http://www.nypost.com/business/26522.htm
Snippit:

The Labor Department's Bureau of Labor Statistics delayed release of the wholesale inflation number � the PPI � by half a week recently because, according to a press release, it needed to "resolve unexpected difficulties in calculating the index." A government agency doesn't produce a very important economic statistic on a timely basis and that's their best explanation?

Keep in mind that billions of dollars are wagered each day on whether inflation is increasing or falling. And remember that the PPI is one of the most visible gauges of this � watched all over the world. Not only is the number important to the Fed, but it's also key to the presidential election if only because it can change the economy by forcing financial markets to make borrowing costs more expensive.

When the PPI was finally released it showed an increase of 0.8 percent in May, the biggest jump since March 2003. If you take out food and energy prices the increase was 0.3 percent. That the media didn't seem to care about this delay was as astounding as the government's ineptitude. So let me be one voice of indignation.

Brian Catron, a BLS economist who works on the PPI data, says the number was delayed because "there was a calculation issue." What exactly does that mean? Does Catron mean that the PPI's jump, as originally calculated, was too large for the financial markets to handle? "You are implying that we are manipulating the number," Catron shot back when I asked. "I'm not going to dignify that with a response."

OK, don't respond. I'm still wondering if that was the case. But here are some other things you might want to know. Catron assured me that the "mistake" that caused the PPI's delay had to do with the quality of the data that were provided by manufacturers. And he contended that Labor Department higher-ups had not seen the original number before it was pulled, so only lowly bureaucrats decided to rejigger the data.

The raw data, Catron told me days before the PPI finally came out, didn't pass a quality assurance test. Prices � as they stood on the day they were originally supposed to be released � just weren't "appropriate" for public viewing. A little editing and they apparently become appropriate. Which makes me wonder: shouldn't someone be keeping an eye on the stat-amagicians?


Black Blade: Oh oh - someone "peeked". Yep, Crudele hits the mark again! I have attacked the abusers of statistcics here many times before so I just leave you to view the article (see link). The BLS is nothing more than a government scam operation.

http://moneycentral.msn.com/content/invest/extra/P87483.asp?Printer
Snippit:

Bank predicts a 'hard landing' by mid-2005 and says prices are 'spectacularly and unrealistically high.' But the Fed remains unworried. Economists at HSBC on Friday waded into the debate over whether the U.S. housing market is overinflated, declaring a bubble exists, something the Federal Reserve has been reluctant to do.

Black Blade: Of course. There's a glut of houses for sale and a building boom on top of that. Now with rising rates sales are sure to plummet hard and prices as well. A lot of real estate investors and consumer up to their necks in debt are going to take a bath so to speak.

http://biz.yahoo.com/rf/040630/financial_moneymarket_1.htmlHEADLINE: Rising rates provide relief, finally, for savers
NEW YORK, June 30 (Reuters) - Savers got some long-awaited relief when the Federal Reserve hiked short-term interest rates on Wednesday.

The Fed's decision to raise its target overnight lending rate to 1.25 percent from 1 percent means yields on money market mutual funds, certificates of deposit and other bank accounts -- and rates on credit card and other consumer debt -- will rise....

Investors shouldn't expect a quick return even to mid single-digit yields on cash investments. And money fund investors in particular should not seek out funds that take outsized risks to capture a bit more yield.

Still, Crane said "we don't expect anything near the scale of the problems in 1994," when about 40 funds came close to breaking the buck as rates rose.

"Portfolio managers have stayed cautious primarily because of the Enrons and WorldComs of the world," he said. "No one wants his fund in the headlines for that."

Consumers, meanwhile, should keep close tabs on what they pay on adjustable-rate home loans and credit cards, McBride said. Credit card rates are usually tied to the prime rate, which moves in lockstep with the Fed's overnight rate.

As rates rise, McBride said, the biggest mistakes people make are "failing to lock in fixed rates while rates were low, and maintaining exposure to higher rates through their outstanding credit card and home equity debt."

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

To what extent does this 25 basis point hike in rates require gold to show a capital gain (rise in price) to keep up in the race?

Due to this increased rate on cash account earnings, over the period of one year, gold (priced at $400) must now gain ONE whole dollar more than it previously needed to. Of course, your interest income is subject to taxation each year, whereas gold's capital gain taxation is a consideration only at such time as you decide to liquidate your holdings.

Gold's climb thus far in the past few years from $250 to $400 has made the potential interest one might have earned on alternative cash savings at the going rates look completely anemic. It will require much more than this token rate hike to take the shine away from gold while its still priced at these absurdly low levels. (On the other hand, were gold to be currently priced at $4,000 per ounce, it would then have to gain a whopping TEN dollars extra over the period of a year to keep pace with this 25 basis pt higher cash rate. (YAWN) Enough to send gold owners into a fit of nervous shaking? Not likely.)

R.

http://www.chron.com/cs/CDA/ssistory.mpl/business/2648799
Snippit:

For many older Americans, retirement is not a financially viable option; many are going back into the work force. The trend is evident in the number of older workers, people 55 and above. Their numbers rose to 22.7 million in May, up from 22 million in 2003 and 20.7 million in 2002, according to the U.S. Bureau of Labor Statistics. The increase in older workers coincides with a shift in employers' attitudes at a time when the government is forecasting a significant labor shortage by the end of the decade.

Black Blade: With rising inflation and Social Security being a cruel joke as COLAs do not keep up anywhere with "real" inflation, a severe lack of financial preparation, and pension plans in trouble, it's a no-brainer that many spend and never save seniors have no choice.

ALL MONETARY POLICIES WILL BE KEPT * NEUTRAL *...as neutral as possible. Means that the bank of banks (BIS) wishes to keep, IRs-exchange rates-goldpricing..., as flat as can be.
Trichet (ECB) will most probably refer to this, in the afternoon.

Conclusion : The US and EU economies are NOT reviving, despite many drastic measures. Inducing Hyper-inflation of confettis and prices remains the only solution. Herein lies the remaining major fundamental conflict between FED($) and ECB(�)-policies ! Currency-management and/or economic stimulation.

Our conclusion should remain the same : Profit from the enduring obscene GOLDprice discounts and keep on accumulating for as long (as much) as you can...and understanding of Physical Gold permits.

In the past 3 decades, we never had a similar situation as at present. And this from *all* standpoints. *Hope* that the good old, familiar days of before, will come back,...might cost one dearly.

I was talking to an pre-elderly (65ish) man a year or so ago about silver. He owns a modern, tidy photo shop. The conversation began with me inquiring about the recycling of silver. His long story dazzled me immensely. A lot of silver was consumed for a long period of time. I had the impression that perhaps the late '50's thru to the mid-'90's. The amount of silver consumed has came off the cliff fairly significantly, again, by his story maybe 50%. It's still falling (digital) but it is beginning to level out. Surprises in the digital world should be farther and fewer between.

He was an active trader of silver in futures markets in the '80's but because he was late to the party lost his shirt badly. He scowled and grimaced when he spoke of silver....I think there is a definite love/hate relationship there! He spoke more affectionately when he spoke of gold however.

"You buy gold when TSHTF", he bellowed. "You should always have a little bit ...and you should have a lot just before TSHTF". So I asked him about TSHTF soon and his view of the world, politically.

He said, "They are wheeling in one of those monster giant fans over to the middle-east right now. That thing will be turned on very soon. There's another one, but not as big, being wheeled up Wall Street too! It is so funny to see self-proclaimed big-shot bankers getting IT when TSHTF"

"So TS is going THTF?" I asked.

"Of course it is! There are so many fans this time that it will make your head spin. "

"So how much gold do you have?" I asked, getting very nosy at this juncture.

"Well.......I'm somewhere in between a 'little bit' and 'a lot'."

I left the store absolutely convinced that my long-term strategies were 100% correct. Slowly accumulating the REAL McCoy, the real thing is the only thing that can turn off a fan, even those big monster giant ones.

Have a golden day!

(I says we crack 400 again today, the last half-hour of trading yesterday saw many miners spike)

25 points is nothing. Sir Alan just wants to get the maximum impact with a minimum input. You have seen the whole mediacircus the days (weeks) before the FOMC. This is a psychological move.

"There seems to be a correlation between the intensity of the official attacks on gold and the severity of monetary crises." HANS F. SENNHOLZ

Some posters often (Belgian, Another, FOA) talk about the BIS. I've read about their mission and all on their website, but that's the official blabla. What do you know about this institution ? What kind of guy is Nout Wellink, the President of the BIS ? Does the BIS just trades gold,executes orders etc. for CB's, or does it owns Gold, does it trades for its own ? Is there al lot of political involvement ? Do they intervene in the markets under ECB-command ? Thanks in advance for your answers !

Dear Friends

I have authored the following letter and will be sending it out to various elected officials and small town bank owners in my terrain....hope some of you might cut and paste it out to your computers....and one day do the same.

My idea is to send it out to a certain list now, and then IF we see moves afoot to restrict PM trade, to resend it then with the reminder that they had been alerted before.

. . . .


PRECIOUS METAL MARKET ALERT (By Poor Old Solomon , June 25, 2004)

CONCERNS OF POTENTIAL LEGISLATIONS BANNING OR LIMITING THE OWNERSHIP OF PRECIOUS METALS AND COMPANIES MINING PRECIOUS METALS.

Dear honored official,

We are writing this letter as a general letter which may be presented to government officials in any function who may influence legislation, or may simply have concerns about the financial rights of honest citizens living within their constituencies.

The topic of concern is the right of American citizens to own and invest in precious metals such as gold, silver, platinum, and palladium. Of very specific concern is that legislators may be requested (lobbied) to pass or enforce new laws which severely restrict, or even outlaw the rights of Americans to own (or profit from) the sale of precious metals or companies involved in the mining of precious metals.

There is also a concern that the use of gold as money amongst illegal drug traders, mafia, and terrorists, will be used as an excuse to pass legislation against law abiding American citizens who own precious metals.

Lastly, were there to be a serious financial crisis in America which resulted in high levels of inflation and loss of global dollar purchasing power, Americans who have traditionally used only dollars, might move in a panic to convert portions of their savings from dollars to precious metals. The escalating price of gold, silver and other precious metals, in this case, would be an accurate barometer of the problem with US Dollars.

A brief summary of the situation is presented, and all that is asked is that you, as a legislative or enforcement official become attuned to the situation. America is both a democracy, where every vote counts, and a representative democracy, where citizens expect their representatives to vote and act in accordance with their conscience and beliefs.

The primary understanding which we would like to communicate about precious metals is that at many times in the past, both gold and silver have been used as money. All large governments have long ago discontinued the use of gold or silver in legal tender coinage, and have even gone so far as to sell much of their reserves of gold and silver. Gold and silver are no longer considered money, but their historic use as money has left a legacy of monetary value. Most Americans would easily equate treasure chests of gold and silver coins to wealth or riches. Platinum and palladium, along with silver, are primarily considered industrial metals. A unique property shared by all these metals is that they may be fabricated into coins and ingots. Coins can, in some cases have collectable value, and ingots of various sizes are usually convenient forms of high purity bullion metal. Thus, although the primary use of silver, platinum and palladium is now industrial, a portion of the world reserve of each is in the form of small coins and bars which are held by investors.

There are actually several ways to own precious metals. The most obvious and most simple is to buy a coin or bar from a dealer who handles them. For persons or corporations that want larger amounts of precious metals, they may choose to buy a certificate that gives them title to a certain amount of a precious metal in a vault in a bullion bank. The daily price for all of the four precious metals is determined in international markets and is known as the spot price. In addition, there is a large amount of gold and silver trading in the futures markets as futures contracts and options.

A person or company with large amounts of money and short term investment time horizons of hours, days, or months will often choose to place their money in the futures or certificate trade. These markets are large, with active trading, and therefore allow large investors to move in and out with low transaction costs. Although gold is no longer used as money, its price in these large futures markets is carefully followed, allowing all global currencies and commodities to be instantly valued in grams or ounces of gold.

Why would someone want to buy real gold or silver or other precious metals? There are two primary reasons. The first is that coins or bars of these metals have a durable, tangible and intrinsic value which derives from their future utility in industry as well as their perceived value as a financial instrument. Owners of precious metal coins or ingots may use them as a form of savings, but they sacrifice an interest on the savings, since such coins and ingots bear no interest. An important counterpoint to the loss of interest is that the asset value of each coin does not correspond to an obligation of another party which may be defaulted. The second reason to own precious metal coins is to have an asset which is private or anonymous. One man may choose to spend $100 on a dinner out, the other may choose to buy $100 worth of gold. The one man has spent his money, the other has saved it, privately. Although we live in a computerized world with ever less financial privacy, the owner of a precious metal is exercising a long tradition of financial privacy.

An observation which justifies the ownership of precious metals as a form of savings is that over time, all printed monies of all nations tend to experience inflation. Prices rise slowly, and the purchasing power of the money falls slowly. Governments and their citizens tend to enjoy inflation at low levels since it allows them to pay long term debts back with inflated currency. A positive side of mild inflation is that it tends to encourage savers to place their money into interest bearing investments and assets such as homes and stocks, in the hopes that the value of their investments will grow faster than inflation. A corollary to that is that everyone knows that only a fool would stuff their money into a mattress for 20 years. But precious metals, over the long term, tend to generally hold their value just about even with inflation. There are occasionally periods where the value of precious metals does not rise with inflation, but those are usually followed by periods where the price of the precious metals rises, sometimes suddenly, and usually finds a new equilibrium price near the level dictated by inflation.

For persons living in smaller countries where governments have a history of destroying the value of the currency, precious metals, primarily gold, represent an asset which can easily be sold but which will not suddenly lose value in a currency collapse. Even in modern times, families in many nations in economic trouble have been able to preserve their savings, through holding that savings in gold, rather than their local currency. Those families did not do this by suddenly converting their savings into gold during a financial collapse, they did this during the good times preceding the collapse, by slowly buying gold each time they had spare savings.

Small countries who get into trouble with their national debt, and print up a lot of new money trying to fix things, and then see a dramatic collapse in the value of their currency, are usually able to let a bunch of folks go bankrupt, borrow a few billon dollars from the International Monetary Fund, print a new currency and start over. They are usually much more concerned about arranging bailout loans than they are about the option to confiscate gold or regulate or tax sales of gold.

America is in a very different situation. We are already borrowing about $500 billion dollars per year from foreigners. This is about 5% of our entire economic activity (GDP). If America would get in trouble with the national debt, print up a lot of new money trying to fix things, and then see a consistent drop in the value of the currency, yes, many of us could go bankrupt, but who would bail us out??? If the dollar upon which we all have relied is losing value, the central banks of the world might prefer that Americans begin to save in other currencies such as Yen and Euros, but just as likely is that Americans begin to consider saving in gold. If this happens, the US Government and Federal Reserve Bank will certainly see that a rush away from dollars and into gold, by American citizens, is a vote of no confidence for the dollar. The temptation will be to restrict and regulate gold markets for Americans, trying to force them into holding dollars. But the real solution is for the Government to manage its spending and the FED to manage back real trust in the dollar.

The situation in silver is even more dramatic. Near the end of World War II, since America had been a large silver producer, and had also accepted silver as payment for war supplies, the United States Treasury (including circulating coin) and the US Strategic Silver Reserve held close to 10 billion ounces of silver. Since then, silver has become an essential component in thousands of modern products, and even though the amount of silver mined each year has grown, the demand for silver has grown so much faster, that most of those 10 billion ounces of silver reserve have been used up. As a matter of fact, the ongoing availability of silver from reserves has tended to keep the prices for silver low, and so the global mining industry has not made large new investments related to silver. In essence, the world has been experiencing a shortage of silver for several decades, and this has been hidden by the consumption of reserves. Now, those reserves are gone. Silver known to exist in vaults is only about 150-500 million ounces�2% to 5% of the reserves we once had. Enough to cover a couple short years of typical silver deficit, but that is not enough time for the global mining industry to build mines to produce an extra 200 million ounces per year of silver. A shortage of silver is now eminent. Certain silver investors have recognized the emergency situation in silver several years ago.

The situation with silver is that an acute shortage of silver (leading to certain industrial companies closing down production lines if they can't find silver) may now occur almost simultaneously with inflationary erosion in the value of various global currencies, particularly the dollar, and a trend away from financial investments such as stocks and bonds into commodities such as energy, food, lumber, metals, etc. In any financial environment, the rise in price caused by an acute and structural shortage in silver will attract new interest in silver investment, but this could even be more dramatic in a poor economic environment where inflation is once again high. Many of the world's poorest nations are still prolific savers. If even 1% of the savings generated in one year were to attempt to invest in silver, the price of silver would easily move to over $100/ounce. Historically, most serious investment advisors would advise owning about 10% of an investment portfolio in precious metals. If Americans now tried to convert even 1% of their portfolios into silver, massive increases in silver prices could occur.

The great fear of this author, and of many investors who already own precious metals as a protection against a national or global financial emergency, is that once such an emergency unfolds, and many investors rush to the precious metals, it will be very easy to confuse cause and effect and try to blame the rush into precious metals as the cause of the financial emergency, when it is in effect only the symptom. As a matter of fact, since precious metals trade globally, allowing free markets in all precious metals, and therefore a true market price, is a perfect mechanism for measuring the true state of monetary affairs of each nation. Even after a global financial emergency, as governments reestablish well managed monies and do better at balancing their budgets, the prices of precious metals will once again fall back to a new equilibrium.

Although it is predictable that governments in a crisis may attempt to take control of precious metals ownership and markets in their nation, and take control of precious metal mining properties, it should be remembered that the movement of small investors to own these metals in a time of crisis is a natural and very non-political human emotion.

American politicians must recognize the importance of allowing all precious metals to trade freely, and perhaps build improved monetary systems by incorporation of precious metals back into bank reserves. But, above all, the right of all Americans must be adamantly defended, to choose honest and legal investments, and be rewarded if those investments are profitable. Attempts to outlaw or restrict the ownership or trade of precious metals is a fundamental violation of principles of economic freedom and justice, and one would be encouraged to carefully scrutinize the motives of individuals asking to implement such laws.

Poor Old Solomon

That was a fascinating read about the decline of the Roman Empire. There are so many parallels with current affairs, it's scary ! The part I particularly noted was :-

The cornerstone of Diocletian's economic policy was to turn the existing ad hoc policy of requisitions to obtain resources for the state into a regular system. Since money was worthless, the new system was based on collecting taxes in the form of actual goods and services, but regularized into a budget so that the state knew exactly what it needed and taxpayers knew exactly how much they had to pay.

C! Sounds like an earlier version of burning confetti giving way to the real thing ! Thanks for sharing that with us.

C!

Some of your concerns might be the result of letting your fear run wild and your worries get a lot less urgent if you remind yourself that politicians put their pants on one leg at time like everybody else. Don't kid yourself that thier own personal stake in gold is any less than our own, and the reality is nobody wants to cut the floor out from under himself. So the trick isn't to worry about the floor being taken away but to be smart enough not to take the floor for granted. The more you have the more room you'll have to move.

Wrong side of the bed?No Sir,I thought my tongue was enough in cheek to sound ironic.I might sharpen my english further for the next time.

So FreeGold has already been born officially,hmm,I thought it is still an embryo,an embryo none except the mother knows of.Then I have to rewrite my data,I guess with the date of birth you mean the WAG1 or the mark-to-market,if true,the "June rumour" of "ECB to free Gold" would mark pregnancy.

I had a lot of discussions with my father and altough he aknowledges fully Golds role present and past,he just doesn't believe in FreeGold "son,this will never come,they won't let it happen".What can I tell?You have to admit this concept needs some powerful backing,I mean just because it might be a good idea and you are a good guy won't bring it.(no offense meant)

I guess it is about not seeing the newborn,or,respectively, not seeing him because he is not there.Its also the major hurdle in talks with other people,though they do listen,especially if you tell them the Goldstandard is the past and something new with a positive role for Gold had to be created.But,will they go out and buy Gold?

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

http://channels.netscape.com/ns/news/story.jsp?id=2004063023190001589162&dt=20040630231900&w=APO&coview=Man saves 1,000,000 pennies on a bet, can't get rid of pennies or collect the wager prize. Many of you 'prolly already saw this, nonethless here is the link;

http://www.ecb.int/press/pr/date/2004/html/pr040701.en.htmlECB Press Release:

1 July 2004 - Monetary policy decisions

At today's meeting the Governing Council of the ECB decided that the minimum bid rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 2.00%, 3.00% and 1.00% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. today.
===============

(excerpt from the press conference)

Looking beyond the short term ... the outlook remains consistent with price stability, provided that wages develop moderately, in line with the latest evidence available. Nevertheless, there are some upside risks to price stability. The strength of global economic dynamism may continue to exert upward pressure on commodity prices, including oil prices. ...... Against this background, the potential risk of second-round effects via wage and pricing behaviour needs to be monitored closely. ..... Finally, measures of long-term inflation expectations derived from financial market indicators remain relatively high. While these indicators should be interpreted with caution, their development calls for particular vigilance.

Moving to the monetary analysis, the overall picture remains unchanged from our previous assessment. Annual M3 growth rates have fallen over recent months. While this decline partly reflects base effects, the portfolio decisions of firms and households are also returning to normal as financial uncertainties have receded. Indeed, there are signs that savings are increasingly being allocated to long-term assets outside M3 rather than to liquid monetary assets.

[Randy's interjected note: That is EXACTLY how you should view your own gold holdings... as savings from funds that have been allocated to long-term assets outside the Monetary System proper.]

However, despite the recent moderation of annual M3 growth, there remains substantially more liquidity in the euro area than is needed to finance non-inflationary growth. While a significant part of the excess liquidity has accumulated as a result of past portfolio shifts, low interest rates have also fuelled the build-up of liquid assets. The low level of interest rates also supports credit growth. The stock of excess liquidity, if it persists, may pose an upside risk to price stability over the medium term.

---------(policy statement available at url)--------

Bottom line: "Risk to price stability" means effectively a risk of weakening of the currency within the monetary system. Hence, the motivation for savings to be "increasingly allocated to long-term assets outside M3". Choose gold and thus get as far away as possible -- while still preserving your liquidity! Oh, happy day!

Call USAGOLD~Centennial for all the professional help needed to get the job done right.

R.

http://www.ecb.int/press/pressconf/2004/html/is040701.en.htmlPress Question:
Mr Trichet, I would like to refer to the annual report of the BIS. They raise more general questions and I would be interested in your opinion. One thing is that the BIS says there is an asymmetry in the reaction of central banks: they loosen in the downswing but they do not tighten in the upswing in the same way. So they say that you can do that once, but then you have no room for manoeuvre left and that is dangerous. What is your opinion on that?

Trichet:
First of all, the BIS is an international institution which is important, with a close relationship, as you know, with central banks and which is there precisely to ask pertinent questions or to suggest further deliberations in important areas at the global level because it is a fully international institution. And I am very happy myself to participate in meetings in Basel under the auspices of the BIS, in particular the G10 meeting, the global economy meeting which we organise every two months.

That being said, the question is stimulating. I trust that the question is not too much addressed to the ECB in your mind. But it is a theoretical question of great importance.

Are we symmetric? Are we asymmetric? How do you deal with this very important question of asset inflation? What kind of responsibility do we have ourselves as central bankers when taking account of asset inflation?

You know that we are reflecting a lot on that, that this institution has developed a special understanding and vision, and that we are a little bit original in the constituency of central banks the world over.

We consider that on top of the possible interaction between asset inflation and possible bubbles and the monetary policy oriented towards price stability, which is the rule of the game for all central banks, we are keen ourselves on having a monetary analysis. And we trust that it is a way not only to better anchor inflationary expectations, because in the long run inflation is a monetary phenomenon, but also a way of perhaps taking more closely into account phenomena like asset inflation and bubbles because they are fed by monetary expansion.

So we trust that perhaps � I say perhaps, I am cautious, I am prudent � our monetary policy concept is well-suited to this particular responsibility that is part of the overall BIS remark.


Question:
Mr Trichet, the Centre for European Policy Studies in its annual macroeconomic report this week had a number of criticisms of the ECB. One of them was that transparency had actually reduced because under your predecessor at these press conferences we had a feel for how the debate was evolving within your rate-setting meetings. It also suggested that you should have a bias. I wonder how you respond to these criticisms and whether you could, perhaps, fill us in on how the debate is evolving or has evolved in the meetings?

Trichet:
Frankly speaking, it seems to me that all the criticism about the absence of transparency of the ECB can be taken with a grain of salt.

Do you know another central bank that holds a press conference immediately after the decision of the monetary policy council? Do you know another central bank that produces four or five full pages assessing the situation, expressing the diagnosis, not in two paragraphs but in a more detailed way?

Do you remember that, when we launched the single monetary policy concept of the euro at the start of 1999, the state of the art of central banking was to say absolutely nothing at the moment of the decision and to wait for five weeks before giving an indication of the reason why a decision had been taken? So, not only do we try to be as transparent as possible but also we, more or less, contributed to changing, for the sake of transparency, the state of the art of communication in central banking.

So, all that being said, I cannot invent a bias where we have none, and change for your pleasure the assessment of my colleagues in the Governing Council.

We try to do our best. We are under the control of public opinion. We are under the control of markets. We are under the control of savers and investors, and not only in Europe but the world over.

On the basis of our credibility they are managing trillions of euro, and we try our best to maintain the credibility that we have in their eyes.

And I mention this again because it is very important: we shipped to the euro area the yield curve that was the best yield curve available before the euro area was set up. That has made it possible to generalise for 306 million inhabitants a level of market interest rates that was previously the privilege of only a fraction of those 306 million inhabitants.

To the extent that we started from scratch, this relied entirely upon the credit of stability that was given to us on the basis of our credibility. The credibility of the institution. The credibility, perhaps, of the transparent interaction with you and, through you, with the full body of observers, savers and investors. And also the credibility of our monetary policy concept, which -- at the beginning -- was perhaps criticised a little but it is now less and less criticised, it seems to me.

-----(from press conference at url)------

Again, "We are under the control of public opinion. We are under the control of markets. We are under the control of savers and investors, and not only in Europe but the world over. ... THEY are managing trillions of euro..."

And to this point, I add the remark in the previous post citing Trichet's introductory comments: "Annual M3 growth rates have fallen over recent months. While this decline partly reflects base effects, the portfolio decisions of firms and households are also returning to normal as financial uncertainties have receded. Indeed, there are signs that savings are increasingly being allocated to long-term assets outside M3 rather than to liquid monetary assets."

Taken as a whole, you can see his comments regarding control are exactly right. Remember FOA's truism -- own gold and thereby you control your would-be controllers.

With a mark-to-market reserve structure in effect upon its own gold holdings, the ECB is indeed signalling "that this institution has developed a special understanding and vision, and that we are a little bit original in the constituency of central banks the world over".

Could gold possibly ask for a better Friend? "Forth! And fear no darkness!"

R.

Just before leaving on holidays...one more reflexion on "FreeGold"...

We all, never realized (suspected), for more than 2 decades, that Gold was "un-free" in the first place and now we don't believe in the possibility (reality) of FreeGold....

See you later Knallgold...

I'm kind'a reluctant to post again on this august forum. A forum, which has helped keeping my sanity for many past years - and yes, I believe in Gold!

Do I believe in "Free Gold"? That may be more a matter of semantics - free gold, after all is a personal choice to accumulate for long term saving or not.

Oh, and yes it was only in the land of the free, where possession of gold was prohibited for almost two generations, ever. No-where else in the world has confiscation of PM's ever happened in this sense. OK, it was FDR's New Deal, which dictated strong measures against the depression of the 1930`s and the new deal only prolonged the suffering.

Anyway, GOLD does not have to be freed from any shackles. Whether its the ESF (PPT), LBMA, Crimex or any other entity papering over the real price finding menachism. Real gold will always find its real price. Well, gold is the only real price and in the end all real assets will be priced according to gold's dictate.

In essence, I'm really getting a bit tired of the same old tirades of the coming of 'free gold'! Gold is always free and at liberty to ascertain its freedom by manefesting its challenge to any fiat bondage ever.

That's what gold is just re-estrablishing now - and doesn't and hasn't needed any free gold advocates ever.
Gold is and was its own intermediator - and it will carry on in the same fashion ... gold for the free - cb2

http://www.financialsense.com/Market/wrapup.htm
Lately--the past few months--chartists and Dow theorists have been confused by inconsistencies in the stock markets. The industrials seem wanting to fall, but don't... and the transports seem unwilling to confirm weakness in the industrials.

Today on a neighboring site a technician, Martin Goldberg, in an article, shows how to control the stock market for $12 million/day. Peanuts to any group with access to unlimited money (like access to Gov'mnt money).

Goldberg's argument, briefly, discusses how easily and cheaply the transport index could be manipulated through only a few weighted stocks in that index. And guess what? Those stocks ALL show strong support over the past year!

He also asserts that this type of low budget influence would create far less notice than throwing large wads of dough at major stocks.

The confusion caused by the transports refusing to confirm any Dow industrial decline has caused some to buy the industrials and others to fear shorting it.

Click on over there and read it yourself...not too long an article.

"Gold is and was its own intermediator - and it will carry on in the same fashion ... gold for the free - cb2"

Good thought on this weekend CB and....pooh pooh psychophantitis...CM

CoBra(too)...post 122695...agree entirely. Thanks for saying it.
rich

A prosecuting lawyer gave his monologue today about the charges facing the ousted Iraqi leader. After several minutes of rambling a lengthy series of 'charges' Mr. Hussein was asked if he understood the 'charges' of human rights abuse and crimes against humanity laid against him.

Mr. Hussein responded that the 'only person that has violated human rights and has commited crimes against humanity was George W. Bush.' (paraphrase)

Mr. Saddam Hussein.........comedian.

http://www.nytimes.com/2004/07/01/business/01place.html?thWha...even the New York Times has seen what is happening.

Snip:

"...
Inflation and market interest rates are far ahead of Alan Greenspan's federal funds rate, which he raised yesterday to 1.25 percent. Now the nation will see how well Mr. Greenspan, the Federal Reserve chairman, plays the game of catch-up.

Fears that Mr. Greenspan has opened wide the door to inflation in the United States by keeping interest rates too low for too long prompted a sell-off in the bond market recently. That has pushed short- and long-term rates far above the federal funds rate and produced the worst quarter for bond investors in almost 25 years.
..."

Sundeck:
Mr Greenspan has little alternative, in my view. He is like a lumberjack riding a round log in a raging river. A bit this way...oops! A bit the other way...dang! How DO you ride this thing?

In my view, it would bring joy to Greenspan's heart (and to the Treasury) to see price increases (inflation) take off, followed by wages, followed by prices, followed by wages,...etc....a lovely theme, with Bernanke's printing press chugging in counterpoint!

Devalue that dollar, trash repayment on debt...the best alternative by far (for the US). Just like the 70's? No? Wake up Paul Volker II, your time is coming...

;-)

.
.
.

"FREE GOLD" is the gold that you hold in your hand.

.
.
.

Knallgold's own Pappy says, "son, this will never come, they won't let it happen."

Knallgold himself says, "You have to admit this concept needs some powerful backing, I mean just because it might be a good idea and you are a good guy won't bring it."

Awww shucks... thanks for suggesting I'm a good guy. But the truth is, sometimes I wake up in the morning and all I wanna do is kick that dog for barking so damn much.

Maybe, just for now, the fact that I don't is reason enough to claim the title?

Lemme let you in on a little secret -- there's really only one thing that scares a central banker enough to keep him lying awake at night. A profligate government with rampant budget deficits? Nawww... that merely pisses 'em off. The monster under the bed for a true blue central banker creeps and crawls and answers to the name of Systemic Risk.

The innate fear and desire to vanquish that monster is a powerful force in our favor, my friend. That alone is worth a helluva lot more toward reaching our goal of FreeGold than me just hanging around being some sorta "good guy."

CoBra, the only way I can make sense of your #122695 post is to conclude that you haven't quite yet figured out what the heck FreeGold means, or maybe more charitably, you haven't figured out what WE mean by it (in which case the fault is surely ours.(??))

You talk about Gold in need of no freeing from shackles and that real Gold is already (actually you used the word "always") "free and at liberty" -- and here's the part I don't follow -- "to ascertain its freedom... blah blah blah..."

To my mind, Gold ascertains its freedom in the very act of finding its price through the help of the particular functioning of the nearest available market, what with its quirks and all -- them being the nature of the unfree problem. How can a Real Physical Ounce stand up and be fairly counted (or marked), pricewise that is, when surrounding it are dozens of impostors decked out in superficially convincing papier m�ch�?

To carry onward with your lingo, the lower Gold finds its price in that crowed field, the more I'd say it's ASCERTAINED that it ain't as free as it oughta be!! The market ain't free to hang a proper price on RARE Real Gold until such time as the masquerading imposters are stripped of their papery powers of financial illusion. Who c/would engineer such a thing? Weeeellllll,,,, we all know how central bankers feel about elements that unnecessarily engender Systemic Risk...

Real Gold. Its time will come to be free. Get you some. --- Aristotle

Thanks all for responsing,particularly Belgian (scepticism can be a trap sometimes...) and Aristotle,good arguments. Unlike Cobra(too) I'm not tired of this discussions.

FreeGold is mostly about DERIVATIVE free Gold,I think we should give it a chance (the concept and physical Gold).Question is where starts the term derivative?Options,futures sure.A Goldmine?Not really,it produces Gold,your own fault if you think its like Gold.But you can buy physical Gold from a Goldmine.

And then there was this discussion about Money being a derivative of Gold (or vice versa?),I'm still thinking about that.But the weekend is calling now...

Free gold is understood I believe.

I am with Cobra(too), a long-established poster, because one thing (amongst others) that I don't like about CNBC is the constant cheerleading comments about something that has both sunshine and shadows. Never hearing of shadows there, always hearing about sunshine speaks of the need for balanced coverage. As it applies there, it applies here.

Cobra(too), you would be missed.

The universe is conspiring for us to succeed in our quest
Yet too many choose to bring to a test
the things they think are for the best

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040702&ID=3853709Snip:
The Labor Department said only 112,000 jobs were created last month, far fewer than the 250,000 that Wall Street analysts had anticipated. April and May new-job totals were revised down, to 324,000 and 235,000 respectively, from 346,000 and 248.000.
The unemployment rate was unchanged, as expected, at 5.6 percent. (end snip)

The decline in job growth continues to accelerate as the lingering effects of fiscal stimulus dissipate. "Bout face Al. This month's report falls short of the estimated 150,000 new jobs that must be created each month to maintain a stable unemployment rate. With more and more wealth generating activities off-shored, the workforce becomes further dependant on government employment and repatriated corporate profits, the latter just isn't happening.

If you listen closely, you can hear the sound dollar plummeting toward its intrinsic value. That's gonna be one impressive crater.

http://www.gold-eagle.com/editorials_04/wallenwein062904.htmlGood Morning!

I happened to read Wallenwein's lastest at the neighboring castle and, in light of some current posts here, thought some of you might appreciate it. It contains nothing new for most of you but any newer reader might benefit from his theories/conclusions. (And, of course, if what he writes needs further clarification or debate, Belgian, Ari and many others here can easily rectify that situation!)

Despite his title "THE EURO: Another Broken Promise?" he mentions little of the Euro but does do a very nice simile on "weightlessness" that is entertaining and seems appropo.

In the end, he leaves it open ended as to whether the Euro
will accomplish its goal. However, he does add a "burden" to the Euro/FreeGold concept with his view of a "parallel bullion currency."


It's always nice to come to this castle and bask in the glow of (and become renewed by) the chemistry of wonderful minds in debate and overall communion!

Thank all of you. Though usually silent, I am here in the shadows, absorbing the wisdom.

My best to everyone, and if a US citizen, may this July 4th weekend be a safe and joyous celebration and reaffirmation of the principles upon which this country was founded.

Lady GFG

At 8.30 this morning, the USDX went from 89.0 to 88.25 within the 5 min window of the chart I happen to be looking at, and continued on down to 88.1 in the following hour. This was presumably due to the poor employment figures. I'm not sure about other people, but it impresses the heck out of me that there can be that huge a change in notional value in such a short period of time and that there is so much free cash sloshing about in the money markets for them to move that quickly.
Stranger still is that this kind of thing should happen at a time when the volatility of the stock markets is at an all-time low.
Of course, the POG reacted nicely, only to be capped at $6, as usual ....
C!

http://www.usagold.com/contests/June2004.htmlIf you visit the contest page, you will find a hyperlink atop that page that take you to a chronological listing of all essay entries. (see url for direct shortcut)

After a week of reading, sorting, pondering and sorting some more, we still feel the greater part of the challenge is before us to narrow the field to its final prize-winners.

You are hereby asked to see what we are up against and gain for yourself a sense of the challenge we face. Feel free to read all the posts and pick your top three entrants (not including yourself -- we will automatically give your own essay extra credit in our final considerations for your willingness to lend a hand).

Then, don't assign or indicate a final rank to them, but simply post your choice for top three by listing the three posters' handles in ALPHABETICAL order.

We'll use your suggestions (along with the special credit mentioned above) to help us reach our final decisions and break the ties.

Thanks!

R.

Quite frankly,I think CB2 must of stumbled into a room filled with nitrous oxide.

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

Gold: BCBN (Buy cheap buy now,
for Aristotle)

Paper mache gold,
Shiny confetti freefall-
Life of the party

Most haiku's don't need a title, e.g.:

Free hand for free trade.
Free birds with free will buy gold-
Spirit hops, leaps, soars.

Thanks for reading.

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.

(closing market excerpts)

Gold futures rose for a third session Friday to close at a four-day high as disappointing figures on U.S. job growth weighed on the dollar and boosted investment demand for the metals....

Job growth in the United States slowed in June after three months of robust hiring, the Labor Department estimated Friday. "The monthly unemployment report indicates that the Fed may have to abstain from raising rates for the remainder of the year," said John Person, head analyst at Infinity Brokerage Services....

The news sparked the biggest bond rally in six months, sending interest rates and the dollar into a dive, both of which favored a move to gold for portfolio insurance. August gold settled up $2.30 at $398.70 an ounce, extending Thursdays $3.40 rally.

Stop-loss buying above $400 extended the gain to $401.50 from a low of $392.60. But after the opening flurry, trading was quiet as the market watched the clock before a midday COMEX close for the July 4th holiday weekend. U.S. financial markets will be closed on Monday to observe Independence Day....

Regular trading will resume Tuesday...

The jobs report bolstered confidence that the Federal Reserve might not embark on an aggressive tightening of monetary policy after it raised interest rates Wednesday, ending a historic 3-1/2 year period of accommodation where interest rates were at their lowest since the late 1950s. The government also reported that new orders at U.S. factories fell 0.3 percent in May, half the expected 0.6 percent decline, but still suggesting a slowdown in second quarter growth....

The dollar was sharply lower against the euro following the job growth data, and the move sent many investors to gold as a hedge against losses. "Gold's strength is being supported by the perception the U.S. dollar will only get weaker over time," said Peter Grandich, editor of The Grandich Letter, a financial publication...

The euro jumped to a 3-1/2 week high at $1.2324 as the dollar fell. Dollar-priced gold looks cheaper to overseas buyers when their currencies rise...

-----(see url for access to full news, 24-hr headlines)----

Ah! Troppo lavoro!! But here are three of several essays that I really liked. Confession: Anything past about 5-600 words was just too much to get my feeble thoughts around, so if management wants, they may throw this out as being prejudiced and not part of the rules. Fair enough. Perhaps 'twood be considered in the future?

Great use of facts, projections, metaphor, and opinion throughout. It is truly an honor to be in this great group! Difficult it was, but here goes.....

Black Blade
CB-2
Tevye
And many others!
Ciao!
Buongiorno!

Caradoc
mamoose
wehappyfew

What an education, reading through all the essays! I thorougly enjoyed it.

-r

I gave the page about 90 minutes attention. TC, you have my sympathy.
In alphabetical order.
Boilermaker
specie-man
Steve22

Sounds to me like you could use a refresher course in the nature of sunshine.

The sun doesn't send down its rays *balanced* in both light and shadow. (And neither does the Truth need arrive *balanced* with lies on forked tongue.)

The light IS precisely what it IS, Light, and thanks to it, and its singular illuminating quality, you are only thus able to ascertain the depth of The Shadow that presently surrounds you.

Without the Light, you would know nothing from either illumination or shadow -- you would know only utter darkness. And utter darkness, pal, without even a shaft of singular light to give it meaning by its very contrast, is in itself utterly without meaning.

But then, you probably already knew all this, it's just that your keyboard hijacked control while you were having breakfast? Sheeeesh, the state we're in.

Gold. Get you some. --- Aristotle

I did not submit an essay. I did download and print and read all the essays so I don't know if my opinion should be included. But now I certainly appreciate all the work the judges had to do.

I just want to mention that on Friday morning after reading Caradoc's essay I decided to give up writing mine.

Why attempt to re-invent the wheel or shoot for second place?

Oh, Ari I'm ever so sorry to have provoked your wrath on still not getting what "Free Gold" means.

Of course, I do know what it means geologically, but then again you disparage the miners of the metal, either being shysters to sell their product to the legal tender of current day and overuse, or even sell it before it's mined to the same - with all of its known effects.

I guess more of your ridicule will be directed to me when I would respectfully ask to - ah, let us have your interpretation of what Free Gold on your terms really means.

... and really, Ari, I've sensed some kind of exhaustion in your temper lately. Is it that free gold hasn't arrived yet, or is it that the weight of the metal is still too low to add up to too much acquisition of the same which bears you down. After all it's a great position to be in; And it would also explain your bad temper, even going as far as being utterly rude. And I don't mind being rude to me, as I may have deserved it.

Anyway, to close my case with my posting here, I just would like to add that zealots are not a real help to any case! And in particular zealots of your ilk are somewhat suspect anyway.

Don't ever worry, I'm still executing my long term strategy to go gold and have been kind'a successfull in acquiring much more than would seem my due in your (im-)practical and one-sided philosdophy.

Don't worry just blast my incompetence of understanding your tirades - I've probably been around these markets much longer than you! Bla bla... and still don't have your easy answer -shame on me!

Cheers cb2

PS: What happened to the Ari posting a great essay about Oil some years back? Just considering the merits you've in all reality have had and lost for me... Ciao

There were a lot of good essays. It has to be hard, being the judge. Perhaps, limiting length as well as brevity would help the cause?

I choose three that I felt answered ALL three questions asked:
In relation to the U.S. economy?, the world economy?, and Gold?; and they were able to do it in a succinct, Short essay. Spending some time on each issue.

They are:

Rocky
Buongiorno
Toolie

Buongiorno
Rocky
Toolie

There has been a SLIGHT delay in the announcement of the Essay Contest "THREE" WINNERS ! Perhaps you all can understand the problem, as there were almost half as many GREAT ENTRIES to the Essay Contest as there were in the "relative easy" POG guessing contest !

The Hobbit "Panel of Judges" requested additional advise after the "first cut" of entries -- They ask me if I would go and ask SIR MK if he would consider awarding TEN "FIRST PRIZES" ? ------

I then quickly sent them back into "deliberations", with instructions to consider if THEY wished to provide the additional NINE uncirculated U.S. Liberty $10. Gold coins from their collections ! THEY then, quickly determined that THAT request may be a little tooooo much --- so they re-evaluated their rankings, and suggested that perhaps a total of at least EIGHT prizes could be awarded !
I had a sit-down meeting with them and threated to take away their pipe-weed and told them that I myself would review their top SIX ranked entries.

They cluched their pipe-weed closely, and smilingly gave them to me !

I have been reading, rereading and rerereading these and have have "now seen" their delema !
BUT -- Knot to worry --

I shall simply send them to SIR MK and let him determine the WINNERS !! <;-)

WHEN -- that will be is the QUESTION !
Perhaps on the FOURTH of JULY !!!
Stay tuned.
GW

Using alphabetical order to indicate a three-way tie for first place...

DryWasher
Remarx
Toolie

Rationale...

First off, there were several essays ranging from thought-provoking to persuasive (including two so good I've already forwarded the text to friends) that simply didn't address all three questions. No matter how "good" these were, they qualify only for partial credit and so don't make my "top three."

As the mirror image reversal of this problem, Toolie's essay is arguably the most straightforward essay in competition, knocking the questions down one at a time while literally "essaying" to present his opinion. This makes my top three even though I doubt that the "required energy efficiencies" will actually come about so as to give dense population centers the edge of enhanced productivity.

Since the outcome of all three questions is a matter of probabilities, the only "true" answer is the spectrum of possible outcomes. Both DryWasher (short and sweet) and Remarx (a more detailed analysis) present us their versions of best case/ worst case and do the most to make us think. Bravo!

With my top three out of the way, I've got to add that Specie-man also deserves a prize for sheer creative genius.

Final thoughts... For future contests, a word limit would make the judges' job a lot easier as would a short list of criteria. Since "essay" means "attempt" and the contestants are attempting to present their opinion, I'd suggest that clarity and persuasiveness be the primary criteria.

Caradoc

Gee Gandy and Panel, I sure do not envy you all with the decisions you have to make. With so many thought provoking essays and involving so many issue ranging from geopolitical, geological, regulatory to depleting resources and economics of the hydrocarbon society where hydrocarbons (fuels to petrochemical and feedstock - oil and natural gas) are the life blood of any established industrialized society to the newly emerging economics vying for the same product where supply and the ability to increase supply significantly is rather limited (Remember - gasoline and diesel fuels are just "by-products" of crude oil) and yet are crucial to most societies. The supply-demand issues on this crucial product alone do and will continue to play havoc with currencies, trade, and inflation/stagflation. Every postwar (WWII) has been preceded by an "energy crisis".

