime, the Fair Currency Alliance -- which includes the National Association of Manufacturers and other farm and business groups -- plans to keep up pressure on the White House to force China to revalue its currency.

The Fair Currency Alliance claims China's decade old-practice of pegging its yuan at about 8.28 to the dollar violates World Trade Organization rules by artificially depressing the price of Chinese goods on the world market.---------------


When you get right down to it, to call a spade a spade, so to speak, is the Chinese philosophy of keeping the Yuan pegged at a fixed exchange rate with the *world's* Dollar (in this case, 8.28 per Dollar) really any different than America's own de facto sorta "policy" that also keeps the Dollar pegged at a fixed rate against the *world's* Dollar -- although in our case, it happens to be at a rate of one-per-one?

Just mull on it *whimsically* for awhile...

What's good for the goose can't *can't* CAN'T(????) also be good for the gander???? How long will the world play along with rules that aren't close to equitable? I'd say from the look of things, these past few decades have about brought us to our limit.

This old architecture is teetering on borrowed time, boys, especially when we see groups of folks like these on the winning side joining in the chorus of complaints!

Gold. Get you some. --- Ari

What if, instead of paying you to pour a concrete driveway for me, I make a call and simply increase my long side exposure to portland cement?

What will I have when it rains?

From your words and attitude I'm inclined to figure that when you had spare time as a teenager, you used to go hang out at the kindergarten playground with lighters and matches. "Don't try this 'til you're older and wiser, kiddies."

Little time goes by. Sirens wail.

"Gee, Mom, I told 'em all to do as I say, not as I do."

That's a pretty lame balm for a toasted kiddie, Mister!!

For all your claimed insights and comprehensions, I may have always had a flamethrower in my hip pocket, but you'll certainly never know it here. Where you and I differ, young Ritchie, is that I know enough to know where and when to keep such a thing under wraps.

Your homework for tonight is to think about that for awhile.

Gold. You'll never get it. --- Aristotle

May an old man ask a question? How many people who post here have an exit strategy when they will sell some or all of their physical gold?

Say gold goes up and up and hits $1000. Will you sell if it drops back to $800, or maybe $600? Surely one must protect ones capital. A fistfull of dollars can look very good and is a lot more useful than a block of yellow metal valued oneday at probably $100/oz. (The price I think it will go to in ten years time)

A man I know has a 10oz ingot of gold bought in 1980 at $750 an ounce. He takes it out and gets some pleasure fondling it but he is near to tears when he remembers that he paid $7500 for it and today its only worth $3800.

So how do we judge when to exit the scene and put our money into some rising asset, whether it be land or space tourism whatever. This surely is the most difficult decision to make. Its easy to buy but when is it sensible to sell?

I am bullish on gold and I expect it to be over $500/oz by this time next year but I want ideas from those with much better brains that I as to what exit strategy to employ.

Perhaps you are all so in love with the yellow metal that you will keep it buried in your gardens for ever but I hope that isn't the case.

GOOD LUCK ON YOUR SUGGESTED MAKE WORK PROJECT!!!
Because Calgary and the rest of S. Alberta are already doing their best to use up a large portion of the S. Saskatchewan river system.

BALZAC

At the risk of oversimplification, it's about the same strategy I reckon most thinking people use when they decide between using their savings account or their checking account.

Do you get my quick drift?

Gold. Save you some. --- Ari

http://www.fromthewilderness.com/free/ww3/042204_mazur_morgan_oil.htmlApril 22, 2004 1800 PDT (FTW) -- I sometimes think peak oil has already hit Manhattan as subways become increasingly unpredictable (although surveillance cameras are state-of-the-art) and escalator shut-downs present stair master survival challenges, a kind of perverse underground amusement. Unfortunately, surfacing on Fifth Avenue does not end the scenario, for where once there was excellence and exquisite fashion, now there are bargain stores catering to New Yorkers who are poor, and yes � even starving.

So I was particularly fascinated by the opportunity to listen-in to the telephone conference call that JP Morgan held for its clients on April 7 and 8, "Peak Oil: Fact or Fiction", which From The Wilderness was given exclusive permission to monitor. Maybe there would be answers as to whether or not Manhattan is a harbinger of what's to come for the rest of the nation, and whether its fleeting opulence (not counting all the questionably-financed real estate extravaganzas rising up) is energy-related.

The main speakers faced-off on separate days. First Dr. Colin Campbell, Founder of the Association for the Study of Peak Oil, succinctly gave his position saying that peak oil is "such a geological matter." Campbell says we're now at the halfway mark and that "by 2010 volatility comes to an end and then terminal decline" sets in.

The pronouncement is chilling. What's more, Campbell says that "over the next few years everybody will become aware of this, and in some ways the perception of this growing situation is as serious as the event itself." Campbell's a retired geologist with decades of experience in the oil industry in both exploration and executive positions. He compares peak oil to old age � saying that a man knows when it has set-in.

Campbell was followed the next day by Michael Lynch, a computer oil and gas modeler for the past 25 years, President/Director of Global Petroleum Strategic Energy and Economic Research. Lynch came out slugging, informing conference callers that Campbell has refused to appear with him since 1997, saying "you'll understand why very shortly." He seems to view Campbell as old school and too tired to be optimistic about the future. Perhaps a bit like Cheney and Rumsfeld having their last hurrahs before retiring into the bed & breakfast business on the Eastern Shore of Maryland.

Lynch believes the Hubbert model that Campbell 's theory relies on � discoveries and production follow a bell curve � is not only "incorrectly modeled", but is "much closer to being junk science." He says further, that while Campbell and his colleague, Jean Laherr�re, have now "stopped saying that" . . . they've "never admitted they were wrong."

Lynch takes the position that URR � Ultimately Recoverable Resources � is not a static amount and therefore cannot follow such creaming curves. "It grows over time," he says, "as a result of economic changes, development in an area, but also because of technology, and in some cases, better scientific knowledge."

Campbell says today's oil supply is finite, and that it all came into being during two periods of global warming 90 million and 150 million years ago when "excessive" algal blooms formed on the seas and lakes, became heavier and heavier, and sank to the bottom of the rifts where they were "preserved" and pressure-cooked. The resulting oil and gas then began leaching its way back up to the surface through the sandstone (in the pore spaces between the grains of sand) and rock.

Campbell is adamant about the peak oil issue not being an economic or political one, but simply a case where we've now so depleted our "endowment" that peak oil will occur by 2010, and that soon after there will be a rapid fall-off in oil resources, which will profoundly affect world civilization.

So the conference began with a bit of posturing and name calling � with Campbell announcing "no common ground" with the "flat Earth economists" (Lynch et al.), who he says believe there's an infinite supply of oil (no one believes this, including Saudi Aramco).

Lynch called Campbell, Laherr�re (and investment banker Matt Simmons) Malthusian pessimists, and obliquely referred to Simmons's upcoming book on peak oil as "content free."
***************************************************

Druid: BB, I know you are one busy bug but if you get the chance, I would appreciate your comments on this article or if anyone else wants to jump in, please do. TIA.

Doug Casey who is quite tried and and experienced mining analyst and editor of his own Newsletter has advised his own strategy as follows....

He believes gold will go very much higher that it is today but he has chosen to exit at 1500.....even though, he believes that will be early in the cycle...

I tend to believe that at that level something else will be grossly undervalued that will offer great potential ...
to BUY LOW....or TRADE INTO LOW using the GOLD as A medium. This gives the prospective reciever of your gold upside...on their horizon. Gives you plenty of time to shop undervalued opportunities...whether equities or way undervalued real estate etc etc etc.Happy shopping ...

http://www.arabnews.com/?page=6§ion=0&article=44722&d=11&m=5&y=2004As I posted the first article, I also wanted to share this other bit of Chinese trade news. You'll notice that mention of the Dollar is nowhere to be found. Here's the short version:


---------11 May 2004 -- Gulf Arab states will sign a landmark economic cooperation agreement with China at the end of the month to boost trade relations and pave the way toward a free trade accord, the head of the Gulf Cooperation Council told AFP yesterday.