There were many interesting and well though out essays and I think because we are all affected by the cost (rising or falling). Some I agreed with whole-heartedly and others I did not completely agree with, however, we are subject to our personal experiences and what we percieve by how the issue is presented by (mostly) the mainstream media. Much the same as how the same media deals with mining (base and precious metals mining as well as basic commodities). Gee, I could have easily just reprinted "The Rise and Fall of Hydrocarbon Man") I posted here a couple of times in the past (even in the early days of this forum). Nothing much has changed except the increase in demand as the Third World emerges from its cocoon and attempts to "catch up" to industrialized neighbors. The issue of oil and natural gas will continue to plague the world economies for years to come. Even the promise of a "Hydrogen Society" is a farce as the tight bond of H20 will make the energy input to break off Hydrogen a non-starter without a free energy source such as geothermal in Iceland for example or a low cost expansion of nuclear energy (very difficult politically and economically at present). The hydrogen will come from methane (natural gas) CH4 where the bond is easily broken and the Hydrogen separated at low cost.

Then there are the "dreamers" who see biomass to solar as the ultimate answer. Conservation can only help but we are also in the "New Economy" with even higher demands on energy (not just fuel saving internal combustion engines and hybrids alone will not have much impact - especially with 1.3 billion Chinese looking to become more like mobile Americans (and don't for get the nearly 1 billion Indians to the south). Perhaps a "clean coal technology" at a reasonable cost may be available down the road so to speak. Still, oil and natural gas are critical components of our western society and demand is fast outstripping supply - just forget about the refining and pipeline capacity for now and think of the expansion in demand).

We already know what will happen to currencies and the major bankers tied down with $trillions in unsteady derivatives and US debt as reaserves even as the Federal readies to keep raising rates (lowering the value of goverment paper). No doubt as to why China's four major banks are buying Gold and other foreign currencies to diversify away from the crumbling US dollar. Even now the Chinese politicos are looking at changing the Yaun-Dollar peg and allowing a free trade in Gold and even encoraging personal investment of its people to private ownership where such a thing was unthinkable until relatively recently. I would not be surprised to see the dollar tank after the November elections and to see Gold, Silver, and Platinum Group Metals even double or triple by year-end. Now is the time for "portfolio insurance" if you have not already done so. The Castle Guards (MK, Jonathon, George Cooper, Marie, etc.) stand ready at the gates/vault door to give advice or to "cut a deal" to exchange debasing US dollars for the "real deal".

Happy fourth of July - or more correctly "Independence Day"!

- Black Blade

BTW, during the Revolutionary War against Britain - how many colonists supported the fight?

Answer: 37%! Yes, bravery and taking the first step is the hardest on a long journey (buy Gold and Silver now at these "cheap" prices while you can). Also now you know where a lot of Canadians had their origins after the defeat of Cornwallis to George Washington as French warships sat offshore when the French had the "fire of fight in their hearts" under the direction of ole Lafayette.

I think I may be well qualified to be fair in judging, in that I am new around here and haven't developed any biases toward or against one character or another. So, here are my picks for the top three:(and with respect to all the rules of judging)


caradoc - (For precipitating the series of events that challenged me to think of judgement day in ways I had never conceived. Scary!)

mamoose - (for taking the leap to propose solutions and for questioning complacency)


remarx - (For placing an emphasis on the highly important, "Limits to Growth")

Here Here For all the writers!

*WHO* are you reading???

That part was off the mark, but thanks for your overall assessment, though. I'll be glad to go down in history officially now as the first so christened fiat-using, Gold-holding, non-conspiratorializing *zealot*. Sheeeeeeeeeeeeesh. (Where's my dictionary? Z- Z- zzzzz...)

Gold. Get you some. --- Ari

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

If we turn to the work of the great Dow theorist, Robert Rhea, he says, "Whenever one average pushes above a previous high and the other indicator refuses to take the hurdle, the market is reflecting uncertainty�..." Rhea also stated that when the averages were not "in gear" or "when the averages disagree, they are shouting be careful." I know that most people are very skeptical of the bearish case. This is completely understandable because of the duration of the bear market rally. This rally has served to suck the bulls in and even served to neuter most bears, sucking them right in as well. We have seen sentiment readings at levels not seen since 1987, so this makes perfect sense. Most technicians have complained about how their system or indicators have not worked. This has served to discredit them and even cause many to question or abandon their own work.

Black Blade: Tim and I have had our disagreements (on another site), but he does stick to his guns so you gotta respect that at least. But he is TA and I am FA so our take is usually like "comparing apples to oranges". He even called me "scathing" once in one of his articles about the "so-called" Gold anaylist Andy Smith - I still chuckle over that one. Times will continue to be challenging for some year to come. Just get prepared for the possible pitfalls in the future. Your wealth and savings may very well depend on it. (You know where to call and who to talk to - USAGOLD).

I am posting this late because it is somewhat a rambling waste of time-my apologies.

If you have a lot of gold and you store it in a vault and they give you a key or card or code they essentially give you a receipt. I'm not so lucky but I am guessing in many cases it is a paper or digital receipt. Is this also like owning paper gold?

I realize it could just as well be your antique furniture in the vault and the isuues are not, on the surface, about 'free gold' but simply about security and private property rights. Vault or storage unit owner goes belly up you cannot get to stored valuables in some way.

I know this is a poorly formed thought but it has been nagging me nonetheless. Is there some analogy between "vaulted gold', as above, and gold still in a mine that you buy rights to, or even paper gold?

Initially it seems the comparison fails because, as I said, it could be antiques and not gold in the vault, but not the mine and the risks are about security not scarcity or market forces/tricks.

But the 'vaulted gold' in some ways seems no more in the owner's possesion than the gold 'belonging' to the owner of a mining or paper gold note.

If fiat currencies fail and there is not enough gold to pay the
paper( I hope I have this somewhere near right) are other circumstances sufficiently unstable to leave 'vaulted gold' at risk? Or could they follow, or MUST they, for gold to be really free gold unfettered by artificial forces?

So going beyond this apocalyptic scenario can this apply to free gold. Can free gold( again I really am rambling and confused, my apologies) 'ascertain' when it is owned in very large quantities. Such ownership has a cost of security and seems to beg for 'lending from it' and so on . . . For gold to do it's thing must more people own it and in fewer large concentrations?

Could that concentration level be as low as what one might feel personally capable of providing security for? Is the cost of ownership(security costs) an incentive to lend and so begins anew another mess?

By nature or default or Providence will gold only be independent when it is distributed more widely and proportionately?

http://quote.bloomberg.com/apps/news?pid=email_us&refer=home&sid=avA8y.Zx1ZEk
Snippit:

June 28 (Bloomberg) -- U.S. personal spending rose 1 percent last month, the biggest rise since October 2001, and a gauge of inflation matched the largest gain in almost 14 years as the economy and job market improved. ``The underlying inflation rate has moved up significantly over a relatively short period,'' said David Greenlaw, chief U.S. fixed income economist at Morgan Stanley in New York.

The increase in purchases followed a 0.2 percent rise in April and reflected more spending on automobiles and other durable goods, the Commerce Department said in Washington. The report's price index rose 0.5 percent, in part because of fuel prices, and hasn't been higher since September 1990. ``The obvious risk is that there is no let-up on the inflation front and the Fed is forced to abandon the `measured' approach to tightening,'' Greenlaw said.

``A surprising portion of the strength in U.S. income growth through the first and second quarters has been absorbed by price increases,'' said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. ``Consumption has been impressive throughout 2004, but the inflation bite was hammered home in May.'' Englund lowered his second-quarter growth forecast to 4.5 percent from 5 percent. Economists at Morgan Stanley reduced their growth estimate to 3.5 percent from 4.2 percent.

The personal consumption expenditures price index has not risen more than 0.5 percent since September 1990. The gauge rose 2.5 percent from May 2003. Excluding volatile food and energy prices, a gauge tracked by Federal Reserve Chairman Alan Greenspan and other policy makers, the prices index rose 0.2 percent for a third month and is up 1.6 percent since May 2003.

The increase in the personal consumption expenditures price index reflected a jump in gasoline costs. The average price of a gallon of gasoline at the pump rose to a record $2.10 in the week ended May 24 compared with an April average of $1.84 a gallon, according to the latest figures from the Department of Energy.


Black Blade: Quite a change in sentiment from these clowns but even as they admit inflation is back they are typical economists - always in a positive move in spite of the evidence of much higher "real" inflation rates with more to come. They are as sheep believing anything they are told or lying and keeping up a brave front. Economists (especially at large investment houses are generally wrong - they are more like mathimatically challenged astrologers, palm readers, etc. than those who dig into the data and read the fine print). It will get very ugly even though oil is still rather "cheap" as demand rises. Inflation adjusted it should be selling around $60/bbl.

http://www.freep.com/money/business/energy-bar12e_20040702.htm
Snippit:

WASHINGTON -- As if steep gasoline prices this summer weren't enough to make consumers grumpy, the energy crunch also could lead to higher home heating costs next winter. While weather is a major determinant of winter heating costs, analysts said homeowners in the Northeast and Midwest may get hit harder than usual even if temperatures are in their normal range. "I would be shocked if we don't see soaring natural gas and heating oil prices next winter," said Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., provider of industry data.

Crude prices are more than 25 percent higher than a year ago. Another concern is that refiners, who are focused on maximizing production of high-priced gasoline and diesel fuel, could fall behind in making next winter's heating oil supply. Nationwide inventories of distillate fuel, which includes diesel and heating oil, are 7.7 million barrels below the 5-year average for this time of year at 110.9 million barrels, according to Energy Department statistics. "Whichever way you look at it," the agency said in a recent report, "distillate fuel stocks will need to build at a faster rate in order for there to be enough supplies on hand this upcoming winter."

The unusually expensive heating oil at this time of year presents yet another problem, according to Peter Beutel of Cameron Hanover in New Canaan, Conn. "What these high pries have done is to have forced most heating oil distributors to put their buying plans on hold for next winter," Beutel said. "Inherent in that is a risk. And the risk is that prices won't come down."

The other main fuel used to heat homes, natural gas, has stayed expensive this year due to strong demand -- from the electric power and manufacturing sectors -- and the run-up in oil prices. The price of natural gas has been significantly higher in recent years because domestic production has not kept pace with demand.


Black Blade: Not a surprise at all. Refining is running flat out and like a hamster on a treadmill we are not gaining any ground. Thankfully it is not inflationary according to our government leaders. Gotta love that "core rate" BS. Ah well, we shall see what fun develops now that we are in mid-summer and some US refiners are closing up shop. "Interesting Times" indeed.

I have been assigned to watch the results of the contest while mamoose is at the cottage, completely out of touch, living the simple life she expects to come. Therefore, she will not be able to enter 'the opinion' phase of the contest. Sorry.

I do know the supply of oil has been a concern to her since the early 70's, the last oil crisis.

Yes, owning gold has its problems. Problems that are "built in" to the metal, and you can't get away from them, no matter how you slice it.

Gold is liquid, gold is ultimate liquidity. That is an economic term or a financial term. But also, gold is as liquid as water, as far as possession goes. Can you keep water in your hands, poured out from a pitcher? Water will run through your fingers, and in a manner of speaking, so will gold. It is hard to hang on to it, very easy to lose it.

If your gold gets tangled up in a legal problem, Poof! That's the last you will see of it. Where is it? Who has it?

Some people - a lot of people, in fact - don't want these problems that come with owning gold. So, they do not accumulate gold, and so they get into much, much worse problems. Sure, they keep their numbers quite securely in the bank, they know to the penny how big the number is of their dollars, or pesos, or pounds, or euros. But, their big problem coming at them is, How much will those numbers buy later on? Even Greenspan cannot tell us what a Dollar IS.

Life presents problems. You can only choose, up to a point, what sort of problem you prefer to deal with.

There is no such thing as perfect security. Whatever you do, you are at risk of losing your gold, if you have any. You have to choose the lowest risk alternative, and live with it: Bury it, put it in a safe, in a security box, in a private vault, in an allocated bank deposit - everything carries a risk.

Americans seem to have been culturally formed to avoid risk at all costs. Insurance for everything under the sun. They appear to be afraid of everything, afraid of the natural risks of living. They won't eat bananas with black spots, though these are the sweetest and tastiest: "Might be wormy!"

Gold will serve you well, but you must be big enough to own it.

The GAB

The e-mail below received Friday is extremely intelligent and important. All I can say is -- Do I have smart subscribers or what?!

Richard,

Expanding fiscal policy in order stimulate growth during a "Balance Sheet Recession" is predicated upon the capacity to do so. It is doubtful that the government of a country, such as the U.S., which runs large external deficits on account of negligible domestic savings will have the capacity, particularly given the large nominal size of the U.S. economy and external deficits relative to the rest of the world, to bring forward future demand to the present through public borrowings. The large external deficits and fiscal deficits are reflective of previous stimulative efforts by the fiscal and monetary authorities to keep consumption high in past periods. We have, in essence, already borrowed heavily against future consumption.

The current accounting of the problem, of course, does not include "off balance sheet" liabilities such as pension deficits in the private sector or entitlement deficits in the public sector which when added up suggest the country as a whole is technically insolvent. The government for decades has, in effect, been using fiscal policy to boost present growth by accelerating to the present future consumption through inter-generational transfer schemes that leave parents borrowing (stealing) from their children's future income.

With the currently high debt ratios across all sectors of the U.S. economy, it is difficult to comprehend how expanding borrowings can solve the problem. Consideration of expanding fiscal policy as a solution, however, does highlight the trap we have entered. We have already spent our ammunition. The transition from a debt-fuelled growth regime to a more sustainable savings-fuelled growth regime is likely to be painful since it is difficult to see how incomes and asset values are not at least temporarily depressed in the process.

Japan's situation is very different since it remained a net external creditor on account of relatively high domestic savings. The "balance sheet" causing the problem in Japan was/is primarily that of the corporate sector. It's currency does not serve as the world's reserve currency. As such, a large expansion of fiscal policy to stimulate growth is largely a domestic affair. In essence, the expansion of fiscal policy to fill the gap created by corporate savings ultimately liquefies highly damaged banking balance sheets since in lieu of corporate lending the banks buy government bonds to fund deposits. This probably works, in time, for Japan (until retirees realize that their cost of living far outstretches the benefits provided by the government � tomorrow's story). It is not clear that this will work for the U.S. given its absolutely and relatively large net external borrowings facilitated by the dollar's role as the world's reserve currency.

Mr. Koo's assessment of the causes of the "Balance Sheet Recession" may apply to the U.S. but the conditions in the U.S. are sufficiently different than those in Japan to invalidate his assessment of the proper solution. There is no such easy way out of the U.S. balance sheet problem since it exists across all sectors of the economy and is further exacerbated by the mammoth size of "off balance sheet" liabilities we fail to acknowledge today. In fact, maybe we will end up calling any U.S. recession an "Off Balance Sheet Recession" as pension deficits and escalating entitlement deficits limit expedient solutions to what has been a problem long-time coming.

Best Regards,

JF

Russell Comment -- It's possible that the sheer amount of monetary and fiscal stimulation needed to hold off recession and deflation in the US would literally sink the dollar. The dollar continues to be one of the main "Achilles Heels" of the US. Friday the dollar closed very weak. I'll be watching the dollar very carefully in coming days.

Of course, if the dollar becomes "too weak," it's going to frighten our foreign holders of US bonds (and their holdings are massive). At some point, a falling dollar will force foreigners to "save what they can" and dump their US bonds. That would drive interest rates through the roof. God help us if it comes to that.

Of course, the Fed could buy all the bonds that are dumped on the US. But that would require the Fed to create mountains of new money in order to buy the bonds, causing massive monetary inflation. That would cause the dollar to cave in and gold to go through the roof.

You see, one way or the other you have to own gold.

Will not bear the brunt of this equalization of accounts.The US will continue to run ever increasing deficits as both the fall-off in consumer demand,coupled with rising external debt service costs and other factors(free lunch)send said deficits through the roof.

So,we all know the debt based money system must continually expand,furthermore,we all know there's an admitted 45 Trillion dollar funding shortfall to be faced by the US government in the next 20-25 years.

This debt will all be inflated away,this will happen based on the social needs of the majority,as FOA has so pointedly written.The other alternative will not do,for a variety of reasons'some of them quite frightening.

The bagholders here are the UST buyers,inevitably this will also include the Federal Reserve,as they are forced to monetize US interest rates down to keep the game going.

Of course,that's fine,because they run their money off on a printing press.It's really quite a reasonable proposition.

"Why chop off a hand,when we can all lose our wealth one finger at a time."

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

UST's in a comfortable band is chump change.The market is not really all that big,once all the large official and commercial interests are removed.The inflation will take place on a world wide basis,the recognition of the event will take a long time,IMO.

Happy motoring.

"We got to this point because our money was gold in the beginning."

Thanks for your time. I think I meant to say this;

Can the 'benefits of free gold' ever be fully realized without a larger number of indivivduals owning gold and fewer individuals owning very large amounts?

(my term 'Individuals' can also include groups, central banks and governments)

As soon as the Fedex guy gets here I will just be a Heathen :)
Have a great weekend, I'm off to fish the Konkapot.

Sir Bizarro-Greenspan,
That is like saying, the system is not the system without the system. I agree that it could be a while, though. If a large holder like China decided to sell off the bulk of it's holdings in favor of Gold, that would be considered an act of war and most likely pursued as such. Tolerating massive inflation in places like China, while they debase ahead of the devaluing dollar in order to maintain support for as long as possible might be a good idea. Money is time. Let me know what you think?

Thanks
Steve22

Bizarro-Greenspan (07/03/04; 12:10:14MT - usagold.com msg#: 122736)
The "money" needed to sustain

UST's in a comfortable band is chump change.The market is not really all that big,once all the large official and commercial interests are removed.The inflation will take place on a world wide basis,the recognition of the event will take a long time,IMO.

Happy motoring.

"We got to this point because our money was gold in the beginning."

http://business.timesonline.co.uk/article/0,,8209-1163961,00.html(article dates from Thursday July 01, sorry if this bas been posted before)
SNIP:
If history is any guide, politicians and voters will decide that inflation is the only way to spread the burden of these ever-growing social costs. If so, then the trend of interest rates and inflation will continue to point upwards for years, or even decades, to come.

Went to see Spiderman this afternoon. The villan in the movie decided to steal money to finance his evil intentions. When he ripped off the vault door at an un-named New York bank to do so there was not a pile of FRN's but rather bags of physical gold. This was not a glimpse in the movie. Instead, the movie director had the bags of gold be a centerpiece of the fight scene between spidey and the bad guy. There were numerous, focused scenes of gold in the vault.

Indirectly, subliminally establishing the value of gold in the mind of Joe Sixpack? Could be.

However, for those newbies who have never read a post from me before, please head the following:

I may be wrong. I often am.

Paper Avalanche (coming your way soon!!!)

http://www.cyberclass.net/turmel/pombank.htm..
There's feedback that is positive that forces debts to grow.
The flaw is in the software while the hardware's working right,...
Our nations, towns and provinces are burdened all to tears,
By an exponential function overlooked by engineers....

"But the fact that we live in a fiat currency world, with no backing for our currency except the good name, good faith, and good credit of we the people tells me that money is, at the end of the day, a political decision. I mean, lo and behold, this free market concept is founded on a fiat currency."

I think China will only spend USD reserves on trade deficits,there is nothing to be gained by rocking the boat at this time.

There is talk of using the USD reserves to bail out the underwater Chinese banking industry,I guess we'll all have to wait and see on that one.

Can be part of the Chinese trade deficit.

The Declaration of Independence of the Thirteen Colonies
In CONGRESS, July 4, 1776

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

What's *BETTER* than GOLD???

How about... an Independence Holiday like this one, glowing coals on the BBQ, with warm friends and cold beers gathered 'round.

Best of all, it needn't be a choice of Either-Or. Have them both!

Gold. The one ingredient most American families are still missing. Get you some. --- Ari

Cavan Man,

Thanks for posting the Declaration of Independence. Those words, written at the zenith of Liberty in the USA, were once quite inspirational. In days gone by, people actually believed in limited government and fought to make it happen.
Today those words make me weep in sadness for what we have become. I get the same feeling when I read Emma Lazarus's "The New Colossus". The words ring hollow for me.
It seems to me most folks have transferred their reverence for the concepts of Liberty into a reverence for the symbols, statues, declarations, currency, fireworks, etc. That is, we love the symbols more than what the symbols stand for.
Perhaps, King George III was ahead of his time.

One way to declare individual liberty today, and back it up with action is to buy gold. An ounce of gold always rings like an ounce of gold. Liberty is in deed precious.

Here are some simple words that do not require anyone else's concurrence to live by.

"Give me liberty or give me death"
-Patrick Henry

Best Wishes

Your post reflects some of my own concerns regarding gold. If not enough people (voters) have an interest or sense to own gold then will our congress protect our rights to own it?. If not enough people understand the reasons to own gold can we expect them to elect a congress that allows them to? If more people are convinced that government is a crutch will they ever learn to walk?
This 4th of July will most likely be a turning point for the US of A, the country I love and will fight for. The purchase of gold is a vote against the direction that I see it moving and towards the reclaiming of its glorious heritage.
Vote now, vote often, for your golden future.

This 4th of July worries me. I feel like the US is becoming a zoo. A zoo is a place that cages its animals with total care and security. They will be fed every day and not be eaten by preditors. They will live a longer and lead more predictable lives. However, they will not be free to become "all you can be". Which life do you want?

The zoo may run out of funds and the animals therein may suffer. I would not want to be a zoo kept animal turned loose to a "free" habitat.

I like the contest of life for good or bad. God-given determination and good sense will sort out the winners. God made gold for winners. As Ari relentlessly reminds us, gold, get you some.

This week's Barrons has an article by Rhonda Brammer about Newmont Gold, "24 Karat Play". The article is generally positive, citing Newmont's president, Pierre Lassonde's bullish forecast for gold and newsletter writer Fred Hickey's (High-tech Strategist)case for higher gold prices. By the end of the article the message was clear, a cyclical play on a stock in a cyclical business. Sort of like General Motors or USSteel. Lassonde and Hickey give the case for a weak dollar but there was no hint of the stuff we talk about- dollar and systemic fiat failure- as being the reason to be long gold.

"I am certainly not an advocate for frequent changes in laws and constitutions. I think moderate imperfections had better be borne with; because once known , we accommodate ourselves to them, and find practical means of correcting their ill effects. But I also know that laws and institutions must go hand and hand with the progress of the human mind. As that becomes more enlightened ,as new discoveries are made, new truths discovered and manners and opinions change, with the cxhange of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors. "

Thomas Jefferson

In truth we are the United States of Being of all our constituents...if we could only learn this. A tretise on truth? Perhaps another day.

T. Jefferson was born in a time when the prevalent and fashionable idea was that mankind had to PROGRESS to higher and higher stages of civilization. That was what "The Age of Reason" was all about.

I notice in the post by Camel, that T.J. said:

"I also know that laws and institutions must go hand and hand with the progress of the human mind.

Yes, indeed, when civilization is moving upwards to a higher level, laws and institutions will have to adapt to that higher plane. But, do humans ever really progress? Is not humnanity always the same?

What about our time? Quite evidently a time of regression, of descent to barbarism. Even worse than barbarism, for the barbarians were God-fearing people. NOw, we have atheistic barbarism - never has mankind sunk so low.

Good and brave Thomas Jefferson - I think he thought too highly of humanity. Too optimistically.

Time to gather in the family, and tell it like it is. And gather in some gold and silver, too; will certainly come in handy, not too far down the road, now.

The GAB

http://biz.yahoo.com/rf/040704/financial_wamu_1.html(excerpts)
NEW YORK, July 4 (Reuters) - Washington Mutual may have wanted to become the Starbucks of banking, but it is getting a harsh lesson ... coping with interest-rate risks...

Last Monday, one of the largest U.S. mortgage bankers shocked investors when it warned that its 2004 earnings would be at least 11 percent below Wall Street forecasts, blaming "expectations for a sustained increase in long-term interest rates."

WaMu declined to elaborate on Friday about losses related to its hedging of interest rates...

After Monday's closing bell in the stock market, WaMu cut its forecast ........in a statement announcing the warning, WaMu Chief Executive Kerry Killinger said the effects of interest-rate changes "are likely to outpace the timing of ongoing cost-reduction plans in our mortgage banking business."

With U.S. mortgage rates rising nearly 1 percentage point from their historic lows last summer, many lenders have already pruned staff because business has dropped off.

This drop in mortgage lending follows several years when U.S. mortgage bankers were flush with new business because mortgage rates dipped to Eisenhower-era lows.

Not only did consumers rush out to buy homes, they refinanced repeatedly to cut borrowing costs and took equity out of homes at a record pace.

While collecting fees for underwriting home loans was easy, what was tough was figuring out which homeowner will refinance a home loan and when ....... "They put on a hedge and it moved against them."

------(see url for complete article)------

Between the world of hedges and contracts over there, and the world of gold over here, there is a huge chasm separating them -- big enough to entertain a lifetime of continuous exploration and study.

R.

http://biz.yahoo.com/rf/040704/minerals_newmont_1.htmlNEW YORK, July 4 (Reuters) - Newmont Mining Corp.'s president, Pierre Lassonde, said that the price of gold is at the beginning of a long-term bull run...

Lassonde, who owns nearly $100 million of stock according to Barron's July 5 edition, told the magazine that a deteriorating outlook for the U.S. dollar would underpin a "paradigm shift" that would send gold on a long-term rally.

...Lassonde also said that selling the dollar and buying gold was the best way to diversify away from currency risk.

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

Frosting on the cake... Boilermaker has already cited some of Lassonde's gold-positive interview in Barron's.

R.

After rereading the essays on The End of Cheap Oil I have the following short list to recommend.
Clink
Smeagol
Solomon Weaver
Toolie

The essays above generally reflect my own opinion that the transition to more expensive oil will stimulate many existing technological responses and will bring about new technologies. This will be another step in the evolution of mankind's energy production. However, the political response to higher oil prices is where most of my concern lies. The major oil consumers will be tempted to rearrange the oil market by force or coercion.

I agree that this is a difficult subject to judge and I saw many extremely well written entries.

http://www.usagold.com/contests/June2004.htmlThe ESSAY Contest Questions:

"What will the end of cheap oil mean as a permanent state of affairs for the U.S. economy? For the world economy? What will it mean for gold?"

USAGOLD - Centennial Precious Metals was pleasantly surpised ---(OVERWHELMED)--- with the large number and quality of the responses !!!!! Take a look and read for yourself, the ENTRIES at the LINK !

LATE last night the WINNERS were FINALLY determined ! As EVERYONE was very sleepy, it was decided to wait and post the list of WINNERS after a good nights rest.
-----

THE WINNERS ARE:

The "First Prize" of a highly collectible United States $10 Gold "Liberty" coin in Uncirculated grade, (0.48375 oz. net fine gold), goes to Sir Boilermaker !!!!

The "Second Prize" of an Uruguay "Five Peso" gold coin in Uncirculated condition (0.2501 oz. net fine gold ), goes to Sir Tevye !!!

The "Third Prize" of an one ounce U.S. Silver Eagle in NEW condition, goes to Sir TheJuniorMiner.

IN ADDITION, "for Honorable Mention", ANOTHER one oz. Silver Eagle "PRECIOUS", goes to Sir Smeagol.

THANKS ALL for the GREAT responses and NOW, the Judges will take the rest of the day to recover !
<;-)

http://www.silver-investor.com/cs_july04.htmVery long, very interesting.

Are vaults of CB's (especially China) now void of silver?

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.


OVERSEAS Markets
--Gold dealers in London fixed a recommended price of $398.40 bid per troy ounce at midmorning, up from $398.10 late Friday.

--In Zurich, the bid price was $398.15, up from $397.95.

--Gold rose $4.10 in Hong Kong to close at $399.05 an ounce.


Monday market rap -- Gold rises on strong euro, U.S. holiday thins trade

Gold rose in Europe on Monday, helped by euro strength against the dollar, but trade was thin and stuck below resistance at $400 as U.S. financial markets closed for the Independence Day holiday...

Dealers said that while the market was caught in ranges on Monday, higher prices were on the cards soon with support from currencies. The dollar held near a one-month low against the euro on Monday after taking a beating from weaker than expected U.S. jobs data last week. ... A weaker U.S. currency makes dollar-denominated gold cheaper for European investors...

"Few fireworks are expected today but gold is likely to continue to test higher in the short term given the current momentum, but needs to break first $400 and then $405 to re-establish a clear upward trend." Kamal Naqvi of Barclays Capital said in a daily report...

---(see url for access to full news, 24-hr headlines)---

Please accept my humble thanks for being selected a winner in "The End of Cheap Oil" essay contest.
Perhaps my experience and perspective as a small O&G producer was helpful along with my 35 years of experience in power generation from various forms of fossil and renewable fuels. As some may recall from past posts I have been a long time proponent of higher oil and gas prices as a means to prepare for the inevitable point when they are no longer cheap. Gradually-introduced higher prices will bring peaceful long-term solutions. Rapid price increases will cause economic disruption and "political" solutions including war.

Let me also offer my sincere thanks to our most gracious host and benefactor, Sir Michael Kosares and his trusty colleagues Sirs Randy, Gandalf, George, Mike Jr and Lady Marie (forgive me if I've left anyone out). This $10 "Liberty" will be a fine complement to the $20 Liberties and St. Gaudens that I had the good fortune to purchase from CPM about three years ago.

I also want to congratulate the other winners, Sirs Tevye, TheJuniorMiner and Smeagol for their excellent entries. It was clear from reading all the entries that the range of opinion on the effect of The End of Cheap Oil is in no way uniform among goldbugs. Let us just be assured that the end of cheap oil has come and will signal the end of cheap gold.

Boilermaker

YES YES YES ! She (Lady Marie) is the one that sends out the Prizes to the WINNERS !

PLEASE, will each WINNER provide their REAL Name, with their Forum Handle, together with a SNAILMAIL address for posting the PRECIOUS ! Send this data to Lady Marie via email at:

marie@usagold.com

THANKS and CONGRATULATIONS !!
<;-)

----
THE WINNERS ARE:

The "First Prize" of a highly collectible United States $10 Gold "Liberty" coin in Uncirculated grade, (0.48375 oz. net fine gold), goes to Sir Boilermaker !!!!

The "Second Prize" of an Uruguay "Five Peso" gold coin in Uncirculated condition (0.2501 oz. net fine gold ), goes to Sir Tevye !!!

The "Third Prize" of an one ounce U.S. Silver Eagle in NEW condition, goes to Sir TheJuniorMiner.

IN ADDITION, "for Honorable Mention", ANOTHER one oz. Silver Eagle "PRECIOUS", goes to Sir Smeagol.

http://www.themoscowtimes.com/stories/2004/07/06/001.htmlsnip;
"The actions of representatives of the Russian government have led Russia's best and most creditworthy company to the brink of an unintended and artificial situation of insolvency and bankruptcy, creating an unthinkable default situation with its bank lenders, all at a time when the company is experiencing the best results in its history," Yukos chief financial officer Bruce Misamore said in a statement Monday..............
Experts say the government could relax its tax case against the company, which is threatening it with bankruptcy, if Group Menatep shareholders, the core group that owns a majority of Yukos shares, agree to give up their stakes. The legal onslaught has been seen as an attempt to force Yukos founder and its largest shareholder Mikhail Khodorkovsky out of business because he was beginning to encroach on President Vladimir Putin's power base. Khodorkovsky has been held in jail for the last eight months on separate fraud and tax evasion charges.

WHAT YUKOS OWNS (This came from an article at http://www.themoscowtimes.com/stories/2004/07/06/039.html

Cash - Yukos said on May 27 it had $800 million in liquid assets. Second quarter results will boost that to $1.1 billion to 1.2 billion. By the end of the year it should have enough to pay 60 percent to 70 percent of a $3.4 billion back tax bill for 2000.
Output - Yukos produces 1.7 million barrels per day (bpd) of crude and exports a total of 1.1 million bpd of crude and refined products to destinations outside the former Soviet Union. It is one of Russia's two biggest oil companies.
Reserves - Main production subsidiaries based in Western Siberia. Yukos had 16 billion barrels of proved oil equivalent reserves on Dec. 31, 2003, under U.S. Society of Petroleum Engineers rules.
Refineries - Five major refineries, including Angarsk (which in 2003 ran some 230,000 bpd of crude), Syzran (285,000 bpd) and Kuybyshev (130,000 bpd). The firm controls the Mazeikiu Nafta oil refinery and Butinge terminal in Lithuania.
Sales - 1,200 branded petrol stations in Russia.

comment;
This is one of the world's largest oil producers at about 1.7 million bbls/day. I really don't know what's going on in Russia but it sure smells like a governmental takeback of their most valuable commodity. My take is that Russia wants to re-nationalize their oil industry and begin to regulate their oil production a la OPEC. In any case it will stimulate oil prices just like the threat of any other supply disruption.
I'd like to hear from others on this, particularly Black Blade, on this unfolding intrigue.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Do you think that the Exchange Stabilization Fund was busy somewhere else shortly after 8 am. ?
WOWSERS !!
What does this tell you ?
GET the YELLOW !
<;-)

Thank you Centennial Precious Metals for an opportunity to put a few words together and attempt to win such wonderful prizes.

Boilermaker, what can I say but "what a great essay". Tevye, congratulations. Me thinks you are a realist and your essay has me pondering from which country you reside. Smeagol, I am always amazed how you write as if you just stepped out of the Hobbit/Lord of the Rings.

It was good to see so many entrants and so much activity on this board during the last few weeks. There are many great minds here and much value can be had reading their posts.

Thank you again USA Gold for such an opportunity.

Glenn

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://www.richard-seaman.com/Aircraft/AirShows/SpaceShipOne2004/And my condolences to the judges - I bet that was WAY more work than you thought you had signed on for. By the quality of the responses, I think that the posters here have, in fact, raised the bar for the questions in the next competition ! Nothing too trite or banal for us next time, please ! (But maybe the word limit would be a good idea LOL !)

One thing that I was dying to add about that rather nifty Renault (it was off-topic for the essay, and it's still OT for the forum, but ....) is that it demonstrated a fundamental improvement in how cars are driven which was enabled by 'cheap' information technology, namely a computer-controlled parking brake. It worked as follows :- The brake is applied when the engine is off or when it is activated by a little pull-handle under the dash. It is released automatically when you apply power and release the clutch such that you are going forward (or backwards if you happen to be in reverse). You feel just a slight hesitation before the release. What this means is that the dreaded hill start is basically as simple as one on the level - if you haven't applied enough oomph to go forward up the hill, you will stay with the brake safely applied. Almost as simple as an automatic. Neat !
Necessity is the Mother of invention. I think we will see a lot of amazing new inventions ( eg the Segway ) coming in the next few years. They may be of only marginal economic viability today (ie rich boy's toys), but could become the precursor of the future. For example, how much did Edison's phonograph or Dunlop's pneumatic tyre cost when they were first commercialised ?

C!

PS. Or for something more topical, feast your eyes on this wonderful sequence of photos at the URL above. This was all done for around $20M - I can imagine that if this were done by NASA (or the DoD or whoever) the cost of the design team's catering bill would have been more !

Congratulations to the winners of the contest. Thanks to MK and CPM for hosting and judging it -- not to mention putting up the prizes!
-r

.........And thanks to the judges.

I would like to propose in the presence of all the members of this Table Round that the totality of entries be enshrined in the Hall of Fame so that posterity might see how we stated ourselves on the issue of oil, money and gold in this unsettled summer of 2004. I think history will show that we had an understanding that transcends that which passes for enlightened analysis elsewhere and in the popular press.

Special thanks to Boilermaker -- the winner in a stellar field. And thanks as well to all the contributors. I was surprised at both the number and quality of essays submitted.

Onward, my fellow knights and ladies. And thanks for making this a special place on the internet.

Strategic as in "warfare."

Unfortunately, it must be pointed out that Mr. Khodorkhovsky, who controlled Yukos, is Jewish. Hence much sympathetic moaning in London about Russia going back on its program of privatization and sliding back into government ownership of enterprises. Well, Yukos is not making hamburgers nor selling running shoes! The FT is down on Putin for behaving so nastily and for saying as much as "You are not going to mess with Russia's oil!"

Also, it appears Mr. Kh. was going to sell an important interest in Yukos to Exxon, as I recall.

That's all Putin needs, Exxon owning and operating an oil company in Russia.

By the way, has anyone got wind of the "settlement fails" in the US banking system? Most interesting...

The GAB

http://news.bbc.co.uk/1/hi/business/3865943.stm.
An article on Yukos is available at the link.

George Ure speculates that the default might cause a chain of further defaults elsewhere - mentions the Herstadt Bank as an example.

The Financial World will all fall apart in due course. Sit back, relax, and enjoy your T.V. and newspapers with their gory details, while you are safe in the knowledge YOUR wealth cannot evaporate overnight.

The GAB

From: Gateway to Russia, website:

Yukos has confirmed today that it received a notification from a group of banks declaring it in default on a $1 billion loan, says Reuters.
The credit was given by syndicate of banks - Societe Generale, Citigroup, Commerzbank, Credit Lyonnais, Deutsche Bank, HSBC and ING.
Prior to that the court obliged YUKOS to repay the Tax and Duties Ministry`s bill of 99 billion rubles. After that the T&DM billed another 98 billion. Last week representatives of the Prosecutor's office and bailiffs raided the central office of the company.
-------------------------
Perhaps? HSBC is Herstadt Bank that GAB just mentioned in a previous post.

http://www.gold-eagle.com/gold_digest_04/russell070304.htmlA few excerpts from the latest Richard Russel Dow Report:

The two paragraphs below are from the always excellent King Report (July 1 report) --

"A stunningly disturbing Chicago PMI trumped the Fed rate hike. The action in the markets yesterday suggested a change in economic perceptions. It could be the beginning of the end. The ugly ChicagoPMI details: 56.4 expected; employment fell to 53.6 from 54.8; production collapsed to 53.9 from 71.1; new orders collapsed to 56.8 from 74.4; prices paid jumped to 84.5 from 80.

"You can forget all the post mortems on the Fed decision and communiqu�; the real talk in the money world yesterday was the astonishing collapse in the Chicago PMI."


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

I keep harping on the thesis that following a burst bubble (learning from the Japanese experience) it will require massive inflation to keep the US economy from sinking into recession and deflation.

Along these lines, M-3, the broad money supply, was down $10.4 billion for the latest week ended June 21.

This morning the Sept. 30 year T-bond was up 1 and 18/32nds to 108.13. This was a new high on the rally that started on May 13, at which time the bond was selling at 101.24. So is the bond market thinking inflation or deflation? You make the call.
---------------------------
Gdome: The economy, stock market and-- the dollar-- in particular appear to be in real perile.
If the fed continues to liquify on a massive basis the dollar is doomed by inflation, and on the other hand, if they cut back on the mass liquidity, they run the risk once again of the economy rolling over and heading into a deflationary period (for credit backed assets).
------------------------------------
More from Richard Russel:

There's an irony in the current situation. The weaker the US economy, the more the need for the Fed to increase liquidity and the greater the need for the government to spend and run deficits -- both processes calculated to ward off the forces of deflation.

But the more the Fed inflates, and the larger the government deficits, the weaker the dollar. If the Fed and government are successful in warding off deflation, the dollar's fate is still in question. If deflation takes over, the international value of the dollar could cave in -- since deflation would crush the US economy and turn foreigners bearish on the dollar.

Either way, the dollar would be in danger. Which is one of the important reasons to hold gold.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373470082&p=1012571727166Jean-Claude Juncker, Luxem- bourg's prime minister, has emerged as the strong favourite to be the first "Mr Euro" - the political face of Europe's single currency.


The creation of the post will be discussed on Monday at the monthly eurogroup meeting of 12 single currency finance ministers, but a clear majority is in favour.

Although the Dutch presidency of the European Union maintains there are no plans to nominate a specific individual on Monday, Mr Juncker has strong backing among member states.

The Luxembourg prime minister, who is also his country's finance minister, is a skilful operator trusted by colleagues and particularly valued by France and Germany. He decided not to put his name forward to be president of the European Commission - the EU's top civil servant - in spite of strong pressure from Paris and Berlin. However, he could combine the new job with his Luxembourg role.

The post of president of the eurogroup - the informal forum for eurozone finance ministers - would give the euro a political figurehead and provide a counterweight to the European Central Bank.

One French diplomat said: "We believe Mr Juncker would be an excellent president of the eurogroup."

Supporters of the "Mr Euro" post believe the eurogroup president could represent the single currency in international forums and be a political interface with Jean-Claude Trichet, president of the ECB.

The new position, with a two-and-a-half year term, is proposed in the new EU constitution but many finance ministers want to fill it even before the treaty is ratified.

Gerrit Zalm, the Dutch finance minister, today takes the rotating chairmanship of the eurogroup for six months under the Dutch EU presidency but his colleagues want a more permanent chairmanship, probably starting next year.

Last week Mr Zalm said such a move would not be an affront to voters asked to ratify the treaty in referendums because the eurogroup was essentially an informal body. "We are free and we can be sensible and anticipate what will be coming around after the constitution is in place," he said.

Mr Juncker, who takes over from Mr Zalm in January when Luxembourg assumes the EU presidency, would in any case chair the eurogroup until the end of next year. Britain takes the EU helm in the second half of next year but is not in the eurozone.

The Luxembourg prime minister has acted as an intermediary to try to defuse the crisis over the EU's stability and growth pact, which collapsed last year because of repeated French and German breaches of its budget deficit ceiling.
-----------------------------------------------------------
-----------------------------------------------------------
European politics want a "counterweight" to ease (???)ECB/Trichet. The EU leaders have talked for long about this new function, but they got this topic out of the refrigerator after Mr. Bush' visit to Italian PM Silvio Berlusconi (= US-friend).

5/21 YTD growth rates:
M3 +11.0% Annual Rate
Savings Deposits +22% AR
Bank Credit +12% AR
Real Estate Loans +20.1% AR
Commercial Paper +15.9% AR
Foreign Custody holdings of Treasuries +32.4% AR


last week:
M3 +10.1% AR
Savings +16% AR
Bank Credit +10.2% AR
RE Loans +15.9% AR
CP +8.3% AR
Foeign Custody +30% AR

Big slow down in a month, hence pressure on economy, especially at lower end, stocks except some hard assets, and on $.
Feds got to keep pumpin harder..come on Easy Al!

http://www.washingtonpost.com/wp-dyn/articles/A29560-2004Jul5.htmlSnip:

BAGHDAD, July 5 -- Oil prices rose Monday after attacks on Iraqi oil lines forced the country to reduce its exports by half. News of Russian giant Yukos Oil Co.'s expanding legal and financial troubles added to traders' anxiety.
..............................
The shutdown cut exports of crude oil from Basra to about 960,000 barrels a day, roughly half the postwar levels there.
.....................
Also Monday, Russia's Yukos came a step closer to bankruptcy after a group of Western banks signaled they might call in a $1 billion loan to the company. Societe Generale of France, the lead arranger for the lenders' syndicate, said the banks don't want to "jeopardize" the company, but the notice issued Monday means the banks can call in their debt at any time.
********************
Misetich

The 2004 Oil Shock And Awe continues relentessly, as consumption demand soars and supplies tighten

All Aboard The Gold Bull Express - Part ll

http://www.washingtonpost.com/wp-dyn/articles/A29869-2004Jul5.htmlSnip:

The statistics show that foreign and international investors account for the entire increase in privately owned Treasury securities since George W. Bush took office.
.......................
Privately owned Treasury securities are those that belong to investors, as opposed to those owned by federal government trust funds or the Federal Reserve Board. Private investors own about half our $7 trillion-plus of national debt; the Fed and federal trust funds own the rest.
...........................
if you want see for yourself, on the Web at www.fms.treas.gov/bulletin/ b24ofs.doc
........................
Besides, by ending at March 31 -- the June 30 numbers weren't out last week -- I'm cutting the president some slack. If recent patterns held during the second quarter, the numbers are even worse now. Foreign investors may well own a majority of privately held national debt. They held 49 percent on March 31, up from 36 percent when Bush took office.
........................
And one day, the bill will come in. It always does.
****************
Misetich

The "vendor financing" carried out by central bankers is unsustainable.

It is a question of when, not if to Sir Greenspan end of the free lunch era.

The US $ is overvalued and the ANOTHER down leg will start shortly.....

All Aboard The Gold Bull Express - Part ll

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373476028&p=1012571727313Snip:

This could expose Japan to a different financial risk just as things appear to be going well at last.... started with last Wednesday's US rate rise, it is the most leveraged economies that are most at risk.
...............
Take the public finances first. Gross government debt, according to Ministry of Finance projections, will reach 161 per cent of gross domestic product this year, compared with about 66 per cent in the US and Germany. The tax take, at a miserable 10 per cent of GDP, will not close a growing budget deficit and only massive increases in money supply and bond issuance, combined with low yields, have allowed Japan to finance its spending habit.
..............
The situation is not much brighter in the private sector. Bad loans are declining but financial groups hold about Y106,000bn of government bonds. A 100 basis point rise in yields will generate about Y3,700bn of losses on those bonds and the Nikkei stock index would have to rise to 14,000 (from less than 12,000) for profits on the banks' equity portfolios to compensate. With a more bearish 2 per cent rise in bond yields the losses would jump to Y7,400bn, requiring a Nikkei of 16,000.

Japanese companies, finally, still have an average debt/equity ratio of 100 per cent, twice that of their US or European peers, and many have only been kept alive by having to pay practically no interest on their debt.
*****************
Misetich

Japan printing machines went to overdrive -The massive amounts of debt accumulated by Japan Inc. found its way in US $ "investments" Japan is the largest holder of US $ reserves

As Lois Lane asked Superman - paraphrasing -" I know you're holding me - but whose holding you?"