Finance ministers of the six-nation alliance will visit Beijing from May 30 to June 2 to ink the agreement. "We pin great hopes on this agreement to open negotiations for further deals and finally strike a free trade accord. China is a huge promising market," said GCC Secretary-General Abdul Rahman Attiya.

"The economic cooperation agreement is a framework for further deals with China. It will shape future economic and political relations between Gulf Arabs and Beijing," Attiya said.

Following the signing, a timetable will be set for deeper trade negotiations with the Asian giant, capitalizing on the strong political relations that exist between Gulf Arab states and China, he added.

The GCC, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, has announced a monetary union for 2005, a common market by 2007 and a single currency by the start of 2010. China is the fourth largest trading partner with GCC nations after the European Union, Japan and the United States.

In a quest to open new markets for oil, petrochemicals and aluminum products, the GCC states signed a framework economic cooperation agreement with the European Union in 1998, and inked free trade agreements with several Arab nations.

But the GCC has so far failed to sign an elusive free trade agreement with the EU. Kuwait's Finance Minister Mahmoud Al-Nuri on Saturday said he hoped the pact will be signed before November this year after some progress was made in talks held in April.------------


I also want to highlight a portion that states "Chinese exports to GCC states last year, which included electronics, various types of goods and garments..." and "GCC exports to China, mostly oil and petrochemicals..."

Hmmmmmm... seems to me like a lot of unnecessary effort to get the goods they want. Would it be silly of me to ask why they both don't just print bonds for export like we do?

How much longer will our privilege last?

Gold. Get you some. --- Aristotle

You may wish to consider exiting gold in increments rather than all at once. As you may know, POG forecasts from news, personal comments and reasonings, or posted essays, range from negative to "orders of magnitude" positive.
By perusing these pages in coming days, months and years, all can add to their exclusive database and informed judgement and
polish to perfection a most uncommon strategy. All the while using critical input to sense and respond to changing conditions that would overwhelm a mere computer.

Ari: You ask, "How long will our privilege last?"

IMO: As long as we hold *ALL* the military cards!! The one thing that we have on everyone else (in addition to the privilege) is a crushing military, supported by those around the world who feel they are buying "protection".

First, I would not exit gold just because a certain price in fiat has been hit. Why exit at $450? At $500? At 850? At $1,500? At $3,000? At any "price" in paper?

You can exit any time you want - but, all depends on "What for?"

You need to eat? Very good reason!

You urgently require clothing, food, heat and shelter? You sell your gold, obviously! At any price. Can you bear to hear a baby cry from hunger? Not all the gold in the world is worth that!

Beyond this, I'd say selling your gold would be more properly considered as "trading" it for some thing or thing combined with some activity, which will provide you with necessaries for life - either yours or your family's. (Not just for a big bunch of paper "profits")

Say, you are going into farming, where perhaps you have some experience. You will trade your gold, for something that is going to be perpetually a source of income for you.

You might have some special skill, which combined with equipment, might provide you with a livelihood. Use the gold for that.

You might decide to invest in some project which your gold capital can advance, to your expected benefit.

It isn't really a question of what "price" is right as an exit strategy. The question is, "WHAT do you intend to do with your fiat?"

Finally, forget about cashing out and putting your fiat into any "paper" investment. You will, unless you are exceptionally skillful, defeat yourself. That era is past, and will not return for a VERY long time.

Thanks for reading. The GAB

I'ma hearin' it... I'ma just not buyin' it.

Another thought for Golden Lionheart, to add to my previous. Put in the pure sense that you seemed to imply, an "exit" strategy, per se, from Gold is akin to an "entry" strategy for paper. It takes a helluva lotta insider geopolitical information to play that game reliably into a winning hand.

Fughettaboudit.

That's why I framed my earlier response like I did. Although some people might not know how to manage *metal*, they surely know how to manage *savings*. The decision to sell some of your Gold should be seen as akin to the decision we might make when opting between drawing down our savings account versus seeking a loan at the going rate in conjunction with using our checking account.

Gold. Gettin' some real savings. --- Ari

Druid I'm not surprised that such points of view are taken by some who ought to see the plain facts. While some are debating the existence of Peak oil, others debate the existence of real money.

I just attended a wonderful lecture by Dr. Fritjof Capra. It is clear he has a detailed understanding of ecology and the rather messed up situation we are in. It is equally clear he doesn't see the glaring contradiction that fiat money poses. In an ecological system EVERY resource is ultimately a limited resource. In our economy however, MONEY (credit) is unlimited.

So while you're out there bidding on a bicycle or a hybrid electric vehicle, some other banker will cut a check for 100B to develop some far out oil field on the far side of the moon. His 100 billions will compete for steel, labor and plastics right along with your meager savings that you direct towards your needs. You earn your money. The bank doesn't.

Inherently this system is unjust, and irrational. In effect, if money is free, then even uneconomical oil can be developed (at a loss). Perhaps this is what Michael Lynch means by "unlimited oil" (smirk!) I can assure you that Black Blade will point out that if the energy of extraction exceeds the input then the process is uneconomical. Ahh me...

... If only it were true! With funny money you just pay for a dirty nuke reactor (the quick-and-dirtiest design of course) and then you can spend as much energy as you like extracting tar sand oil or whatever. Ok, I realize that I am being facetious here, but I think you see my point. In order for "price" and "cost" to be balanced, the enabling medium, (called money) must also be balanced (and limited in quantity). And thus it follows that sustainable projects are always priced too high relative to unsustainable gimmickry that relies on eating up your seed corn versus investing it, (paid for with judiciously directed credit).

Thus, BOTH Lynch and Campbell are correct, in a certain sort of way. It's sad really, the environmentalists see that capital has run amok. What they dont see is that it is CREDIT that has broken free of its golden moorings. Because of this you hear all sorts of utopian visions where "if we could just let the UN, or the greenies run the paper printing press" everything would just be peaches and organic cream.

Aint so. Never will be.

Unlimited power, and unlimited credit are imposibilities in any closed system, economic or ecological. It is time we all saw these things for what they are. Credit destroys. Absolute credit destroys absolutely. Credit is not a SOURCE of energy. Credit destroys, it sucks power OUT of a sustainable system, it bleeds its very life juices out. Every hobbit who ever stuck his toes in the dirt knows that. Too bad that credit is so much more confusing than potatoes. Perhaps it is a language thing.

I think not, just a perception problem. We mistake seed corn as trade flows instead of as capital. And thus we "consume" it and pretend it is something called the "current account deficit".

All made possible by ever inflating fiat.

I'll take the natural money, thank you; it's much more sanitary.

cuio nin mellon!

Dr. Colin Campbell and Jean Laherr�re of the Swiss-based Petro-Consultants as well as the Houston-based "peaker" Matt Simmons have been very accurate in the past and I have no doubt that we have already reached "Global Peak Oil" production. I thought it would have been another 5-8 years yet, but with the phenomenal growth in China, India and the so-called "Asian Tigers" demanding ever increasing petroleum products it is more apparent that economically viable oil production is waning fast. Even Iraq is still exporting 25% below prewar levels (BTW, another saboteur(s) blasted the northern Iraqi pipeline and it has been burning for the last two days). The era of "cheap oil" is over � at least for the US. There has been no new refineries built in the US since 1976 � the same year the last "Super-Giant" was discovered (Canterell Field, Mexico). With dozens of reformulated environmental blends and ever changing regulations/blends and no way for these old refineries to keep up it's a sure bet that this bottleneck will keep petroleum prices high and going much higher. Yet some well-informed investors like Stephen Leeb see the "Global Peak Oil Production" in 2 to 5 years. Meanwhile, lifting costs keep rising in Saudi and Kuwait where oil money is used to pay off Wahabbi clerics, terrorists, political opponents, and fill the coffers of the Royals.