Sometimes film's "superpowers myths" are entranged in people's minds -

Gold investors minds are clear and focused. THEY KNOW and have fortold upcoming events - and thus far in history of mankind Gold investors have always been rewarded kindly.

More savvy investors will join the gold bull express - soon-

All Aboard The Gold Bull Express - Part ll

http://sg.biz.yahoo.com/040705/15/3lhrc.htmlSnip:

New Delhi, July 5 (Dow Jones) - Strong growth in India's farm incomes after a second straight year of good monsoon rains will boost demand for gold in 2004, leading to higher imports this year, a senior industry official has said.

"Rural demand in the first six months has been very strong and is expected to remain high over the year. Besides, a number of people who invested in the stock markets ploughed back their capital gains into gold in the first quarter of 2004, which further boosted demand for gold," said Sanjeev Aggarwal, managing director of World Gold Council, India.
........
The country's agriculture sector saw a bumper harvest last year and is expecting a similar crop this year.

India's farm output rose 10% on year in the financial year ended March 31, 2004. Gold demand rose 16% on year in 2003 to 588 metric tons, while the value of total gold imports was 320 billion rupees ($1=INR45.90).

Aggarwal said gold demand could reach 600 tons in 2004 if prices aren't too volatile during the rest of the year and if the economy continues to grow at a fast rate.
***************
Misetich

India's unsatiable demand for gold continues

All Aboard The Gold Bull Express - Part ll

http://www.cato.org/dailys/07-06-04.htmlBrought to you by what I consider to be think tank behind most of the free trade spin that then becomes talking points for legislators that advocates expanded free trade.

The CATO institute has been relatively silent on a return to the gold standard. Do we begin to see a foundation created that will bring the current account deficit to heel? With a devalued dollar and productive industry vacating the domestic economy will the tax and spend Demoplublicans have any choice but to raid Fort Knox? Wealth must be created before it can be stolen.


SNIP: Financial markets have been fretting for some time about inflation. In a nation at war, the federal budget is bloated by a "guns and butter" policy of a president with an ambitious domestic agenda coupled with a forward defense posture. Monetary policy has been expansionary. Oil prices are setting records, at least in nominal terms, and there is a serious threat of further supply disruptions.
In short, many of the problems confronting Ronald Reagan when he took office as the nation's 40th president in 1981 are now present or anticipated. The Reagan administration is the last time a gold standard was seriously considered. In 1981, Congress agreed to an increase in the U.S. quota to the International Monetary Fund on the condition that a gold commission be appointed Senator Jesse Helms crafted that compromise.
Professor Anna J. Schwartz, who served as staff director of the U.S. Gold Commission, provided a concise history of the deliberations of that commission. The commission was highly politicized; the Fed was adamantly opposed to a return to gold; and the Reagan administration never backed a gold option. The commission issued an inconclusive report to Congress on March 31, 1982.
Gold proponents have long been critical of Professor Schwartz for having been hostile to gold, a charge she vigorously denied at the conference. Indeed, she buoyed the spirits of gold adherents by saying that it was time once again to seriously look at the operation of the gold standard. (end snip)

This is ridiculous. How much more ammo do the anti-gold forces have at their disposal?

Obviously, a CB somewhere is dumping gold again.

It's hard to beleive in gold unless there is some irrefutable evidence that the CB's have been neutered.

ouch! Well FOA said that the collapse of the paper markets would occur before freegold. It is still not clear weather this will be an upward price failure or a downward one. Judging from the banker ques on the downside, I guess the direction has already been determined...just a matter of when.

http://ap.tbo.com/ap/breaking/MGB6ZVXZBWD.htmlThe situation in Russia (Yukos,debt call by western bank,Russia's Guta Bank Suspends Operations etc...) and Gold gets hit-surely not a coincidence IMHO.Good for Gold=bad for Goldprice...

http://fidweek.econoday.com/reports/US/EN/New_York/challenger_report/year/2004/yearly/07/index.htmlSnip:

The Challenger report revealed that 64,343 job-cuts were announced in June, a 12.3 percent drop from May. However, job cut announcements were up 7.8 percent from year ago levels.
..............
In June, the largest job cut announcements were in the financial and telecommunications industries. Last month, the largest layoff announcements were in retail and telecommunications.
**************
Misetich

Job cuts continue in this "jobless recovery" - The fact job-cuts announcements in the midst of higher corporate earnings reports (Pro-forma not-withstanding) is alarming since corporate earnings WILL SLOWDOWN in coming months as Real Price Inflation hits bottom lines thus the prospects of further job-cuts ahead is growing

Further corporate earnings will be negatively impacted by unfavorable foreing currency convestion as the US $ "strengthened" in recent quarter

All Aboard The Gold Bull Express - Part ll

http://news.xinhuanet.com/english/2004-07/06/content_1576450.htmSnip:

BEIJING, July 6 (Xinhuanet) -- China's gold consumption for jewelry reached 201.1 tons in 2003, ranking the world's third after India and the United States, according to the Chinese edition of the gold yearbook.

The yearbook shows that China's gold consumption for jewelry has stayed in the world's top three list. China's gold output in 2003 reached 213 tons, ranking the fourth in the world after South Africa, the United States and Australia.
..........
Wang said that China's newly-opened gold market still had a huge potential to accommodate more gold products. The developing market should pay more attention to attracting the youth by showing more 18K gold fashion products, and attracting the elderly by stressing the gold value for investment.
*************
Misetich

China's gold demand is poised to boom up as the Red Dragon economy continues to grow
The "recent slowdown" in China's red hot economy provides a healthy respite for a continuing sustainable growth - keeping commodities price inflation RED HOT for years to come...

Those industrialized countries that have relied on cheap price natural resources will experience all sorts of difficulties - from containement of inflation expectations to higher unwanted IR's and slower consumer spending and to.....

All Aboard The Gold Bull Express - Part ll

http://www.reuters.com/newsArticle.jhtml;jsessionid=0G4PGED5EWHL2CRBAEZSFFA?type=businessNews&storyID=5597747Snip:

NEW YORK (Reuters) - The number of companies that issued negative outlooks outnumbered those that upgraded their earnings forecasts by more than two to one last week, according to Reuters Estimates.

Cyclical consumer goods and technology companies made up 42 percent of the downgrades, citing inventory build-up, pricing pressure and weak sales as the reasons for the earnings shortfalls.
................
Wall Street has forecast earnings growth of 25 percent for the broad Standard & Poor's 500 Index for the second quarter, but the slew of profit warnings could be sobering for the markets.
****************
Misetich

For whatever reason "realistic news" is considered "negative news, doom and gloom" as it goes contrary to the spinmasters rosy scenarios

Anectodal reports, show a deteriorating economic landscape in the US -

Much of the "boost" received from emergency IR's and tax cuts and lower US $ has disappeared without any SIGNIFICANT JOB CREATION

Wages are not even keeping up with the massaged CPI/PCE inflation gauges-

The last economic lever still of some use is a further devaluation of the US $

The IMF warned earlier that a futher US $ correction is needed (3rd qtr) and its just around the corner....

All Aboard The Gold Bull Express - Part ll

Hi Toolie, I don't know about the quality of professor Lawrence H. Whites' mathematics but "at a price of 400 US$ per ounce of gold, there would be more than enough gold reserves for a return to the gold standard" sounds rather ridicule to me.
What an amount of gold/price for gold should be necessary for the return to a gold standard considering Sir Alan's present dollar policy ?

Hi 968. That is a very good question! If all dollars were to be honored � The amount of dollars issued divided by gold supposedly in the treasury, I've read figures like $50-60 K/oz. . In which case a $100 of gold may be a wafer thin sliver encased in plastic with bar code and magnetic stripe -- Not a coin. But who knows.

The thing that I find intriguing about the scenario with free trade being pitched as good for the economy is that it plays to the greed of business through the promise of expanded markets. Businesses lobbied congress to get behind the deal. Congress largely understands only what is being explained to them by a lobbyist with a fat wallet. And it puts the FED in the position of having to print enough $'s to keep the domestic peasants making their payments while loading up the world with dollars. The dollar is printed into oblivion.

If indeed it is a stealth agenda to return America to its roots, It is brilliant! It turns the usual process of expanding government on its head in that; government usually creates a problem then fixes it by creating a bigger problem. By accepting the notion of free trade, they have given the dollar a death sentence. No more "great nipple in the sky government". If you read through Cato positions, you will find their goals in line with the idea that America should return to its roots. Similar, if not identical to that of the Libertarian Party. If I am not mistaken, Libertarians that saw the electoral challenges as too great started Cato.

Congragulations to all of the gold contest winners, it is respectable that we are all thinking about it here. I see now that the wisdom of practicality states that the essays which include the most supporting evidence will not necessarily be higher in the judge's eyes than the more succinct, easier to read essays.

Gold. Practical. Get it while it's cheap.

-Now seeking constructive criticism on my essay, which would be much appreciated!-

Don't you know the workings of the market by now?

At the point of market-making for everyone on the "bull team" who buys the long side of a gold contract there is someone else on the "bear team" who buys a short side. So how can anything run out? There's no such thing as a limitation to the contracts that can be written, and the only "ammo" as you call it that can be exhausted is the mental resolve of either side of the opposing teams of players. If weak attitudes and poor understandings like yours are typical of the bull (long) team, the conclusion is foregone. Haven't you figured out the gold derivatives system was built to run that way? Why is it when you talk to people about lawnmowers, nobody's surprised that grass gets shorter, but when it comes to gold contracts there's always a group of disappointed bulls so surprised when the system does what it was made to do.

If you're tired of feeling foolish and disappointed try owning gold instead of buying contracts. Contracts can only work to serve either party when they work, but in the long run they're asymmetric because they have a way of defaulting which is what strengthens the hand of the shorts and puts the whole game in favor of the anti-gold house which is running the game from the start. Like I said, that's what it was made for. It's like borrowing the theory behind casinos in Las Vegas. The house offers slots and R-wheels because they're designed to benefit the house.

Why else do you think the contract system operates under an elaborate set of rules of margins and expirations and notices between counterparties conducted through the house while on the other hand true gold ownership can get by with only one easy rule of full payment between the buyer and the seller?

www.dailyreckoning.com
Dr. Kurt Richebacher is announcing a savage credit crunch right around the corner.

The carry trade in bonds, which is in the trillions, will now have to unwind due to rising long term rates. The market as LTCM showed, is not symmetrical: on the way up in prices of bonds, there are plenty of ready buyers and sellers. Not so when the tide turns: buyers will stand by and that means interest rates on bonds will rise much more than anyone suspects, as the carry trade tries to unwind.
This means enormous losses - even bankruptcy - for bondholders who will try to bail out of highly leveraged positions. Capital wipe-outs galore.

Further, the activity of refinancing mortgages has plunged.

No more possibility for the consumer, of tapping out equity from his home, to fund further purchases. Collapse of consumer buying is going to hit the economy, as this activity represents 70% of GDP.

Hang on, fellow goldmeisters! It won't be long now before TSHTF. Continue accumulating gold at giveaway prices, as the attempt to stifle gold offers buying opportunities.

The GAB

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.

----Closing market rap -- excerpts:

Gold futures on the Comex division of the New York Mercantile Exchange dropped over $5 per ounce Tuesday on fund and dealer selling ..... the most-active Aug contract settled $5.70 lower at $393 per ounce.

Prices ended last week on a firm footing, just shy of the $400 mark, as players nudged up gold exposure ahead of the Independence Day holiday weekend in fear of terrorist attacks in the U.S. during that period. ... Traders preferred to have a little gold over the weekend as insurance in case extremists launch more attacks in Iraq and elsewhere.

With the weekend having passed without incident, gold immediately encountered some fund selling Tuesday morning as players unraveled that increased exposure.

The U.S. dollar then managed to edge higher on short covering in the wake of a mixed Institute for Supply Management non-manufacturing business index reading. Pre-placed stop-loss sell orders [in gold futures] then added to the fray by increasing sell-side volumes.

Meantime, tough resistance was seen at the convergence of key moving averages just below $400 an ounce on the COMEX. Traders said they saw as technically bearish a crossing of the 100-day below the 200-day moving average, which transpired during the day's shakeout. Many speculative funds use computerized trading programs that sell or buy on such signals..

As buyers remained content to linger on the sidelines gold prices swiftly sank between 1000 ET and 1100 ET. However, some bargain hunter interest eventually emerged in the $390 region to steady prices in a $390.50-$393.50 range by the end of play....

"The market should continue the theme of dollar watching with traders keeping half an eye on the broader geo-political situation, but with the summer holiday season approaching and market liquidity set to thin, volatility is likely to be the only thing guaranteed," wrote analyst James Moore at TheBullionDesk...

Traders said rebounding crude oil prices could keep gold in demand as an inflation hedge. NYMEX crude was up 3.2 percent at $39.63 a barrel Tuesday afternoon, its highest price in a month. A floor broker said he thought it was just a matter of time before oil went to $45 a barrel and gold followed it back up to $420 an ounce, where it last traded in mid April when the August contract was falling from a 15-year high at $433....

---(see url for full news, 24-hr headlines)---

http://businessplus.hemscott.net/hstoday/AFXNewStory.dll/text?SerialNumber=2274&Indate=06/07/2004&EPIC=HEADLINE: Bundesbank's Weber says ECB, Fed mulling ways to control hedge funds

FRANKFURT (AFX) - The European Central Bank and the US Federal Reserve are trying to agree on a framework for controlling speculative hedge funds, the head of the German Bundesbank, Axel Weber, said here.

"We are currently in talks in Basel (Switzerland) with the Americans about ways to control hedge funds," said Weber...

"The Americans' position is clear: no regulation. Our conception is different..."

Hedge funds ... often concentrate on speculative, short-term financial instruments with the aim of reaping large profits.

An estimated 6,000 such funds exist worldwide that manage around $600 billion in assets. ....some have been suspected of participating in large-scale stock fraud.

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

As FOA might say, you have the choice of throwing yourself into the swiftly churning rapids of the river where the force of "hedge fund gravity" does battle with the resistance of "central banking boulders"; or else you can skip the beating and jump straight ahead to the final destination -- the self-minded waters of the deep blue sea. That is, you'll find your security in the substance, not the process.

R.

http://www.moneysense.ca/news/shownews.jsp?content=20040518_050528_3_cnw_cnwI was reading an article the other day about the "housing affordability index" and to my astonishment housing is more 'affordable' now than in years gone by. This article relates to Canada which apparently is accused of a larger bubble than in the US.

What becomes clear about the 'housing bubble' debate is the ongoing fierce debate in mortgage rates. Obviously, as rates increase the 'affordability' index will climb but the point of debate, in terms of the bubble, boils down to the future of I.R.

-snip-

"With the federal bank expected to ease interest rates in the short-term - driven in part by a soaring loonie, which has gained about 20 percent against the U.S. dollar in the past year - housing activity is expected to remain strong.

Carl Gomez, an economist with RBC Financial Group in Toronto, says that compared to the housing bubble of the 1980s, the current market has stronger fundamentals to support the rising prices.

Gomez, whose firm publishes a regular housing affordability index, says the percentage of household income needed to carry a typical bungalow on a five-year mortgage has shrunk from 48 percent in 1989 to about 32 percent today. For a one-year mortgage, it is as low as 28 percent."


-end-

I offer this tidbit to counter endless 'housing bubble' conjecture. I also offer that I am 'undecided' on this issue because I haven't the foggiest if I.R. are going up a bit or a lot.

http://origin.bankrate.com/brm/news/real-estate/20040122can.aspThat snip below is from this link:

(from the same 'google' search, "housing affordability index" "RBC")

http://www.rbc.com/economics/market/pdf/house.pdfExcellent charts & stats on this 'pdf'.

During the crazy (real) housing bubble in Toronto in the late '80's housing costs were near 70% of household income (40 and 50% for all 'metro' areas) and dropped to and below 40% through the early '90's and presently average approximately 35%.

Housing affordability is at or near a 20 year low, again low interest rates are the reason. The call of a housing bubble is a call on future I.R.'s.

AND --- NO !!!!!, Sir Smeagol, just because Sir Mackattack has not yet picked-up his PRECIOUS winning Prize of an one ounce USA Silver Eagle, it can not be given to you !!!!
<;-)

Sir Mackattack --- Please read the following "REPOST" !!
----

This is a "REPOST" of the POG CONTEST announcement !!

Gandalf the White (06/25/04; 12:34:09MT - usagold.com msg#: 122530)

TA TA TAAAAAAAAAAAAAAAAAAAAAA POG CONTEST WINNERS !!

The August '04 GOLD COMEX Contract prices for Friday June 25, '04 were:

HIGH = $403.8 low = $401.6 and SETTLEMENT = $403.2
CHANGE = minus $0.3

and FROM the OFFICAL Listing of POG Contest entries:
---
$$$$ $404.3 $$$$ mackattack (6/19/04; 16:16:02MT - usagold.com msg#: 122258)
$$$$ $403.5 $$$$ Waverider (6/20/04; 18:32:03MT - usagold.com msg#: 122287)
$$$$ $403.0 $$$$ phil288 (6/22/04; 18:16:33MT - usagold.com msg#: 122386)
$$$$ $402.1 $$$$ price (6/19/04; 18:31:01MT - usagold.com msg#: 122263)
===

THEREFORE we have FOUR (4) WINNERS !!!!

Sir Phil288 wins the "First prize" of an Uruguay FIVE (5) Peso gold coin which contains 0.2501 oz. net fine gold.

"Second Prize" goes to Lady Waverider, an U.S. Silver Eagle, which contains one ounce of pure Silver.

Because of a TIE for "THIRD PRIZE" ---
BOTH Sir Price and Sir Mackattack shall ALSO recieve an one ounce U.S. Silver Eagle.

CONGRATULATIONS to ALL four WINNERS and to those that entered the POG CONTEST !

Will EACH WINNER please provide to Marie at USAGOLD --- Centennial Precious Metals, Inc., their Forum posting "HANDLES" and REAL Names, together with their Snailmail SHIPPING ADDRESS, so as to be able to mail the PRIZES ! Marie may be reached at the email address of: marie@usagold.com

THANKS ALL !
<;-)

Ag Mountain,

Actually, I don't play contracts. Also, I do own a bit of physical gold.

I owned shares in a junior exploration company, which went bust partly due to the protracted manipulation of the POG by the cabal, which could only manipulate the price with the provision of some physical by the CB's. My old silver company warrants also went bust due to the manipulation. I also currently own warrants and shares in other mid-sized producer gold companies, as well as gold mutual funds.

Basically, I see at least some serious link between the paper and the physical market. The Comex has not defaulted on a gold contract yet. Those who demand physical delivery through the Comex do get physical delivery. Basically, the paper market is manipulated because there is sufficient physical made available to effect the manipulation. The main source of such physical must be the CB's complicit in the manipulation.

The point is: We cannot ignore the role of the CB's in supporting the "cabal". The manipulation can destroy the ordinary rythms of the market. It can kill one's gold share investments. Even with physical, it can affect the value of your physical if you ever have to rely upon it, or if the gold-holder dies and the estate (including gold holdings) must be liquidated at a given time.

A lot of people on the gold sites say that the CB's are out of physical, but this is just speculation. No one really knows except the CB's who loaned out or sold the gold.

.........but to continue on the 'devil's advocate' trail.........

Heard an investment advisor ask recently, "If the Chinese Reminbi is to be re-valued upwards why would they be converting their holdings to a 'currency'(gold) that will devalue against it?"

Seems like a reasonable question, no?

If that theory is plausible why wouldn't I (if I was a Chinese person) convert all gold to Reminbi, wait for the Reminbi/dollar revaluation and then buy gold.

So with this/these theories is the Chinese person really buying gold or is the Reminbi/dollar revaluation baloney?
One must be false, yes?

For the life of me I cannot understand why the 'manipulation' has not been figured out.

Often I ask, on this forum and others, "What happened at 11:30am? " or "Who did what at 2:00pm?" or such similiar questions. Today I ask, "What happened today just a minute or two after 10:00am? Seldom is there an answer. Occasionally, there is an obvious answer such as 2:15pm (FOMC) or 8:30 am (Payroll report)but far too often no one seems to know. It is a mystery.

Today smelled of manipulation. Someone said that it was the lack of terrorism over the US holiday weekend. Why didn't gold fold at the open if that was the case. Another thing is the gold up several dollars today, down several dollars tomorrow on little or no news. Why?

So with all the 'coverage' on this forum and other gold forums and dozens and dozens of analysts and gold commentors why can't today's wicked drop at 10:00am be accounted for? Why is today's drop such a mystery as it often is? Is it CB selling? Perhaps and if so why do we not know? We (gold bulls) have several thousand (millions?) of eyes and ears out there, why do 'we' not know?

BB posted a pdf a year or so ago, "CB held gold" exactly 32,000 tonnes. The same number that it has been for years and years. Co-incidence? Howe and Bolser and Murphy and ALL those guys say CB's have half, 16,000 tonnes. WHY DO WE NOT KNOW? For crying out loud the United States don't even know how much gold they have. Unbelievable.

The citizens of the US have a government that says they have some 8500 tonnes of gold as 'monetary reserves' same as they say they have X Euros and Y Yen and Z donuts but they haven't done an independant physical audit in OVER 25 YEARS. IT"S LIKE SAYING WE HAVE A BILLION EURO, AND 100 BILLION YEN AND A BILLION SWISSIES AND 8500 TONNES OF GOLD BUT WE HAVEN'T COUNTED IT SINCE 1976.........YOU'LL JUST HAVE TO BELIEVE US.

Give me a break! What a crock of elephant dung. We can't figure out how much CB held gold there is because the root of all deception is the US Treasury. They refuse to count it! The reserve currency of the world and the superpower of the world and they won't show their measly, miserable gold. If it wasn't so sickening it would be the funniest thing ever!

It's the biggest, fattest, evilest lie EVAR. If we each bought an oz. of gold the lie would be over. Eliminate CB (aka crooked, lying) gold and the game is over.

We have moaned and groaned for 24 years but we can end the sorry story in one day if we wake up! HELLO!



Beginning and end of story.

TESTING

Hi there. This is my first post.I have been lurking for some years & very much enjoy the overall quality of the posts @USAGOLD.

I hold physical gold & silver & some shares -which I don't want to talk about right now:) Here in Australia the price of Gold in local $ terms has dropped around $26 in less than 2 weeks. Not very uplifting to say the least.In the longer term I see Gold being worth muliples of todays price
BUT --- its not easy to sit through the daily/weekly & ongoing manipulation. Just look at todays action & how the drop was slammed in just before the close.Physical prices apart from the USA are in many currencies --under the buying prioce of 2 yrs ago! (Certainly in Oz)

Reading todays posts(Ned,canamimi,Ag Mountain)I remembered I had read (Today) at a neighbouring site a letter calling for Media coverage. I think it's a GREAT IDEA -- any publicity would be better than the NIL we enjoy right now. Here tis:

(PUBLICISE THE MANIPULATED MARKETS!)

I'm sick of being always a victim as an investor in the PRECIOUS METALS MARKET. It's about time we all decided to do something tangible about it.

Some years ago I first suggested to Bill Murphy that some well placed ads might help to make public what we knew about manipulation.The idea was not thought workable because of the cost.
A notion I do not agree with!

In APRIL ( 04 ) I brought up the subject again -this time sending an outline to Chris Powell as well as talking with him on the phone.
His response:
---------------------------------
"I spoke twice today with GATA Chairman Bill
Murphy about the advertising idea you and I
discussed this morning, and he liked it very
much. While I never got around to writing
an outline for it tonight, I expect to do so
this weekend and will forward it to GATA's
other board members. I expect they'll give
their approval and I'll let you know."
---------------------------
There was no further response from Chris Powell

In May of this year I E/Mailed the following letter to Bill Murphy -Re LE METROPOLE CAFE --

-------------------------------------------
Hi there Bill. As a confirmed Precious metal believer I want to give you some feed back --wanted or not : )

In my opinion & as a paid up Cafe Member I get bored $hitless with some of your commentary. It goes right over the top & does no good for the cause ( GATA ) or your website. I 100% believe that the metals are manipulated --you'd have to be stupid to say otherwise. However hearing & seeing the same same comments parroted on a daily /weekly /yearly basis does not help overmuch. In fact the opposite!

The rhetoric needs toning down if you really want to keep credibility. Just print what happens --at least some of the time instead of the endless rant. The rant is fine if it is used more judicially & backed up with specifics.

Also & most importantly its about TIME to get the act together & place some small ads in MAJOR print outlets to alert the public as to what's happening. Prior to placing ads you should be approaching all your subscribers & other Gold Friendly Websites asking for donations that will be kept in a Trust Fund prior to being used for media ads. The ads do not have to cost an arm & leg --- by careful positioning they only need to give an OUTLINE -- then point to a web page where the guts of the message is contained. It is essential that a separate web address be established so that some of the more extreme claims ( true or misleading ) do not initially put people off.

This is WHY in recent correspondence with Chris Powell I have suggested ( strongly ) that only SILVER manipulation be talked about. It will be easier to prove & will not muddy the public perception to start. The silence coming from GATA / Le Cafe is deafening --- commonsense asks what are the vested interests in NOT going public?

A lot of good people have given up on GATA & Le Cafe mainly for the reasons outlined above. To reiterate: There is no point in parroting non stop about the same old/ same old to the same people --it makes little sense."

-------------------------------------------------
The response was in De Nile: ) I did not renew my membership.

I believe in what I wrote to Bill. We have to take the fight into the open where there is a huge audience. The cost need not be huge. I believe that interested parties would contribute to a well run MEDIA CAMPAIGN.

WHAT DO YOU ALL THINK ?? IF YOU SUPPORT THIS STAND UP & BE COUNTED. SAY SOMETHING! PLEASE
Please also comment if you have a problem with the above.
---------------------------------------------------------

Pritcho

Pritcho, the advertising proposal was not met with a lot of enthusiasm by GATA's board. While it wasn't rejected either, the board thought that it wasn't likely to produce much and that our efforts should be directed at people and organizations who control substantial investment funds or otherwise have economic power. We are doing that now and have an especially sensitive initiative under way. This initiative seems to have been cordially received by the other side, so I'm hopeful that something very important may come of it. But GATA is a small, volunteer organization with limited funds and we have to rely on encouraging OTHERS in the precious metals community to undertake their own agitation wherever they are. Even the smallest effort is more promising than leaving the effort to someone else. For starters, any stockholder may raise the market manipulation issue with his company's management and ask that the company act on it ... if only by making a contribution to GATA. If GATA didn't have to worry about money, we'd hire an agency and follow the advertising route very quickly.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

"For the life of me I cannot understand why the 'manipulation' has not been figured out."

I would start by saying that most that post on this forum have "figured it out". Many will also tell you that owing the real thing is much wiser than toying around in the futures market.

I found it extremely interesting that silver, gold and copper sold off big time within minutes of each other and for about the same duration. Manipulation is an interesting beast and perhaps there are a myriad of answers.

First, it is done because it can be done.

Second, so many traders are so technical and put such close stops to positions that it easy to break them.

Third can include central banks, governments and large institutions.

Who really knows on any given day? Someday the charts will not react like they used to, someday the mathematical programs will err, someday something will happen that isn't supposed to, someday gold and silver will break free.

We are playing around in the land of giants and you must have a lot of patience.

Glenn

I certainly ment owning , to own ...certainly you dont want to owe gold.

My apologies.

Glenn

Take a look at a big bottle of
Canada Dry. They offer 100 oz.
of gold. No purchase required.
They make a mistake: on the
bottle they say 100 oz. of 14 K
gold worth about 34,000 dollars.
On their webpage they say it is
100 oz.of pure gold.
Someone outside the gold-community
had a great idea. It will make many
aware of gold. Great advertisement.
If this kind of promotion catches
on it might be significant....OvS

That odd accounting method, Pro Forma
(according to form) is STILL widely employed
in the US in lieu of genuine earnings statements.
This must do wonders for our image overseas,
especially where GAAP (Generally Accepted Accounting Principles) are mandatory and culturally ingrained.

Where can the world go to play,
Count cards but not dally to stay,
Where they'll deal from a deck
That's been marked all to heck
In a famous casino that's called USA?

Chris thanks for your reply.I still think its a very worth while idea and I agree with the author that it need not cost a huge amt to simply place small ads to get attention.

As a long time supporter of GATA & LE Cafe myself I am puzzled why you bring up the "worry" of money for such an endeavour -- To the best of my knowledge in following GATA et al I cannot remember an appeal to precious metal investors asking for $ for a Media Campaign? Please correct me if I'm wrong on this. GATA just may be surprised at the depth of feeling out there in the Gold/Silver community for a POSITIVE PLAN. Regards

Pritcho

Power of the press! Power of real money, silver! Get the word out to the masses and manipulations will stop short. Drain the comex dry and the price can only rise. Silver can lead gold up. Bumper stickers across the country! The challenge is to come up with the most concise wording. What better place than here? Centennial PM can make a few bucks by printing and selling the stickers. Ya'll get to cogitating to come up with the most catchy, informative, one liner that portrays the need to hold gold and/or silver.

REAL MONEY FOR REAL PEOPLE-OWN SILVER!

Ehh-Pritcho! Your e-mailing the wrong Bill...if you want results start mailing to Gates not Murphey. Just tell him to, buy-Buy-BUY!! A few $billion here, a Few $billion later, who can say? That might have some effect. What-da-ya-think?

www.technicalindicators.com/gold.htmStudents of the gold market may find the above site of interest.

Breakdown for 29 June showed the following:-

Large Speculators Long 38% Short 21%
Small Speculators 23% 8%
Industry Hedgers 30% 62%
Spreads 9% 9%

The site also has the weekly figures from 2002-04

Enjoy!

Bill Gates buying billions of dollars worth of the yellow metal! Now that really would be manipulation methinks.

Welcome to the forum and a fine
first effort you've made. "Get the message out"
is what we do here and to be honest,
Michael Kosares has been at it for far longer than
most anyone with his FREE newsletters and
cutting-edge analysis before the internet was born.
That's a catchy little slogan you've rendered there, and
if I were to put a few up on my bumper, I'd be lucky
if I had a bumper the next day, between the
politically correct patriot rednecks, stoic
religious fundamentalists and the local police! ;)
Strike Back With Silver
S%*@ Yes I Buy Silver
Sue Me But Not My Silver
God Gave Us Gold
Goldbug On Board
Get Gold Before It's Gone
Give Gold Before You're Old
Life Is Good, But Gold...

Ah ..Goldendome.. how 'bout throw in the Walton family, Warren B, & Mark Cuban.... oh what a dream.

Me thinks the Hunt Brothers taught them a lesson.

Time is on my side so let the cards fall as they may.

Yea, I hear Gates has a soft spot for gold.

Ned (msg#: 122799) wants to know:
"What happened today just a minute or two after 10:00am? Seldom is there an answer. Occasionally, there is an obvious answer such as 2:15pm (FOMC) or 8:30 am (Payroll report)"

"So with all the 'coverage' on this forum why can't today's wicked drop at 10:00am be accounted for?"


Hey there, Ned-man, good questions. Timewise, the benchmark you're probably looking for as the pesky little thing the market players used to stub their toe and fall all over themselves today was the London PM Fix. Ten o'clock in New York (if my Geo-Mickey isn't lying to me) jives with the 3:00 London fix. When Deutsche Bank, Soci�t� G�n�rale, Honkers & Shankers, ScotiaMocatta, and Barclays put their books together and conjured a fix ($394.50) that was $3.90 lower than the morning's ($398.40) it was enough to put everyones undies in a bunch over at COMEX. From that jumping-off point all you gotta do is consider just two of the media snips from the Daily Market Report for the "plunge" to take a bit more shape and make as much sense as can be made outta trading in paper Gold.

#1) "Pre-placed stop-loss sell orders [in gold futures] then added to the fray by increasing sell-side volumes."

#2) "Traders said they saw as technically bearish a crossing of the 100-day below the 200-day moving average, which transpired during the day's shakeout. Many speculative funds use computerized trading programs that sell or buy on such signals."

'Tis all nothin' but a passing thing. A really good thing, if *IF* you know what to do with it.

Gold. Get you some. --- Aristotle

The 'independence' of Gold is a direct function of the number of individuals that own physical Gold.

bumber sticker-

If You Don't Own Gold- THEY Do.

Follow me home and steal my gold.
:-)

That sorta puts an end to the bumper sticker idea ; )

That answer is almost answer-ish!

I see spot has retraced itself EXACTLY to the point when it was yesterday at this fine hour of 6:35 eastern. So today's question is are the paper traders FICKLE? Are they DENSE? Do they have the foggiest idea of what is going on?

What I like to see is the RESILENCY of our gold friend in these last couple weeks. The bearish tone is now giving way to a bullish look!

Nothing like a bold, noisy post to awaken the sleeping GIANTS, is there! There have been more posts in the last 12 hours than in the last 2 days. Time to crack our necks, bury some paper traders and GO OUT THERE AND BUY AN ONZE OF GOLD!

Let's see if these CHUMPS at the CB's can pour it out faster than we can take it in. I think I'll do a little overtime these next couple weeks and when I get my FUNNY MONEY I'll exchange it for the REAL McCOY. It's the REAL THING!

Gold. Get you an onze and end this charade!

On a very serious and sobering note I was watching CNN last night, a high ranking offical from Homeland Security (sorry, didn't catch the guys name) suspected and I believe it is also the position of H.S. that a terrorist event will occur between a few days before and a couple weeks before the November election.

Walking on eggs here trying not to say the wrong thing because this is a VERY sensitive thing I suspect that physical will be a beneficiary simply because of the threat. There will be a lot more said and speculated as we roll through summer; it will be a strange fall I am sure.

It has been said and I am in no way, shape or form qualifying this statement that "buying gold is unpatriotic...approaching terrorism". I have said and I say it again that I do not buy gold and wish for 'mishaps'. I don't think any of 'us' do. I buy gold because I know that 'mishaps' will occur. It is unfortunately, at present times, the way of the world, our folding, fading paper world. It's not a question of IF, but WHEN.........

So that buying gold is a 'hedge' (it is of course not only this) against bad times (define bad times as you wish). Homeland security believes bad times will happen. There will be gold buying, perhaps a lot of gold buying pre-election.

Will it be preceived as a crime to buy gold pre-election? Is it shameful to recommend gold as a hedge pre-election.

Anyone wish to comment on this most delicate subject?

TIA

We know that someone is expending an effort to cap this market, but we should keep in mind that someone else is expending an effort to put a floor under it. For a war to occur -- and there is a war on gold -- there need be two sides. Elements on Main Street are pro-Gold. Elements on Wall Street are anti-gold. And the battle between the two goes on. If the group attempting to keep the price down is so powerful, how did gold get from $260 to $400 over the past couple of years? Who's winning? Who's losing? Who has the strong moral position? Who the weak? Who has history on their side? Who pop culture superficiality? Assess this to the core. Don't dwell on the superficial. And you will come to the reasons why you should own gold, why it would be foolhardy to give (it)-up, and why in the end, we win.

Keep in mind that the London Gold Pool of the late 1960s and early 1970s did break down after an enormous effort to keep gold at $35. At the time most in the financial world, including most investors, believed that the powerful pool would never fail -- that gold would be contained.

Also keep in mind that the great, contemporary bull markets in gold have followed elections in the United States -- 1973-75, 1977-1979 ............ and the lesser bull market of 2001-2003 (which I see as a prelude to bigger and better things.) There are reasons for that as well.

The stage is set. Accumulate. Watch. Wait.

http://www.forbes.com/business/2004/07/06/cz_rl_0706soapbox.html Freddie Mac's Impending Fiasco
Forbes.com- Richard Lehman - July 6, 2004
Excerpt:
"Freddie could be just one car in the train wreck
coming due to the artificially low interest rates engineered by the Federal Reserve in 2001."

Gold Has Biggest Gain in 13 Months as Investors Seek Haven
July 7 (Bloomberg) -- Gold futures in New York had their biggest gain in 13 months after Russia's central bank reduced reserve requirements to avert a banking crisis, boosting the metal's appeal as a haven.

Russia central bank lowered the amount of money banks must set aside to 3.5 percent from 7 percent, effective tomorrow. Gold gained on Friday after U.S. employers in June added about half as many jobs as expected by analysts, sending the dollar to its biggest decline in almost four months.

``There are some problems appearing in Russia, and the employment numbers on Friday didn't look that good,'' said Robert McEwen, chief executive of Toronto-based Goldcorp Inc., Canada's fourth-largest gold producer. ``Some of the problems that everybody thought had disappeared are starting to appear again, and that has some people concerned.''

Gold for August delivery rose $10, or 2.5 percent, to $4030 an ounce at 12:53 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would result in the biggest one-day gain since May 19, 2003. Prices were 16 percent higher than a year earlier.

Gold also climbed as economists scaled back their expectations of U.S. economic growth, sending the dollar lower against the euro and yen. Hedge funds have boosted their holdings in gold futures for two straight weeks, figures from the U.S. Commodity Futures Trading Commission show.

``I expect hedge funds to continue favoring gold as an alternative asset,'' said William O'Neill, a partner at Logic Advisors LLC, a commodity consulting company based in Upper Saddle River, New Jersey.

Russian banks are struggling to prevent a crisis after the central bank in May shut OOO Sodbusinessbank amid money- laundering accusations, sparking a squeeze on lending. Consumer bank Guta ceased operations yesterday.

http://www.etherzone.com/2004/henr070704.shtmlDEBT LOAD... THE REAL ECONOMY
Ed Henry - July 7, 2004

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

"Gold for August delivery rose $10, or 2.5 percent, to $4030 an ounce at 12:53 p.m. on the Comex division of the New York Mercantile Exchange"

I think they are getting a bit ahead of themselves, that price ($4030/ounce) won't be reached at least for another year or so.

A couple short years ago open market operations to add "permanent" new cash to nation's banking system were typically seen as coupon passes in the ballpark of $700 million. These days we are more typically seeing permanent adds which are nearly double that size.

Today, to cite a recent example, while the market in fed funds was behaving in accord with the latest FOMC directive to target a 1.25% overnight (annualized) rate, the Fed's NY Trading Desk saw fit to conduct a coupon pass, buying outright $1.557 billion in Treasury securities.

Earlier in the morning the Fed had also injected $10 billion in temporary funds through overnight repurchase agreements.

R.

That whole "anti-patriotism" schtick directed at good folks wanting to have Gold is a throwback to the old propaganda in the days of Civil War greenbacks, war bond, and, generally speaking, as a bank manager's official analgesic in the heady days of Gold Standard currency convertibility giving rise to bank-run migraines.

Anyone in today's world mouthing the words, "buying gold is unpatriotic," is a moron, plain and simple. Having gone global like it has all these many years, the fate of the U.S. Dollar is really outta our own hands now. It would be the acme of foolishness for anyone to imply that U.S citizens have any ability to materially affect the outcome, and even more ridiculous to suggest that buying Gold to protect themselves from a global shift in reserve structure reflects any lessening of their own red-white-and-blue-blooded admiration for their country.

If anyone doubts me, I suggest they buy themselves a nice tall stack of turn-of-the-century $20 Liberty or Augustus Saint-Gaudens coins. I'm sure they'll feel national pride right quick, and a healty, empowering sense of personal independence -- the kind of character that every successful nation needs among its populations.

Gold. Get you some. --- Aristotle

Sir It can be perceived as a crime if one is willing to allow others to decide for you: "for your best interest" or "for your own good". If it is a crime,buy now and avoid the rush. Shameful?? with a 5000-year history of safety, honor and honesty? I doubt it. I hope our host does not ban me. Oil makes you go,
Gold makes you grow.

http://www.jsmineset.comHere's a twist to the 'patriotic' discussion of buying gold. Today from our friend Mr.Gold :

"A rising dollar as the momentum of the US recovery stalls is the last thing any rational economist should wish for. Yes, a rising dollar would cause gold to fall while increasing the US Trade Deficit, hurting exports and acting as a break on the US economy. Since gold and the dollar are tied together in the inverse, no central bank(s) or the COMEX maniacs can break that relationship as the world market for gold as a currency grows.

So higher gold, which implicitly means a lower dollar, is good for the US economy and lower gold prices, which implicitly means a higher dollar, are bad for US economic activity. In time, even the num-nuts on the COMEX will wake up to this reality.

You can bet that the funds selling yesterday got reamed quite nicely and like the goofs they are will learn by the Pavlov method that what I have told you is true. Eventually even the army of knuckle draggers will wake up and discover that putting your hand into the fire is not good. Then the COMEX bombers will finally be on the long side -probably at $1064 on gold because they are really really thick."

LOL.

So perhaps, in a long winded twist, it IS patriotic to buy gold because it helps the economy!

Don't be a "num-nutted, knuckle-dragging, thick, goofy maniac", be a patriot.

Buy gold, the hold in your hand REAL McCOY!

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.


--- excerpts of closing U.S. market rap ---

Gold futures climbed nearly $10 an ounce Wednesday to close above $402 ... with a sharply weaker U.S. dollar sparking renewed investment interest in the metal...

COMEX August gold settled up $9.70 at $402.70 an ounce, reversing a $5.70 loss on Tuesday.

The dollar hit its lowest price in more than three months at $1.2389 per euro on Wednesday, as traders bet that mixed U.S. data and high oil prices would dissuade the Fed from raising interest rates too aggressively.

Gold has allure as an asset that holds its value against inflation and a depreciating dollar...

"Based on a weaker dollar against most of the major currencies, gold has proved to be a true market favorite among long-term investors,"said John Person, head analyst at Infinity Brokerage Services...

With a weaker dollar, overseas investors can leverage strengthened currencies to buy more gold.

Dealers agreed that gold stood to gain ground Wednesday anyway, following its own pronounced decline Tuesday as fund players unwound exposure built up ahead of the Fourth of July holiday weekend. However, the fall in the U.S. currency to three-month lows against the euro overnight added fuel to gold's rise, and allowed Aug futures prices to get off to a firm start and easily vault the resistance in place around $400...

The market sees this kind of "thin summertime trading" whenever bearish investors get too overconfident or their bullish counterparts show too much anxiety, said Kevin Kerr, a senior trader at Kwest International. Such market conditions can really "chop up many non-well-funded traders because the swings in price can be just so incredible," he cautioned...

John Tyree, commodities analyst at brokerage house Rosenthal Collins Group, also said that while the recent gains and volatility might attract follow-through momentum and fund interest over the near term, prices remain largely locked within a rising trading band defined by the higher price lows and higher price highs charted over the past two months.

"Things are obviously a little jittery out there, so I guess you just have to be on your toes and be ready to jump on any move once we do break this range," he added...

----(see url for access to full news, 24-hr headlines)---

http://biz.yahoo.com/rb/040707/economy_retail_redbook_1.htmlSnip:

NEW YORK (Reuters) - Sales at U.S. chain stores finished June below May's growth pace, as retailers failed to see strong business after the middle of the month, a report said on Wednesday.

Sales at major retailers increased by 3.3 percent on a year-over-year basis for the week ended June 26, slightly up from the preceding week's 3.2 percent pace, said Redbook Research, an independent company. Sales in June were down 0.2 percent compared with May.
****************
Misetich

From auto sales to retail the trend of slowing growth continues -

Consumer spending has been resilient in the past decade- yet ther latest trend demonstrates Real Price Inflation, lack of meaningful jobs, and little wage increases are taking their toll

The Feds have failed in their primary objective of Job Creation -

...the hoped increase in corporate spending is showing signs of slowing from earlier periods - earning warnings are again accelerating

...yet Price inflation cannont be HIDDEN any longer... as the prices of raw materials and fabricated items are going through the roof

The US $ has commenced its second leg down - which should take us to the 80-85 level with corresponding gold prices up to $450

Simultenously The 2004 Oil Shock And Awe will continue - creating unprecedented havoc setting the stage for Phase lll of the gold bull express... with a target of $450-800 as the Feds will reverse course and LOWER IR again!

All Aboard The Gold Bull Express - Part ll

http://groups.yahoo.com/group/gata/message/2273Yahoo! Groups : gata Messages : Message 2273 of 2273
July 7, 2004
Michael Kosares and Jim Sinclair-
Kosares: Manipulation and a Short History Lesson
Sinclair: Higher gold prices help the U.S. economy

Spot sitting right on 200 DMA. DX broken below 200 DMA. Many small cap miners sitting on 50 DMA. Man we are close to a B/O!

Just need a little baby push over the edge.

.....or forget about all the excitement, get some of the REAL THING and relax!

Here's to the push tomorrow.

I just consulted with my son and asked him who would be trading in the markets right now since our markets are now closed. He said Japan and I said Hawaii , and China as well. I told him that the markets were up marginally today but that two days ago they were down pretty hard. Then I told him that right now the Nasdaq was down 17 overnight and the S&P was down 6+ and that I rarely see them hitting this hard in the overnight this early in the afternoon. Then I asked him what he thought I should do , since he is in Arkansas. He said short the market . Then he said , " Don't you think they will try to buy the market back up in the morning ?" I said " Yes , so if they want to hit the market overnight , I'll close my position before the open in the morning" if I decide to go ahead so the PPT can't get at my profit.

It is always patriotic to be prepared.

History is written by those who were prepared.

During the civil war, several companies of volunteers outfitted themselves with expensive repeating rifles at their own expense so as to be MORE prepared than the other guy. (origin of the phrase "that damn yankee invention").

During WWII, the Dine volunteered ("have to honor that stupid treaty even if the other guy doesn't") and showed up to the induction center bringing their own guns.