Even so, adjusted for inflation, gasoline and petroleum products are still cheap � in fact cheaper than 20 years ago. The simple facts are that OPEC cannot raise output to meaningful levels. Saudi has already reached "peak" production and the "Super-Giant" Gahwar Field is infiltrated with rising brine levels and production is falling off. Oman and UAE are in rapid decline despite the best and brightest consultants from BP to restimulate production. Venezuela never recovered from the Chavez debacle and demands for higher prices and lower production and strikes (and murders of oil workers) plague Nigeria. Indonesia is a little fish with no prospect of increasing production. Iraqi fields have been irreparably damaged by unchecked pumping and damaged reservoirs with dropping pressures. Iran has called for higher prices as well and won't play along. Kuwait has never recovered from the first Iraqi invasion and dropping production. In short � no matter what the Saudi oil minister says, OPEC is finished as far as fulfilling increased demand. Other hopes have been dashed as the Caspian Sea oil never came through as Chevron (now Chevron-Texaco) sank $billions into several "dry holes" and Russia still has yet to reach peak production attained in 1989. The remaining hope for Russia is in Siberia (a very in hospitable environment and Exxon's efforts on Sakhalin Island).

Oil is the blood that keeps the patient alive and precious metals are the currency of the future as global competitive currency devaluation debases global currencies. Even those such as the Chinese Yuan which is utterly worthless as it is non-convertible (expect for the smart Chinese who are exchanging the toilet paper for precious metals when and where it is available). Just wait until gold and silver are available everywhere in China to the average citizen and not just those in Shanghai, Hong Kong and Beijing. One note to make though is that the summer months are typically slow for precious metals and it picks up dramatically starting in August as harvests in Asia are sold and farmers store their wealth in precious metals, then followed by festivals, gift-giving seasons, and traditional marriage gifts.

Where has the smart money been going the last couple of years? Simple � petroleum an precious metals (ask Warren Buffett and George Soros for example). Ask a Wall Streeter and you get lies about petroleum and precious metals. Ask geologists around the world and the answer is clear � the rare and finite resources of petroleum and precious metals. Right now the hot issue is petroleum and the "Peak Oil" production � that is oil that is economically viable at "cheap" prices (below $60 - $100/bbl). Drilling and extraction costs are climbing, discoveries are small and fewer, and quality is getting worse (resulting in higher refining costs). The Department of Energy and the IEA (International Energy Agency) state that demand for oil will grow from today's current 77 million bbl/day to 120 million bbl/day by 2023. Sorry Charlie � we won't make it that far. The Organization for Economic Cooperation and development estimates that production will grow to about 80 million bbl/day and then stop forever. That leaves us short by a mere 40 million bbl/day of oil by then. Yep � "Game Over". All the easy oil � "Super Giants" have already been found � because of their huge size they were easily found and there is no more.

Want some more good news? The Saudis are very secretive about their reserves for good reason. Simple reason is that many officially listed reservoirs simply exist only on paper and not in geology. The Saudis can talk all they want but they have yet to prove that they have the oil by actually increasing production. Well friends, it has not happened yet and never will. If they could they would have done so by now. So while your failed used car salesman (now known as a "stock broker") says to buy tech stocks or some other useless garbage think of what you really need � protection! That is by a solid fundamental foundation of hard assets like food, water, portfolio insurance (gold and silver), and then you might look at paper (but be very wary, picky, and selective by doing serious study and lots of homework). Actually another book on oil has come out called "The Oil Factor" by Stephen Leeb. I haven't read it yet but he is predicting $100/bbl oil by the end of the decade and maybe more (the reviews have been good so maybe that's my next book to read).