During the 50's, thousands of your countrymen prepared holes in the ground stocked with canned goods because they thought the bomb would fall. Nobody called them sissies.

When the towers were hit, those who were prudent decided to exit the towers in an orderly fashion. To call their "exit" cowardice is just plain silly. Nor can it therefor be unpatriotic to leave a burning building or plan by wearing asbestos underpants.

No doubt Columbus had a bumper sticker that said, "No God, No guns, no gold - No Glory." But in any case, assuming you are like the majority of sane people, and do not relish the thought of actually having to use weapons to defend yourself, it is still always prudent to prepare for what you think will happen. And prudence is never the same as cowardice. Ned, if anyone tells you otherwise, smile, say "I see..." and pay them no heed.

http://www.themoscowtimes.com/stories/2004/07/08/002.html"Rumor fueled fear and fear fueled panic, sparking the biggest run on Russian banks since the 1998 crisis. Spooked by the closure Tuesday of mid-sized Guta and reports that top-tier Alfa was on the ropes, depositors descended on banks in droves Wednesday, intensifying a trend that has seen an estimated $5 billion, or about 10 percent of all household savings, taken out of the system in the last two months..."

I liked your advice to Ned [i.e., "if anyone tells you otherwise, smile, say 'I see...' and pay them no heed,"] but personally, I'd prefer to see him take a more proactive approach. That is, take things a step farther and call the person a moron (but maybe be a wee bit more delicate about it than that.) If anything's universal (besides the appeal of Gold,) it's that people HATE to feel stupid.

The craziest thing is it's paradoxical. It's almost impossible to "force feed" information to somebody who doesn't know which way is up, however, if you flatly challenge their viewpoint without watering the challenge down with explanations, they'll often respond (privately) by doing their own research and coming up to speed on their own.

Back when I was younger and quite positively knew "everything there was to know" about all things financial, I had the very VERY good fortune of running into someone who'd already "been there, done that." You know... having a head full of steam and all.

I don't recall how the topic came around but the important point of the tale is somehow I started talking about how the money supply is expanded through banks. I mean, I knew, baby... I really *KNEW* how it was done -- as if the information had been handed to me by God himself on one of his slow days.

Weeeeeellll.... long story short, this guy I was talking with simply shook his head and said, "No. That's not right."

The most frustrating thing for me was he wouldn't explain on any level or at any point where his view differed from the one I'd put forth.

It was probably one of the top five favors anybody has ever done for me. It gnawed at me and forced me to reevaluate every point of my so-called understanding of the way the world worked from the ground up.

It was a lotta work, lemme tell ya! And then, suddenly, there it was! "Eureka!" And so, now I've joined the elite club of 379 people in the world who actually *DO KNOW* the true nature of money as though it were in fact handed down by from on high... (a little humor, there.) From that single epiphany onward, I've seen money and Gold each in a whole new light, and it's proving to be a veritable financial salvation.

Anyway, the whole point of the thing is that sometimes the best we can do is call the wayward people's attention to a few signposts (like those put up by FOA,) because mostly they'll insist on doing all the driving for themselves anyway, even if it's only to wreck themselves in a head-strong effort trying to run down those very same posts. Ah, well...

Gold. Get you some. --- Ari

I am rather annoyed at what I perceive may be a political contest outcome. Please forgive me if I am incorrect, but it seems that either my wording was too heavy handed, my take too obvious (it didn't seem so to me!) or depressing, or the political process has had its way again. I am going to venture to ask the judges exactly how their selection criteria functioned?

Dear Steve 22: Does there have to be at least "One", in every contest? ....And you know what I mean...feeling slighted and all...Look, just be pleased that there are contests at all, and that we all are afforded an opportunity to participate. And the entry fee is certainly reasonable--right? Yes Steve--we can all see that you probably spent two weeks in the library researching your paper, and undoubtedly, honed your draft four or five times to assure that it was just right. ...And yes, it was a wonderful essay. But Steve 22, since you were the very last entry on the very last day, there was a 50% deduction in your score, since we knew that you poached from everyone else's entry.

If by poached you mean that I verified some intuition, and filled in some blanks here at the usagold hall of fame discussions, then yes, I poached. If by poached you mean that I used previous gold contest essays as the basis for my essay, this allegation is completely untrue. If what I wrote had been said in a clear way previous to my posting, I would not have posted it at all.

If I did not appreciate the opportunity for contest I wouldn't have spent so much time on it. For your information, it took a total of about 20-30 hours. Not two weeks, but not a small chunk of time either. While quantity definitely does not equal quality, I cannot find where another author in the contest so thoroughly and even handedly examined the questions at hand.

I'm not mad. I don't even feel like I wasted my time. In fact - I'm pursuing other ideas that branch off from Peak Oil/Gold in a fascinating fashion.

I just genuinely believe that the quid pro quo here is skewed.

Quid pro quo - get you some

Best Wishes

Hey, Steve22,

I enjoyed reading your essay (even though I read slowly and it took a while), but I just went back and checked the time of submission. Am I right in my understanding that to be eligible, essays had to be in by "High Noon" Mountain Time on 25Jun? Yours is time-stamped 14:29:38MT, which is later than High Noon...

Another point...reading and posting to this site is a **privilege** - and one that I (for one) value greatly. On top of this, Sir MK and his Company provides **free** contests from time to time with great prizes and all may enter. They are beneficial in several ways (in addition to the prizes that may be won). For example, one gets to learn from other people's thoughts and experience, and one also gets to hone one's own understanding and knowledge by competing.

Please don't feel let down by the judges' decision...political or otherwise, their criteria are **entirely** at their discretion...and so it should be.

I hope you will please take these comments kindly...they are offered kindly.

Cheers

:-)

Steve 22: Happy to read that you aren't mad, that would really spoil the fun! Yes, expand on your ideas of, whatever...Gold, oil. Oh, I've got your next essay assignment, ready? Here it is:

Why did Gold advance today nearly $10.00, when the only news of note, was that an ex-trial lawyer from North Carolina, is teaming up with a guy named Kerry from Massachusetts?

Please, keep your essay under 1000 words.

I just got word from the contest Gnomes, remember this: sticking to the price contests only, takes only a minute and eliminates those disappointments based upon subjective grading. Now, have a stiff one--and then, hit the sack!

Hey Stevetwotwo;
I enjoyed your essay and it's just great you spent so much time on it and everyone reading it can see that. But don't you think it is kinda lame to whine about the Judge's choices? Have you had the opportunity to own physical Gold yet? I know those were really attractive prizes our GENEROUS hosts were GIVING away so, maybe like me, you were really hoping to get some of that Gold Booty. Can I suggest you shop your essay around? Make some paper with your paper and come back here and BUY some Gold from CPM. I know of several Peak Oil websites and newsletters, and at least one major news and opinion portal, that are looking for content and could use your insights, especially vis-avis the Gold issue, and might pay you for what you've written.
Out of respect for the Forum policy concerning promotions I won't mention these URL's but a quick Google search will lead you to many a venue where you might EARN something with the essay and then you can buy some Gold and you won't feel so left out.

Morning GAB, last week you mentioned a possible US attack against Iran. Perhaps this explains something :
"In the light of the foregoing, the move by Iran to trade oil in dinars seems to be a most critical development,
possibly explaining moves by the United States to accuse it of posing a nuclear threat."
The Iran takes on west's control of oil trading.
(Terry Macalister Wednesday June 16, 2004 The Guardian)
Iran is to launch an oil trading market for Middle East and Opec producers that could threaten the supremacy of London's International Petroleum Exchange. A contract to design and establish a new platform for crude, natural gas and petrochemical trades is expected to be signed with an international consortium within days. Top oil producing countries are determined to seize more control of trading after being advised that existing markets such as the IPE and Nymex in New York are not working in their favour. Three years ago a former compliance director accused the IPE of manipulating prices, although these allegations were dismissed after an investigation. The Tehran oil bourse is scheduled to open in 2005, according to its architect, Mohammad Javad Asemipour, who is a personal adviser to the Iranian energy minister.
------------------------------------------------------------
------------------------------------------------------------
968 : Iran doesn't want US-confetti for oil with 140000 US/UK soldiers at their borders !!! That should scare the hell out of Washington.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=PaperGold is seen once again dragging the chain vis it's alt currency "equals" ... tho the last leg up could be cause for excitement ...whee!!
On the Bond/Dollar/Oil front, the PoO is again separating from Dollar/Bond and a correction is in the offing.

http://www.futuresource.com/charts/charts.jsp?s=CL&o=DX&a=D&z=610x300&d=LOW&b=LINE&st=eom.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373561639&p=1012571727088Snip:

Strong global demand for oil, limited supply increases and continuing security fears led the US government on Wednesday to raise its central price forecast for US crude over the next 18 months to $37 a barrel.

The monthly oil outlook report of the Energy Information Administration, forecasting arm of the US energy department, said in June that prices for West Texas Intermediate were likely to fall gradually over the rest of 2004 and 2005 to $33 a barrel. As recently as April it forecast crude falling below $30.

The EIA report said: "The chances for even a gradual, sustained decline in crude oil prices through 2005, as previously projected, seem to have diminished." Guy Caruso, chief executive, told Congress yesterday: "While our forecast has crude oil prices easing slightly through third quarter the world market will still be tight as world petroleum demand picks up seasonally in the fourth quarter, increasing potential for unexpected upward price pressure [on oil] this winter."
.....................
Sheikh Ahmed said: "It looks almost certain the market will continue above $30. For that [reason], I think we have to study carefully changing the basket price to about $30-$35."
****************
Misetich
The 2004 Oil Shock And Awe impacts and effects are still in infancy.
The collateral damage, is the US $ (some may argue, its a "precision pointed - rather than collateral damage). As the US $ devalues, oil prices stem higher, increasing the trade deficit and above all imported price inflation.

Thus, US consumers are being taxed indirectly by higher oil prices, slowing spending, whilst simulteneously slowing the US economy, eliminating any hope of job creation, and thus higher budget deficits.

The US $ devaluation - 2nd leg - has just started - which will result in higher imported price inflation.

The Feds have failed in one of their primary objectives, of job creation. The "other shoe to fall" is not increased corporate spending that Sir Greenspan recently alluded to, but it is, the failure to maintain price stability.

Thus the Feds will have failed in BOTH primary objectives. The third unstated Fed objective is to avoid financial calamities and market disruption.

Its difficult to invision how the Fed third objective is going to be accomplished since housing, stock market, bonds, derivatives are in bubble territory.

All Aboard The Gold Bull Express - Part ll

http://www.nytimes.com/2004/07/08/business/08LAY.htmlSnip:

since it was forced into bankruptcy in December 2001, costing investors tens of billions of dollars and putting thousands of employees out of work.
.....................
The majority of the charges against Mr. Lay are said to center on a series of what the government believes are false statements he made to investors, employees and accountants that painted a positive picture of the company's finances at a time when he was selling Enron stock.
......................
"I didn't commit any crime," Mr. Lay, 62, said in the interview. "Based on all the information I had at the time, I don't know of a single statement I made, either publicly or internally, that didn't conform with what I thought the facts to be."
.....................
The centerpiece of the Enron investigations has been the company's complex off-the-books partnerships, which were used to prop up earnings and disguise its growing deb
....................
Prosecutors are said to believe that either at that meeting or at some other points, Mr. Lay misled Andersen about Enron's intent to retain Wessex and invest money in the company. If it did so, the charge against income would not have to be taken; prosecutors say they believe that Enron never intended to make those investments.
...............
At the same time, Mr. Lay was engaged in a series of huge sales of his Enron shares, which financial records show were compelled by his need to pay off bank loans
**********************
Misetich

The big question: why did it take so long to indict him? Ken Lay, Enron fiasco, investment bankers, SEC failure etc is emblematic of a corrupt and self-destructing process.

Corporate governance was said to have improved, yet little signs have emerged, except some little slap on the wrist, on calluding investment bankers-

All Aboard The Gold Bull Express - Part ll

Could be a decisive day. Approaching spot 200 day MA.

As they say, good luck, good trading.

will be on the pardon list in January. It worked for Marc Rich.

Hi, Misetich. Proving, repeat PROVING, guilt in white collar crimes is extremely difficult for two main reasons :-

Firstly : Because of the complexity, it is difficult enough to understand what was really done, let alone find a jury of ordinary people capable of understanding and appreciating the subtleties.

Secondly : There must be a clear demonstration of intent to commit a crime - unfortunately, I have met enough genuinely incompetent people in my career to see that proving the difference between malice and stupidity could be tricky. And remember, despite treatment in the press to the contrary, an accused is innocent until proven guilty. Except against the IRS.

Which brings me to my final point. Maybe it took them so long because they wanted to find at least one thing he could be nailed for in an ordinary court. Remember that Al Capone was never jailed for murder, racketeering, etc, but for tax evasion.

C!

Hey Gandalf, what happened? Did you get some high-test Roo meat this time? Or are Spot and Spike finally bored of snoozin' around 393-398 and decided to go for a run? Either way, it's nice to see the dogs up and about again!!!

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLTB[PA][DA][F!3!!]⪯f=GRimh (7/8/04; 08:42:15MT - usagold.com msg#: 122856)
Release The Hounds!
===
I have been far too busy to watch over the "hounds" lately, BUT it sure looks as if Sir Smeagol is slipping them some of his "GOLDfish"!!!! They LOVE them !!

The GOLD P&F chart was REVISED this MORNING and now shows ANOTHER "GOLDEN" reversal "UPWARD" on the P&F Chart after yesterday's effort!!! TODAY's effort is the BREAKOUT of the downtrend from the April "Fools Day" HIGH of the "$432. square". -----SOOOOOO, guess where "GOLDis" (LOVE that Forum handle) <;-) going NOW ?

ONWARD GOLDHEARTS --TO the MOON!
<;-)

Couple weeks ago I asked if the Gold Dinar will eat our lunch(was really just a weak pun) nonetheless, look whose coming to Dinar. I think this little coin and the 'social movement' around it are leading us, perhaps via a different route than wished or planned, towards 'Independent Gold' which I have, naively, defined as a direct function of the number of individuals that own and HOLD physical Gold.

http://www.moscowtimes.ru/stories/2004/07/08/002.html.

To ask the same question as Ned (message# 122799) : what happened today ? Dollar bear too strong, Russian banks - Ruble, didn't the manipulators have enough ammo, gold bull too strong,... ? Why was gold allowed to spike today ?

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

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

Q. In your book, The ABCs of Gold Investing: Protecting Your Wealth through Private Gold Ownership you start the chapter by saying "Who you do business with is one of the most important aspects of gold investing." Why is that?

MK. Most, if not all, of the progress an investor makes towards realizing his or her goals with respect to gold ownership hinges on that relationship. Unbiased, objective advice from one's gold advisor is a key element. So are market information and education. Pricing, product selection, fulfillment and on-going support also rely on that relationship. Above all, it is extremely important for gold buyers to match their objectives with the type of gold they buy. Positive results in all of those areas depend upon a strong relationship with a gold firm. That is why it is important to spend some time finding the right one.

Q. Can you briefly describe some of the pitfalls a beginner might be on the look out for?

MK. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investors simply want to add gold coins to their portfolio mix, but by the time they finish talking with a typical national firm, they might end up in a leveraged gold position, exotic rare coins, or being diverted into silver or platinum. Others drift into gold stocks or gold futures which in reality are proxies for real gold ownership and could actually act opposite the intent of the investor. There's nothing wrong with any of these non-physical investments per se, it's just that none of them is really a safe-haven. The investor should bear this in mind. The question investors must always answer for themselves is "How will this investment serve me should the economy or financial markets suffer a major disruption?"

http://www.usagold.com/halloffame.htmlThe permanent link the Forumers' responses can be found at the Hall of Fame Index -- click url and scroll down to the stack of "gold bars" and beneath the Haiku link atop the stack you will find the link to "The End of Cheap Oil" essays.

Those looking specifically for specie-man's playful post, which I have dubbed "The International House of PUNcakes", can find it seven links lower on the page via the link entitled the Lighter Side of Gold.

R.

The panel of judges demanded overtime pay when your entry hit their desktops. Admin said "no can do". Judges said "no can judge". It was ugly all around. But then admin brought out a peace offering of sandwiches and cold drinks and everything was right witht the world once again. The evaluation process got underway. To be sure, as difficult as the evaluation phase is for each individual judge on the panel, the consolidation (or reconciliation) phase among the judges is even more difficult. What is to be done when judges do not agree on each other's rankings -- when Judge-B names his top contender and it is discovered that that poster did not even make Judge-D's top ten list? And vice-versa?

Recognizing that our panel of judges thenmselves represented a broad spectrum of interests and insights, and further recognizing that the task was to single out those posts that would best resonate with the broad spectrum represented by USAGOLD's visitors, the solution (reconciliation of rankings) unfolded as thus. The judges' top ten lists were compared, and only those few posters who were in common to all lists made the final cut -- and so broad was the spectrum of rankings, that some who actually ranked first or second on some judge's list were nowhere to be found on another's, whose own first or second choice may have failed to make the cut also.

Of the short list of only those found in common among the top ten lists, the judges' individual rankings per each of these posters were then tallied, and the final rankings awarded based on those results, the lowest combined number representing the winner, and so on.

"My, but this horse is long in the tooth!"

R.

There is an old prospector named Greenspan,
Who'd sneak off to hike with a pan.
Once strayed onto prime mining land-
Met a Forest Marshal with cuffs in hand,
Barking: "Pay up or get in the van!"

Was there no mention from either the judges or the administration of that old, time honored dart picking method? Perhaps it was mentioned just before the drinks and sandwiches arrived? It has been back tested as a stock picking method with satisfactory results, much to the chagrin of high profile analysts....the likes of which that often smile from ear to ear on the peoples' stock picking television channel.

Not a bad day for the POG or for that other white metal either (g).

http://www.moscowtimes.ru/stories/2004/07/08/002.html(excerpts)
Rumor fueled fear and fear fueled panic, sparking the biggest run on Russian banks since the 1998 crisis.

Spooked by the closure Tuesday of mid-sized Guta and reports that top-tier Alfa was on the ropes, depositors descended on banks in droves Wednesday, intensifying a trend that has seen an estimated $5 billion, or about 10 percent of all household savings, taken out of the system in the last two months.

"It's like 1998 all over again," Nikolai, a travel agency manager in his mid-40s, said as he squeezed into a packed Alfa Express branch near Sokol metro station. "I don't have much money here, but I am going to cash out just to be safe."

After three bank closures in as many months -- each bigger than the last -- intervention and reassurance by the Central Bank was not enough to calm growing concerns that a full-fledged crisis was in the making....

Most experts polled shared Gafin's optimism regarding Alfa's ability to weather the storm, although the general hysteria may drag down smaller banks....

Gafin said as many as 200 of what he estimated were 1,670 banks could collapse in the coming months. "It is not bad for large banks... but for the banking system it is very harmful," he said. "People are only beginning to learn how to use banks, so with every crisis, trust in the financial system is undermined."

The main concern now is exactly what the Central Bank, as the market regulator, wants to see happen and how it will act...

"The banking crisis is like a little bushfire that could become a huge forest fire. If people lose confidence and pull out their savings, the Russian banking system could collapse," he said, rapping the Central Bank for not managing the crisis better. "That's why Western systems have crisis management systems in place."

-----(read full article at url)----

Depending on degradation of depositor confidence and on central bank action to monetize individual bank assets, the situation will ultimately resolve itself according to individual bank liquidity (see CB monetization) versus solvency (against mitigating elements of CB enforcement and/or mergers to smooth over a technical bankruptcy).

A solid gold savings plan carries with it no such uncertainties.

R.

Darts... will keep them in mind in the event of a "next time"!

R.

Following yesterday's permanent addition to the nation's money supply through the outright purchase of $1.5+ billion in Treasury coupons, the Fed today continued with its liquidating ways.

Even as the market in overnight fed funds was on course with the 1.25% FOMC target, the Fed's trading desk conducted three open market interventions today totalling $23.5 billion in fresh cash for the reserves of this nation's banking system.

Nine billion was through overnight repo operations, three-and-a-half billion was via eight-day repos, and $11 billion was added through 14-day repurchase agreements.

R.

http://msnbc.msn.com/id/5395753/"Russia's largest private bank acted to stop a run on deposits on Thursday as President Vladimir Putin's economic adviser said the country's banking industry was in crisis and blamed the government. Alfa-Bank imposed a 10 percent commission on depositors who want to withdraw cash early as authorities fought to prevent a run on banks and bring calm to the sector. Presidential economic adviser Andrei Illarionov made clear he disagreed with Prime Minister Mikhail Fradkov who tried earlier in the day to calm fears that banks were in trouble."It is obvious that there is a banking crisis," Interfax news agency quoted Illarionov as saying."

Waverider: More on Russians rushin' to the bank....

http://www.usagold.com/gold-price.htmlIt's hard to find anything among these charts' peaks and valleys that doesn't presently look very very good.

R.

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.


--- closing market rap excerpts ---

Gold for August delivery rose $5.50 to close at $408.20 an ounce on the New York Mercantile Exchange. Earlier, it traded as high as $409.60.

"If we begin to see the short side of the market unravel along with the continued and growing buying interest in gold, we could see a $425 gold price in the offing soon," said Kevin Kerr, a senior trader at Kwest International. But for prices to push past $412, it "will likely take another serious world event," he said. [Randy wonders at the curiosity that neither he nor anyone else in the gold press is willing to cite the potential Russian banking crisis -- potentially a "serious world event" as interconnected as international banks are.]"There is no doubt ... that the last two days lay the groundwork for a significantly higher gold price, and these levels are clearly pivotal to such a move," said Kerr...

Homeland Security Secretary Tom Ridge warned Americans Thursday that al Qaeda may try to carry out a "large-scale attack" to disrupt the upcoming elections, though the government did not raise the terror threat level. "Tom Ridge convinced everyone to get long," said a broker at a futures commission merchant...

Dollar disinvestment pushed the euro to a three-month high and buttressed gold as a safe haven.

David Rinehimer, head of commodities research at Citigroup Global Markets, cited relief that gold was able to hold above $400 after Wednesdays technical breakout. "The funds are becoming a little more confident as far as the upside potential in the gold," he said.

Thin summer trading conditions are exacerbating the moves... But Thursday's rally fed on itself, as speculators vied not to miss out. Oil prices rose above $40 for the first time in a month after gold closed Thursday, feeding concerns about economic slowing. "I don't know what's sparking it," said a floor broker. "Remember, just a couple of days ago gold traded down to $389."

-----(see url for access to full news, 24-hr newswire)----

Greedy supply side wall street banksters have run up a 1 trillion dollar debt during the economic recovery, aiming to pump up the external economy while it rots from within allowing them to bullwhip the stock market higher, last few months insiders selling shares in record numbers. They have exhausted the consumer and put them on cliff, and loaded the US government with debt while robbing the social security fund, and saddling us with constant trade deficits. Finally, the game show is over. The FED is lathering the markets with constant coupon passes to keep things going, but lately it doesn't seem to have any punch as the stock markets fall. Russian bank panics driving gold higher. Economic fundamentals based on consumerism starting to sputter and fail.

Is your paper money safe?

http://www.currentconcerns.ch/archive/2003/04/20030409.php

This article is several months old and has a good deal of the same content as Clark's article, but the arguments are backed with more information and it is more persuasive. It is worth reading, IMHO. I found the reference to it in the most recent ASPONews.org article.

Also, the site seems to be a good source of progressive articles.

Cheers,
-r

http://www.asponews.org/HTML/Newsletter43.htmlProbably should have posted this URL too...

We've talked about this before. Each and every single market moves (and bucks) in such a way to throw most potential investors out of a winning position.

To take a favorite example, look at Gold. If you've been doing your homework and reading the various news and views everyone shares here, then it's probably true that you're educated enough to feel with every fiber of your being that Gold is going to go much higher. If you would just close your eyes and react to what your guts are telling you, you'd be fine.

But the market won't let you think straight, will it? Damn market. It falls steeply on one single day, right out of the clear blue sky, and you're suddenly paralyzed with fear. "Ohmigosh, it's crashing! I wouldn't dare buy any more."

Then, the very next day or so, an upsurge occurs more than double the size of the previous downdraft. "Ohmigosh, it's halfway to the moon! I missed my chance... maybe if I wait I can catch it cheaper."

Then maybe it does drift down a bit, and you play the waiting game, only to be shaken out of your buying conviction by a one-day steep drop. "Ohmigosh, it's crashing!"

Then, it powerfully rises again while you're too paralyzed to buy...

Sheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeessssssssssssssh!

Don't kick yourself. It happens to almost everybody. The way to get your legs back under you is to be keenly aware of your own convictions, and to focus more on the daily state of your wallet (cash availability) than on the daily market snapshot.

Only when you've mastered the art of being true to your guts and using that available cash accordingly and with conviction, maybe then you can risk looking at the bucking market square in the eyes without being turned to stone.

There's no good excuse for being without (more) Gold, and deep down you know it. You also know you've regretted your inactivity thus far. Stop wasting engery kicking yourself and do what you know you gotta do.

Gold. Get you some. --- Aristotle

Thanks for clarifying the judging process, Townie. I had little hope for my submission as I had too little time to devote to it. I read the winners submissions, though, and was impressed with their depth and clarity. Good choices in a tough field!

To the winners, a belated "Well Done"! Enjoy the 'precious'!

Rimh

In other words, a mere *understanding* of the fundamentals doesn't do anything for you unless you take action and *DO* something about it. Look deep within and *DO* what's right for you.

Gold. Get you some. --- Ari

From the wide world of news:

-------------WASHINGTON, July 8 (Reuters) - The International Monetary Fund said on Thursday it had warned Madagascar to bring its inflation under control ......... Cyclones, rising oil prices and the sliding currency have incited street protests in recent months in Madagascar, the world's fourth-largest island. ......... More than 75 percent of Madagascar's 16 million population lives on less than a dollar a day, in an emerging economy struggling to withstand the series of economic shocks.------------

When our currency is taken and used our of our own context, our sense of it's value becomes all distorted. On the one hand, we might say, "A dollar a day??? That's some serious poverty!" And we'd be fairly right in that assessment. But it also needs to be recognized that a dollar overthere counts for more than a dollar overhere. (In the same way a single dollar means more to most rural western-Americans than it does to Californians who can bid up land prices willy-nilly.) To the extent that parts of the world are subsisting (poorly, yes, but still subsisting) on a "dollar" a day, we would do well to restate their "individual GDP" through a universal translator that will appear less warped for us than trying to see any recognizable meaning in our dollars used so much farther away from California.

Translated through Gold, these people are living on 1/400th of an ounce in economic activity per day. Think about that. Maybe one day soon the rest of us will perceive Gold's value as mightily.

Gold. Get you some. --- Ari

http://groups.yahoo.com/group/gata/message/2276... and proclaim market rigging by central banks.


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

gata-subscribe@yahoogroups.com

Aristotle (7/8/04; 17:35:48MT - usagold.com msg#: 122879)
See the world through a Gold-filtered lens
-------------WASHINGTON, July 8 (Reuters) - The International Monetary Fund (IMF) said on Thursday, it had warned Madagascar to bring its inflation under control .........
==== WOWSERS -- Madagascar is now going to bring down the WORLD ?
-------
AND the Russian people are thinking that 90% of something (because of a 10% "WITHDRAWAL Bankster Charge") is better than 100% of nothing !
---
TELL me that this could not happen AGAIN in North America ?
IT already (recently) has happened in S.E. Asia, parts of South America, and the OLD Russia.
---
WHILE you, could be holding your OWN YELLOW in you own hands, and have FULL CONTROL of your own "FUTURE" !
Like Ari asks,
GOT GOLD ?
Call USAGOLD and talk to someone about your FUTURE !
<;-)

1) Yukos goes "Belly Up" - Russian Oligarchs on the run

2) Enron's Ken Lay indicted

3) US Dollar plunges again

4) Gold gains strongly

Yep, in just the last 24 hours too! "Interesting Times"

- Black Blade

http://interestalert.com/brand/siteia.shtml?Story=st/sn/07080000aaa02466.upi&Sys=rmmiller&Fid=NATIONAL&Type=News&Filter=National%20NewsInclude also that CIA Director Tenet steped down early. His last day was originally to be July 11th the actual 7th anniversary of his tenure. But he left today instead, perhaps for a weekend of dry fly fishing. The somewhat muted, yet smoldering, IRAQ will figure big in next week's headlines.

Actually the CIA report on 9-11 and other matters will be released tomorrow. I suspect that to be the reason to "get outta Dodge" while he can. Of course as a Clinton appointee he also passed along the same info to Clinton as did intelligence agencies worldwide did to their leaders. The story just get more amusing all the time. But that's politics for ya. Glad I am neither conservative or liberal and can side step the "cow pies" in all the discussion. ;-)

- Black Blade

Definitely "Interesting Times".

Notice that TWI Crude hit $40.01/bbl today? Inflation? Nah - of course not, not according to the BLS (They don't count "unnecessary" items like food, energy, clothing, shelter, etc. - not in the "core rate" anyway). We live on borrowed time with soaring current account and budget deficits - God forbid the Fed raises rates and pity real estate tycoons with adjustable rates, and just watch the Asians Bankers on a selling rampage of US paper debt. Get ready and get "portfolio insurance" while you can on the "cheap".

Tic Toc Tic Toc

- Black Blade

Gotta finish some work and catch some zzzzz.

MK,

You make some strong points. The manipulators have been losing the past few years. The next big revaluation could be afoot, fairly soon.

http://www.themoscowtimes.com/stories/2004/07/08/002.htmlFrom the Moscow Times
Nervous Depositors Make Run on Banks

By Denis Maternovsky
Staff Writer

Igor Tabakov / MT

People lining up Wednesday afternoon to withdraw money from one of Alfa Bank's automated teller machines on Stary Arbat.


Rumor fueled fear and fear fueled panic, sparking the biggest run on Russian banks since the 1998 crisis.

Spooked by the closure Tuesday of mid-sized Guta and reports that top-tier Alfa was on the ropes, depositors descended on banks in droves Wednesday, intensifying a trend that has seen an estimated $5 billion, or about 10 percent of all household savings, taken out of the system in the last two months.

"It's like 1998 all over again," Nikolai, a travel agency manager in his mid-40s, said as he squeezed into a packed Alfa Express branch near Sokol metro station. "I don't have much money here, but I am going to cash out just to be safe."

After three bank closures in as many months -- each bigger than the last -- intervention and reassurance by the Central Bank was not enough to calm growing concerns that a full-fledged crisis was in the making.

Hit hardest of all was Alfa, the nation's largest private bank.

"We have never had so many people here," said a security guard at Alfa's Sokol branch. "There were lines already when we opened the bank in the morning."

A letter signed by Alfa Bank CEO Rushan Khvesyuk and posted on the front door of Alfa branches throughout the city accused the media of spreading "erroneous information" about Alfa's operations and told depositors that the bank would meet all its obligations to clients.

That letter was followed by one from Mikhail Fridman, the main owner of Alfa Group, Alfa Bank's parent company. It said Alfa's owners were ready to provide their assets outside of the banking industry to back the bank's efforts to meet demands from clients. The letter, published on the company's web site, was co-signed by Alfa Group's president Pyotr Aven and its CEO Petr Smida.

"The nervousness on the market will be overcome in the nearest future," the three said in the statement. "We're sure it won't damage Alfa Bank's clients or the bank itself."

An NTV report Tuesday evening on Guta's troubles was just the latest in a series of unsourced media reports suggesting Alfa will be the next to fall.

The bank held $1.1 billion in personal deposits at the end of March, the last month for which data was available, but a senior bank official said early Wednesday that it had lost at least $100 million in deposits since Saturday. "This is 10 times the normal amount," vice president Alexander Gafin told a conference on integrating Russia into the world economy.

By midday Wednesday, the waiting list to close an account at Alfa's Arbat branch was already up to 75.

In a speech to the State Duma, Central Bank Chairman Sergei Ignatyev tried to ease the fears of Alfa customers, saying the bank "did not have any problems [with liquidity]."

"The bank has enough resources to satisfy depositors' demands," he said.

As far as Guta is concerned, Ignatyev told the Duma that the Central Bank was ready to essentially fund the nationalization of Guta by backing a buyout bid by state-owned Vneshtorgbank, the country's second largest financial institution by assets.

Guta issued a press release saying the deal had already been signed, but Vneshtorgbank refuted that, saying acquisition talks should be over by the "end of the week."

Ignatyev also refuted persistent media reports that the government has a so-called blacklist of banks that are targeted for closure. The reports, denied repeatedly by senior government officials, first surfaced after the Central Bank revoked the license of second-tier bank Sodbiznesbank in May. CreditTrust, a bank that reportedly has the same beneficial owners as Sodbiznes, collapsed in June.

Reports of the blacklist and the actual failure of several banks has created a "crisis of mistrust," as bankers are calling it, that has led to banks closing credit lines to each other, further squeezing liquidity out of the sector.

To jump-start the system, the Central Bank on Wednesday -- for the second time in a month -- slashed mandatory reserve requirements, to 3.5 percent from 7 percent. The bank cut the rate from 9 percent to 7 percent June 15.

Some analysts doubted the move would be enough to calm the market.

Although halving the reserve requirement injected some 125 billion rubles ($4.3 billion) into the system, it is unlikely to help banks facing a run on deposits, said Mikhail Matovnikov of Moody's Interfax Rating Agency.

Gafin, Alfa's vice president, refuted that notion. "There won't be any crisis for us. We have $3 billion from the TNK-BP deal and therefore the liquidity problem is nonexistent," he said.

Gafin said an enemy in the telecommunications sector was to blame for Alfa's troubles.

"Alfa has fallen victim to a well-prepared campaign aiming to discredit its name. We know who did it. The story stems from the telecommunication market," he said, without elaborating.

Alfa Group owns a stake in No. 2 cellular provider VimpelCom and is locked in a legal battle with Telecominvest, a Kremlin-connected company based in St. Petersburg, for a large stake in No. 3 provider MegaFon.

Most experts polled shared Gafin's optimism regarding Alfa's ability to weather the storm, although the general hysteria may drag down smaller banks.

"A lot of smaller banks will experience a lot of problems," said Andrew Keeley of Renaissance Capital.

Gafin said as many as 200 of what he estimated were 1,670 banks could collapse in the coming months. "It is not bad for large banks... but for the banking system it is very harmful," he said. "People are only beginning to learn how to use banks, so with every crisis, trust in the financial system is undermined."

Matovnikov agreed that smaller banks are in danger, but he said a full-fledged crisis was unlikely, even though the "depositors' run" is likely to last for several more days.

The main concern now is exactly what the Central Bank, as the market regulator, wants to see happen and how it will act, said Hans Jorg Rudloff, deputy chairman of British investment banking giant Barclays Capital.

Rudloff, a major player in Russia's early privatization drive, said a banking crisis would "be more worrying than the Yukos crisis."

"The banking crisis is like a little bushfire that could become a huge forest fire. If people lose confidence and pull out their savings, the Russian banking system could collapse," he said, rapping the Central Bank for not managing the crisis better. "That's why Western systems have crisis management systems in place."

http://www.themoscowtimes.com/stories/2004/07/08/002.htmlFrom the Moscow Times
Nervous Depositors Make Run on Banks

By Denis Maternovsky
Staff Writer

Igor Tabakov / MT

People lining up Wednesday afternoon to withdraw money from one of Alfa Bank's automated teller machines on Stary Arbat.


Rumor fueled fear and fear fueled panic, sparking the biggest run on Russian banks since the 1998 crisis.

Spooked by the closure Tuesday of mid-sized Guta and reports that top-tier Alfa was on the ropes, depositors descended on banks in droves Wednesday, intensifying a trend that has seen an estimated $5 billion, or about 10 percent of all household savings, taken out of the system in the last two months.

"It's like 1998 all over again," Nikolai, a travel agency manager in his mid-40s, said as he squeezed into a packed Alfa Express branch near Sokol metro station. "I don't have much money here, but I am going to cash out just to be safe."

After three bank closures in as many months -- each bigger than the last -- intervention and reassurance by the Central Bank was not enough to calm growing concerns that a full-fledged crisis was in the making.

Hit hardest of all was Alfa, the nation's largest private bank.

"We have never had so many people here," said a security guard at Alfa's Sokol branch. "There were lines already when we opened the bank in the morning."

A letter signed by Alfa Bank CEO Rushan Khvesyuk and posted on the front door of Alfa branches throughout the city accused the media of spreading "erroneous information" about Alfa's operations and told depositors that the bank would meet all its obligations to clients.

That letter was followed by one from Mikhail Fridman, the main owner of Alfa Group, Alfa Bank's parent company. It said Alfa's owners were ready to provide their assets outside of the banking industry to back the bank's efforts to meet demands from clients. The letter, published on the company's web site, was co-signed by Alfa Group's president Pyotr Aven and its CEO Petr Smida.

"The nervousness on the market will be overcome in the nearest future," the three said in the statement. "We're sure it won't damage Alfa Bank's clients or the bank itself."

An NTV report Tuesday evening on Guta's troubles was just the latest in a series of unsourced media reports suggesting Alfa will be the next to fall.

The bank held $1.1 billion in personal deposits at the end of March, the last month for which data was available, but a senior bank official said early Wednesday that it had lost at least $100 million in deposits since Saturday. "This is 10 times the normal amount," vice president Alexander Gafin told a conference on integrating Russia into the world economy.

By midday Wednesday, the waiting list to close an account at Alfa's Arbat branch was already up to 75.

In a speech to the State Duma, Central Bank Chairman Sergei Ignatyev tried to ease the fears of Alfa customers, saying the bank "did not have any problems [with liquidity]."

"The bank has enough resources to satisfy depositors' demands," he said.

As far as Guta is concerned, Ignatyev told the Duma that the Central Bank was ready to essentially fund the nationalization of Guta by backing a buyout bid by state-owned Vneshtorgbank, the country's second largest financial institution by assets.

Guta issued a press release saying the deal had already been signed, but Vneshtorgbank refuted that, saying acquisition talks should be over by the "end of the week."

Ignatyev also refuted persistent media reports that the government has a so-called blacklist of banks that are targeted for closure. The reports, denied repeatedly by senior government officials, first surfaced after the Central Bank revoked the license of second-tier bank Sodbiznesbank in May. CreditTrust, a bank that reportedly has the same beneficial owners as Sodbiznes, collapsed in June.

Reports of the blacklist and the actual failure of several banks has created a "crisis of mistrust," as bankers are calling it, that has led to banks closing credit lines to each other, further squeezing liquidity out of the sector.

To jump-start the system, the Central Bank on Wednesday -- for the second time in a month -- slashed mandatory reserve requirements, to 3.5 percent from 7 percent. The bank cut the rate from 9 percent to 7 percent June 15.

Some analysts doubted the move would be enough to calm the market.

Although halving the reserve requirement injected some 125 billion rubles ($4.3 billion) into the system, it is unlikely to help banks facing a run on deposits, said Mikhail Matovnikov of Moody's Interfax Rating Agency.

Gafin, Alfa's vice president, refuted that notion. "There won't be any crisis for us. We have $3 billion from the TNK-BP deal and therefore the liquidity problem is nonexistent," he said.

Gafin said an enemy in the telecommunications sector was to blame for Alfa's troubles.

"Alfa has fallen victim to a well-prepared campaign aiming to discredit its name. We know who did it. The story stems from the telecommunication market," he said, without elaborating.

Alfa Group owns a stake in No. 2 cellular provider VimpelCom and is locked in a legal battle with Telecominvest, a Kremlin-connected company based in St. Petersburg, for a large stake in No. 3 provider MegaFon.

Most experts polled shared Gafin's optimism regarding Alfa's ability to weather the storm, although the general hysteria may drag down smaller banks.

"A lot of smaller banks will experience a lot of problems," said Andrew Keeley of Renaissance Capital.

Gafin said as many as 200 of what he estimated were 1,670 banks could collapse in the coming months. "It is not bad for large banks... but for the banking system it is very harmful," he said. "People are only beginning to learn how to use banks, so with every crisis, trust in the financial system is undermined."

Matovnikov agreed that smaller banks are in danger, but he said a full-fledged crisis was unlikely, even though the "depositors' run" is likely to last for several more days.

The main concern now is exactly what the Central Bank, as the market regulator, wants to see happen and how it will act, said Hans Jorg Rudloff, deputy chairman of British investment banking giant Barclays Capital.

Rudloff, a major player in Russia's early privatization drive, said a banking crisis would "be more worrying than the Yukos crisis."

"The banking crisis is like a little bushfire that could become a huge forest fire. If people lose confidence and pull out their savings, the Russian banking system could collapse," he said, rapping the Central Bank for not managing the crisis better. "That's why Western systems have crisis management systems in place."

Posted the article twice. Maybe we better read it twice to see what's about to happen.

Cytek

The events of last couple of weeks, overlaid on the events occurred over last year or so, point, IMVHO, to a possible move by a Russian Central Bank to introduce gold-backed rouble (as suggested by Sir GAB in his post #122594, 06/27/04). Consider the information available:

1. Russian Central Bank diversifying away from $-reserves (Russia to increase Euro reserves, http://www.eubusiness.com/afp/031022102329.t49utq6z).

2. Russian Central Bank increasing Euro and gold reserves beyond expectations (Russia's gold and currency reserves soar, http://www.gateway2russia.com/st/art_186056.php). The article does say that the Russian Central Bank "did not expect it would have to buy up more dollars than planned to prevent a sharp strengthening in the ruble rate". If you consider the gold chart for the time period referenced in the article (Nov-Dec 2003), as well as the EUR/USD chart for the same period of time, the dollar was falling in relationship to Euro and gold. It is hard to believe that a Russian CB would continue to purchase a currency which has declined approximately 8% against both gold and Euro in a period of two months (using round figures), and still experience a 15% increase in its reserves over the same period of time.

3. Iran, a country closely associated with Russia, is planning to open an alternative to London's oil exchange, http://smh.com.au/articles/2004/06/18/1087245103758.html?from=storyrhs. A possible link to trading oil for gold dinars instead of dollars? Also, from Sir GAB's #122594, Russian weapons supplied to Iran and Syria, as well as Russian-built nuclear reactor in Iran may suggest that Iran has Russia's backing in openly opposing London (and US) interest in oil trade.

4. I just got back from Russia, spending about 2 weeks in Moscow. One of the central topics of discussion in the mass media was the convertibility of a rouble. Russian government seemed to spend a lot of energy to achieve the stability of the national currency. Unfortunately, being linked to the Euro and the dollar, rouble fluctuated daily, depending on the exchange rate of these two currencies, rather than the economic situation in the country. One could argue that if Russian government wanted to achieve a secure currency, it would seek to break rouble's dependency on the EUR/USD exchange rate

5. A few days ago, Russian government froze the assets of the largest oil conglomerate in the country, forcing the company into bankruptcy and forcing several major Russian and foreign banks to declare Yukos in default on its $1 bil loans (07/05/04, Sir GAB, post #122770 and Sir Goldendome, post #122771). Also, several Russian banks were affected by this development, as indicated by numerous posts over the last couple of days. Russian government proposed a deal for Yukos� largest shareholder, Group Menatep, to give up its interest in the company. Apparently, Kremlin is serious about the possible bankruptcy of the company, because Khodorkovsky is ready to talk http://www.gazeta.ru/2004/07/07/oa_126315.shtml. Personally, I doubt that Kremlin will stop at this time, as it seeks control over a critical commodity � oil.

6. Moscow is in a middle of a serious banking crisis. Russian economy is very specific, as the majority of business capital is centralized in Moscow's banks, and a panic in the city can cripple the economy of the whole country. The difference between Moscow and the rest of the country is drastic. As Lady Waverider posted today in her #122870, Putin (through his advisor) announced that the banking industry is indeed in crisis, despite of what the Prime Minister said. Coupled with Moody's reported intention to downgrade of securities issued by Russian banks (source in Russian only, no translation available) and lowering of the required reserves by 50% (Sir Federal_Reserve, post #122823), all occurring on the same day, 07/07/04, it is clear that Putin is not interested in protecting the private banking industry in Russia. There were also reports in Russian press (source in Russian only, no translation available) that two government-owned banks declined to grant loans to both Guta-bank and Alpha-bank to aid in resolution of the crisis, which further supports this fact.

7. Finally, if one would consider Putin's encouragement (or so it seems) of the banking crisis, lead by privately-held banks, official support of Iran's oil trade initiative and weapons trade with this country, securing of Russia's oil reserves, and opposition to US-lead military action in Iraq, one must think: what is the goal of these actions? Since becoming president, Putin was trying to reestablish Russia's role as a major world player. I believe that by distancing himself from US, securing oil reserves, amassing Euro and gold reserves, allowing private banking to collapse, thus ensuring currency controlled by the government-held banks, and reestablishing once-lost military influence outside of former Soviet bloc, Putin is positioning his country for the last step � announcing gold-backing of the rouble, thus achieving convertibility of the national currency, equal to the only dollar alternative (Euro) available.

Thoughts?

SunDude,
I submitted my essay on time and was given the go ahead from a moderator on one resubmission

for an edit.

Goldendome,

I appreciate the encouragement.

Gold's price is a function of its gold paper price right now, a slow news day means as

little as a fast news day for gold $ price. That is, until things really get moving. Right

now, we wait. Is this explanation more to your liking length wise? Do you really feel like

you understand it, or does it sound like I am just making semi-educated claims?

Heathen,
I am not sure how well my would fare on a commercial basis. It might find the odd person

who grasps it, but, as Towncrier says, it may be a bit long in the tooth for most.

Nevertheless, I would be very interested to hear which sites you think might be interested?