Now watch the swinging watch and repeat after me � "There is no inflation, there is no inflation, there is no inflation,�.).

- Black Blade

Oh bother!

I wrote "if the energy of extraction exceeds the input then the process is uneconomical."

I meant to say "if the energy cost of extraction exceeds the amount of energy recovered then the process is uneconomical."



Fritjof Capra "The Hidden Connections". Yet another ecologist that cant understand economics. Truly the worms know what the wisest can not imagine, for of the great sublety of their wisdom they now do CREDIT the folly of their illusion. Principle does not prevail against false laws, nor law against raw power. Yet even the power of credit can not prevail gainst the golden truth of heaven for heaven is as real as the lion, while power is but the noise of the wind of the void.

http://www.gold-eagle.com/editorials_03/verbeeck040403pv.htmlSocrates, please go to the last chart of P. Verbeeck's essay : $-POG > EW projection made one year ago.
Verbeeck made a very accurate analysis + goldprice targets we saw being materialized in '04.
Now, the VERY good news : The TA/TI is consistant with Gold's fundamentals. The POG-move '99 > '04 ($253 > $430) is WAVE I (ONE) and w're running through the corrective wave II, now ! Wave II (down-correction) found already its bottom at (the projected) $370 !?

Yep, y've seen...ONLY WAVE I, ... Another two waves to come, before Gold reaches a pricelevel in a goldproxy currency, that indicates by how much Gold already should have been "Valued" by now...in a FreeGold environment !

Socrates, also look at the LT �-POG chart and please, comment on my idea that this (euro-POG) chart is clearly indicating (visualising) that the Gold-Revaluation hasn't even yet started ! Whilst, Golden Lionhart is already worrying about and "exit"-strategy !??? But that's a very understandable worry, when I see that Mister Gold (Sinclair) keeps on repeating that Gold IS a currency. Gold is wealth and wealth is NOT a currency ...no matter how "universal" Gold is !

Wealth is simply "MORE" than any currency ! Maybe more on this subject/notion, somewhat later.

But if Golden Lionhart would be the owner/holder of a Rubens painting ...WEALTH...why would you be constantly on the outlook for an exit...exchange the Rubens for a numeraire (money) and catapult yourself back to the victim of permanent depreciation. Once wealth has been exchanged for paper...one has lost its wealth and transferred it to another wealth-holder, who wished to consolidate the paper-fruits of his labor into ever lasting wealth.

And there is nothing wrong with wealth and therefore doesn't need to be "privatly" hidden and/or be associated with criminality.

This illustrates how this confetti world has been turned upside down : To hyperinflate all paper and take away one's reflex towards wealth consolidation (Gold), is very OK...holding Gold is suspect ! I want to protest firmly against such insane, dubious, purposesly denigrating kind of (desperate) associations ! It is the systemic act of hyperinflation (printing presses-paperization) that rather should be regarded/considered as a criminal offense. It reminds me always about the (unprotested) 40 years of Gold confiscation.

@GAB : Liked your King Canute posting #120933, very much ! Almost poetic.

@Ari : Pegging the yuan to the dollar is increasingly considered as "unfair" !? But I thought that we were on a dollar-standard and that we should therefore all remain a dollar-derivative ! Another blatant example of the double-dollar-standards ! Smile Ari,...give us a Big one.

@Randy : Yes Sir, that hyperinfla-thing is definitely in sight ! It is the core fundamental for explaning that "technical" WAVE I in the "Re-Valuation" process of the precious wealth. Money, currencies, confetti...will keep on trying to deflate all real wealth, relentlessly...always, again and again,...everywhere ! But we are very lucky that this planet cannot and will never be "monopolized" by *one* dominator with 9 lives. That's what makes it so fascinating, being here on this blue planet.

Socrates : Do you think we are presently constructing a down-correcting wave II ? If yes, give us your opinion, please.