TownCrier,
Thank you for the explanation of the judging procedures. Sometimes even when I am sure of

something the dice rolls against. I'm sorry for bringing up a seemingly juvenile claim. As

my brother has been heard to say, "Why don't you cry about it?"

Sigh,

Steve "22"

An additional factor that you might consider is the recent purchase by Russian companies of South African gold production (I have forgotten the companies involved).

Also, I understand that Russia has very large gold resources, identified during the Soviet era and awaiting development.

Interesting...

:-)

How do you define gold backing for rubles? Do you make distinctions from gold convertibility? TIA.

Ari: Thank you for the view through your "gold-filtered lens."

When listening to my California neighbors talk about how their house has been going up in value by $150 per day and swapping stories about particular houses going for more than asking price, I consciously remind myself that it's price, not "value," that has been going up. And I know that few if any of these folks will see any benefit from these paper increases. Despite this attampt at staying grounded in realism, I find my pain threshold as to what number constitutes a high price for a particular item being continually skewed upward. It's refreshing to be reminded that elsewhere people are living their lives on less than a dollar per day.

Thanks to your gold-filtered lens, translating this level of economic activity into 1/400th of an ounce brings me all the way back to reality. With slightly less than an ounce of gold per person on this planet divided by 365 days per year, it's automatic that a subsistance economy works out to a daily figure of less than 1/365th of an ounce per person.

So, in terms of BTUs, one manpower equals 1/400th of an ounce. Whatever fraction of humanity manages to live at a higher level does so by adding BTUs to the equation whether those BTUs come from a donkey walking in a circle, from a waterwheel tapping the energy of a river, or from a bank of solar panels. Small wonder that the (largely coal-fired) steam engine of the Industrial Revolution added enough BTUs to raise living standards while allowing population to increase. More recently, those extra life-enhancing BTUs have come from oil. True, the first oil well was in Pennsylvania, but I suspect that Pennsylvanians saw "peak oil" within 5 or 10 years and the fact that oil now comes from elsewhere says that, just like Japanese and most Europeans, Pennsylvanians will see their quality of life determined by the flow of oil and its price. Which doesn't bode well for quality of life....

I've forgotten the horsepower/manpower ratio (11:1? 20:1?), but there's no doubt that being able to fill up your tank for less than $50 (excuse me, less than 1/8th of an ounce) and spend all day controlling 400 horsepower still qualifies as "cheap oil."

Before coming to this Table, I intuitively (and naively) thought that the proper price for gold would approximate $3,640. Today -- after benefitting from both new posts and the archives -- I realize that the number doesn't matter. Just as a house provides the same value (shelter) no matter how it's priced this week, an ounce of gold remains constant whether it's priced at 364 or 3,640 or 36,400 or 364,000 paper dollars. As the world comes to view things through Ari's gold-filtered lens, the forces of competition will cause a skilled worker's annual wage to approximate one ounce of real wealth. Those without skills who bring nothing to the bargaining table but the one manpower they woke up with this morning will find that their services price out at substantially less.

Useful item, this gold-filtered lens. Ari, thank you!

Caradoc

.....just got our London morning pop.....407.90!

Yaahhhooooo!

Bet we see $500 today!

Sir Ag Mountain

You asked:

"How do you define gold backing for rubles? Do you make distinctions from gold convertibility? TIA."


Perhaps your question is better addressed to Sir makcumka...I was just adding a couple of factors that were not mentioned in makcumka's post #122890... I thought the points raised were interesting; events coming, as they do, together...they may or may not be part of a larger single game plan unfolding in Russia...

...but to answer your question, to my mind, "backing" and "convertibility" may be either identical or different, depending on how they are defined. "Convertibility" is probably a straight-forward concept - x rubles per ounce of gold; like the US dollar was supposed to be (at least for foreigners) before Nixon. On the other hand the term "backing" may easily take on a variety of meanings from being identical to "convertibility" through notions such as that raised by Sinclair, a year or two ago, where gold is somehow linked to M3...I really don't know what possibilities exist for "backing" a currency with gold...

Not wishing to fob you off, but others here may have more to offer on the subject. There has been lots of discussion on this forum over the years on the subject as well...

Cheers

:-)

Its worthwhile to follow economic data from China in lieu of its important impact on global economies on Rising Unhidable Price Inflation through commodities


Headline Snips:

China car sales slip after credit squeeze
By Richard McGregor in Shanghai
Published: July 8 2004 19:31 | Last Updated: July 8 2004 19:31


The rate of increase in China's car sales slowed dramatically in June, sending the market into potentially more perilous territory for the local and multinational manufacturers that have recently committed more than $10bn to new capacity in the country.
........................

China's factory output growth slows to 16.2%

BEIJING, July 9 (Reuters) - Growth in China's industrial output slowed as expected in the year through June to 16.2 percent from 17.5 percent a month earlier, extending a moderating trend as government measures to cool the economy take effect.

Factory output in June had been expected to rise 16.5 percent from a year earlier, according to a median forecast of five economists.

Industrial production from January to June was 17.7 percent higher than a year earlier, the State Statistical Bureau said in a statement on Friday.
......................
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373605394&p=1045050946495

Power shortage: 6,400 factories to go off-line

BEIJING, July.9(Xinhuanet) -- Due to summer's unquenchable power thirst, about 6,400 industrial enterprises in and around Beijing will be shut down for a week.

Starting from Thursday, the plants -- mostly State-owned industries that have an eight-hour working day -- will be shut down and come back online according to a staggered programme. The policy will run until the end of next month.
........................
http://news.xinhuanet.com/english/2004-07/09/content_1585437.htm

Central bank not to loosen control on loans: governor

SHANGHAI, July 9 (Xinhuanet) -- China's central bank will not loosen control over loan extension despite complaints from local businesses about cash flow problems, according to Governor Zhou Xiaochuan of the People's Bank of China.

"We will not slacken restrictions on loan extension, though commercial banks have reported a slightly smaller number of non-performing loans," Zhou said at the China International Conferencein Finance 2004 held in the eastern commercial hub Shanghai.
http://news.xinhuanet.com/english/2004-07/09/content_1587534.htm

Cooling measures taking effect

BEIJING, July 9 (Xinhuanet) -- Editor's Note: China's rapidly-growing economy showed significant signs of change in May, which has increased confidence that the State's macroeconomic measures to slow growth are working. The State Information Centre examined key economic indicators in a recent research report, and provided policy recommendations for the future. Following are excerpts from the report. Friday's China Daily said.
.....................
1. Fixed investment growth subsided, but continued in the fast lane
2. Retail sales growth accelerated, but stayed at safe levels
3. Imports slowed down impressively, while this year's first single-month trade surplus was recorded
4. Lending growth slackened slightly
5. Money supply growth came down marginally, returning to safe levels
6. Prices accelerated, but remained in a safe range
http://news.xinhuanet.com/english/2004-07/09/content_1586221.htm
****************
Misetich

Most experts expect a hard China economic landing - though very few of them had predicted China's rapid econonic rise-

The brakes being applied to slowdown its torrid pace appear to be working - though factories are humming as witnessed by the power supply shortage

China is devauring commodities and energy and its thirst is not easily quenched thus it can be expected for PRICE INFLATION TO CONTINUE RISING GLOBALLY

All Aboard The Gold Bull Express - Part ll

http://www.tomdispatch.com/Snips:

Among the early goals of the Bush administration, controlling global energy flows was certainly right at the top of the list; so imagine the irony (not that Bush's men are much into irony) -- this administration might, in part, be sunk by soaring domestic gas prices.
.......................
The U.S. hasn't even been able to stop the escalating attacks on and sabotage of Iraq's oil pipelines -- now practically an everyday event. In the meantime, the threat to oil supplies has been seeping across the border into Saudi Arabia. Oil prices, which had dipped from recent highs, are again inching up toward the $40 a barrel mark. Throw in chaos in Russia's oil industry; stir in a Middle East guaranteed to be ever more in turmoil (just wait until the first Saudi oil facility goes up in flames), add in the skyrocketing global desire for ever more oil, and you're beginning to deal with the realities of a business which could provide a distinct October surprise for the Bush administration and many more surprises in future years for the rest of us. Only yesterday, according to the British Financial Times, "Strong global demand for oil, limited supply increases and continuing security fears led the US government� to raise its central price forecast for US crude over the next 18 months to $37 a barrel� As recently as April it forecast crude falling below $30."
***************
Misetich

Marshall Auerback, an international money manager, wrote the above passage and he's been right on the money, though BLACKBLADE deserves KUDOS for his visionary alerts, way before

Readers may also find the below link of interest
http://www.tomdispatch.com/index.mhtml?pid=1458
The View from Hubbert's Peak

Perhaps it is. As Venezuela's energy minister Rafael Ramirez told the Financial Times on May 24, "The history of cheap oil may have ended."

Oil and Gold Prices rising beyond expectations

All Aboard The Gold Bull Express - Part ll

http://www.todayonline.com/articles/21256.aspSnip: During his meeting with President Pervez Musharaff, Mr Goh urged Pakistan to work towards what he described as a gold standard Free Trade Agreement between the two countries. (end snip)

Does this mean what it sounds like or, is it poorly chosen words? Last year Pakistan entered into the Gold Dinar regime with Malaysia. Perhaps Singapore is next.

http://www.economist.com/printedition/displayStory.cfm?Story_ID=2908448Economist.com - The dollar
Keep An Eye On It
July 8, 2004

Snip: "And if they do not buy the buck, who will?"

@Sundeck and Makcumka, concur with your points that these two may mean about the same. Also "backing" may mean that a certain % of M-1 is "backing" currency issued. Heard the Euro is set up in this way. Others? Backing also could mean "way back" backing--as in "deep storage" reserves at Fort Knox and other undisclosed locations?
Could also mean "virtual gold backing" using derivitive receipts from options trades deposited in "deep storage". How about holographic 3-d projections of gold "backing bars" displayed in a public park? Aaah! Shades of meaning, meaning that when the boys start slicing the baloney for us--they can slice it as thin as they wish--sorta reminds one of discussions over what the meaning of "is", is.
My shiny gold coins do not have to worry about such shadings. They are both "convertable" and "backed"!

Chin-chin....ting!
Buongiorno!

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

Q. What is the best approach for the safe-haven investor?

MK. If you want to protect yourself against inflation, deflation, stock market weakness and potential currency problems -- in other words, if an economic disaster is your concern, there is only one portfolio item that will serve you in all seasons and under most circumstances -- gold coins or bullion.

Q. In recent years, we have seen a large number of gold dealers proliferate on the internet. What do you have to say about that?

MK. The internet offers an interesting challenge for the gold buyer. Fly-by-night firms are as big a problem in the gold business as they are in other areas of the investment business. One major problem at the moment are all the one-man-do-it-from-your-basement internet operations that have cropped up in the last few years. How does one know that the individual with whom you are dealing in these situations is legit? We've even heard of instances where some of these people actually have criminal records or have had past problems with regulatory authorities -- like the Federal Trade Commission or the Securities and Exchange Commission. After all, what does it take to go on-line with a website? Anyone can do it. It's up to the consumer to do their due-diligence before doing business with these operations.

Q. Any comments about your own internet presence?

MK. First and foremost, USAGOLD / Centennial has always been a brick-and-mortar brokerage headquartered in secure and professional office space here in Denver, Colorado. In function our own website is just a readily-available extension of our advertising and marketing programs. The USAGOLD website further gives us the opportunity to easily provide our clientele with timely market information and commentary.

http://biz.yahoo.com/cbsm-top/040709/4bd74dee190fd02958c23b9b149422d8_1.html"..Among the day's advancers, General Electric was up 29 cents at $31.99 after reporting a 3 percent rise in earnings, beating Wall Street's expectations by a penny a share.."

Beaten by a penny?This Wall Street nonsense is increasingly embarassing...

From the link above:
"Gold futures prices traded narrowly lower on the New York Mercantile Exchange, with some traders rethinking their positions after a more than $15-an-ounce climb in the past two sessions.

Gold "still has some hurdles to clear, but the momentum is strong and getting stronger," said Kevin Kerr, a senior trader at Kwest International."

A more than 15$ climb?Wow,I knew the sky was the limit...

http://www.howestreet.com/story.php?ArticleId=492From below; ". . . can create out of thin air and in that way, rob their subjects. We have all been well indoctrinated not to understand that fact, but that is exactly what the ruling elite in all countries do to their citizens these days. Alan Greenspan said as much in his 1966 essay, "Gold & Economic Freedom."

Anyone read this essay or know where it might be found online?

http://www.usagold.com/Order_Form.htmlNewcomers requesting an introductory information packet from USAGOLD~Centennial are shortly thereafter offered a complementary hardcopy selection (of your choice) from among several informative articles, this piece being among them.

Established clients, of course, have access to this and a great realm more, just a phone call away. 1--800-869-5115

R.

Thanks,TC,will call-I should have guessed you would have it.

You can also find a hard copy in Ayn Rand's book "Capitalism: The Unknown Ideal," just for your info. Also, a lot more on the subject.

I'll take a random stab at it.

Convertibility in a strict monetary sense refers to what you can expect to receive according to the official structure of the monetary system when you execute a withdrawal from your bank account. Convertibility most immediately refers to the state of the circulating pocketable currency into which your monetary units of account on the bank's ledger are transferred/translated for hand to hand use/representation. Typically, national monies are convertible into elaborately printed notes and iconic coins, the design of which have been dictated by some coordinated process of the federal government and its central bank.

When you hear talk of 'convertible currencies,' it's usually in reference to a nation's money being tradable on the world's foreign exchange markets for any other 'convertible currency,' meaning, the central bank isn't officially maintaining an iron grip of control on its sphere of circulation and exchange rate.

It stands to reason that money being 'held' in account on the bank's books should, by nature, *NOT* necessarily undergo any SIGNIFICANT change in its monetary character or worth upon simply being withdrawn from the bank as portable cash. And by the same token, it should *NOT* necessarily undergo any inherent transformation in monetary character or quality upon being deposited into a bank. That's all a long way of saying that a banking system's money and its circulating currency need be intrinsically comprised of the same fundamental makeup or rather essence. If one form were superior/inferior to the other it would not be for long that they could/would function in tandem (the inferior would ever be traded to exhaustion for the superior,) to the undoing of "convertibility" as a meaningful enterprise.

With that in mind, we can see why a Gold Standard, defined by convertibility between bank ledgers and Gold currency, is ever an exercise in inevitable failure. As currency, a coin-shaped quantity of Gold in hand is most definitely *NOT* intrinsically comprised of the same fundamental "essence" which we find inherent in the list of numbers on a banker's ledger of accounts. In this Gold Standard case, there certainly IS a most obvious and troubling inherent transformation undergone via the process of depositing currency (a solid Gold coin in this case) into a bank ledger -- an accounting of formless numerical obligations/credits.

As a result of the fragile (non)sustainability of Gold Standard-style convertibility, we quite naturally have evolved into the fiat-style currency convertibility system we see in use today.

The true essence of money which populates our world banking systems is certainly not "backed" by its currency. Again, a currency is at best just a version of your same bank money in a form that's suitable for travel -- recognizable as money and not easily counterfeited. To better make my point, we could in fact do away with fiat currency entirely and rely solely on checks or electronic bank cards. That fact alone should convey amply that the essence of money is *NOT* truly "backed" by *ANY* manner of convertible currency, regardless of whether it be inherently Real or merely fiat representational.

Money finds its "backing" in the Rule of Law that governs the society of the land. Insofar as that goes, we must admit that it can be a pretty shabby backing at best -- subject to the caprice of the sociopolitical process under the realities of human nature up against hard circumstances.

Whereas the depreciation of money provides the scapegoat or the relief valve within the comprehensive network of social contracts, it can't be counted upon to serve you as meaningful savings through times of social difficulty and transition. Money serves us as a utility, only. It is not wealth. Now here's the good news: as a utility, it can be used (spent) to secure for yourself tangible property to store away as meaningful savings to convey your wealth forward through time in the face of the ever-depreciating fate of your nation's monetary utility of dollars, pesos, rubles, etc.

Gold. Get you some. --- Aristotle

I had a bad experience with Monex.

A few years ago, I had some Credit Suisse 1-oz palladium bars (still sealed in their original "ingot card" packaging). Palladium was relatively high (~380) and gold was relatively low (~300). I called to see about a swap (palladium bars for gold eagles). The "broker" I talked to quoted about $364 on the bars and about $312 on the eagles (as I remember).

The deal was agreed upon and I mailed the bars. After the bars arrived, they called and said that the bars were only worth about $300.

Over the protests of the "broker", I demanded immediate return of the palladium bars. I did get them back, but I was out the initial shipping cost.

Jerks.

I talked to a broker there some time back, and decided against giving him my business. There was something I didn't trust in his tone of voice--it reeked of a boiler room.

Also, as you can imagine, he tried to steer me into more exotic investments, such as palladium.

In addition, they were more expensive. They tacked on a lot of extra fees.

The potential is certainly there for this to spiral out of control as there is ample fuel for the fire according to just the few of the war-stories that I am personally aware of.

However, before this goess any further, one of the posting guidelines for this Forum is a prohibition of derogation of the competitors of USAGOLD - Centennial Precious Metals. First and most practically, it calls unnecessary attention to them as a form of free advertising (even if it isn't very flattering). Second, it takes us down to their level if we publically participate as mudslingers against their transgressions. (However, please do feel free to discuss it privately by phone with one of USAGOLD~Centennial's brokers -- you'll know instantly you're in good company with a sympathetic ear and professional treatment.)

R.

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.


--- Daily rap (excerpts) ----

Gold, Silver Cement Recent Gains

Gold futures on the Comex division of the New York Mercantile Exchange put in a consolidatory performance Friday and held just below recent, nearly three-month highs in steady two-way action throughout. The most-active Aug contract settled 30 cents lower at $407.90 per ounce.

...given the fact that Aug gold prices have risen from a low of $389 to a nearly three-month high of $409.60 within the past four trading days, good levels of profit taking were expected and seen before the weekend. As a result, gold's mainly sideways showing so far Friday surprised few.

...sources agreed that should prices fail to sustain their recent upside momentum in the days ahead they stand the chance of sagging on increased profit taking.

However, market watchers also agreed that gold's recent sturdy performance has impressed many fund players who will likely view any near-term price pullbacks as buying opportunities rather than signs that strength is unsustainable.

"It's looked pretty good lately so it's probably more attractive now to the funds," said a floor dealer with a large U.S. commission house...

-----(see url for access to full news, 24-hr newswire)----

http://www.mineweb.net/columns/emerging_russia/333578.htmThis article was published at Mineweb.com 2 days ago and I didn't see posted here but it's required reading for all who wish to get an understanding of what's happening to Russia's resource prooducers.

snip;
What is more than novel about the new lawsuit is that it threatens to put an end to all attempts by the Russian oligarchs to cash out of their vulnerable Russian assets into UK or US-registered securities, and launder the proceeds of their Russian crimes into ostensibly clean western bank accounts, real estate, and other forms of wealth. For as everyone knows, the massive tax evasion that was practiced at Yukos has been the standard operating procedure for the building of all the Russian oil, mineral, metal and mining fortunes that have been amassed by the likes of Roman Abramovich, Oleg Deripaska, Vladimir Potanin, Victor Vekselberg, and Mikhail Fridman.

Good one, Sir Aristotle...

Would it therefore be fair to say (summarise?) that government-mandated "convertibility" of one's "money" (be it represented by electronic or hand-written digits in a ledger, pretty pieces of paper or iconic coins)into a universally-accepted form of "wealth", such as gold (or perhaps other "things) is a sound way to "back" the money of the realm?

Gold "conversion" is perhaps the most universal and long-lasting form of "backing" for good reasons. Unfortunately (as you alude to) for it to work over time requires a degree of discipline within society at large (and the political and financial elites, in particular) that runs counter to collective human nature. Thus "money" expands faster than "wealth" - in all its representations - with the familiar consequences.

Hence we see the role of gold (and perhaps some other "things") as a preserve of wealth.

Cheers

:-)

Makumka, the Russian situation is interesting.
glad you guys are talking about it.

My guess is that Russia under Putin will be like Japan.
By that I mean, they will play this chess game WITH the US as quiet partner. Not in opposition.
On the surface, Japan looks like a selfinterested country.
But its real actions make it look like it is the 51st state to me.

Putin has been wearing a christian item around his neck without taking it off since his mom gave it to him well over 10 years ago. I do believe Bush and Putin have had --christian boy-- chats at the ranch in Texas.
Notice that the day after the so called 911 commission came out with a report and the usmedia bannered one sentence implying there was no link between alkida and saddam, Putin lets loose with a bombshell that Russia had warned the US repeatedly about saddams plans to strike the US. Plans told to Russian workers in Iraq.
I would appear that france and germany didnt know Putin told the US way back when, and to me it is one more sign that Putin, while in the midst of his countrymen with all thier factions and desires, Putin is playing a deep game and he is teamed with the US. Actually against the EU and his own countrymen who are against the US.

What plus was there for him if Saddam became the real power of the world? Just because french and german politicians cared in a short sighted way for thier own euro as reserve currency goal, didnt mean it wasnt damn foolish to have saddam as thier key partner in making it happen.

Putin has to contend with muslim issues of his own, and, when faced with the US "us or them" situation, he HAD to decide "US". It was in his countries self interest!!
The US didnt attack Russia ever. Germany and France both have. With muslims below, and the eu teamed with saddam as the new reserve currency power, the us defeated by terrorist actions of saddam and alkida, the future would have been bleak for russia.
Leftists would never see the positives of the US policies, but there are some. And some of them are KEY policies that mean something to other key figures in other countries.

Probably, the globalist structure the US is holding out as a carrot, a structure no one is able to see at our level, but MUST exist. A plan for the future that has enough merit for all that Japan, China, Russia and Saudis are on the US side. Or so it appears to me.

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

http://interestalert.com/brand/siteia.shtml?Story=st/sn/07090000aaa011f5.upi&Sys=rmmiller&Fid=NATIONAL&Type=News&Filter=National%20NewsRIP

The observation below, posted recently nearby, is sobering as we note the distance we have traveled as a nation and people down the predicted path.
........................................

At about the time our original 13 states adopted their new constitution, in the year 1787, Alexander Tyler (a Scottish history professor at The University of Edinburgh) had this to say about "The Fall of The Athenian Republic" some 2,000 years prior.

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, (which is) always followed by a dictatorship.

The average age of the world's greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence.


From Bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."

There's "crazy talk" over at Jim Pupulvas second hour today regarding many issues that are going to affect the price of gold......
I say crazy talk........because it's and indication of how far away the uninfomed public is from the truth about the financial underpinning of U S markets and how close readers of this forum are to the TRUTH .........

the manifestations of the disease in the system is surfacing slowly but is becoming unmistakable and these gentlemen with their "crazy talk " are intimating that at any time we could have an explosive event that will blow the lid off of the disease the media is attempting to cover up . At that time , they indicate, that it may be too late to prepare.....

Very enlightening........and confirming ........our worst fears...........

Don't be Paranoid.....Be Prepared ......THen you can follow the the advice of one of our gifted musical friends

and

DOn't Worry , Be Happy ............because you did your homework and you are getting ready to graduate.........
Your graduation present is going to be a BOAT ........
A BOAT THAT FLOATS that has a special automatic Navigation system on it that takes you where you want to go ( free open water) and automatically takes you out of the Storm .

in reply to your theory of russian moves to introduce gold-backed rouble
i think you may be spot on as the kremlin looks to take back control
of the major wealth producers in the russian economy or at least not
let them be sold off to elite western intrests for pennies on the dollar

the yukos tale is incredibly fascinating as it shows very big players
in the game jockying for positions of control over russias biggest
oil producer with the largest oil reserves

heres how it began, all sunshine and smiles as far as the west was concerned

http://news.bbc.co.uk/1/hi/business/1436189.stm

http://news.bbc.co.uk/1/hi/business/2116133.stm

then it looked as if money was there to be made by western oil firms and intrest
in investing there picked up dramatically as yukos/sibneft looked to merge even
though there was the first rumblings of kremlin investigations

http://news.bbc.co.uk/1/hi/business/3160522.stm

http://news.bbc.co.uk/1/hi/business/3120661.stm

then things started to go a little array

http://news.bbc.co.uk/1/hi/world/europe/3217499.stm

http://news.bbc.co.uk/1/hi/business/3228257.stm

then surprising new owners appeared

http://news.bbc.co.uk/1/hi/business/3235429.stm

then some of the top men sought safe haven

http://news.bbc.co.uk/1/hi/business/3243735.stm

then the cat out the bag from the kremlin

http://news.bbc.co.uk/1/hi/business/3277949.stm

then offers to set him free

http://news.bbc.co.uk/1/hi/business/3492145.stm

merger gone

http://news.bbc.co.uk/1/hi/business/3766333.stm

battles over

http://news.bbc.co.uk/1/hi/business/3867079.stm


http://news.bbc.co.uk/1/hi/business/3880129.stm

and to tie it all together with some history

http://www.joevialls.co.uk/myahudi/sunburn2.html

now we have news this week of major runs on private banks in russia
who or what could have caused that ???

especially seen as the state central bank is absolutely swimming in
gold and euros meanwhile it has been selling dollars over the last few years

http://www.mosnews.com/money/2004/07/09/moodysrussia.shtml


the financial chess game that is the euro/dollar/oil/gold comes
nearer to resolution.......

It looks like the new president of Yukos could solve Mother Russia's problems, but unfortunately, he's no longer at the helm of Russia's CB

http://news.independent.co.uk/europe/story.jsp?story=539789
SNIP
"There is no banking crisis," the Finance Minister, Alexei Kudrin, said. "The banking system is in a normal state. What we see now is a reform process... and the fact that some banks cannot cope with that ... should not affect the whole system."

http://scotlandonsunday.scotsman.com/business.cfm?id=792542004
SNIPS
ONLY a few weeks have passed since Viktor Geraschenko accepted Russia's poisoned chalice - the chairmanship of crisis-stricken Yukos, the country's largest oil company. His job is to pour oil on Yukos's troubled waters.
+
Geraschenko, 67, is a dinosaur of the old Soviet establishment. Twice before, during periods of economic crisis, he had been rushed in to head Russia's Central Bank, the first between 1992 and 1994 and then between 1998 and 2002. Twice he was sacked. He was described once in the Wall Street Journal as "THE WORLD�S WORST CENTRAL BANKER". (emphasis mine)
+
But the latter era of Geraschenko's banking career will be remembered for producing a stable rouble and AN INDEPENDENT CENTRAL BANK WITH HUGE GOLD and hard currency RESERVES. (emphasis mine � rest of paragraph should also be emphasised) He fought against transferring the bank's gold and currency reserves to the government. He tried to explain what gold and hard currency reserves were for and why they should not be transformed into the pockets of the finance ministry. He feared the Central Bank would become "a soccer ball there for the kicking by everyone". Instead it was he who received the kicking.
He has played a difficult part with good humour. In an interview just before his sacking, he was asked what the exchange rate might be at the end of the year, he parried: "We are not a weather office, we issue no forecasts." He's not making forecasts about Yukos's future, either.

http://www.times.spb.ru/archive/times/984/top/t_12953.htm
SNIP
MOSCOW - The "socialist" policies of the Central Bank provoked the current instability and panic in the banking sector and could topple the whole financial system if left unchecked, President Vladimir Putin's top economic adviser warned Thursday

Does anyone know WHY the US chose to mint a gold bullion coin in 1986? Is there an official story?

Additionally, does the design of the reverse hold any significance for you?

For those who have any doubts about where we are on the charts relative to Gold's secular bull market ........
Check out Adam Hamilton's latest article next door....
and remember to do as Jim Sinclair says and GET REAL .....
GOLD.

www.lewrockwell.com/north/north282.htmlTwo articles in the past few days have been of special importance to this Forum.

The first was Dr. Kurt Richebacher's article at the Daily Reckoning, where he predicts a severe credit crunch about to hit the US. The origin of the crunch lies in the fact that rising interest rates have put an end to the ability of homeowners to continue squeezing funds out of their home equity, through refinancing. This means consumer buying will drop, with serious implications for the economy which relies on the consumer to continue buying.

The second and more ominous, is the appearance of "settlement fails" in the US banking system.

Every day, all banks in the US must settle interbank debits and credits. Failure of a bank to come up with the cash to settle claims against it, by other banks, is a very serious condition. Normally, it would - in my opinion - signify imminent bankruptcy for a bank unable to settle claims against itself, at day's end.

The Fed has stepped in to avoid such a situation by any bank, first on Sep 11, 2001, when as a consequence of grounded airplanes, massive amounts of checks did not arrive at their destination.

But there have been further days on which "settlement fails" took place. Most recently, in May 2004. This is indeed very serious.

The following, which appeared in Gary North's publication, expresses the concern of Warren Pollock. I could not find the link to the Pollock article, but you can go to it, from the article at Gary North's site, mentioned here.

Here is the substance of the "settlement fails" question, very troubling indeed, taking into account that interest rates are only just beginning to take place, and are unavoidable from now on.

If memory serves, just J.P. Morgan Chase has $29 Trillion interest rate derivatives on its books. Easy to write these derivatives, when interest rates are low and expected to remain so. When interest rates turn upwards, how on earth are the counterparties, which J.P Morgan Chase has relied upon to hedge its operations, going to come up with the cash to make good on their derivative obligations?

Here are the quotes from Pollock, at Gary North's site:

"The Federal Reserve provides the banking system with a framework to settle inter-bank transactions. On two occasions it is very clear that interest rate increases severely stressed the banking system. When the inter-bank settlement system temporarily fails to clear transactions banks are effectively "bouncing or kiting checks" to each other.

"The 9-11 event triggered the first failure of the settlement system. For technical reasons a statistic called "Settlement Fails" surged to epic proportions. At the peak of the technical problem it became impossible to settle $1.4 Trillion dollars of inter-bank transactions. The Fed was able to smooth the failure over.

"9/19/2001 1,476,185,000,000


"The system failed in July and August of 2003 when an unexpected market driven spike in long-term interest rates occurred. Rates were managed downward and the problem was temporarily solved.

"7/30/2003 938,354,000,000
8/6/2003 1,409,644,000,000
8/13/2003 1,356,773,000,000
8/20/2003 1,622,011,000,000
8/27/2003 1,040,811,000,000


"The same condition of failure occurred in May of 2004. The failure was directly related to the recent rise in interest rates. Increases in M3 liquidity could be "a fix" to this problem.
5/19/2004 1,175,041,000,000
5/26/2004 868,148,000,000"

Gary North goes on to say:

"Pollock then provides a graph of the 10-year treasury yield in comparison to the settlement-fails spike. He concludes:
"The recent failures are timed exactly to interest rate increases. The settlement system has a significant problem absorbing modest changes in interest rates. The FED must have to step in periodically to prevent a crisis from occurring. Interest rate sensitive derivatives and interest rate arbitrage plays are putting pressure on the continuity of the banking system.

"Given this condition, how can the FED raise interest rates to levels needed without blowing up the entire system? The problem is that the market will raise rates if the FED fails to do so."

The GAB says: Russia is having banking problems? So is the US, and very serious ones, of which it seems very few are at all aware.

Be sure to increase your stash of gold immediately, and insulate yourself from those problems.

The GAB

http://www.globeandmail.com/servlet/story/RTGAM.20040710.wxrtakingstock10/BNStory/Business/ Lots of Glitter Left in Gold
The Globe and Mail
Mathew Ingram - July 10, 2004
In this mainstream article, various reasons are cited for gold's improved performance in recent years, including it's
ancient allure and role as money. Also of interest is the
author's case for a long-term bull market, and
three extremely conservative price projections seen before
at USAGOLD.
Taken from comments of Pierre Lassonde, John Embry and another gentleman, the price forecasts
(two for 2005 and one for 2010) are recently,
often quoted in media stories neutral or moderately favorable to gold. To us seasoned gold analysts and investors, the quotes were deliberately chosen for there conservative, statist slant- to maintain the status quo
because it's too early to let the cat out of the bag.

http://www.morganstanley.com/GEFdata/digests/20040709-fri.html#anchor0Snip:

Nor is there much reason to celebrate the quality of the jobs that have been created over the past four months. In scanning the detailed industry breakdown of this recent pick-up in job creation, the leading sources turn out to be restaurants, temporary hiring agencies, and building services. Collectively, these three groupings, which comprise only 9.7% of total nonfarm payrolls, accounted for fully 25% of the cumulative growth in overall hiring from February to June 2004. Moreover, hiring has accelerated in other industries at the low end of the job hierarchy � namely, clothing stores, couriers, hotels, grocery stores, trucking, hospitals, social work, business support, and personal and laundry services. Collectively, this latter group of industries, which makes up 12% of the nonfarm workforce, accounted for another 19% of the total growth in business payrolls over the past four months. Putting these segments together, low-end jobs accounted for about 44% of total hiring over the February to June interval, double their share in the workforce. Consequently, to the extent there has been any improvement on the job front over the past four months, the impetus has been concentrated at the low end of the quality spectrum.
................
An even more dramatic picture of the quality of recent job growth emerges from the survey of households. According to the US Bureau of Labor Statistics, the count of nonfarm persons at work part time � both for economic and non-economic reasons � increased by 495,000 over the February to June 2004 interval. That amounts to an astonishing 97% of the cumulative increase of 509,000 in total nonagricultural employment as captured by the household survey over this period.
.......................
Globalization remains the most powerful economic force of the modern era. It was only a matter of time, in my view, before the IT-enabled globalization of work had a major impact on the US labor market. That time is now
***************
Misetich

Roach, again emphasizes the lack of meaninful job creation -
The manipulative Feds have resorted to other means in the past to stimulute consumer spending - The resulsts of which has resulted in an emerging housing bubble market and higher indebted conumser and households

It is the continuing jobless recovery which will force Sir Greenspan & Co to remain "accomodative" going forward and tolerating higher price inflation = higher gold prices

The time is NOW to add physical gold to one's insurance investment portfolio.

All Aboard The Gold Bull Express - Part ll

Evidently the trade agreement with Mexico has received final approval allowing Mexican trucks into the US for the first time. A recent news article stated that the city of Alpine ,Texas will see truck traffic increase from 50 per day to 500 per day. A bypass might be built later on but for now they will be going right through downtown.

Poor deluded NIMBY. How could they be so stupid? Why they are right on the cutting edge of "progress" .

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

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=dmax&w=1&t=l&a=200It's going to be a pivotal week IMHO. Hope that the chart attached works, USDX w/ 200 DMA which has just rolled over......barely.

Should get clues this week.

Did anyone see the possibility of a disconnect between physical and miners last week?

Have a golden week.

http://www.morganstanley.com/GEFdata/digests/20040709-fri.html#anchor0Snip:

Consumer Discretionary: Business conditions deteriorated, while pricing conditions improved for most groups. .... No industries plan on increasing capex over the next 1�6 months.

Consumer Staples: Business conditions were mixed for the consumer staples companies. Pricing conditions were improved, as most groups are increasing prices to recoup higher input costs with the exception of food retailers who are having difficulty passing through higher prices. Hiring is flat for the group.

Energy: Business and pricing conditions are noticeably improved in early July for the oil services companies. Advance bookings have picked up and hiring conditions are strong. The companies plan on increasing capex by 10% or more over the next three months.

Financials: Business conditions are mixed for the financials while pricing conditions are deteriorating. Business conditions are improving for the REITs and deteriorating for large-cap banks, property/casualty and mortgage-finance companies. Employment conditions are weak, as large-cap banks and mortgage finance companies were still cutting payrolls over the past three months, although multifamily REITs, mid-cap banks, and specialty finance companies plan on adding to payrolls over the next three months.

Healthcare: Business conditions were slightly weaker this month, although conditions continued to improve for healthcare facilities. Prices increased for the sector and hiring plans are stable for the group.

Industrials: Industrials continue to experience broad based improvement. Business conditions as well as advance bookings continued to improve. Pricing conditions continued to improve, although prices have fallen by 1�3% for the airlines. Most groups with the exception of electrical equipment and machinery/multi-industry plan on increasing capex, and all groups except electrical equipment and airlines plan on adding to payrolls somewhat.

Information Technology: Business and pricing conditions are mixed in IT. Advance bookings are also very strong for the group. In general, hiring plans for the technology sector remain strong. Internet and PC application software, electronic manufacturing services, and semiconductor companies plan on increasing capex by 10% or more from current levels.

Materials: Business conditions continued to improve for the steel group and moderated for specialty chemicals and paper and packaging companies. Prices charged at steel companies have increased by 3% or more and advance bookings have increased; financing conditions have also improved. Steel companies plan on increasing capex by 10% or more, while the paper and forest products companies plan on increasing capex by only 0�3%. Hiring plans for the group are stable.

Telecommunications Services: Telecom services continued to suffer in June, partially at the expense of the wireless services. Bookings were higher for the wireless services companies. Prices charged continued to decline for the group, and the telecom services companies were still cutting payrolls over the past three months and have no plans to step up hiring over the next three. Both groups plan on increasing capex by 3�6% over the next 1�6 months.

Utilities: Business conditions were unchanged last month for the electric utilities companies. Prices charged continue to increase, but at a decelerating rate. Companies are still cutting payrolls over the past three months and have no plans to step up hiring over the next three, although they plan on increasing capex by 0�3% over the next 1�6 months.
***************
Misetich

From above

*Hiring is flat for the group.
*Hiring conditions are strong. (ENERGY INDUSTRY)
*Employment conditions are weak, as large-cap banks and mortgage finance companies were still cutting payrolls over the past three months,
*and hiring plans are stable for the group.
* and airlines plan on adding to payrolls somewhat. (????? arilines hiring? - in which planet?)
*In general, hiring plans for the technology sector remain strong.( Earnings Warnings in IT are increasing!!)
*Hiring plans for the group are stable.( COMMODITIES!)
*telecom services companies were still cutting payrolls over the past three months
*and have no plans to step up hiring

In few words - prices are increasing - jobless recovery continues

All Aboard The Gold Bull Express - Part ll

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1089403980000&sn=1&banner=mainwireSnip:

WASHINGTON (MktNews) - "Saudi Arabia is in a crisis," and unless internal turmoil is curbed, the world oil markets may face the consequences of a failed state, a U.S.-based analyst said Friday.

Speaking at a Hudson Institute policy forum, Simon Henderson, an analyst from the Washington Institute for Near Eastern Policy said the "growing apparent strength of al-Qaida" is circumventing the Saudi royal
family's leadership, creating a "battle of Islamic legitimacy" the House of Saud is likely to lose.

Henderson referred in particular to the internal struggle between Crown Prince Abdullah, and Prince Naif, the Saudi interior minister.

"Instead of a structure of stability, you have a structure of tension," Henderson said.

The analyst said the aging Saudi leadership is undergoing
"processes of succession" that will likely produce "less than stable" outcomes.

"If there is chaos in Saudi Arabia, then it hits us all very
quickly." Most notably, he said a failed state would have dangerous impacts on global oil markets.

"The impact will be on the price of oil all over the world," he said, not just in countries that have relatively higher reliances on OPEC oil.
***************
Misetich

Jim Sinclair has been emphasizing the Saudi's dilemma - and the odds of something major happening are RISING

How will soaring oil prices affect gold prices?

As Ralph (Jackie Gleason, the Hoeymooners) would say " to the moon Alice, to the moon ..."

All Aboard The Gold Bull Express - Part ll

Very interesting, I hadn't heard that they had approved the Mexican trucks coming into this country.It is my opinion that it will be a disaster in the making if they do. For one thing it will hurt out domestic trucking industry right when they are under the pressure of rising fuel costs. Also it will put those routes that they use and the domestic traffic that uses them in danger. The Mexican trucking business is notorious concerning the lousy equipment that they use and the number of unqualified drivers they have as well as the unreliability of the insurance they have. It will certainly facilitate the movement of illegal drugs,
illegal aliens and all other contraband into the country.

The ports of entry along the Mexican border are already stretched to the limits of their capacity and have been for some years. In times like these when we should be securing our borders and not inviting all the problems that allowing Mexican trucks to go willy-nily were ever they want will cause. I have really heard no good argument that would support such measures which are a part of NAFTA. Everytime anybody questions our trade policies the supporters of Globilization cry "FREE TRADE" which is to them the Holy Grail which can't be questioned. To me becoming the consumer market of the world only will and does represent a transfer of wealth from this country to the seller of those consumer products. How long can we continue to print dollars to pay for all this relativily one way FREE TRADE? White Hills

I am inclined to debate your Anti-Free Trade opinions.
On this forum however, I feel compelled to keep the argument relative to gold.
It would be interesting to hear what you think about the merits of owning gold relative to your anti-free market views.

Should domestic gold transactions also be protected from foreign competition, restricting the benefits of lower cost to millions of consumers, forcing us to subsidize a less efficient supplier?
Suppose I chose to purchase gold willy-nilly from an undocumented Mexican on the street selling gold coins from a cart.
Suppose I have confidence in myself to discern if the transaction is authentic or bogus, and I don't require external protection.
The transaction is not fraudulent or coerced in any way.
Should that be against the law or just a risky way of doing business?
Don't I have a right to do business with whomever I choose, as long as I accept responsibility for the outcome from my choices?

I wouldn't worry too much about undocumented aliens any way.
Immigration always flows in the direction of more freedom and shamefully, freedom has become quite bearish in the USA.
In fact, many of our most productive citizens have already gone off shore.

Best Wishes

http://www.busrep.co.za/index.php?fArticleId=2146076&fSectionId=613&fSetId=304UK urges IMF to revalue gold for debt relief
July 12, 2004
By Reed Landberg

SNIP : UK Gordon Brown asks IMF to revalue their gold in their books (still valued about 40US$ an ounce). This way they have "a backing" (sorry Ari) for write-off of developing nation-debt. IMF emphasises they have no intention to sell their gold (3217 tons).
------------------------------------------------------------
First step in a revaluation of non-monetary assets/reserves ? Was't it better to buy gold to back their depreciating dollar assets ?

http://www.handelsblatt.com/hbiwwwangebot/fn/relhbi/sfn/buildhbi/cn/bp_artikel/docid/760242/STRUCID/PAGE_200011/PAGEID/PAGE_200729/index.htmlUnfortenately in German.
SNIP : According to Graham Birch (Merril Lynch) China is going to put a lot of its trade surplus in dollar denominated assets. These assets have to be low risk investments for insurance against creditrisk en inflation. The only investment perfect for these purposes is GOLD. China has already increased their goldreserves the last months.
------------------------------------------------------------------------------------------------------------------------
Even Merril Lynch knows the best and safest investment is GOLD !

1340cc,
The problems you mention are real and serious problems, however they are not caused by free trade.
Those problems are the result of government owned highway systems. They are good arguments in support of highway privatization.
When free trade is restricted, both the sellers and the buyers suffer a lower standard of living.
I want our domestic trucking industry to prosper as well, but not by government enforced subsidies.
More people prosper from a free and competitive market than prosper from PAC controlled trade.
These are basically the same arguments we see here pertaining to gold (free) vs. fiat (controlled) currency.

Best Wishes

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

I am vacationing away from email and other on-line pursuits for a couple weeks but had the chance to check in to the forum today. What a wonderful surprise to find that I was a contest winner! Many Many thanks to all and congrats and complements to all the entrants! I will write more in the near future.
I hope the fish keep biting!

Gold. Its Tradition!

Tevye

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

Q. I've noticed that USAGOLD / Centennial stresses education more than most of your competitors. Why is that?

MK. For years, we have emphasized "We educate first-time investors" in our advertising. We believe education to be the key to successful gold ownership. To make a long story short, we tend to keep our clientele as they become better educated, while many of our competitors tend to lose their clientele once they become educated. It shows in the type of services we consider important to complement our sales and delivery programs.

Randy interjects... Mike is way too nice to say this bluntly so I will. What I've noticed about the apparent rationale behind some of those other firms' operating philosophy is that, if they bend the client over far enough for their wallet the first time they ever do business together, they really don't have to care about getting repeat business. They find new uneducated targets ripe for picking arriving at their doorstep every day. It doesn't have to be that way, but some investors simply don't take the time to shop around for a quality firm that will treat them professionally and with respect. They should.

Q. What are some of the criteria a prospective investor should look for in a gold firm?

MK. Credibility, longevity, pricing, service and compatibility -- all come into the mix. Of those I rate credibility and its sister virtues -- reliability and reputability -- the most important. Too many of the national firms have brokers who were selling condos at the beach or automobiles a month ago and now suddenly they've become "gold experts" selling leverage schemes, $50,000 rare coins, reproduction medallions at 25 times their gold content, or overpriced silver investments. Most sophisticated gold investors would probably like to avoid that sort of thing.

http://www.ecb.int/press/key/date/2004/html/sp040706.en.html(excerpts)

Central banking activities can impact on longer run growth through a number of potential channels. ... Specifically, the question addressed is whether the pursuit of the objective of price stability by the central bank leads to higher output and living standards in the longer term.

Interest in the link between monetary policy and economic growth has a long tradition. Up until the middle of the 20th century the dominant opinion was encapsulated in 'classical view' of John Stuart Mill and other classical economists. According to this view, money is essentially a veil. Monetary policy, via the resulting quantity of money, determines the overall price level but has no impact on the level of output.

Of course, observers such as David Ricardo were aware of the temporary stimulative effect on output emanating from increases in the money stock. Indeed, as a result of the Keynesian revolution, the short run relationship between monetary and growth has been a dominant interest of macroeconomists since the middle of the 20th century.

The subsequent neglect of the longer-run relationship between monetary policy and output is somewhat surprising since, when cumulated over time, longer-term sustained changes in output have welfare implications which substantially outweigh the effects of normal cyclical fluctuations.

As Robert Lucas (1988) points out, "the consequences for human welfare involved in questions like these are staggering: once one starts to think about them, it is hard to think about anything else".

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

A worthy toil that eventually lands its better thinkers at the threshold of gold.

R.

The vigilent souls at airport security recently relieved me of a money clip that had a finger nail file attached less than two inches long. Pathetic thing! Also had to x-ray my see-through hat. Coulda read a newspaper through that hat and had me hopping around in stocking feet!

Now, we allow an uninspected Mexican truck, paying little tax, to blast down our highways weighing lord knows how much at whatever speed and no one has a problem with that because we need "free trade". What is wrong with this picture? (Can we not have a level playing field for competitors who are in our country?)

Perhaps the mid-level navel-gazers have really taken over and those at the top do not realize....perhaps we are so eager to do business that we lose perspective....things are really unraveling. Matto, matto mondo!

Excuse me while I go and buy a new gold-plated killer finger nail file.....
Buongiorno!

Free trade policies are being used as a foreign policy tool, equated with spreading democracy and American influence around the globe. If we trade with various countries who do not share our democratic values such as communist China, it is said to lessen tensions and move them more to our views. This is a theory which in fact is untested, even dangerous.

http://www.busrep.co.za/index.php?fArticleId=2146076&fSectionId=613&fSetId=304Great article!

I've got a question for you, though. When someone uses the word "SNIP" I assume it means they're directly quoting a portion of an article, but I couldn't find the section which corresponded to your selection. Has the article been revised in the past few hours, or were you paraphrasing?

Either way, you don't have to apologize to me for the "backing" term. I tried to make the point a couple days ago (Friday(?)) but it's probably too subtle a point to really matter much to anyone else but a monetary pedant (and we all know what bores THEY can be!)

Sooooooo... true to form I'd rather not throw in the towel quite this easily, and I'll make this additional remark: rather than dealing with the "backing" term you cited, I greatly prefer the word usage found at the end of the article:

"a way of allowing the IMF to boost its assets and reduce its liabilities."

"Backing" is probably best left exclusively for use when describing physical phenomena such as the presence of adhesive in the proximity of postage stamps.

Gold. Get you some. --- Ari

Almost 1 million ounces were withdrawn from the comex today. That 20 million ounce shift recently might have been the start of something.

Buongiorno!, Federal_Reserves,

Safety issues are best dealt with as safety issues.
Tax issues are best dealt with as tax issues.
The same goes for foreign policy issues.
Why obscure and complicate the free trade issue with all this other stuff?
A free market is self leveling at the highest possible level.
Once the government and regulations are involved, the trade is no longer free. Any attempt to "level the playing field" involves more regulation and less freedom.
It's like trying to level a table by cutting off the legs one at a time. By the time the table is level,it has lost all it's value as a table. Then what do we do in the USA?
We start cutting the legs off the chairs too, then we raise taxes on the folks with long legs.
It is pathetic!

Freedom is a good thing.
Responsibility is a good thing.
Both are best acheived in a free market economy,
neither require government intervention.

Gold shines it brightest in a free market.


Best Wishes

J-B,
the COMEX-sanctioned bean counters also reported a departure of over 1.1 tonnes of Gold from COMEX-blessed depositories. It doesn't mean much to me personally, but if this is the sorta high-profile thing that can inspire anyone else to do the right thing and get Gold, then more's the better and I'm all for it.

Liberty Head,
Right on. Good post. Tables becoming floor mats... heh heh heh.
Personal responsibility AND Gold both shine their brightest in a free market.

Far outdoing the formal elections, through our actions and purchases we are effectively voting daily and consequently shaping the structure of the world toward what we'd prefer to live in.

Gold. Get you some. --- Ari

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.

---closing market rap excerpts---

Gold Sturdy, Awaits Data Releases...

Gold futures on the Comex division of the New York Mercantile Exchange adopted a holding pattern Monday to consolidate last week's scramble above the $405-per-ounce level on fund buying spurred by the weaker U.S. dollar....

Gold futures staged a late-session reversal Monday to end narrowly higher as a broad market decline sparked fresh investment interest in precious metals. The fall in the broader markets, led by downgrades in technology stocks, offset pressure on gold prices from the stronger U.S. dollar but kept metals equities lower....

The most-active Aug contract settled 50 cents higher at $408.40.

Overall activity levels were fairly light ... many gold market participants are expected to await a resumption in the dollar's trend lower before re-igniting buy-side interest in gold....

With data on the U.S. trade balance, retail sales, jobless claims, producer and consumer prices, and industrial production due this week, sources agree that gold is expected to likely see a choppy ride by way of the U.S. dollar's reactions to those reports, and that volumes would likely be patchy....

"The dollar is expected to come under pressure this week as some data has been forecast to come in on the weak side, so I think gold is waiting for that bad news to be confirmed and the dollar to weaken again before we push higher again," said a floor dealer with a large U.S. commission house....

U.S. inflation data due out later this week "should have a positive impact and help set the stage for the next leg up toward the old highs of $430 to $435,"....

----(see url for access to full news, 24-hr global economic headlines)---

While mowing the lawn this PM a big white FedEx truck stopped on the road out front and a young man jumped out with a big white envelope. I stopped the mower and greeted the fellow with a smile. After confirming that I was the addressee I signed the delivery receipt and became the proud owner of a shiny old $10 Eagle. Many thanks to all at CPM for their continuing dedication to excellence in all things golden.

Boilermaker

@ Liberty Head--you miss the (tongue firmly in cheek) high irony of my finger-nail file being a safety concern, but no one cares about an 80,000 pound vehicle running on our roads without inspections that our own trucks must meet. Unsafe and not fair all at once!

Agree that markets should be free, but they must also be fair--and each of us might define that in different ways. OK. Also think these actions are a measure of our despiration. And it is that very despiration and the things that have brought us to this point that make my case for gold.

We bin tryin' to spend ourselves rich -- then borry our way out of debt fer too many years!

Wine for my men! Fire up the Peterbuilt! We ride in an hour!
Buongiorno!

As far as your remarks about my "tirade on free trade" you obviously did not read it correctly. I will not even defend my remarks as truth is self evident and needs no defense.

As to its appropriateness for this forum I will remind you that any economic happening that affects the dollar will, in turn, have some affect on Gold. That so-called "free trade" results in large trade deficits and has for a long time. This means an out-of-balance system that causes more dollars to flow out of the country. When we print those dollars, that causes more inflation in the long run, and the effect is the rise of the price of gold. That may be a simplification, but it is also true. If you have an argument with that, go back to the 1970's when you could buy a new car for $3500.00 or 100 oz of gold and compare it to today where 100 oz of gold at 400 oz can still buy a new car. We are presently printing dollars at a breathtaking pace and the ramifications of that I will leave to the many able posters on this forum. Yes, my friend, it would be better to call "free trade" "one way trade", or "suicide trade" (which I think are better definitions.) White Hills

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1089643080000&sn=1&banner=mainwireSnip:

NEW YORK (MktNews) - An overflow of foreign-made goods entered the U.S. in May, and early reports suggest an even bigger flood in June, with manpower and equipment at American ports struggling to keep pace with unprecedented volumes, say port and cargo officials.

The peak season is still ahead and containers are already piling up, raising concerns about bottlenecks through the summer and fall, they say.

The heavy inbound flows in May were caused by an unending appetite for consumer goods, a desire to secure those goods in advance of peak-season bottlenecks and a desire to beat modest general rate increases scheduled to begin in May, officials note.

Meanwhile, May exports were mixed, with many exporters reporting continuing progress, while some noticed a slight retreat from the progress of past months, suggesting no help coming from a weaker dollar in narrowing the U.S. trade deficit.
..............
The U.S. Commerce Department is scheduled to release international trade data for May on Tuesday, July 13 at 8:30 a.m. EDT. April's trade deficit set a record at $48.3 billion. The above commentary detailed May and June.
****************
Misetich

The trade deficit keeps on ballooning as jobs have been exported overseas ...

All Aboard The Gold Bull Express - Part ll

http://money.cnn.com/2004/07/12/markets/oil.reut/index.htmSnip:

LONDON, (Reuters) - Oil prices made fresh gains Monday after a blaze at Norway's biggest oil refinery halted the plant's gasoline exports and strengthened concerns over transatlantic supply.
***************
Misetich

The 2004 Oil Shock And Awe continues as the margin of error has been reduced to high risk, due to production constraints and high demand

All Aboard The Gold Bull Express - Part ll

http://quote.bloomberg.com/apps/news?pid=10000080&sid=aR1IzMf8SDcM&refer=asiaSnip:

July 12 (Bloomberg) -- China's exports surged 47 percent to a record in June, helping drive growth in the world's seventh- largest economy as the government reins in lending to cool an investment boom.

Overseas sales jumped to a larger-than-expected $51 billion after climbing 33 percent in May, the Beijing-based commerce ministry said on its Web site. China's imports were also stronger than expected, surging 51 percent to $49 billion, their biggest gain in more than a decade.
****************
Misetich

It appears the chinese administration is being successful in slowing down overheated sectors and keep their economy humming.

Stress on commodities prices will continue as the Orient roars ahead

All Aboard The Gold Bull Express - Part ll

OK,I'll bite.

My objection to the trucks was that they will destroy the peaceful small town ambiance of several little communities in the Big Bend area. Were doing just fine out here. Business is booming from all the tourists trying escape the cities, culture is thriving and everyone is happy. We don't want your stinking trucks!!!!!

As I understand it, La Entrada is a highway from the west coast of Mexico to somewhere in the Midland -Odessa area where a new warehousing center is to be constructed. All is said to be the brainchild of some shadowy, guilt ridden, oil man trying to atone for what they did to that area . At one time it had one of the biggest pools of oil and gas on the planet, but they pumped it dry, dry as a bone, so dry that all the little towns are just drying up and blowing away.

They are no different from the buffalo hunters. They have no conscience and no soul . They are like sharks , the perfect killing machine,. They have control of the congress and they have prevented any sort of government plan to conserve energy even in the face of impending catastrophe.

Have you ever asked your self what kind person would be in the cigarette business? According to the American Lung Association 400,000 people per year die from the affects of smoking. Multiply this by 50 years and it comes out to 20 million killed( including John Wayne and Humphrey Bogart) and millions more maimed and crippled. That is just in this country. They get away with it because they have bought off the congress. If you tried to do this in any small town in America you would never get to court because some angry mom or dad would jump over the rail and rip your throat out.

The libertarian ideologue trying to to equate contemporary corporate capitalism with John Galts little Utopian community up on the mountaintop. What planet are you guys living on.

http://news.independent.co.uk/world/politics/story.jsp?story=539802Serious students of Gold will remember the previous time Gordon Brown agitated in the Gold arena so visibly was the spring of 1999 where he called for IMF Gold sales amidst an unprecedented environment of large precautionary Y2K buying spree by the general public and also a reserve dollar being newly challenged by another monetary system, the euro.

The outcome was a program of Gold sales from Her Majesty's Treasury, presumably the salvation of the LBMA's bullion banking network in a very tight spot. Another outcome was the late-September announcement by the network of euro-land and sundry relatives informing the world through its Washington Agreement that "Gold will remain an important element of global monetary reserves. " The turnaround in Gold's fate was thus assured, and the IMF took a few trial steps to the beat of this new tune at year's end, not with sales, but with an operation to revalue a sample portion of its Gold reserves to market value.

Old dogs *can* learn new tricks, especially when survival depends on it, and that's what we seem to be seeing signaled these five years later. The euro model has proven the superiority of its legs, and there's no use for the Anglo-American/IMF resistors (the privileged shepherds of the old system) to continue fighting the long sure defeat.

To be sure, the Chancellor isn't wasting our time calling publicly for any more Gold sales. Rather, it's a call for Gold *revaluation* that suits his political purpose this time around. A-A halfway throwing in the towel on the outmoded IMF???? How close behind can FreeGold now be expected to make its full-bodied appearance?

Brown unleased his Gold revaluation proposal wrapped up in a speech of compelling humanitarian themes.

Begin snip
-----------Gordon Brown called on world leaders yesterday [...] At a conference of church and government leaders at the Vatican [...] He compared the campaign against poverty and disease in the 21st century with the challenge of rebuilding Europe after the Second World War. Then, the US backed the Marshall Plan that saw billions of dollars used to reconstruct the British and Continental economies.

"This time it is not war-ravaged Europe but the disease-ravaged countries of Africa," the Chancellor said. "With Britain holding a special responsibility through our presidency of the Group of Eight nations and the European Union we are determined to take advantage of this opportunity to make 2005 a development presidency designed to make real and irreversible progress in tackling poverty," Mr Brown said.

"It is our Christian teaching that when some are poor our whole society is impoverished, that when there is injustice anywhere it is a threat to justice everywhere and what selfish men tear down selfless men and women must build anew."

Mr Brown called on the International Monetary Fund to revalue its vast gold reserves to in an accounting device that would enable it to write off the multi-billion-dollar debts owed by some of the world's poorest countries.---------------
End snip


Unless they change their ways, the managers of the institutions of bullion banking will find themselves cold and lonely on the outside looking in as more and more thinking persons and their governments come to recognize and understand the benefits of a non-derivative FreeGold system for the greater good of mankind. Make a purchase and vote for it today.

Gold. Get you some. --- Aristotle

Snip: Mr Brown called on the International Monetary Fund to revalue its vast gold reserves to in an accounting device that would enable it to write off the multi-billion-dollar debts owed by some of the world's poorest countries.--------------- (end snip)

So true to the Euro model, an increasing gold price allows a further printing of fiat. It's not hard to envision this sort of thing feeding on its self.

But I'm not going to object at the risk of confusing the matter for any of the folks who might be able to seize upon this oversimplified case as an excellent tool for helping them understand that whatever may unfold INflationwise, (money supply) *DEflation* is definitely a thing of the past.

Gold. Get you some. --- Ari

Remember please, they are carrying goods INTO your country, goods that have been purchased by means of providing the Mexicans with some vouchers that will never be paid, called "dollars".

So, the US is getting stuff free from Mexico, on those trucks.

The GAB thinks that since the stuff in the trucks is for free, the least that could be done in return is to let that stuff arrive in those hated trucks.

How does that grab you?

The GAB

Buongiorno!,

I really like what you said about fairness:
"Agree that markets should be free, but they must also be fair--and each of us might define that in different ways. "
------
Everyone wants fairness and as you point out, each person has their own definition of what is fair.
In a free market each individual is free to trade or not trade based on his own definition of fairness. What could be more fair than that?
Who wants somebody else's definition of fairness forced upon him?

Best Wishes

A free market SHOULD be fair yes.
The question is what is fair? And who is impacted?
The greatest tragedy of modern markets is
the lack of moderation, balance and harmony.
Where sufficiency is no longer good enough- one must
conquer nature and nations of "infidels" who do not share the same political, cultural and religious "enlightenment".
No heed given to the working conditions of low wage nations, the lack of safety and environmental standards, the massive resource depletion, the disregard for traditional and sustainable
land, wildlife and forest management resulting in droughts, flooding, desertification, mudslides, etc.
The affects are on the environment, in disease and war, in financial and social disorder and dislocation, unemployment, family breakdowns, escalating crime rates,
escapism, sexual abberations, drug and alcohol abuse,
psychological and eating disorders, etc.
The ability to sustain the use of debt money is
one of the major ills cited in scriptures worldwide,
as is the weakness of men to embrace deceit.

Looks like FERC has warned of NatGas shortages again and higher oil prices.

Anyway, I will be gone a few days on business. In fact I am writing this from a hotel internet room.

Take care and congrats all contest winners!

- Black Blade

When the fires of passion for freedom burn, one can always count on a multitude of statist to quickly form a bucket brigade.

Thankfully, I stand not alone.

----------
I praise our gracious host for providing this forum and don't mean to imply anything negative about CPM, quite the contrary.

Best Wishes

Sorry Ari, you're right. I used the SNIP-thing wrong. Mea culpa ! I'm not used to communicate in English.

Noyer (ECB) : ...selling Gold...is... OUT OF THE QUESTION !!!

HANDELSBLATT, Dienstag, 13. Juli 2004, 08:28 Uhr
SNIP : Chodorkowskij plant, seine Aktien der Konzernf�hrung kostenlos zu �berlassen
Am Vorabend war ein neues Milliarden-Angebot der Yukos-F�hrung zur Tilgung der Steuerschulden bekannt geworden. Der bis vor kurzem noch gr��te russische ... lkonzern bot den Beh�rden eine stufenweise Zahlung von insgesamt 6,5 Mrd. Euro an. Yukos muss mit Steuernachforderungen von insgesamt bis zu zehn Mrd. Euro f�r die Jahre 2000 bis 2003 rechnen. Der bislang hoch profitabel arbeitende Konzern ist nach einem ersten rechtskr�ftigen Urteil seit im Verzug mit der R�ckzahlung von 2,8 Mrd. Euro. Finanzminister Alexej Kudrin hatte am Freitag betont, es w�rden keine Teilzahlungen akzeptiert. Es gilt in Moskau als sicher, dass die Steuerverfahren gegen Yukos und der Strafprozess gegen dessen Eigent�mer im Zusammenhang stehen.
------------------------------------------------------------------------------------------------------------------------
The Kremlin doen't want to solve Yukos tax evasion problem. The penalties have to be paid in one time (10 billion Euros). Yukos offered to pay 6.5 billion Euros in steps, but the government declined this offer.
Putin definetely wants to control all Russian oil. Pay attention : they offered to pay in Euros, not in rubles or dollars.

http://goldmoneybill.org/ Here's what I sent last week to all the Virginia state senators and delegates. Its a baby step, of course, but easy enough for others to get their state involved, too.

PRice

I'm writing to ask you to consider sponsoring a Gold/Silver Money Bill for Virginia for the next legislative session. New Hampshire has introduced such a bill, and from the information at http://goldmoneybill.org/ it appears that substituting the state name is all that's needed to introduce the same bill in other states.

Hello Belgian, I'm glad you are back. Did you have a golden holiday ? Have you heard the European Commmission will appoint Mr. Juncker as political counterpart for Mr. Trichet ? Your thoughts ?

@ GAB--Love your premise that we are just creating bogus $ and sending them to Mexico, thus getting "free" stuff for nothing. And to heck with the idea that their trucks must meet our standards to use our roads.
Great! Next, we should have every Mexican adopt an American and do all his work for him. We could shut everything down, create even more money, and all go on vacation--courtesy of our very own Mexican national!

This is not new. Just before the Soviets collapsed, the standard joke was, "we just pretend to work, and the gov. pretends to pay us"!(The money was no good, for that very reason.) Badda-bing, down with the wall!

Spain's plunder from the New World could have made her the world's first truly modern nation--all that capital! But she chose to just live well, do silly stuff, and imported, rather than creating, goods for living. She became then, is now, and will remain, less than a (ahem) world leader.

GAB always has real genius--I know somewhere, in his dark cave,he has head tucked under wing, laffin'and laffin', cause he was just foolin' with our minds. And he knows that those Soviet workers (and Americans) would love to have a few of MK's golden coins.

So...."If someone offers you a deal too good to be true....it probably is just that."
Buongiorno!

Junckers/Trichet = Another act in the euro-palace-intriges.
cfr. G.Brown/Blair stuff and recent statement on IMF Goldreserves.
Today's CNBC even polls the general public's preferences about pricing oil in $-� or yen. Cru(d)e(l) question, isn't it ? They know it is coming...w're heading towards it, step by step.
But the many EU (euro)factions (inside and outside) still differ on the way (speed) the "transition" should evolve (orderly or disorderly). Some even wish to encourage a positive pro Bush environment as to have him (the administration) re-elected. Simply to make things worse, before they can turn for the better as a tactical (politically intriging) move.
Many CBs (China-Russia-others) have been changing their fundamental reserve-view ! This is slowly but surely coming into the open public athmosphere.

Yes, I had a great holiday and met some Brits in France (Aquitaine-Bordeaux) who massively are buying their second property in France as to have a pied a terre under the euro-umbrella. They are anticipating.

The EU wishes to have Junckers on board as to bring Luxembourg (and Switzerland), both dissident capital (fiscal) paradises, in line with EU capital regulations and targets(convergence).

For the time being, $-POG will continue to perfectly mirror the $-� exchange rate and $-�-POGs (plural) are not permitted to have a life of their own,... YET (oil >< gold-matters)!
With the cruel crude going above the $40 pb, evidence of "pricing" (not yet invoicing) the oil in euro, becomes clear for all to see. Next curtain that must (publicly) fall is the oil-gold relatonship. FreeGold allergics should stock on their (metallic) medicine...and preferably not in homeopathic dosises (-):(-). Chuz, Socrates.

I ask myself wether the � is the alternative ? France & Germany budget deficits are above the 3%GDP-rule. No reaction from European Commission, now Italy is having troubles and Il Duce Silvio will get away with it ! Where will all this end ?

France and Germany's deficits are big pieces, but even so, they're still not the *whole* eurosystem pie. The way the world works, its not reasonable to expect anything to be *perfect*. As they sit on the bakery shelves wanting for customers, the eurosystem needn't be perfect, it needs only to be *better* than the others -- specifically, better than the dollarsystem pie.

Gold. Get you some. --- Ari

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

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

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also publish a very good hard copy newsletter called News & Views: A Bi-monthly Review of Forecasts, Commentary & Analysis on the Economy and Precious Metals. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

Happy Bastille Day Eve! Do the authorities track my individual gold(physical) ownership? If I buy a few Gold and Silver Eagles is that recorded in some way? Does the broker have to record and report to whom and what he has sold? Thanks in advance.

How did we get where we are today in the monetary realm?

Was the evolution driven by natural or artificial force?

Has anything occurred to suspend that force?

Those who cannot remember the past are doomed to repeat it.

Gold *AS* money (technically, it was only ever used as currency) is a thing of the past.

Gold has been working hard ever since in the minds of thinking men to throw off its monetary-ties and legacy shackles. Gold is ascending to its paramount role as property == king of wealth.

Gold. Get you some. --- Aristotle

http://goldmoneybill.org/Aristotle:

I didn't find it easy reading through the legislation. But what is proposes to be used is the market value, not the stated value, of the U.S. gold and silver eagles.

Was that your concern?

PRice

Soooo.... it'll move at market value.

Seems to me like a long way around just to "reinvent" Bullion, no?

Gold. Get you some. --- Ari

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.


--- closing market excerpts ---

Sharp gains in the U.S. dollar, following a narrowing of the U.S. trade deficit, sent gold and silver futures sharply lower Tuesday. But then, analysts and traders said, these metals might have been due for a pullback, anyway, after their recent rallies...

[Refco's James] Steel and [Prospect Asset Mgt's Leonard] Kaplan both said the recent rallies in gold and silver may been overdone. This was especially the case for silver, added Steel. "It hadn't shown a justifiable reason for the rally," said the Refco analyst. Aug gold had shot up from a July 6 low of $389 to a July 8 high of $409.60, while Sep silver had climbed from a close of $5.79 on the final day of June to a high of $6.58 on Monday. Kaplan pointed out that numerous analysts lately had been calling for a big rally in gold, with some saying prices could move to $430 and some of the more bullish forecasts as high as $480. "They were all bullish like crazy," said Kaplan. "Naturally, when everyone is on one side of the market, it goes the other way."...

"Gold is feeling the effects of a smaller than expected trade balance report," said John Person, head analyst at Infinity Brokerage Services. ... Indeed, the U.S. trade deficit for May -- marking the first narrowing in six months -- sent the dollar higher against most foreign currencies Tuesday....

The dollar flexed its muscles Tuesday morning after the government said the nation's trade deficit narrowed to $45.95 billion from a revised $48.1 billion in May....

Aug gold lost $6.10 to $402.30...

"It's dollar-related," said Leonard Kaplan....

Stops were triggered in the currency market, enabling the dollar to add to its gains, forex sources said. Stops were also triggered in the precious metals....

"The dollar comeback, based very much off of the trade figures, undermined both gold and silver," said Jim Steel...

"Exports out of the United States were stronger than what analysts thought," Person added. "This translates to a potential trend developing, and in that case would be bullish [for] the dollar."...

John Strafford, editor of Strafford's Investment Strategy Letter, argued that gold actually "rises coincident with rising interest rates at this stage of the dollar/gold cycle and under these conditions."

He pointed out that "gold rose from $42 to $850 as interest rates rose from 6 percent to nearly 20 percent" in early 1980.

Person also asserted that the difference between the past and the present is that the market wasn't trading globally, and that China, Russia and Latin America weren't moving toward capitalism then. Gold formerly was an investment hedge against inflation, but now traders have more "effective trading vehicles," such as options and other derivative products, to use as hedges against rising inflationary pressures and against rising interest rates, he argued.

In any event, the gold market is "slightly overbought and this was an excuse to take money off the table and view pullbacks as a buying opportunity," Person said, adding that he nonetheless expects gold to reach $475 by the end of the year....

----(see url for access to full news, 24-hr headlines)----

Socrates, you keep looking at the euro (the currency) through the classical dollar currency spectacles. It is NOT about the euro as "currency" but about the euro-gold-concept that is architected with this new currency !!! All the gold-statements of the past 5 years, are induced by the very existance of that euro-gold-concept. We lived during 15 years (1980 > 1995) without any gold-statements as the reigning dollar-gold-system was in place, accepted and supported, worldwide !

The euro-concept is all about replacing the dollar goldmarket by the new euro goldmarket, wellcomed by all those, outside the US, who have (are) accumulating dollars...debt loaded credits (as all other fiat currencies) not associated in paralel with Gold Wealth.

The dollar reserve system wants you to speculate as to compensate for dollar depreciation by acquiring...more of the same dollar currency (digits). The euro concept wishes to lead you towards wealt consolidation in Gold that lives in a FreeGold euro market.

France/Germany's relatively small deficits don't matter in this concept ! How else are you going to explain the constant rise of the euro exchange rate against the dollar !?

Make (think about) the fundamental difference between a "currency" and real "universal"...UNIVERSAL *WEALTH* (Gold). The dollar has always claimed that the dollar-currency is as good as wealth. The euro will never make that same claim, not even in its most probable future function as reserve currency. One's wealth is one's Gold and everything else can impossibly be claimed as everlasting universal wealth.

It must be clear by now, when thinking about the evolving $-� exchange rate, that the euro fiat has its gold-concept silently accepted by a growing majority of non US (dollar-block) sympathisants (dollar accumulators-earners). Remember how massive concerted dollar action knocked the new born euro down by 30% against the dollar !!! How did that zeuro managed to get back on its feet and grow taller (24% above dollar parity)!? Have I put your France/Germany deficits into perspective with the factual arguments (exch. rate from minus 30% to plus 24%)!?

If the dollar can intervene in the dollar goldmarket (throug POG containment) in order to support (strengthen) the dollar exchange rate (and purchasing power)...the euro (and its outside EU supporters) can do exactly the same but in exactly the opposite way : *lower* $-POG = stronger dollar and *higher* �-POG = stronger euro !!! That's the hart of the Gold matter, Soc !

Bedtime for me. Read ya in the morning.

http://goldmoneybill.org/goldbill.htmlAristotle:

The honest structure of the bill would put a camel's nose under many deceitful tents. Its basic premise is to establish a parallel path of monetary dealing of the state with its citizens.

What state are you from? Wouldn't it be great to get eagles back at tax time?

PRice

Before you decide to give your good name toward championing a cause, you should really do your homework ahead of time and figure out if the cause is worthy of your good name. In this case, it most certainly isn't.

Think about the essence of "Gold" as it would exist within the monetary context of a Gold loan all within the framework of a bullion banking system. If that seems too alien, just try to visualize it all as an exact parallel to the dollar, dollar loans, and our existing commercial banking system.

If you'll give that some serious thought, I think you'll discover in that arrangement that the essence of Gold becomes disconnected from its physical reality and loses all meaning while within a monetary context.

I'm willing to go out on a limb and guess that root cause of the problem so many people have with this premise is that they are not willing to give "money" (as an intangible) enough respect in the course of their own thinking. Big mistake. Just show me one person who isn't thrilled to receive a big fat check.

Gold. Get you some. --- Ari

Please excuse me, I couldn't help but overhear you conversation with price.

I happen to think that that such a bill has some merit. If enacted it would take some physical off the market, no? It would help the good folks New Hampshire to become reacquainted real wealth, no?

I had been kicking around a similar idea. After hearing my governor complain about the effects of the high dollar on manufacturing and, the states inability to do anything about it. I then heard her pledge to do anything and everything that she could to retain as many jobs as she could in the state, yea� I'm a sucker for believing anything that come from a politician's mouth eh? My thought was to suggest that the strong dollar is really weak gold and that the dollar would be weakened if substantial physical were removed from the market place. If property taxes were payable in gold, where the value of gold was spot plus 5% this would encourage folks to hold it. The state would, at a later date, offer the gold back the public at spot. So �the state looses 5% of tax revenue for giving this idea a whirl, a lot less expensive that much of the knuckle-headed stimulus and give-aways that are offered as our economic salvation. For the record the property tax receipts in Michigan would amount to over 1000 tonnes, if all payers took advantage of the program.

Nope� it's not free gold. It's not likely to happen. But I don't think it's a bad idea.

Always appreciate you posts!

About each Mexican adopting an American and doing his work for him.

It's worse than that: both Mexicans and Americans are being adopted by Chinese and they are doing the work for them.

75% of the content of products in Mexican retail stores, is of Asiatic origin!

The Chinese are paid in uncollectable vouchers, i.e. dollars, but they are happy with that situation, for the time being. The high muckey-mucks upstairs in China must have something up their kimono sleeves, we don't know exactly what, but the surprise will not be pleasant when we find out.

In the meantime, both the industrial base of the U.S. and what there is in Mexico, is being (has been) undermined by the labor of these coolies who have adopted Mexicans and Americans.

Let us stop quibbling about trucks, for goodness sake, and concentrate on the common and enormous problem, which is: that the fiat US dollar is detroying the US itself by allowing the American people to buy everything under the sun, more cheaply abroad. Wal-Mart is just the visible consequence of this problem, which has a monetary origin.

Agreed: get your gold coins before the New Rome, the US, crumbles as a result of its "conquests".

The GAB

http://cbs.marketwatch.com/news/story.asp?guid=%7B277A8376%2DFDFE%2D4C5B%2D920D%2DEC619E1FF8DF%7D&siteid=mktw Fannie Mae Criticized By HEO

Federal Housing Enterprise Oversight(what will they
come up with next?) director Armando Falcon
is quoted as saying that naughty
Fannie is not cooperating in providing various vital information, and formal action will be taken to acquire it!

The hounds are looking foreward to some more of those GOLDfish !! Are you about ? No one has seen you for a fortnight.
<;-)

@ GAB--concur your comments about the Chinese. Thank goodness they are not on our southern border!

The reason I brought up the effect of New World wealth upon the Spanish is what I percieve to be a related if not parallel situation--that being the injection of huge, unearned liquidity into our own economy. Outsourcing (and insourcing) of jobs, huge govt. programs, inability to control our borders--all, I feel, are symptoms of this massive, unearned injection of liquidity.

I know, you do not think the trucks are a problem. IMO, they, with illegal immigration, are a symptom of our desperate need to do a deal, and our inability to control things anyway. We are feckless, unwilling to either enforce existing laws, or to change them. A nation without borders may, sadly, no longer even be a real nation.

So we have debt bubbles, credit abuses, energy problems--and now the GAB informs me that I have been adopted by Chinese and Mexicans. Worse yet, he may just be correct! One thinks fondly of a golden anchor to windward....

Fire up the Peterbuilt, I gotta go!
Buongiorno!

Why add unnecessary layers of bureaucratic complexity on something that ought to just continue trending as it is toward elegant simplicity and systematic perfection?

I.E., Why try to wrangle an official way to use Gold to pay their taxes when it's already so nicely usable for people to "pay" their own savings and retirement plans? Is that too simple? Do Goldbugs simply revel in the adversity of a challenge?

I'd say not, otherwise I'd expect that we would see more Goldbugs rise to the occasion and accept my challenge to see the degradation of the essence of Gold as it would exist within the monetary context of a Gold loan functioning within the framework of a bullion banking system. Instead, no one attempts that bit of heavy lifting, and yet the reward for success is a BIG one.

Gold. Use it for savings. Get you some. --- Ari

Make the effort to read " America's deficit, the dollar & Gold " (Tim Congdon) at the Gilded Opinion.
The (WGC) prudently balanced study was written 2 years ago.
Today, we see that the author's projections gained a much higher (faster) probability of effectively materializing.

Ongoing evolutions were never stopped and reversed. Evolutions only gain in momentum (intensity) as time goes by. So will all the discussed Mexico/China things .

Goodmorning Belgian. You said yesterday "France/Germany's relatively small deficits don't matter in this concept ! How else are you going to explain the constant rise of the euro exchange rate against the dollar !?" You said Ari looked at this through dollar spectacles, but couldn't this be a look through euro spectacles ? The rise of the euro can also be seen as a dollar decline. Cfr. relatively stable �-POG against increasing $-POG, while the Swiss Francs-POG is "almost" contstant.

http://abcnews.go.com/wire/Business/ap20040714_46.htmlIf the vote today passes as expected, the proposed new hedge fund regulations will be open to public comment for a few months before taking effect. It would require among other things that hedge funds register with the SEC and open their books to inspection.

http://www.silver-investor.com/cs_july04.htmLonger than it needs to be, but well documented and a good historical perspective on silver flowing toward China for centuries and the implications of it having flowed in the opposite direction since 1800 or so.

Snip:
Mr. Xiaochuan, head of the Chinese central bank, is a member of a paper money mob organization loaded with Federal Reserve types, including Paul Volcker, the man who took 158 million ounces of silver away from the Hunts. Running as he does with paper money creators, they persuaded Xiaochuan to dump silver so the low COMEX price could continue to prevail. A mountain of gold and interest rate derivatives, and the dollar, are at risk if silver rises, because silver's rise would also free gold to rise!

Do you really think the � and the $ fraction have such a different agenda / are in "a competition" ? Shouldn't there be a mutual interest in coming out of the post '71-era ? IMVHO, the only one who has the (pricing power) to get the dollar out of the reserve currency function is OIL, with gold in the intermediare function. Not only European(ECB-BIS) politics !

I agree we needn't add layers of bureaucracy, we are headed toward a revaluation quickly enough to suit me. I think I'll just hitch a ride.

Yes, gold within a monetary context of gold loans would be less desirable for today's goldbug, who wants to see the greatest possible appreciation. The problems that I see are these: What mechanism would prevent forward sales in is free gold regime? If oil should ever demand payment in gold, how can a fiat currency possibly hope to account for the oil that has gone into the production of goods and services?

http://www.mises.org/fullstory.asp?control=1557We've talked a lot here about the end of cheap gold and cheap oil. Here is another one that has only been briefly touched upon, but appears to be a trainwreck further down the track. The article discusses the South Western USA, but I see the same sort of politically-induced water wastage in Florida, where chronic shortages are ignored in the lust to build new suburban subdivisions (which are a long way from the owners' places of work and very energy inefficient, but don't get me started .....)
There were two phrases that really jumped out at me :-
Snip1 :
"To put it in a way that Austrians would understand, government policies have resulted in malinvested resources and development that cannot be sustained. As in Austrian Business Cycle Theory, which stresses that recovery cannot begin until the malinvested capital has been liquidated, the American West cannot begin to see true "sustainable" development until new policies are implemented."

C! Ah, yes, the refusal, for short-term political gain, to face reality.

Snip2 : "this ridiculous saga may very well come to an end precisely because the government cannot create that which does not exist."

C! Now how many other things can you think of that could fit this description !

http://www.freebuck.com/articles/guest/040705guest.htm... but may make more of a ruckus later this year and next.

I haven't seen any mention of this at the forum (or anywhere else except today's Mogambo), but, as the Guru says, one has to ask the question "Why now ?"

Snip

On June 23, 2004, the Securities and Exchange Commission (SEC) changed the rules regulating short sales. Until now, it has been illegal to sell a stock short unless it was sold on an uptick. This was the result of Regulation SHO, which was created by the Securities Exchange Act of 1934. This is a major change in the philosophy of the SEC. The new Regulation SHO will allow short sales without waiting for an uptick. Since the founding of the SEC in 1934, their philosophy has been to discourage the selling of equities. Short sales have been portrayed as a demonic instrument that will destroy America. It is interesting that the SEC never made a purchase subject to a downtick rule. One could state that the SEC created the "Buy and Hold" mantra that the mutual fund industry is based upon. Franklin Delano Roosevelt once said "There are no accidents in history" An interesting statement when you realize that FDR created the socialist system that is now collapsing.

The new Regulation SHO will take effect on January 3, 2005.

C!

The dollar will and shall lose its reserve status due to its debt-driven expansion and systemic deficit that is permanent.
Yes, the euro and the dollar are definitely different, because of their opposite relationship towards the Goldreserve(s).
I don't see any kind of possible alternative or compromise between the 2 or 3 major currencies (dollar-yen-euro).

The fact that nothing financial-monetary-economical, is actually "crashing"...is nothing else but a gigantic deceptive smokescreen. It produces (purposely) the illusion that all will come right in time !? I'm NOT buying this, Socrates. Definitely not. This maskerade cannot go on for ever. Interventionist manipulation has its natural limits. And we have been pushing those limits, extremely far. For one single purpose only...to extend the planet's dollar-reserve-system as long as possible.

A rising dollar will make the twin deficits bigger and a declining dollar will bring devastating (hyper) inflation. W've come to the point where there is nothing in between those two extremes, anymore. The economic $-order of our planet has shifted, Soc ! One cannot be a little bit pregnant...

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO_07_04.htm
"The commonsensical explanation as to why, revolves around the observation that debt as opposed to equity requires an obligation to pay � principal at maturity, interest periodically � and when there's too much of it the burden can be crushing if yields rise for geopolitical, policy mistake, or other imaginable reasons � one as simple as higher inflation for instance. In addition, problems arise when the maturity or distribution of the debt becomes imbalanced. Too much short-term as opposed to funded long-term debt has caused many a personal, corporate, and in some cases sovereign bankruptcy. And debt in the hands of benevolent instead of self-interested creditors can be crucial. Americans used to placate themselves with the adage that "we owe it to ourselves" when confronted with mounting public deficits. Such was the case in the 30s, the burden of which was rather anemically molted away by subsequent inflation in the midst of interest rate ceilings imposed during WWII and its aftermath. But when over 50% of outstanding Federal debt is held by foreign creditors, then the rules of the game can change. Global current account imbalances reflected in our ongoing 5% of GDP trade deficit speak to dollar depreciation as a legitimate response to placate foreign creditors in need of a higher currency adjusted return on their "investments." And if that dollar depreciation is significant, swift � or both � then economic and financial repercussions can follow a similar path.



The consequences of higher interest rates mentioned above can be destabilizing as well. It's sobering to contemplate that not only has our current cyclical prosperity been due to the "productivity" of lower interest rates in a finance-based, debt-laden economy, but that the reversal of yields must be more than delicately manipulated in order to prevent reciprocal damage and global economic instability. I use the term global in this context more than figuratively. The reality is that almost all the world's significant central banks save the ECB have begun or are in the process of monetary policy reversal and many do so within an environment fraught with substantial debt and therefore risk. England's Monetary Policy Committee is already on the march upward in an effect to cool speculative housing appreciation. With home prices ultra-sensitive to short-term rates, however, they could go too high or stay too low, with their domestic economy swaying in the balance. Japan is contemplating an exit from their ZRP or Zero Interest Rate Policy. Talk about a foggy horizon! With so much government debt held by so many domestics banks and insurance companies, their central bank could technically bankrupt their own financial sector by too precipitous a move which would sink JGB prices and asset valuations at these institutions. Japan's new friendly neighbor to the west � China � has a pickle with their own short-term rates and eventual revaluation of the RMB vs. the dollar. China's banks themselves have an excess of low quality loans supported by a thin thread of mercurial equity. And then there's the Fed. Wednesday's interest rate hike is just the beginning of a journey as to who knows where or when. Not only our housing market, but the financed-based profits (40% of all profits as shown below) of American corporations are at risk. This in turn speaks to the stock market, P/E ratios, and wealth/paper-based prosperity, that depend on the continued low cost of excessive debt taken on in recent years."

Druid: Excellent commentary and analysis with graphs to go with it.

Yesterday in addition to temporary reserve operations, the Federal Reserve entered the open market to buy Treasuries outright once again for its own account -- a coupon pass to the tune of $400 million which now appears as merely a practice run for today's main event.

The Fed's NY Trading desk has again this morning intervened in the open market for the purpose of buying Treasuries on behalf of the System's account, a coupon pass that injected $1.898 billion in fresh "high-powered" cash directly into the reserves of the nation's commercial banking system. That's the biggest "permanent" add I've seen in memory.

Note: for the new-comers, the term "high-powered" money refers to the phenomenon of fractional reserve banking. This newly created money by the Federal Reserve, now that it has freshly hit the commercial banking accounts of the instititutions from which it bought today's Treasury coupons, acts as an addition to the foundation (or monetary base) upon which the money supply can be further expanded by the commercial banks' regular lending practices.

There is no practical limit to the amount of money that can be thus injected, and the consequence of prolific money-creation beyond the needs of a growing economy is inflation of prices, a depreciation of the currency's purchasing power.

R.

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http://www.usagold.com/Order_Form.htmlNEW YORK, July 14 (Reuters) - The dollar stumbled against the euro on Wednesday after a report on U.S. retail sales showed consumer spending slowing, which analysts said would keep the Federal Reserve on a path of restrained interest rate hikes.

Randy's note: And it is on top of this stagnation that we see the Federal Reserve buying Treasuries and injecting new waves of money into the system.
-----------

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http://news.yahoo.com/news?tmpl=story&u=/ap/20040714/ap_on_re_us/east_coast_flooding_13MEDFORD, N.J. - Residents in the Northeast braced for more heavy rain and flooding after some towns were hit with what meteorologists called once-in-a-lifetime storms.

...On Tuesday, Gov. James E. McGreevey called a state of emergency in two counties and lawmakers asked President Bush to declare portions of southern New Jersey a federal disaster area.

...The storm dumped over 13 inches of rain in a 12-hour period in Burlington County, located in southern New Jersey. It was classified as a 1,000 year storm, the National Weather Service said.

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

That's really an incredible event. As unrelated to economics as it might appear to be, I mention it here only because "the buck" quickly gets passed to the federal level in events like this, and it further strains the budget with either a need for additional taxation or else further deficit financing. You can already guess which method is chosen to deal with this sort of thing.

The insidious depreciation of its currency is the indirect means in which a society often pays the bills which it would rather not pay through direct taxation.

How is a saver to protect his wealth over time? He can either spend lots of time and worry trying to gamble with his savings to stay ahead of the game, or he can simply choose gold and then get on with the more important business of life.

R.

6 new document(s) found since 28.06.2004:

1. Philipp Hildebrand: The new investment policy of the Swiss National Bank (Central Bank Articles and Speeches) (14.07.2004 14:48)
Introductory remarks by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Geneva, 17 June 2004.
http://www.bis.org/review/r040712c.pdf (PDF, 39676 bytes)

...Bank only had limited possibilities for managing its assets. Monetary reserves were mainly held in the form of gold and foreign-currency government bonds with a maturity of less than one year. Accounting for approximately 80%, the...

2. Klaus Liebscher: The importance of the Bretton Woods institutions for small countries (Central Bank Articles and Speeches) (14.07.2004 14:50)
Opening address by Dr Klaus Liebscher, Governor of the Austrian National Bank, at the Conference on �60 Years of Bretton Woods - governance of the international financial system - looking ahead�, Vienna, 21 June 2004.
http://www.bis.org/review/r040713b.pdf (PDF, 66665 bytes)

...to quotas rather than on a one-state, one-vote basis. The first major systemic crisis - the breakdown of both the gold exchange standard and the par value system of the original Bretton Woods system in the early 1970s - was...

3. Eva Srejber: What role do asset prices and credit play in monetary policy (Central Bank Articles and Speeches) (14.07.2004 14:49)
Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at The Adam Smith Seminars, Thun, Switzerland, 30 June 2004.
http://www.bis.org/review/r040713h.pdf (PDF, 92136 bytes)

...countries. Unemployment fell, growth was robust and inflation was low. The US currency, which in turn was pegged to gold, served during the period as an anchor for inflation and exchange rates in mainly western Europe, where the...

4. Toshihiko Fukui: The centenary of the Bank of Japan's London office (Central Bank Articles and Speeches) (14.07.2004 14:52)
Speech by Mr Toshihiko Fukui, Governor of the Bank of Japan, at the reception for the centenary of the Bank of Japan Representative Office in London, 29 June 2004.
http://www.bis.org/review/r040714c.pdf (PDF, 30308 bytes)

...how large the proceeds of Japanese government bond issuance. The total amount was more than double the amount of the gold reserves of the Bank of England. The second example is the scheme for credit facility that was made available...

5. Zhou Xiaochuan: Some issues concerning the reform of the state-owned commercial banks (Central Bank Articles and Speeches) (14.07.2004 14:51)
Speech by Mr Zhou Xiaochuan, Governor of the People�s Bank of China, at the IIF Spring Membership Conference, Shanghai, 16 April 2004.
http://www.bis.org/review/r040714g.pdf (PDF, 79534 bytes)

...ways, two pilot reform banks will write off basically all historical loan losses. Third, some foreign exchange and gold reserves were used to recapitalize the state-owned commercial banks. It should be noted that recapitalization...

6. T T Mboweni: The foundation has been laid (Central Bank Articles and Speeches) (14.07.2004 14:51)
Speech by Mr T T Mboweni, Governor of the South African Reserve Bank, at the BMF Corporate Update Gala Dinner, Gallagher Estate, 18 June 2004.
http://www.bis.org/review/r040714e.pdf (PDF, 68912 bytes)

...amount of new money would be supplied to the system; to maintain positive real interest rates; to increase the gold and other foreign reserves to a comfortable level and to develop a sound financial infrastructure consisting of...

This prints out at four pages and, imho, is worth the printing. Gross has summerized a great deal, very clearly, in a well-written short essay.

Good heads up on this one...it's enough to make one think of purchasing more gold...paper and physical..(;> ...thanks Druid...
rich

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--- closing market excerpts ---

Gold for August delivery rose by $3.30 to close at $405.60 an ounce on the New York Mercantile Exchange...

Weaker U.S. retail sales are "just another in a series of economic statistics of late that suggest the economy is not a ball of fire and in fact may be weakening yet again," said Peter Grandich, editor of The Grandich Letter....

"This has allowed the secular bear market in the U.S. dollar to move to the forefront again, which can only enhance the bullish case for gold and commodities in general," he added.

Volatility is likely to continue in gold "until something definitive happens in the world to force the yellow metal to either relax or spike much higher," said Kevin Kerr, a senior trader at Kwest Market Edge...

----(see url for access to full news, 24-hr headlines)----

--ASSORTED HEADLINES--

Stocks Head Lower on Retail Sales News -- ABC News

U.S. Treasury says likely to hit debt limit in Oct -- Reuters - Bonds News

Retail Sales Sink 1.1 Percent -- Fox Arkansas - Money/Business

Derivatives mart gets a whiff of bearish days -- The Business Standard

Dollar dips vs euro, US data confirm measured Fed -- UBS Warburg

U.S. Treasuries slip despite weak retail sales -- Borsa Italiana - News

TownCrier (07/14/04; 11:51:02MT - usagold.com msg#: 123005)
Passing the buck
http://news.yahoo.com/news?tmpl=story&u=/ap/20040714/ap_on_re_us/east_coast_flooding_13
MEDFORD, N.J. - Residents in the Northeast braced for more heavy rain and flooding after some towns were hit with what meteorologists called once-in-a-lifetime storms.

...On Tuesday, Gov. James E. McGreevey called a state of emergency in two counties and lawmakers asked President Bush to declare portions of southern New Jersey a federal disaster area.

...The storm dumped over 13 inches of rain in a 12-hour period in Burlington County, located in southern New Jersey. It was classified as a 1,000 year storm, the National Weather Service said.
------------------------------------------------------------
I live in Delaware and we got hammered by the same storm. We had a once in a lifetime "Storm of the Century" last year which caused flooding in my area where it had never flooded in recorded history. Its in large part due to overdeveolpment and missuse of land. (Thank your local government and greedy developers). The area in and around northern Delaware is so over developed when it rains there is no place for the ground to absorb it. What was until recently a largely agricultural area is now covered over with asphalt and concrete. The water sluiced through the rivers and creeks in our county causing major damage. There will be more of this in the future.

Are there any biological science types out there who understand the concept of a climax community in which we see the final stage of a region's ecological development/evolution whereby a distinct community of organisms reach sustainable harmony with the region's characteristics such as soil-type and climate?

A classic example is where a forest fire has swept the ecological slate clean, in a sense, and various little green critters start to repopulate the area in a fairly predictable evolutionary progression. It usually starts with the most prolific growth of annuals (that nicely stabilize the blackened and barren soil,) which are later crowded out by hardier perennials and shrubs which themselves are eventually checked by the reestablishment of taller trees (of the kind best-suited to the area) that win the arms race for available sunlight with their insurmountable canopy, leaving little green critters of the forest floor to those types who can best survive in the dim and dappled light that penetrates through.

This latter-stage, fully-developed and stable regime of contentedly coexisting species of plants is what is known as the climax community.

The key point is to be aware that this most perfectly-suited arrangement doesn't arrive intact all at once, nor does it arrive as the first thing out of the starting gate. There is a systematic progression toward this example of ecological perfection.

And so it is in the economic community of mankind. That is to say, we are still on the development path toward a more perfect and sustainable ordering of affairs. The monetary evolution that I have been endeavoring to describe (being the least of peers alongside intellectual giants like FOA, Belgian, and Miner) is very much akin to the progression toward an ecological climax community. That is, there are arrangements and associations along the way that are suitable at an early stage, but ultimately must yield the way as they are crowded out by a more perfect arrangement, perhaps returning again at a later stage but in a markedly different capacity and association.

And so it is with the interplay of Gold and money in the banking system, ever shifting and evolving from one arrangement into something new and better suited to the overgrazing tendencies of the growing herds of mankind.

On these sunny hillsides of the economic world populated by modern man, the monetary "climax community" is foreseen as one in which FreeGold grows to the sky as the sturdy perennial wealth, meanwhile the ground level is populated by a lush grassy covering of fiat green for the herds to graze, trample, and poop upon according to their social whims.

Gold. Get you a grove while still as affordable saplings. --- Aristotle

Human/social will, of course! It's the only force that really matters.

Nothing heavy-handed or draconian is required. Imagine a semi-enlightened population that can one day understand the difference between bedrock WealthPropertyGold in hand and the alluvial sands of BankingMoneyCurrency on account.

Do you think that population, or more correctly, it's equally enlightened representative government officials will, to begin with, forever stand still for the papering-over of Gold's physical value? Secondary, with Gold ascendant, do you think an enlightened population and its government will be tolerant of the *unnecessary* systemic risk posed by the *unnecessary* financial regime that deals in Gold derivatives? Why tolerate having the nation's stock of Gold reserves ever at risk of depletion through exposure to "lender of last resort" duties for the potential financial system salvation due an associated commericial bullion banking scheme gone awry?

Derivative operations like forward sales can be stifled simply by assuring the would-be Recipient side of the deal that they are "participating at their own peril -- Caveat Emptor!" That for any Gold-related contract they'll have no recourse through the court system to try to make good on a promised delivery that fails to materialize.

That's just an example off the top of my head. I'm sure you can come up with others.

Gold. Get you some. --- Ari

Before going to bed...one more little detail, probably an insignificant one, but nevertheless worth to communicate :
Goldmine-prices "used" to anticipate the altering dollar/Gold relationship ($-POG). This "seems" to happen less smoothly (evidently) at present, as observed by some (slightly worrying ) goldminebugs !? $-POG seems to be tighly glued to the narrow range moving dollar exchange rate. A kind of behavior that breeds some suspicion if this should continue for some more considerable time. Funny that the rand refuses to oxygenate the needed profitability boost for S-African goldmining !?

We often seem to forget that the interventionist manipulation of the $-POG, results in indirect control of Gold supply from mining !
Bizar, the more that it is generally accepted that there is a deficit in yearly gold supply for quite some consecutive years now.

This "seems" to be a very subtle maneuvering as to put goldmining into the service of VERY important, VITAL Gold commitments. Underground Gold for cheap oil-flow, for instance.

The POO raced above $41, today...whilst its '99 low was $10$. The goldminers lost their autonomy (pricing-power) completely and are at the mercy of the Goldprice interventionists !!! This in sharp contrast with those who are holding the remaining oilreserves.

Funny that nobody ever reflects on the key issue of Gold for oil !?
Goodnight Ari.

WOW!!! I don't know whether your thoughts are from brilliance or from smoking something. Perhaps, at times, it can be one in the same. But, being a major in biology and minoring in chemistry, the analogy, for me, is nothing less than profound!!! Suitable. Enjoyable. Applicable. Makes you think. That's what this forum is all about. How do you come up with something like
this? Keep up the good work and please continue your contributions.

Remember: Gold hath no equal.

Noble1

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Ari, if there has ever been a climax community I have never seen it. The trees finally grow and a century later, the Indians move in and burn it to make room for more grazing animals. Then a couple decades later, a mess of beavers move in and develop more meadows and other swampy places.

There are few wild places in the lands of the west that are not actively managed by "someone", (even if that someone doesn't put up fence posts and billboards, nor even linger around 365 days a year)

As to sustainable development, Mr Clink! (#122998) I saw it in the west. The year was 1491 and there were A LOT fewer golf courses.

The problem is NOT the level of resources, nor is it in finding a new technology to allow us to use the existing resources more efficently (we could all install sonic showers, grow less salad and go to closed loop wastewater treatment).

The problem is always a moral one. Can we live within limits? How is that limit priced? The wise live with great surplusses, they are called savings, or "margin of safety", though in this last two hundred years I have more often heard them called "untapped resources" or "waste". It allows you to be generous, when called for. Those less informed always live at the limit, or in debt.

How close to the cliff edge should you build? Hmmm. It is not an engineering question! I do not ask how close CAN you build; and THAT is the distinction. Of course with a government affixing the price tags the situation becomes a complete basket case. Yet I still fear the day that we solve our water and energy problems- because in that day, having no more limits, we will destroy ourselves if we have not by then learnt self control.

The real issue of property rights is not do we respect them among ourselves, but will we respect the property rights of other nations? Do we look at somebody ELSE's forest as theirs to manage, or do we complain that they dont allow logging? Do we allow goofy nations to choose their third world poverty and lack of "development" or do we insist that they create export markets to provide us trinkets.

Snip:
"While the Times portrays the federal government as the ultimate savior in this growing mess, history tells us otherwise. The American West faces severe water shortages because of U.S. Government policies of this past century; the solution is not for the government to further assert itself, but rather to end the water socialism that it has imposed. The command system of economics that has led nations like North Korea and Cuba into ruin has also created the crisis in the West."

Yes private domains are a fine thing. Too bad we subvert the process with IMF funny money (or judicious invasions). It's also too bad that sustainable management is a habit only practiced by hobbits and backward stone-age third world nations. I have spent a couple millenia wondering why some of us (wont mention names) just refuse to be a part of the ecosystem like every other species. Was it just the funny money? Or was it some religious misperception?

Free gold will help, but it's only the beginning

The group of four was early to rise and on their way to Hammerton. The weather was clear with warm days and cool nights. A travelers dream amoung good company. The camp fires was small as to not draw attention. Bandit would watch Gandalf blow smoke rings through each other forming a cone as each ring was smaller and farther away from the last.
"What is on your mind, good Wizard", asked Bandit.
Gandalf looked over towards Bandit and blowing another perfect smoke ring into the air.
"Many things, good and bad", answered Gandalf.
"This one is going to be really bad" said Bandit.
"What makes you say this?",Gandalf could see he was not going to let this go.
"Your smoke rings are undisturbed by the gentle evening air"."Your thoughts are deep", and the gentle giant smile.
"We will know more when we reach Hammerton", said Gandalf.
The next day they reached Hammerton and passing along the streets were greeted by the towns people. Not stopping they went to the burial mound of the creature. They could see the movement of the ground and the stones were not as Gandalf had had them placed.
Moving to the center ring, the four stayed close together. The grass had turned brown and in some places only barren dirt shown.
Some towns people watched them but never entered the grave of the creature.
Late afternoon came and passed and Cougar, Bandit and Sir Misetich, patiently awaited something with Gandalf.
Gandalf turned to Sir Misetich, "Soon,very soon"
The sun began to set and the temperature dropped, accompanied by a swift wind.
Then like a lightning bolt,it came upon them. Energy form within the earth had entered all and images filled their minds. They could see the Army of Darkness mobilizing. A leader on a mountainside balcony. A sword and a burning black pool. Dark figures in the shadows.
As quickly as it came ,it left them. Gandalf began to speak as the others were still slightly stunned.
"As I feared they are coming and it will not be over till they crush us and take all. This time, we will have to defend what we have. Let's hope Sir Oro, has what we need to save us."
They left the circle of stones and as they crossed the area Cougar and Bandit were just jabbering away at what they had just experienced. Sir Misetich asked as they walked to their horses.
"Gandalf, Do you know where can find, Sir Oro?".
Slingshot------------<>

After reading some excellent posts today from Ari, Belgian, Clink, Rich and others I recalled when I first felt my own attraction to gold. It was 1987 and the US budget deficit was reaching new records. Somehow I equated this debt as a marker for future economic decline and depreciation of the dollar.
Now I have learned that the dollar is debt and that it is the antithesis of gold. Gold is the antichrist to fiat bankers and political vote buyers. The dollar climax is near. Like an aging diseased tree in Ari's forest it will topple to allow a more durable species room for growth.
Just as disillusioned Europeans brought forth this great new nation, enlightened Europeans have brought forth an alternative to its now corrupt monetary unit.

...aaaahhhh...., yess... a nice long sstay in the mountains does a body good, eh, precious? Sets the mind right... too bad we didn't find any of It out there...O, well, but we know where It can be found, eh?... sspeaking of that, let us see what has been happening at the Casstle while we were away... (read, read, read) ach! This is going to take HOURS to catch up on... (read)... sigh... there is jusst soo much here... Russia amd Madagascar, yaiow... (read)... precious, is this place not truly priceless? We wishes we could have the entire ssite on paper for reference when 'TSHTF', as they ssay... hmm, looks like the Hounds got into the Gold-fissh we left, un-watched... and they have a belly-ache now, hmm?... they'll get over it ssoon enough... eh, what's this?

!!!!!
We won a Honorable Mention Silver Precious for our Essay?!!(...stunned shock...)

Surely there were better ones than ours, leasstwise we thinks... because we did read them ALL, precious... ssuch heady draughts of thought and information always makes our head hurt... we feels sorry for the Judges! Ai, what a tassk! Our heart goes out to them. Congratulations to the Contesst Winners, and a big Thank You to the USAGOLD Casstle Hossts! O happy Silver day!!

TownCrier (7/8/04; 12:30:15MT - usagold.com msg#: 122867)
http://www.moscowtimes.ru/stories/2004/07/08/002.html
..."The banking crisis is like a little bushfire that could become a huge forest fire. If people lose confidence and pull out their savings, the Russian banking system could collapse," he said, rapping the Central Bank for not managing the crisis better. "That's why Western systems have crisis management systems in place."

S. (CACKLE!).... O that lasst line, now THAT's funny, precious...esspecially the more you think about it!

S.

An antidotal tale to assist in filling a hot, languid evening.
----------------------------------------------------


What new official inflation decree will be uttered from the marbled halls, or hall of marbles, on Friday, is unknown-- only known, as surely much lower than any actual living being is experiencing. However, the whispered number seems to be "5%" on a yearly adjusted basis.

5%? Small potatoes! I found this week that the window washers inflation index is running at nearly 100%! Here's how I found this out: Early in 2003, a fella I know washes windows gave me a bid of $35. to do my windows inside and out (monthly). Pretty good sounding price, but being the cheap S.O.B. that I've come to have to admit to being, I passed on the deal....Until this past week.

Then being tired from the summer painting and the roofing work, I thought: "Think I'll give this fella a call and see if the deal's still good."

"Oh! No-can-do," says he. "What with the price of gas and insurance, and food and things, I just can't. But I'll stop by next week with the new prices."

So, true enough, he stopped by this week with the new monthly contract that called for $75.00 per visit. "Gosh, that's quite an increase." I said.

"Well--you know how it is," he says.
Well, actually, I could see how it is. For with him, was his new "hottie"... and I'm sure he's having to keep her in rubber duckies--so, I think that's were a lot of the new money's going.

I decided, "ix-nay", to the new contract and today got off my tired derriere and washed all the windows myself...one of those pride of ownership things again.

And then I got to thinking...you know Goldendome, you just cost the GDP of the nation $75 by doing that yourself. Plus, the .078 percent sales tax that would be paid on top of that, here in the great state. And-- plus more, the poor gent is out $75., and his SSI program suffers, and the new hottie? misses a fudge.

Goodmorning all ! Does anyone here has statistics about the annual private investment demand in gold over the years ? Do our fine hosts here at CPM see a rise in the private demand for gold ?

14 07 2004
"People's Daily Online" www.thebulliondesk.com
" In Guangdong Province,one of China's economic powerhouses, 140 tonnes of gold were sold last year, ......."
STAGGERING!!!!!!! In just one poxy Chinese province!!!!!!! And we are supposed to believe that total Chinese consumption of gold is only 200 tonnes per annum (official figures). Don't you think it a bit strange that officially Chinese demand for gold has been static at about 200 tonnes per annum since 1992 during a mega boom of the economy and jewelry production!!!!
Well, think about it. If the cabal wants to keep down the price of gold, the first thing you do is rig Chinese consumption figures.Similarly I don't believe for a moment that China only consumes 50 million ounces of SILVER per annum when the USA with only one fifth of the Chinese population consumes 240 million ounces of silver per annum..
Also, this gives the Chinese Central Bank more time to accumulate gold,currently it is accumulating about 200tonnes p.a.
So what are Chinese real gold demand figures p.a.? Probably at least 600 tonnes p.a. (including Chinese Central Bank). And silver, probably in excess of 150 million ounces p.a.
Natural follow-on from heavily rigging US inflation figures and then suppressing the gold price with paper gold.What could be more logical?

At last...THE QUESTION...WHERE IS ALL THE GOLD GOING !?
I stopped paying any attention to any Goldflow-statistic !
Including the statistics from the China Gold Association.

For the very simple reason that the bulk of the PHYSICAL Gold-flows are "directed" (guided) to the specific "demanding" hands ! That is the task of the Gold-cartel, that in contrast to the oil-cartel, must remain absolutely invisible...untraceable.

And since the globe has clear cut evidence (again) about how unmoved, world leaders can bluntly lie...we shouldn't be surprised at all about deceptive-misleading Gold statistics, also being of enormous strategic importance !

The established Gold cartel has an old fine mixing instrument helping them to conveniently and constantly boil Gold statistics according to circumstances: jewelry and investment Gold !!! The very same circus happens with oil-reserves. Permanent falsifications as a much needed deceptive smokescreen. Sort of WMDeception that always existed.

Just imagine the possible gigantic consequences, if and when the general public should be informed about the evidence of the Gold for oil-flow !!! The immediate result would be the instant un-availability of Physical Gold !!!
These Gold for oil-flows have been organized in many different subtle ways ! Can one expect real statistics on such a "vital" matter of "global" importance !?

These things don't happen exclusively with Gold by with many other items of strategic importance. Without statistics, of course.

And in order to add to the statistical confusion, papergold commitments make the whole thing completely un-transparent.
The combination of a gestapo-like media machine and an infantilizised general public, results in never asking (or answering) the WHY-question on all those supposed (EU-others) CB goldsales and successive conflicting Gold-statements !!! Socrates...and in this context, you are asking for Gold statistics !? Smile brother...give us a huge smile as sign of understanding.

The biggest mistake that we are making here at this unique forum is that we don't form (construct-assembling) the big picture out of the large amount of facts we are re-producing. You started this new day with the productive initiative of a good (thought provoking) question on wich I try to reflect as good as I can.

The media, and in our case, the gold-cartel have the unwritten function to distract the general public from real cohesive understanding ! It is only two generations later (=50 years) that the truths are publicly revealed somewhat closer to what "was" really going on. So will it also be with what was (is) happening with Gold on a global scale since 1971 !

Our interests are trying to guess that Gold truth, as close as possible, NOW...as to argument our anticipation. A normal dosis of healthy egoism is quite natural, isn't it ?

Today, OPEC feels (again) uneasy about finding another explanation (for public consumption) and appropiate action for the $-POO rise. $-POO a bit down, euro-POG steady.

The relationship (proportional price-evolution) between euro-dollar-oil-gold, becomes more and more in lockstep (in concert) and predictable (systemic). That IS a dramatic change from the 3 decades past and positive evidence for the coming Gold revaluation within Another goldmarket.

There's a brilliant article at the neighbours from the kicking donkey...brilliant synthesis with high value for projections on the very possible global future. Bravo to this man's insights.

@Boilermaker : The last sentence of your latest post contains a lot of optimism (my believe) for the future...after THE transition. Good insight, Sir.

Hello in there in rainy Belgium. Thanks for your great reply on the private gold demand question. Another question : Some weeks ago French Finance Secretary Sarkozy attacked the ECB that their primary goal shouldn't be price stability, but also building on economic growth. Today French President Chirac does the same. In what context should we see this ?

http://worldnetdaily.com/news/article.asp?ARTICLE_ID=39452Snip:

"...
Barring the fabled discovery of a free energy source, oil has no place to go but up. And that's just focusing on the energy appetites of the Asian nations. It's not factoring in the shaky state of the Saudi oil producers and the Middle East in general.

"A major crisis could well be a lot closer than many people believe possible. Saudi Arabia is in a perilous state in terms of political stability, and the price of oil, which has been steadily rising for a long time, is in position to spike. And I don't mean by $10. It could go to, say, $80, maybe $100, in the event of a massive terrorist attack in Arabia. Historically, gold and oil have tended to move in tandem, and a crisis of the proportions I am talking about could well result in a spike in gold too, to, say, $500 - $600, perhaps more," wrote German analyst Clive Maund.

He's dead on. Oil and gold have historically moved in tandem. In fact, analysts have long recognized the gold-to-oil ratio. Since 1965, that ratio has been 15.4. Today, however, it is way out of line at 11.1. And that's the best it's been in a while.

At $36 a barrel, gold should historically be $554.40, according to the ratio � instead of the $401 it is at this writing.

"Any way you want to slice it, in light of gold's historical relationship to oil, gold is way undervalued. Gold is significantly lagging the oil bull and will almost certainly catch up sooner or later here to bring this key gold-to-oil ratio back in line," wrote Hamilton.
..."

Sundeck: A bit of light reading on a pleasant subject...

:-)

Two main facts : Russian oil/gas-reserves are definitely under-estimated, today. Russian (non-OPEC) oil production equals Saudi Arabia (9+mbpd).

Russian resources (reserves) are going to count on the world stage for quite some time. We will never have any reliable statistics on the Gold flows to-and-through Russia.
But Russian energysale profits go definitely for the euro and Euroland trade.

Putin will further receive external support for as long as he can prevent Russian resource-wealth to be plundered by oligarchs. For the time being, there is no counterforce for the growing autonomy/hegemony (pricing power) of the oilreserves of the ME. This is a big dollar-negative...gradual loss of its oil backing as its remaining intrinsic worth !!!

The planners of the "new" goldmarket are in a comfortable position.

Greetings Belgian,

thought I'd drop in. Unfortunately, my lack of posts seems to have persuaded you that I'm 968. This is not actually the case, although I'm sure his/her posts stand on their own merits.

Anyway, I'm intrigued by goings on 'Outre Manche' and would be interested in your comments:

Firstly, Authentic Money claims that Chancellor Gordon 'I shall touch the Euro with the ten foot pole of prrudence, but not yet' Brown has been shut out of gold discussions. Is this a deliberate snub or just an automatic consequence of not signing up to WA2 (see link below)?

vide:

Chancellor Brown did not suggest the actual sale of gold by the I.M.F. just the revaluation of their gold. With the valuation of Gold at around $40 an ounce, by the I.M.F. he highlighted an archaic issue at the I.M.F. that has lain �dormant for decades and should be addressed. The valuation stems from the Articles governing the I.M.F. Chancellor Brown, a man who would have been wiser to have stayed quiet on the issue, given his complete failure in handling U.K. gold reserves, highlighted this pertinent issue at the I.M.F. His anti-gold stance is a matter of record and one that has resulted in his exclusion from the present discussions on gold currently taking place amongst Eurozone Bankers.

He will have no part in these discussions which cover the handling of Eurozone gold. The U.K. relinquishes its part in European gold sales when the "Washington Agreement" expires in September They were absent from the "2004 Central Bank Gold Agreement", which commences in September of this year. Was that because the Eurozone Bankers hold a different view to his on gold's role as a reserve asset? - Likely so!"

Then the former governor of the BoE, Eddie George is appointed a non-exec director of Rothschilds. You'll evidently remember him throwing half Britain's gold into the abyss like something out of Lord of the Rings.

Since the British Establishment tends to have the good grace to wait for their payoffs until they leave office, then if we assume that this is payment for services rendered, then what were the services?

It has been speculated that NMR pulled out of the gold fix because they wanted to have a free hand to play the market for themselves, but how easy is it to find a seller in size at the bottom of the market? Just 'les �lucubrations de Socrate, qui, comme toujours, ne sait rien'.

In two words, Socrates : < political hypocrisy >
For the time being, National politicians can still hide (excuse) the problems behind the European curtain (ivory towers). We are very reluctant to actively develop a high (higher) degree of (dangerous) Euro-Nationalism (patriotism) for obvious (historical) reasons. A convenient context (pretext) anyway. The building of Euroland is a very complex affair and the head winds from our (former-?)AngloAmerican allies are not of a nature to make things easier, smoothier, faster...
But Schroder is having a political (!) summit with (whitewashed) Tony, today.

Sundeck : Many, non islamic fundamentalists (A.Q. & Co), are having wet dreams about the chances of increasing unstability in Saudi Arabia ! Remain critical on all forms of subtle perception building, serving specific purposes.
Yep, indeed...a very difficult matter for us as shrimpy observers and aspirant amateur conclusion builders.
Those who saw rivalry often reap storms...or something like that.

This may amuse you, in case you didn't already know...

http://www.indymedia.org.uk/en/2004/06/293456.html

Hence Blair's supporters presumably threw buckets of white paint over Tony, no matter how much he may have protested.

I'm told that a ritual anointing of King Gordon is not the most likely outcome. Could the strategy of Tony's courtiers be to keep him there for as long as possible, in the hope that time (and the economy) will go against the Chancellor (particularly if he has to raise taxes).

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Sorryyyyy for having mixed up the two numbers and the those behind them.
Socrates, yes you 964 : I'm not a fish inside that very intriging London City bowl. Indeed, the mixing up (maneuvering) of personal (individual) careers (rewards) with National (UK) interests, are extremely confusing for outside observers. Same for competitors within the bowl.
(cfr. Berlusconi and Aznar briberies amongst many others)

Were the UK goldsales the reason behind the mysterious "Washington" in the WAG !? And has the UK-Gold really left London in Physical form or in (paper) gold-commitments with later settlement dates !? Were those goldsales 100% an act of solidarity with dollar-support (IMF gold alternative) or an hidden (disguised) advanced euro (EMU) commitment !?

Hey Socrates...I'm only a tiny shrimp and not a member of the International Elite.

How about the speculative idea that with the permanent occupation of Iraq (by AA) as bridgehead in the ME, the euro should make no chance to become an oil currency and therefore IMF and UK goldsales would just be OK as a tool (oil in euro) to euro FreeGold should remain blocked for as long as the dollar-block was controling the ME oil flow as it also thought to be firmly positioned to control Russian oil-gas (Yukos saga at present) !?

Now, what if the UK could recall its Gold, possibly sold for dollar defense and use the same amount for EMU participation with the remaining status as intermediair between the two Atlantic competitors-rivals-$/� promotors.

That's exactly the kind of stuff that I mean with "intriges" and intrigants.
This goes far beyond us, Soc...We can only speculate and guess how close or distant the theories are from the real thing...or the final outcome.

But one main important thing must always be beared in mind : States are NOT throwing away any of their goldreserves for something more than nothing ($300-$800/Oz) !!!!! Be it directly for the visible papergold marketprice or other rewards. Gold only comes into play for a VERY important cause and not for stupid peanuts !!!

No wonder that only one side of the gold coin is made public. Goldsales,... but never the idendity of the buyer (benefitor) nor the price or other reward (colateral) for the (wealth)metal...Swiss banks (banking activity) in the US ?...oil concessions in Iraq...other ?

The "real" clue of many affairs often remain well hidden by the parties concerned.

Is Shroder trying to change the UK's course a bit more towards the EU with his visit to Tony, today ? Who knows ?
The US has been pushing Turkey towards the EU...on what condition will the US encourage the UK to come under the EMU umbrella !? How come that Tony keeps surviving ...must stay in public function against his own will ?

I'm more of a question machine rather than an answer robot, Socrates. Hope you don't mind.

@968:Sorry for having you mixed up with Socrates, although I felt that something wasn't adding up.

No problem! Now I understand the Soc and Socrates remarks in your previous post !!!

I have the impression that Tony, the broken pony, has some kind of self serving support from the EU. He needs (socialist) help and that might bring the UK closer to the EU !? Might have it wrong here. But I suspected this already a long time. Labor is stuck with Tony and must find a positive finale that makes people forget about the whole Iraqi business. The Spain drama is still casting a shadow over all those actively involved into Iraq.

UK closer to the EU means a heavier euro and more chances that the euro-gold (FreeGold) concept and oil invoiced for euro, comes faster. Might bring lasting peace in the ME together with reliable oil flows !?

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5670968

Debt limits need increasing! A little embarrasing for the Snow Man. I thought the tax cuts were supposed to stimulate the economy so much tax receipts would rise so fast it would elminate the deficits!

http://sg.biz.yahoo.com/040715/15/3lpm6.htmlMega Bank Merger Won't Impact Japan's Gold Buying

GATA's Chris Powell postes this article this morning.
It points out all the top reasons Japanese(and Asians) buy and hold gold.
Indicates that the merger of Japan's
#1 and #4 banks may improve the
prospects of bank shares vs mining shares but not vs. physical gold bullion,
jewelry or coins.
I'd expect this to apply to ALL
the noble metals.
Also as the article points out, the
latest bank merger will add to the case
that deflation in Nippon is a thing of the past.

Thanks! The short answer is the old adage, "Necessity is the mother of invention."

The previous day I'd had a quick chat with a friend who is a biologist of some sort. In trying to find a way the best way to explain our monetary affairs in terms that she could more personally/professionally relate to, out of necessity I formulated that analogy with the ecological climax community -- it was about the only thing I could think of from her field of study that would provide a useful parallel. She found it useful, and I'm glad you found it useful, too. It makes the dull chore of typing it up worth the while. (It makes me realize how much I envy the people who can enjoy the process of writing as much or more than the process of talking. I'd rather talk. But when it comes to reaching out to more people than one at a time, there's nothing else for it. So why bother at all, you ask? Because if you're not inclined to do your part to help your fellow man, there's really no point in anything.)

Do what you can for yourself and for others. How to start? It's easy...

Gold. Get you some. --- Aristotle

Those of you who are clients of USAGOLD-CPM, Inc. may have noticed a flier showing up in your mail box over the past couple of days. The volume of calls we've received tell us that it is generating a high level of interest. This message is both a reminder and a notification to our clientele only that this analysis and accompanying recommendation is available.

If you are a client of USAGOLD-CPM, Inc. and have not received notification of this opportunity, your address information with us may not be current. Feel free to contact us and we'll be happy to send you what we've compiled. We apologize for the ambiquity of this post. The nature of this special is such that keeping it under wraps benefits those involved.

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VAT legislation has now been amended and enacted by Turkish Paliament for the exemption of VAT on gold-related activities including, according to the new law, "deliveries of goods and services to the explorers, operators, smelters and refiners of precious metals".

For what it's worth.

Gold-watchers will recall that the gold-friendly European Union several years ago took the high road and eliminated VAT on sales of gold coins and bullion to investors within all its member nation-states.

R.

I'm taking a cue from Townie's use of the phrase "Gold-friendly" when describing Europe. Some hasty folks might wonder about that since Euroland itself has been the only major player that's been the public eye with a program of "Gold sales" laid out in the 1999 CB Agreement. So how on earth can they be considered Gold-friendly on top of all that???

Well, you've just gotta dig a little deeper to see it. First, and I've said this before, much more important than the "quota of sales" in the Agreement is the decision by the CBs to curb their own level of participation in the paperGold biz and by stating outright that Gold will remain an important element of global monetary reserves.

The next bit of rationale is more subtle, but probably more important and more convincing in the end.

It hinges on your ability to grasp/appreciate the shear magnitude of the accomplishment to begin with. That is, the actual development and introduction of a single currency among these dozen sovereign nations. Each one had to be individually convinced of the ultimate benefit and wisdom of EMU and its surety of success, because each nation was being asked to relinquish a very valuable national prize -- their own monetary sovereignty. The euro also had to do battle with a very deeply entrenched adversary, the international reserve U.S. Dollar.

With the euro being many years in the planning stage, it was given rigorous design-scrutiny so that it would come forth with "The Right Stuff" to ensure success against very great odds.

Now try putting yourself on the design team. What would you recommend going into the mix to give the euro an insurmountable competitive edge in vigor and appeal? That's why it was partnered in a *FRIENDLY* way with Gold -- because the euro faced a huge challenge and was to have only ONE crack at getting things right (i.e., a successful launch.) It should be plainly obvious, the euro needed to form a tight and viable partnership with the single strongest (politically-available) ally. Time-tested and Mother Nature approved. Nothing short of almighty physical Gold would have been able to rise to the occasion for the critical mission, and deep down you know this is true. People need to recognize Euroland's quarterly "market-based" revaluation of Gold reserves for exactly what it is. A carefully-planned, well-crafted, "friendly" symbiosis.

Gold. Get you some. --- Ari

Just saw your post. I imagine that Blair must be a standing joke in Europe. Sort of a door-to-door salesman whose product is himself but who never manages to sell anything.

He didn't like Clinton because Clinton knew that the trick was to spread himself thinly and ego-massage the Germans on the economy, the French on Europe, the British on Defence, etc. So Tony could never really take the Transatlantic alliance to the bank.

Then he saw his chance with Dubya, only the Neocons are like the lion in Aesop's fable, who claims half the prey because they're the king, a third because they're the strongest and is happy to fight anyone for the remaining sixth. So Tony again comes away empty handed.

Then he sees himself excluded from the Paris-Brussels-Amsterdam-Berlin axis, so he tries to build a coalition of the excluded with Berlusconi and Aznar on the back of Iraq, which then falls apart.

So he's back to trying to put together a club within a club for the big boys, pissing off his remaining Italian ally who's probably on the way out anyway. What's next? The Poles are in love with the Americans, the Romanians with the French, the Estonians with the Finns, the Czechs and Hungarians with the Germans, etc.. How about the London-Valetta-Nicosia (well half of it)-Riga axis?

I thus believe reports that when British diplomats want to know what's really going on in Brussels they have to pray that the Irish will throw them a few scraps of information.

Now, I agree that compared to Howard (who probably doesn't really care either way but is not going to commit political suicide by pushing a pro-Euro line) and Brown (who is infatuated with the New England Democrats), Blair is more eurofriendly, but I think that's as far as it goes, leading me to conclude that the long-term Eurostrategy for the UK is probably to just let it sink under the weight of its own economic contradictions (Don't know whether a BoP crisis or a credit collapse will get it first, but IMHO, it will be one or the other). When that happens (probably early next decade), the UK will probably join the euro on humiliating terms, � la 1973. JMHO, of course!

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The Daily Gold Market Report has beenupdated.

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--- US closing market excerpts ---

Gold Holds Recent Range...

Gold futures on the Comex division of the New York Mercantile Exchange put in a largely consolidatory showing Thursday near the middle of their recent price channel to match the largely low-key performance of the U.S. dollar. The most-active Aug contract settled $1.20 lower at $404.40 per ounce....

Gold declined as the euro lost ground against the dollar after a Philadelphia Federal Reserve business conditions survey surpassed all forecasts. Gold's downside was seen limited by other data, however, that presented a mixed view of U.S. economic growth, underscoring that the Fed would probably not be able to take an aggressive approach in raising interest rates....

One broker said gold had been trading lower with the euro, "But I think the funds want to buy this thing (gold) because they dont think were going to get a lot of interest rate increases. So, longer term, gold is still a cheaper buy."

For now, traders said they expected gold to continue trading in a range between $400 and $410 an ounce on August futures.

"If you get through $398.20, youll see $393. If you get through $410.50 on the upside, youll see $420. But, for now, were stuck between a rock and a hard place in this $10 range," a technical trader said.

Whether gold makes it through resistance on Friday will depend on what happens with the U.S. consumer price index, the euro, the dollar, and how the U.S. equity and Treasury markets respond, traders said...

----(see url for access to full news, 24-hr headlines)----

HEADLINES

Yukos, Bank Woes May Boost Euro -- The Moscow Times

U.S. stocks end down after warnings, economic data -- Lycos Finance - News

PanAfrica: Countries With Economic Freedom Grow Fastest, Researchers Say -- AllAfrica.com

Hong Kong retains title of "freest" economy in survey -- Channel NewsAsia - Business

Hints of Stagflation Despite Growing U.S. Economy -- Reuters - Technology

Gold Shines Again? -- The Motley Fool
(excerpts from this)
[http://www.fool.com/News/mft/2004/mft04071578.htm]
By Chris Mallon, July 15, 2004 -- Financial markets are often credited with predictive abilities, and in 2003 two very separate markets accurately anticipated the current economic climate.

In early April, the stock market began predicting a powerful economic recovery,�as the Dow�rose 27% through the end of the year.... At the same time, precious metals were predicting inflation, with gold up 30%...

Both markets were proven correct. Economic growth exploded in the third quarter of 2003, with an 8.2% jump in gross domestic product. Inflation (as measured by the Consumer Price Index) was benign through 2003, rising only 1.9%, before exploding at an annualized 5.5% through May 2004. To put it in perspective, at 5.5% annual inflation, prices would double every 13 years.

"Find the trend whose premise is false, and bet against it." Those words of wisdom are credited to George Soros. The reciprocal of that idea, of course, is to find the true trend and put your money on it. For 20 years, the U.S. has been in a low inflation environment, averaging a 3% annual increase in the CPI. The question for long-term investors: Are this year's inflation numbers an aberration, or the beginning of a new trend?

There are a number of reasons to fear the inflation monster: record personal and public debt levels, global economic imbalances, and huge government deficits, just to name a few. Gold, as the anti-dollar, is a classic hedge against inflation.

Nice overview you produced...but...Tony is not a statesman but an accidental (opportunistic) choice by the Rothshilds (patronage) as their "boy".
Think that you are giving him more credit than he deserves.

Anyway, there will come a moment that the UK will/must/shall abandon the AA ship and join the old continent and add/contribute to its new dynamism in progress.

The major news of today is Randy's post about Turkey and no VAT on the bullion-wealth. Another nice example on the broadening "convergence" around Gold as an in concert preparation for the new goldmarket. The gold section in the ivory tower isn't asleep. I'm going to catch some zzzzzzz.

http://www.authenticmoney.com/"I.M.F. Gold -- The issues involved", by Julian Phillips, is being provided here under cooperation with and by request of the author.
----------

Chancellor Brown did not suggest the actual sale of gold by the I.M.F. just the revaluation of their gold. With the valuation of Gold at around $40 an ounce, by the I.M.F. he highlighted an archaic issue at the I.M.F. that has lain 'dormant' for decades and should be addressed. The valuation stems from the Articles governing the I.M.F. Chancellor Brown, a man who would have been wiser to have stayed quiet on the issue, given his complete failure in handling U.K. gold reserves, highlighted this pertinent issue at the I.M.F. His anti-gold stance is a matter of record and one that has resulted in his exclusion from the present discussions on gold currently taking place amongst Eurozone Bankers.

He will have no part in these discussions which cover the handling of Eurozone gold. The U.K. relinquishes its part in European gold sales when the "Washington Agreement" expires in September. They were absent from the "2004 Central Bank Gold Agreement", which commences in September of this year. Was that because the Eurozone Bankers hold a different view to his on gold's role as a reserve asset? -- Likely so!

The outcome of these discussions is significant and will determine just what sales will, actually, take place under the 2004 Central Bank Gold Agreement, irrespective of the ceiling of 500 tonnes per annum set within this agreement.

So in view of these Eurozone discussions, the issue of the valuation of Gold by the I.M.F in its reserves happens at good time.

Why should gold be valued at $40 an ounce? Is this a victory for small minded bureaucrats trying to impose their perceptions of the real world, on the rest of us? We think not. Most likely it is the unwieldy nature of the policy making structure of the I.M.F. which requires 85% of the total voting power of the I.M.F. to make policy decisions. That the U.S. holds 17.3% of these votes, gives it a veto over such decisions, anyway. The cessation of U.S. sales of gold decades ago and their retention of gold reserves speaks volumes on their "Gold Policy".

But the I.M.F. has a record of using the real market gold price in sales and purchases of gold amongst members. In the case of Brazil and Mexico their gold was bought and sold in a sort of "put through" deal that resulted in the full value of the gold, with the deduction of this 'book' value of gold, being used to eliminate the debt of those countries to the I.M.F.

So when push came to shove, the I.M.F. did recognise gold's true value, despite their protests that this was an "exceptional, once-off" action. No doubt there could be future 'exceptional circumstances?

If Gold is still valued at the $40 level, what is the real attitude of the I.M.F. and the opinion of at least the majority of its members towards their gold held by the I.M.F.? Here is the full text of that opinion:

"It is an undervalued asset held by the IMF, and provides a fundamental strength to its balance sheet. Gold holdings provide the IMF with operational manoeuvrability both as regards the use of its resources and through adding credibility to its precautionary balances. In these respects, the benefits of the IMF's gold holdings are passed on to the membership at large, to both creditors and debtors. The IMF should continue to hold a relatively large amount of gold among its assets, not only for prudential reasons, but also to meet unforeseen contingencies."

It seems unlikely that this attitude would allow the real value of these assets to support debt write offs. It would appear that they had put the matter to rest by such a policy. We would hope that the valuation issue be raised in the context of a solid realistic, monetary role for gold. We have no doubt that the results of Europe's discussions on gold will have a bearing on the I.M.F.'s valuation of gold.

Chancellor Brown's remarks no doubt irritated Central Bankers in Europe. We believe that significant announcements from certain Central Banks are in the offing, in the near future. We are giving details and insight on this subject in the next issue of "Gold - Authentic Money" discussing this further and detailing where this story is going.
------(from the source at url)-----

R.

Re: "People need to recognize Euroland's quarterly market-based "revaluation" of Gold reserves for exactly what it is."
I always enjoy your analogies and especially that our
common financial landscape is an "evolving ecosystem".
Today your mention of "symbiosis" could positively
link developing monetary trends with the sometimes mysterious and unseen interactions of wild fauna
and microorganisms within any forest flora, landscape, body of water or digestive tract!
Though ECB marks to market total Gold reserves quarterly,
the rules of their charter actually give them
a freer hand to use their requisite reserve revaluation.
That is, marking to market (spot/bullion/melt/price) monthly or weekly, as desired versus quarterly.
They recognize "time is money" and "staying on top of the market" as intrinsic to survival.
But they must be "leading the pack" as well, since
it's in the nature of all living things to know that
money doesn't grow on trees- most creatures will
utilize their adaptive and learning abilities
to sustain themselves and their young!

When I met Blair in the late 1980s, I was quite impressed by him, but given the state of British politics at the time, I was very easily impressed.

Anyway, I think it will be a case of 'must join' -probably under a conservative PM. One can more or less imagine his sales pitch to the British electorate in 2011....

'I recommend this with a heavy heart, but feel that the alternatives are worse. Unfortunately, there are times when we must take difficult decisions and make sacrifices for the common good and the sake of future generations. As you know, one of the conditions of entry into the Euro is 15% reserve backing with gold. Gold we no longer have due to the recklessness of the former Labour government. The good news is that our bankers N.M. Rothschild have located a source of the necessary gold at $3000 per oz., some 5% below the current market price, the bad news is that we must all shoulder this burden, and it is thus with regret that we have been obliged to raise the basic rate of income tax....

Good night!

Two cents' worth of guano from the GAB:

Just TALK about gold in high places, never mind any action or lack of action, is extremely meaningful.

Just TALK about gold, means that "the barbarous relic" is very, very important, far more than we can imagine, we who are simple observers lacking any solid inside information on what is going on.

Watch and wait. And be sure to get some, while there is still so much "doubt" about the wisdom of doing so.

The GAB

Towncrier: as I heard it, Soros said: "Find a trend based on false premises, and ride it while it lasts. But be sure to bail out before the market discovers the falsity of the premises."

Why would the burdern be any harder to shoulder at $3000 per oz than at $300 per ounce? I'd think it would be easier. Meaning less gold.

The way I figure it, 15% of the overall required subscription payment to the ECB is going to be the same numerical figure regardless of gold's street price, so a higher price means less gold to be carried. Same numerical burden either way, but easier on the shoulders if the price is high when the day arrives. (Unless they've already established their commitments.)

Phillips mentions eurozone talks on gold. Does anyone know the nature of these discussions? Are they occurring in reality, or a figment of Phillips imagination? Perhaps "informal talks"??

Well, just joking, but now you make the point, I presume that the relative amounts of metal that each nation has to chip in will vary with the relative sizes of their monetary bases, since if you have a 15% cover ratio overall, it surely means that France has to cover 15% of the euros circulating in France, Finland 15% of the euros circulating in Finland, etc. Hence, if the UK has an economy the size of France, it presumably will have to deposit the same amount of gold as France, not a tenth of the amount. Seems to me that you're assuming that the gold price will soar while the European monetary base remains the same size. I can only assume that if gold goes up 10-fold, it will be because the monetary base has grown by a similar proportion.

RE: "I can only assume that if gold goes up 10-fold, it will be because the monetary base has grown by a similar proportion."
############

It might be OK for you but I sure wouldn't make that assumption. I'd expect a ten-fold rise in gold would mean more than anything that the gold derivative market has collapsed under its own weight or near enough to it sending the market scrambling for the real thing. I mean, we are talkin' TEN-fold here in your example. Don't underestimate how prices for a hot item can rise totally independent of what's going on with the monetary base.

Also it looks to me like the way you're describing the potential gold obligations of the UK in comparison with France completely negates any real meaning behind the mark to market concept. Like I indicated, an equal weight would only be the case if the commitments were already established. Otherwise it's going to be 15% of the nominal amount of the required subscription based on the relative size of the UK's economy and the actual weight of it will be determined by the market price of the day in question.

That's how I've been led to understand it anyway.

"Druid...Back to the Garden
This prints out at four pages and, imho, is worth the printing. Gross has summerized a great deal, very clearly, in a well-written short essay.

Good heads up on this one...it's enough to make one think of purchasing more gold...paper and physical..(;> ...thanks Druid..."

Druid: R Powell thanks for the kind words. I'm still down loading your "light reading". Thanks for posting them. I like how he points out in his essay, among other things, the fact that many of the world central banks are adjusting their policies to deal with the imbalances with the exception of the ECB. I wonder why the ECB is the exception,hmmm??

The beacon of light that the Euro represents which the ECB is holding and maintaining in the form of price stability has drawn and will continue to draw many giants toward it as they leave the dark confines of dollar instability.

I don't know that "TIPS" representing a paper solution to a massive paper problem is the answer, but then, the investing public continues to confound me on a daily basis.

http://www.economist.com/finance/displayStory.cfm?story_id=2925920Hedge funds - From Alpha To Omega
July 15, 2004
The Rush Into Hedge Funds Is Pushing Down Returns
Economist magazine online edition

This article briefly outines the deteriorating performance of hedge funds, their risk and innate transcience.

http://www.economist.com/world/europe/displayStory.cfm?story_id=2922746Economist.com | Metrication
July 15, 2004
Measure For Measure
"Inches and ounces Are confusing but popular.
The mess is unsustainable"

Belgium, looks like the Brits want to measure up to
a different set of standards, but not by using a
Greenspan "measured" approach this time.

Yes, the eurozone (and others !!!) talks about Gold ! Talks between plundering, selfserving, shortsighted, ignorant politicians and responsible central bankers and long term monetary planners! The only thing that surfaces publicly from these talks are the sudden, out of the blue, (populistic) statements by politicians (goldsales) and the following silence (grincing teeth) of the CBankers. You can certainly imagine these formal inside Gold talks (rather fights) in the runup to WAGII. And as we all know, Gold talks are of an extremely explosive character with regard to the price and Gold-availability results. Do you remember the WAGI goldprice-spike in sept.'99 !? Wasn't an informal event, imvho.

And...as wise Ari remarked...suggested subtly (sousentendu)...the goldbugs anger towards the interventionist manipulation of Gold is in fact a "positive" as it is the road to the hated (irritating-frustrating) FreeGold. But for the time being, Goldreserve transactions do happen at many differing "circumstantional" price-values ! That's the dollar-way. It will happen systemically on the euro-way. That's what the WAGs are indicating. And you can bet on it that much talk (fight) is going on behind the screens. In analogy with the sixties' London Gold Pool and the finalisation in '71 with the closing of the Gold window (Nixon). Also a period of very formal (secretive) Gold talks...heavy fights !

I see the interventionist manipulation of Gold (the big picture) as a net "positive"...and think that the goldbugs' anger to this (the cabal-?)...is rather unproductive. But now I'm pissing in the holy house...

Mikal : The (former) imperial island shall remain nostalgic for another generation to come. Is part of the cultural wealth of the old continent and to remain fostered. This isn't excluding modernization at all. Euroland, strong through its "tolerant" diversity !!! A NEW and very attractive message...beautiful task !

People's Daily Online
7/14

Gold bullions sell well at south China's Shenzhen market

Gold bullions from China Goldsilver (CGS) Co. Ltd. were formally put on sale Monday in Shenzhe. The unprocessed lumps of metal sold like hot cakes in the boomtown facing Hong Kong across the Shenzhen River in south China's Guangdong province.

The business office of China Merchants Bank Headquarters, which has been given a monopoly on the trading of gold bullions, noted that they sold 106 ounces of the precious metal within one hour of sale that day.

For instance, a man surnamed Zhang alone, spent more than 230,000 yuan (about 27,700 US dollars) to buy 18 gold bullions weighing 69 ounces.

The gold bullions in Shenzhen, where one of China's two only bourses are situated, come in three sizes -- two ounces, five ounces and 10 ounces, with 99.99 percent in gold purity, said Zhou Li'ang, CGS general manager.

Investors' demand for gold has continued to increase internationally over the past years.

For example, in Guangdong province, one of China's economic powerhouses, 140 tons of gold were sold last year, accounting for more than a half of the country's total gold sales.
------------------------------------------------------------------------------------------------------------------------
Increasing Chinese gold demand !!

Hi Ag Mountain ! What do you mean by relative size ?Relative size to the European economy ? Because if that is the case, everytime a country becomes new EU-member the relative size of each individual economy gets smaller ! Then the other countries can get some gold back. I suppose I'm wrong but I don't know how the pie is devided.

http://www.economeister.com/reg/popup/popup_frameset.jsp?banner=mainwire&disp=single_story&sn=2&ts=1089964320000Snip:

BRUSSELS (MktNews) - The Bundesbank came out strongly on Friday against plans to allow increased access to International Monetary Fund credit on a precautionary basis. In an opinion piece published in the Financial Times, Bundesbank vice president Juergen Stark said such a policy, which has the backing of some G-7 members, would be "highly counterproductive." "If the Fund took up the role of a general risk insurer, thereby making bailout operations in crises a general rule," he said, "private investor's risk assessments would be seriously distorted and debtor countries' incentives to pursue sound policies and build strong institutions undermined." The central banker also warned that the strain on IMF resources would become unbearable
...............
Larger scale funding would "aggravate the already large risks arising from the IMF's high exposure to a few emerging market countries."

The Fund should only lend to those countries whose overall debt situation is sustainable, Stark argued. "It must refrain from rolling over credits again and again."

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

ANOTHER salvo by the Germans. It is worthwhile to note the FRICTION between EU Superpower and the US continues on all fronts - vociferous and public

In addition to the above the US is apparently against Germany aspiration as a permanent member at the UN as retaliation to the Germans not supporting immunity seeked by the US and in support of the a world court

Further the US & Israel are up against the world at the UN vis-a-vis the Wall

Gold is a primary beneficiary of this continued friction

All Aboard The Gold Bull Express - Part ll

http://www.economeister.com/reg/popup/popup_frameset.jsp?banner=mainwire&disp=single_story&sn=10&ts=1089956040000Snip:

Exchange rates will have to adjust, she said, as the U.S. current account deficit reaches 5%. She noted that households have been net investors while corporations have been net savers, opposite of the typical pattern.

She also noted with approval that China has been able to recognize that its economy was overheating and pulled back accordingly.
....................

She said while the two Government Sponsored Enterprises are 50% of the mortgage market it would be better if they only secured loans and sold them in the secondary market.

While she said they do provide a "wonderful service," especially for smaller lenders who need to pool loans, the two entities have to hold and manage duration risk "very carefully."

"Mortgages are very tricky to hedge," she said. "You cannot find an exact hedge. That is what worries me."

She said she would like to "see some market discipline" for Fannie and Freddie.
*****************
Misetich

Very unusual public statements by a Fed Governor on the US $

...and Ms Bies adjust they will!

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:

A trot around the globe reveals a grim tale among them: civil strife in Saudi Arabia, Iraqi pipelines blown up as quickly as they're repaired, a possible recall of Venezuelan President Hugo Chavez, labor troubles in Nigeria and Norway -- and Russia, the world's No. 2 oil exporter, in a legal battle with YUKOS, its second-largest oil company.
........................
But he also observed that while refineries are operating at record levels, gasoline and distillate stocks remain below historical averages, largely because it's expensive to hold inventories when prices are high
.................
"There is some correlation between the price of gasoline and $40 a barrel for oil," he said. "But there's another phenomenon we've noticed since spring. AAA believes boutique fuel requirements that are in effect
in the summer months are responsible for these price increases."
.................
A government energy analyst envisions permanently higher prices for natural gas. "It's now clear that we reached a turning point in 2000 in terms of the ability of the industry to drill wells and find gas," the
source said. "As the economy starts to recover and demand increases for power generation, we see a lot of pressure on natural gas prices."
***************
Misetich

The 2004 Oil Shock And Awe currently underway, has the potential to be explosive, as the US election nears - supplies tight - demand high - and the high risk of something major happening

Gasoline and natural gas are not too far behind - yet - we hear - "price inflation" is not a worry

...and maybe it isn't if your salary is in the 6 figures level - unfortunately the majority of consumers are barely managing staying afloat through HIGHER INDEBTENESS

All Aboard The Gold Bull Express - Part ll

http://www.spacedaily.com/upi/2004/WWN-UPI-20040714-10422200-bc-us-china-relations-crn.htmlSnip:

The United States must cease its interference with Chinese internal affairs over the question of Taiwanese independence or face a serious deterioration of U.S.-China relations, China warned Tuesday.

In an official statement delivered to the press at the Embassy of the Republic of China, embassy spokesman Sun Weide spoke of China's grave concern regarding recent U.S. actions on the Taiwan question.

He urged the United States to halt all arms sales to the country, terminate military links, end official exchanges with Taiwanese authorities, and stop supporting Taiwan's efforts to join international organizations that require statehood.

Such actions, Sun said, violated the one-China policy to which U.S. leaders pledged adherence in three joint communiqués signed
....................
The United States is caught in the middle of an increasingly tense situation, said Carpenter, and is currently heading for a nasty confrontation.

We're likely to have a major crisis within the next few years, he said.
**************
Misetich

Perhaps they're only words - yet China is getting lauder on perceived US interference re: arms sales to Taiwan

As the Red Dragon economy steam rolls ahead and their military power increases...

All Aboard The Gold Bull Express - Part ll

All, oil importing states, all over the world, can only watch and pay more dollars for the vital oil. Pay with dollars that they have "earn" with production and services...with very little pricing power... and don't have the privilege to "print".

There are only two outcomes for the global effects of this rising $-POO :

1/ Adding much more dollars all over the globe with a general rise in prices. Hyper infladada.
2/ Another oil currency.

If there is no Gold anymore to let oil flow cheaply...and if we believe that a civilized world has no intention of grabbing other peoples' oil...we can easely say that we have a problem at present and a Big one if this oilprice rises further on...up unto OBL's $144 pb.

In '99 when POO-POG = $9-$253 A barril was valued at 1,11 gram of Gold per barril. Today one barril of oil is valued at 3,18 grams of Gold per barril.
In the past 5 years we stayed into the historical 1 gr to 3 gr Gold per barril, range !!! Can we conclude that, once again, w've reached a very critical point for the balances of the global economic system !?

This relationship of < cheap Gold-expensive oil > and vice versa, < cheap oil-expensive Gold > cannot go on for ever if we take into account that available oilreserves will peak one day and that the dollar fiat is not for ever.

I think that it is here that the euro is profitting from. A shift out of the dollar into the euro, because of the euro already being assosiated with Gold in the new euro Physical Gold market.
Today, a forex expert couldn't come up with one single reason why one should get out of the dollar and in the euro.
But other experts can come up with 100 reasons why the POO keeps rising, without ever mentioning (suggesting) that it might have something to do with the dollar currency as such.
Austriches !?

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

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

Q. In your book, The ABCs of Gold Investing: Protecting Your Wealth through Private Gold Ownership you start the chapter by saying "Who you do business with is one of the most important aspects of gold investing." Why is that?

MK. Most, if not all, of the progress an investor makes towards realizing his or her goals with respect to gold ownership hinges on that relationship. Unbiased, objective advice from one's gold advisor is a key element. So are market information and education. Pricing, product selection, fulfillment and on-going support also rely on that relationship. Above all, it is extremely important for gold buyers to match their objectives with the type of gold they buy. Positive results in all of those areas depend upon a strong relationship with a gold firm. That is why it is important to spend some time finding the right one.

Q. Can you briefly describe some of the pitfalls a beginner might be on the look out for?

MK. The biggest trap investors fall into is buying a gold investment that bears little or no relationship to his or her objectives. Take safe haven investors for example. That group makes up 90% of our clientele, and probably a good 75% of the current physical gold market. Most often the safe-haven investors simply want to add gold coins to their portfolio mix, but by the time they finish talking with a typical national firm, they might end up in a leveraged gold position, exotic rare coins, or being diverted into silver or platinum. Others drift into gold stocks or gold futures which in reality are proxies for real gold ownership and could actually act opposite the intent of the investor. There's nothing wrong with any of these non-physical investments per se, it's just that none of them is really a safe-haven. The investor should bear this in mind. The question investors must always answer for themselves is "How will this investment serve me should the economy or financial markets suffer a major disruption?"

http://www.newsmax.com/archives/articles/2004/7/13/171536.shtmlPrepare like you did for the Y2K. Better to be safe than sorry.

I would recommend storing some ready cash in your house in a safe place at a minimum. If you can at least 5-10 thousand. I would also recommend you buy a shotgun and plenty of shells, load up on can goods, fresh water, stick matches and candles. Keep your gas tanks topped off, including propane tanks and fuel oil!

When the terrorists explode the suitcase bombs as many suggest, you'll be ready to defend yourself and buy what you need.

If you live in LA, NYC, Dallas, Washington, Boston, Chicago, Philadelphia, Miami, move out.

I'm no Russian expert and certainly I don't pretend to know the mind of Putin vis-a-vis the USA. However, based on recent events in the war against oligarchs Putin has expressed his intention of keeping Russian resources in Russian hands.
It occurred to me that perhaps this is part of a strategy that emulates what Reagan did by outspending and bankrupting Ruusia in the arms race. Reagan had the advantage of the world's reserve currency that gave him the deepest pockets in the world. The Soviets were saddled with a third world currency that would not support deficit spending. The war was won "peacefully"" by the dollar vs. the Ruble.

Now we have an older, weaker dollar challenged by a strong young Euro contender. Russia senses a title match coming between the two currencies and is starting to place their bets and at the same time trying to influence the outcome. The Russian long suit in this face-off is their resources; oil, gas and other key commodities. Russia may be trying to bury the dollar by judicious management of their resource wealth. This will be a battle of the commodities, real wealth against paper wealth. My bets have been placed on the commodity oriented contender.

http://quote.bloomberg.com/apps/news?pid=10000080&sid=az9nhIF07vdM&refer=asia...Snip:

July 16 (Bloomberg) -- Taiwan's central bank said it may step in to ensure stability in the island's NT$2.9 trillion ($86 billion) mutual funds industry after investor withdrawals forced five funds to halt redemptions.

An estimated NT$240 billion worth of bond funds have been redeemed this week, according to the Commercial Times. The rush is ``irrational'' and sufficient money will be made available to provide ``liquidity to stabilize money markets,'' the bank said in a statement. The government didn't release any figures on size of redemptions.

The problem ``was probably caused by Procomp,'' Jong Huey- jen, deputy director-general at the Securities and Futures Bureau, said in a phone interview. She was referring to Procomp Informatics Co.'s default on a bond payment due on June 16. ``Everybody now panics when hearing about bonds. This is an issue of confidence.''
**************
Misetich

Gold - only Physical Gold - is the ultimte currency of choice

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.


--- Friday gold market excerpts ---
COMEX gold prices firmed at the start on Friday and were helped higher by the muted rise in core U.S. consumer prices and again by a lower-than-forecast sentiment reading, gold traders said.

"I think the CPI definitely affected us, but I also think the whole week we've been working the upside. The markets have been firm all week. The weakest point this week was when we tested $401 (per ounce on August futures), and we could have gotten much lower that day, but there was nothing but buying," said one gold broker...

Gold futures climbed more than $2 an ounce Friday as fresh U.S. economic data eased investor concerns over inflation and interest rate hikes, sending the dollar sharply lower, but prices still ended $1 lower for the week. Gold remained above $406 an ounce "due to the prospects that the Fed may be on hold from another rate hike," said John Person, head analyst at Infinity Brokerage Services....

Gold for August delivery closed at $406.80 an ounce on the New York Mercantile Exchange, up $2.40 for the session...

"As the economy continues to grow at a moderate pace with inflationary pressures declining, the outlook for the interest rate differentials from the United States and foreign countries seems to widen," Person explained. "This makes [gold] more attractive as foreign buyers have an advantage and more purchasing power to purchase gold."

The economic data also contributed to weakness in the dollar, which in turn prompts a spike in investor interest for gold.

While the inflation and sentiment readings provide clues to the Feds interest rate policy, traders said gold continues to take its cue as well from the euro, which rallied on Friday. "Gold is a product that trades against the dollar and so does the euro. So, we trade in tandem with the euro," said one trader...

The current prices for gold "represent good buying opportunities for certain investors," said Kevin Kerr, a senior trader at Kwest International. He believes gold prices are headed for a move toward the $425 level. "Gold is gaining strength every day it stays above the $400 mark and that indicates a bull market," he added...

----(see url for access to full news, 24-hr headlines)----

Expanding on my earlier post, this subject, the Russians may want to become a key Euro zone player by virtue of their resource base. The Euro countries are strong in industry, finance and commerce but lacking in natural resources. Russia would round out that side of the ledger and make the Euro zone stronger than the US on a broad front.
I have little knowledge of Putin's relationship with key Euro zone leaders but if I were running the place (Russia) that would be my strategy.
Perhaps others at the forum could comment on this theory and/or cite recent events that may support or conflict with it.

Hey FR

Noted and read the link you posted on suitcase nukes.

Although I certainly hope that "god willing" none will ever get used......I think that if we see a simultaneous use, it will not be restricted to USA.

There was a great outpouring of support from the world after 9/11. If such a monolithic attack were made in multiple US cities, but no other "western nation", it may succeed in killing many, but it would put USA on very moral high ground in the war on terror.

Poor old Solomon

I would have to differ on Russia. I know that a single trip to central Russia doesn't make me an expert (got back Wednesday), but Russia really doesn't look poised to be a player these days. The Yukos (the largest oil company) mess isn't likely to have a positive resolution, no mater what way things shake out. Recent bank problems, including the largest bank is likely to continue the uncertainty amongst investors in Russia. I spent a week in the third largest city and saw only a little vitality in what was a major industrial and transportation center. Until Russia pulls out of the influence of the Mob/ex-KGB, Russia will continue to be a relatively minor player.

After the disintegration of the SSCB, Russia lost Eastern Europe while the US lost Western Europe. Was this intentional or accidental?

Russia is far from a paradise and chaos is on the order of the day. That's why it is so dangerously important and not in the least on the subject of energy resources (oil-gas).
Russia has already been plundered in the past decade and Putin (supported by Germany) tries to stop the resource plundering . This is, and will remain, a hell of a job.

At present, our planet is in the ban of oil... AS THE VERY BASIC FUNDAMENTAL OF OUR ENTIRE FUTURE ECONOMIC STRUCTURE.

In a geopolitical context, we are deciding today if oil (the remaining reserves) is going to be a curse or a (further)blessing in the very nearby future !

The owners of the remaining oilreserves are increasingly aware of this situation and act accordingly.
All oil-investments are purposely slowed down (gradually) ! We do see the early effects that this is causing. Cruel Oil wishes to be "valued" properly !!! The absolute majority of people who live above these remaining vital oilreserves can only share extreme poverty ...
This is,-has been,-will remain, the most complicating factor in the global oil matters.

Mistich posted Germany's criticism about the purposely irresponsible IMF policies (strategies). Bring more debt to this global village as a tool to dominate, divide and rule within a controlled degree of organized destabilization.

Economy is a politically regulated business as is war, peace and harmony. It are also political decissions that ultimately direct fiat exchange rate trends/moves.

Most of the time, our global village, needs a "crisis" to move massively and concerted into the good (better)direction. Even if "the crisis" is being timed, wich is mostly the case...interventional manipulation !

Main crisis in the make today is the "end" of abundant cheap crude oil ! Russia is defintely within this equation.

And so is the "pricing" of Gold (amongst many other pricings)! Most of the time...the offer-demand factor is of very little importance...a stubborn myth !

The South African rand is rising, since its low of 2002, against the dollar "AND" the euro. The rising trend remains intact ! How come ?

Knowing that the rand has to live from "export" to dollar and euro.
Knowing that there are still underground goldreserves for another 100 years of mining.
How can the rand currency remain so strong, at present, when this currency has been declining (weakening) for more than 20 years ?
Knowing that agricultural exports are far greater than gold-exports.
Knowing that the stability-perceptions on this country are poor and the rand is not exactly a currency in wich to flight.

Any takers ?

http://fx.sauder.ubc.ca/plot.htmlAhh, Sir Belgian...I have been wondering the same thing for some time, but I certainly don't have any definitive answers.

Looking at charts of exchange rates for the last four or five years (the link enables comparisons to be made), we see that Gold versus Rand has a very similar pattern to Euro versus Rand (not surprisingly since gold has been almost constant in Euros for several years). The Rand has strengthened against both Gold and the Euro by about 30% in the last two years.

However, over the last two years, the Rand has strengthened by almost 100% against the US Dollar (and the Russian Ruble, and other currencies as well).

As you rightly point out, the Rand is probably not known (thought of) as a "flight to safety" currency. But also, it probably does not take very large currency flows into South Africa in order to send the Rand up strongly (unless major exchange controls are implemented by the SA authorities).

Why would people (contries) be investing in South Africa?

Well, we know that Russian companies recently made large acquisitions of SA gold producers. We also know that Gold is attracting a lot of attention world-wide as "investors" of one colour or another add exposure to gold to "hedge" against a falling dollar (or to hedge against their own falling currency during the "competitive curency depreciation" that is occurring). Share prices of gold producers world-wide are rising and have been rising for the last two years.

Could it be that the Rand is strong because of foreign direct investment in SA gold producers and explorers?

This is certainly a factor in Australia. Gold is our third largest export earner. There has been substantial foreign investment in our gold industry, partly accounting for the rise in the Australian dollar over the last two years.

I suspect that it is more general than just gold, however. As the price of "commodities" rises in US Dollar terms, there has been investment in countries (like Australia and South Africa) that are major "commodity" producers - hence the rise in their currencies.

FWIW

:-)

Answering the "why" question is difficult. It requires evidences and witnesses. It is easier to do as "Hercules Poirot" does, and ask "what are the consequences and who benefits?". One gold related consequence would be the decrease in gold mine profitability in terms of rand; and hence decrease in gold output. Who benefits? Bull interest. At this point, Mr.Poirot would begin to check the annual gold production of SA mines to make sure that his hypothesis matches with reality. Frankly, that is quite a work, and it is beyond me.

Thanks for taking a swing at Belgian's questions! Yours was a fine explanation, especially if we were assuming the (forex) markets involved in this situation were the ideals of fair, open, and commercially driven vehicles.

But what if we assumed they weren't? What if we assumed they were used, politically, as a means to a political end?

What if certain deep thinking interests/powers came to the recognition that the South African currency market was just a tiny little thing compared to the size of the world's Gold market? And what if these same interests/powers recognized the disproportionately large size of South Africa's Gold resources on the world stage against the backdrop of their tiny currency market?

Boy, wouldn't it be tempting for those interests/powers to go directly after the puny South African currency market as a clever means to facilitate control over its disproportionately large Gold resources?

By driving up the exchange rate of the itty bitty domestic currency, thus taking away the profitability of mining in local terms, think how easy it might be to have the have these important sources of Gold production bent over a barrel in a virtual headlock. Couldn't this be seen as a relatively cheap means to dictate the fate of a lot of important Gold? Production could be stifled, if that were the goal, ****OR**** wouldn't it also then be made all the easier to entreat them, if this were the end goal, with more attractive off-market offers than they could get *on* the public market?

By the means of "influencing" the exchange rate of a tiny national currency, you could most effectively (and discreetly!!) achieve the ends of determining the fate and flow of the national production without -- and this is the important part -- *WITHOUT* facing the alternative, that is, having to compete for that same production in what would quickly become a vicious circle rising-price environment in which EVERYBODY else also suddenly wanted the Gold, too, simply because you were dull-witted enough to try buying it through an open market.

I'm offering all this just as food for thought. Just as a mental exercise, you know. But really, it's not too terribly hard to use those simple calisthenics as a springboard to imagine the existence, somewhere in the world, of a group with a political interest in having control of a measure of future Gold flow -- especially if it "somehow" assisted their obvious political need for assuring future oil flow on favorable terms.

Gold. Get you some. --- Aristotle

Sir Aristotle!! What a wonderfully brilliant and yet, diabolical plot you surmise.

Let me see if I understand it: Some cunning group with deep pockets, buys the Rand incessantly driving it's price up in comparison to the dollar...The Gold that the South African mines produce is sold for dollars, that exchange for fewer higher priced Rand now, that the miners must use to pay their ever increasing expenses. At some point the decreasing profitability (or losses) cause the mine owners to either shut down, or more probably, sell their assets into the waiting hands of...TA, TA, ---the same cunning group with the deep pockets that is buying the rand and causing the problem to begin with. ---Brilliant!!!

Would some group of Arabs benefit from this? They would then control the major oil and, a major gold area. But, I suppose if true, it could be any group that had access to a lot of free cash flow, looking for a long term objective or goal in gaining access to gold reserves.

http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWOil/DX ratio out on a limb here as it appears Oil is retaining the ascendency. The Bond market again looking to stand on it's own two (left) feet as demand for future Oil is being hedged in the T's. I'd be loath to be short a Buck now as equilibrium could return with a vengance.
Gold still underperforming it's currency equals, tho we might get a spike prior to options expiry.

...and so it goes!

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

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also publish a very good hard copy newsletter called News & Views: A Bi-monthly Review of Forecasts, Commentary & Analysis on the Economy and Precious Metals. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

Good morning all. I slept well last night after pondering Sir Belgian's question. Why is it the policy of the South African Government to have a very strong currency whereas all other governments seem to be in a race to the bottom? The SA government has stated that a strong Rand is their policy. They have maintained high interest rates despite protests from trade groups. With high interest rates, speculators can do a profitable carry trade using leverage and drive this little currency to the moon. I think they can also leverage currency futures. Why the government policy to attract hot money to their currency? I suspect it has to do with putting pressure on all productive sections of the South African economy, especially mining, to give assets to Black political supporters and groups, or if that fails to drive them into bankruptcy and then have the State take over. Remember, all politicians, especially "ex-communists" and current "socialists" need to reward their political supporters. There's nothing like having the assets in your hand to provide a good nights sleep. The Uruguay Pesos that I received yesterday were beautiful. Excellent mint quality that I was not expecting from South America. I had some uncirculated Colombian coins from that period where only one in 10 had the full detail clearly formed on the reverse. Maybe ran the dies too long? No matter, I'd still rather have the coins than a Colombian gold mine.

Is the rand at the "proper" level or is it too strong or too weak? A very tough question to say the least and one that depends most on what your position is in regards to the SA currency. SA gold miners and other SA exporters are hurt by the strong rand. The high rand, partly a result of higher interest rates and aggressive monetary policy by the SA government in targeting inflation, has helped the country as a whole in terms of building up country-wide financial conditions. The SA consumer has enjoyed improved purchasing power (imports) and the level of consumer confidence is at an all time high!

The rand is not so strong as the US dollar is more so weak. Yes, relatively high SA IRs has attracted world money streams in search of higher relative yield. However, commodity prices have also improved on a global basis and this factor has helped bolster the rand. There are still some capital and currency controls in place that are going to be removed. The NOFP controls have dampened rand demand. These Net Open Forward Position controls are going to be removed so that the SA government can boost thier currency reserves. This will strengthen the rand and the rand may already be reflecting this strength.

With all the factors boosting rand strength, there are also factors that effect the rand towards weakness. Global recovery and increased global interest rates will draw currency flows away from the rand. The high rand has also produced a change from current account surplus to current account deficit in SA. This is a direct result of lower export revenues. Lower economic growth in SA will eventually hurt the rand outlook. So its a not a strength story without some questions.

Another factor regarding the rand is how outside investors feel about the currency. Rand volatility has been a problem in the past with regards to hedging profits and planning investment models. A currency which sails to and fro based on government policy leaks is dangerous to deal with.

In the past there have been leaks regarding rules that govern the socialistic power of ownership of mining assets. Back in late 1999--2000, SA gold stocks would swoon lower when news or rumors came up regarding Black Ownership. The Black Enterprise (BEE) goal or target is currently set to be 24% of mine ownership.

The amount of foreign investment in SA is not over-the-top. You don't see commercials on TV for SA bonds. So its not an overheated sector, but there is the hedge fund money in there and that can be fickle.

Now to what has been postulated: is there some manipulation from a group or cabal gunning the rand higher so as to control the mining industry and output? Maybe. There is no real way to say for sure. So I want to look at some of the results of such a game and see if there is any proofs out there.

1. SA golds are weak compared to other gold miors based on the strong rand.

2. Offers to buy some or all of these mines have not been overtly large---gold fields(partly) by Norlisk seems to have been a russian hard asset play to get money out of russia.

3. The SA government is keeping the rand strong, policies can change. What if the government decides to give mining companies subsidies or tax breaks or some other relief. This would help the bottom line of these companies. What if the goverment starts to fund more social programs, etc?

4. There is widespread and almost certain bullishness regarding the continuation of a strong rand. From a contrary viewpoint things seem a little too bullish. This may be a short-term trading outlook or it may change to a longer term one depending on circumstances.

5. Trends tend to stay in place as long as they are reinforced. The Soros postulate for now is in place for the stronger rand. I remember a while back --not sure when but is was at the time of a new high in rand strength that Soros came out and said that he thought the rand was overdone on the high side. I think its fair to say and to believe that there is real big money in the SA currency markets. Whether or not that means that the ultimate control of SA gold resources is the game plan is pure speculation.

6. The rand could be going into a blow-off type move. If so the SA golds may plummet. This could be a buying opportunity. Also, if it is true that hedge fund money dominates the SA situation, that money could exit due to whatever herd mentality trigger and the rand could fall dramatically off of a parabolic rise.

7. The rand/gold price is low, but not at historic lows.
The gold companies will survive. The price of gold for the most part has been more strong in dollars than in other currencies. Phase 2 of a gold bull market will see gold rising in all currencies.

Therefore one of the biggest single factors that affects the rand is the price of gold, since gold is the primary export of the country. The strong rand has kept the SA gold industry profit hobbled--but for how long? Eventually the gold price will overtake the higher rand and gold will be priced in a currency basket worldwide, eventually neutering the weaker dollar mirror that most look through when seeing a stronger rand staring back at them. As the US dollar loses its dominance of world pricing, the rand will be looked on for its own merits in a more pronounced way. So if the SA government is contolling its finances and helping its exporters grow and boosting its currency reserves--then a strong world rand can walk hand in hand with a strong rand/gold price.

Today, the SA gold mining industry is a lot better than it was in 1998 and surely isn't going bankrupt. With gold in a secular bull market, then possibly like 20th century gold minors in the US during the 30's, with a stable currency backdrop--profits and dividends were the best performing asset class. A much higher gold price will lift all boats in SA. Its up to the politicians from that point on.

http://www.reservebank.co.za/Ari came up with an intriguing theory that may have some credence but I'm thinking more in line with Shapur's points. It seems to me that Rand strength may be based on a carry trade cashing in on high (7 to 8%)short term rates in SA vs. 1% in Dollars. Surely SA and its Rand are not seen as a financial security haven such as once existed in Switzerland.

But this theory begs the question, Why is the SA CB holding its rates so high? SA's strongest exports (35%) are in mining and metals; Gold, PGM, Diamonds, Coal and Vanadium. Ag products are another large export sector. These commodity items are highly price sensitive and the export markets won't pay up for a higher rand. This leaves the exporter with lower prices and profits because his labor inputs at home are not going down. Mining metals and agriculture are also SA's largest employers and with unemployment in the 25% or higher range why would a black empowered CB risk these kinds of problems?

I decided to do some research and went to the SARB (South African Reserve Bank) website. I was quite astonished at what I learned. What first got my attention was the simple mission statement "the achievement and maintenance of financial stability". To this end they seem to be focused primarily on containing inflation and strengthening the currency via sound monetary policy. The Board of Governors is made up of a broad range of backgrounds, ethnically and
educationally, and they have seemingly resisted the temptation to make the bank an instrument of government orchestrated fincial stimulus. In this sense they have the same approach as the ECB. In fact their substantial gold reserves are marked to market.

It also appears after reading the latest address of July 8 by Governor TT Mboweni they have acted to stifle an incipient stock market bubble and quench the threat of inflation introduced by their partial dependence on foreign oil. The higher Rand has actually reduced their oil costs recently. Furthermore, they seem to be using real inflation indices, not the heavily cooked creations that are offered by US government statistitions.

Perhaps SA is trying to become the new Switzerland. They have more gold in the ground than the Swiss ever had in their banks.

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

It is a credit to FedEx that they actually deliver to my little village of Anatevka. The 5 Peso Gold awarded for the recent contest was recieved yesterday. Many Many thanks to Sir MK and all at the Castle for your efforts on the contest and your generosity in the prizes.

I visit the Castle and its conversations to learn from the expertise. "Make Oil not War", Sir Boilermaker you are right! "Our carefree attitude toward energy is to blame", Sir JuniorMiner you are right. "The closer a country is to the land and to the old ways, the less the People will be affected by Oil's wiles", Sir Smeagol you also are right! I am hohored to have contributed a perspective worthy of such wise company. Let us continue to assist each other, as we live through these interesting times.

Gold. Its Tradition!

Tevye

http://story.news.yahoo.com/news?tmpl=story&cid=580&e=1&u=/nm/20040718/bs_nm/economy_greenspan_dcsnip,
WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan will go before Congress this week armed with data showing the U.S. economy is solid and free of dangerous price pressures that could force rapid interest-rate rises.
The Fed chairman is to deliver his semiannual monetary policy report to the Senate and U.S. House of Representatives on Tuesday and Wednesday, likely assuring lawmakers recent signs of a slowdown are merely a lull and that rates need to gradually rise to keep the recovery healthy.
"I think we're going to see him patting himself on the back for having guided the economy through a weak period," said Richard DeKaser, chief economist with National City Corp. in Cleveland.

comment,
He just might break his arm one of these days.

This South African currency is still controlled by the elitist broader Anglo-club, through the SA CB ! The rand has been at South Africa's goldmining *service* for decades ! Price-inflation in SA, never eased and is still high, today.

High IRs are NOT-NOT-NOT in "defense" of any currency !!!
High IRs do mean that a currency is under stress and is "desperately" supported by high IRs, as the only tool available, up until the "real" cause for currency weakness is cured. High IRs are a net zero sum game ! The price-inflation eats more purchasing power away from your currency that is perceptively defended/supported by hig/higher IRs.

The rand strength + high rand IRs, is an organized contradiction in terminis. The same is true for the dollar !!! Both currencies are under a formidable regime of interventionist manipulation. A gigantic anomaly.

One of the main reasons why the dollar remains relatively strong is because of the highly abnormal "low" IRs, that results in hiding the dollar's intrinsic weakness. These very low IRs are the "REAL" defense of the currency !!!
As soon as IRs start to rise, all can clearly see that the currency is intrinsically weak and higher IRs are like a plaster on a leg that has to be amputated.

The seemingly abnormal strength of the rand against the dollar and many other currencies, at the same time,...results in an organized profitability range for the goldmine sector. Read : Gold output !!!

Note the following goldmine axioma : The more profitable goldmining becomes...the less Gold is brought to the surface !!! The thinner goldmining profits become,...the more precious from rich veins must be brought to the surface as to stay in business !!!

Voil�...I want all goldminers to exhaust their richest reserves and bring as much Gold above the ground as possible !!! Because I have to serve some very demanding Gold clients who wished to be served with cheap Gold that in the same effort makes the dollar look strong (creditworthy)!!!

The SA economy is the size of Belgium. Means, insignificantly small and therefore the easy terrain for ...the old ruling (rand)masters !

Approximately the same story for the Aussie mines wich added to the "organized" goldmine forward goldsales !

BTW, all do remember the Ashanti near default story...and today we see Anglogold-Ashanti as one entity !!!-???
Indeed, the major gold-diggers are not going to default under whatever circumstances . But goldmines are part of the Goldprice interventionist containment. And that shouldn't surprise you at all,...if you do consider Gold, the metal, as the most universal and purest "non monetary" wealth asset.

Goldmine shares are to be considered as fiat carrying an IR (dividend) and a fluctuiating exchange rate (shareprice).
Under the ruling UNFREE Gold-regime, major mature, non speculative, goldmineshares can never fly away like the dot-bombs.

As soon as the goldmining needs some desperate profitability oxygen, they (Anglo-club & Co) will do something with the rand exchange rate as to provide renewed profitability space. That's speculation and not wealth conservation !

Let's watch the rand exchange rate, all together and see if something has changed from the old regular habits that are established under the dollar-Gold regime !?

Some actual statistics re South African economy: GDP is 3.1%, CPI is around 4.5%, mining's contribution to the GDP is in the order of 5%. That...just might put the relative (un)importance of gold into perspective on the local currency.

Sir Cage Rattler (sss... we likes that 'handle'), are you suggessting, that the 5% GDP mining-contribution is not sso important, or on the other hand that this little 5% has dissproportionally much more of an influence on the Rand-fiat at thiss time?

S.

Belgian, Your Rand theory, lower Rand gold prices forcing high-grading of SA mines and hence higher gold production has some short term logic. However, gold and SA gold mines have been been in a slump for many years with the recent exception of 2002 when the Rand was extremely weak. Gold production has declined from 32 million ounces in 1970, 68% of world production, to about 12 million ounces and 14% of world production in 2003. This is not a strong hand for a small CB to play in trying to stimulate production by starving the producers. The miners have been been underfed for too many years to react positively to more low price stimulus.
The markets will tell us who is right.

http://finance.news.com.au/common/story_page/0,4057,10179476%255E14302,00.htmlFrom MK's news feed:
News.com.au - Gold still outshines alternatives
July 17, 2004

A few ultra-conservative price forecasts and some misinformed opinions are included in this otherwise,
upbeat Au assessment. But then upon reaching the
last two paragraphs, Newmont talks of a
"serious way" in the US of A!

Goodmorning ! I've a rather tricky question. What percentage of physical gold would you recommend in a portfolio and why ?

I follow your reasoning...but...A few hundred tonnes per year can make "the" difference in the complex Gold containment regime !!! Cfr. a million or 2, more or less barrils a day have an enormous effect on the price (pricing).
There is a very good reason why the oil-cartel (OPEC) does exists and is accepted . Do the same reasoning for the invisible Gold-cartel. Oil and Gold do have swing-producers !!!

We know, but don't fully recognise, the utmost importance of oil and its pricing as the fundamental for global economic activity...But are we fully aware that Gold and its pricing is of the utmost importance in relation to the entire $-fiat (reserve) system !?

The absurd low POG is desperately needed to ridicule Gold in front of the cosmic dollar debtbergs. If Gold could impossibly be a reserve alternative...it would already be FREE and priced much higher!
It is the absurd low POG that is permanently impacting the attitude (behavior) of "Trillions" of dollars !!! Gold must be percepted as "death" ...and this by ALL means !

If oil owners see a consistant rising POO, they are inclined to pump less as to maintain artificial scarcety and consolidate the high price into the future. As soon as the price starts to weaken, more oil needs to be pumped to obtain the same income. Think Iraq.

The same logic is applicable to the Gold cartel & Co.

Now, the longer I see high oil prices and low Gold prices - anomaly, the more I'm inclined to believe (accept as evidence) that concerted anti-dollar forces are succesful in dethroning the dollar-reserve-system and offering the alternative. Why is it that Sir Alan, must go on telling the planet that...there are NO serious price-pressures !!!-??? A lot might dramatically change, overnight, if the Iraqi reserves could be brought massively into the market...under US control. That's why Iran is next and then I'm going to hold my breath.

It is within this context that I'm trying to see the rand's (abnormal) strength. Might have it wrong again, of course.

You seem to be really sure the US is going to invade Iran ! Because they want to establish their own (golden dinar) oil-market or just to get control over the oilfields ? Do you think it will be a US-only action or will Europe be involved ? European Commission also condemned Iran's nuclear actions ?

My personal view (and action) on Physical Gold in Possession, is rather simple : Everything that I consider to be as my "wealth" is exchanged for Physical Gold.
Most will never consider Gold as wealth and the few others have wide different opinions on what wealth, per definition, is. Therefore it is impossible to ever answer your question with a % figure.

But...the notion-perception (definition) of wealth, for the general public, does evolve...has always evolved for 5,000 years already. And it is here that your question becomes much more interesting. Who believes that Gold is going to be "Re-Valued" with an "Official" status as Universal wealth !? That's the clue Sir...and that's what makes the many different views on Gold and related. And it is exactly here that we are all on our own !

Think that nobody can tell what will happen. But there is a new wave of frightening global "polarization" on many very crucial issues. I do get the renewed impression that we are heading, steadily and gradually, for a sad world fire, once again. Can only sincerely hope that I'm having it completely wrong here.

I cannot imagine for the US to invade Iran the november election. If they want to do it they will have to hope on a re-election for G.W. and invade in jan-feb 2005 because the weather conditions are the best during that period. On the other hand, how will Europe react on a golden dinar oil market ? Euros are not golden dinars.
There is al lot of talk about ME and Russian oil, but there is a silence about Venezuela's oil. Are they definetely in the $-camp ?

Main point is that Iran (+ its supporters), is standing in the way for having (cheap-abundant-constant reliable) oil-flows as we had them before ! In this global oil-turmoil, there are those who profit from it and others who are damaged (threathened). It is against this oily background that present evolving geopolitics must been seen. Invasions and occupations, for whatever reasons, do have certain limits. Impossible to predict who is going to produce what provocation and who is going to stay cool (reasonable) or not. Euroland is doing what it can to stay as neutral as possible. Others wish to add (oil) to the fires.

For the time being we are in a relative stable, unstability.
I only have but broken crystal balls and have also to watch and wait for what stupid/senseable things might come out.
Wars on themselves are not a problem (cynical isn't it ?) for as long as reasonably $-priced oil keeps flowing, one way or another. All this, to avoid destructive price-inflation, through dollar devaluation by oil, to sky rocket.

Should Iran be isolated,... destabilized from within,... invaded and occupied...in order to obtain a higher level of global stability, through stability in Iraq to begin with ?

Poland will (surprisingly) take some troops out of Iraq from 01/'05. Is it possible through friendly and limited isolation of the US, to construct some more International co-operation ? It is in nobody's interest of having a US getting unreasonable/unresponsible out of proportion !

But remember 986 that I'm only an amateur observer and my guesses are as good (or bad) as anyone's else's. There are no certitudes...only probabilities.

Well, I have arrived back to the wilds of civilization (briefly) and have been catching up on my reading.

Firstly, I would like to thank the administration for the opportunity to participate in the "End of cheap oil" contest. I had the results saved, and there was some very intelligent thoughts expressed. I must admit, my views were somewhat more gloomy than most, but then, I believe the end of cheap oil arises from SHORTAGE, and I felt that many were concentrating overmuch on the price, and not enough on the shortage, nor, for practical purposes, the end of hydrocarbons, and the ripple effect therefrom. Time will tell.

Solomon; In your 123070 16July, you say; "it may succeed in killing many, but it would put USA on very moral high ground in the war on terror." 2 thoughts. How long did it take for the current administration to squander the high ground after 9/11? Do you think they might not again? 2) The moral high ground may not be as high as if the last couple of years had not happened. The US has alienated so many people in the last two years, that what could have been moral high ground, will now be "they got what they deserved", (true or not) with no moral high ground admitted. I am reminded of the quote that this or that would be "good advertising". So where can I spend all this advertising (or moral high ground) for things I need?

968- msg 123092 19 July
You say ". What percentage of physical gold would you recommend in a portfolio and why ?
There is no one size fits all answer. It depends on your own crystal ball of the future, and most are quite murky. I know mine is. I believe gold will achieve, briefly, a PURCHASING POWER PARITY price of between US$16,000 and $32,000 in todays terms. (Silver at over $1,000 an ounce.) As the US$ and other fiat goes toward zero, so will the price of PM's go toward infinity. Of course, the PTB will make it illegal to own gold long before that. They will try to save their treasuries, and their power. Based on your personal needs, and how you see the world developing, the answer for you will be more obvious. But definitely, the circumstances surrounding the POG will effect the POG. So, your question revolves around what the future will be like.

In my case, I have charted what conditions I feel are likely 1, 5, and 10 years out. From that, I deduced what (In this case, the POG might be.) and from that how I might fulfill my needs. I have also included a factor of how wrong I might be. (For sure I will be wrong, the question is how badly wrong.) I have established a core position in PM's (plural), and of course, am adding to them as the opportunity arises, just for insurance in case I am wrong. However, in the main, I am now moving on to other things. You will note that I feel the PM's are most important, since I have established that position first. But while important, they are not the ONLY things.

In fact, the End of cheap oil exercise was a great way of looking at some future conditions, and how that might effect you personally, and the world around you. As you saw, there were various opinions, some probably close, but also, for sure, all will be found to be wrong in some measure.

Personally, I prefer to prepare for my worst case scenario.

http://www.couriermail.news.com.au/common/story_page/0,5936,10155781%255E3122,00.htmlI thought this might be of interest to the forum. Its an article on gold with a funny mention to oil.

ABN AMRO Morgans' key stock picks in the gold sector were Highlands Pacific, Lafayette, MPI Mines, OceanaGold, Oxiana Resources and Newcrest Mining. "The oil price is at all-time highs," he said

Unbelievably it even quotes this...

"Newmont believes it is a house of cards that at some point . . . people are going to want their money and there is not enough money behind the US dollar to back it so it is a bit like a return to the gold standard," Mr Giacomo said

Is there anyone on this forum following the Australian dollar exchange rate and the price of gold in Aussie Dollars?

Dear Belgian, Let me react to your message 123093...
"A few hundred tonnes per year can make "the" difference in the complex Gold containment regime !!! Cfr. a million or 2, more or less barrils a day have an enormous effect on the price (pricing).
There is a very good reason why the oil-cartel (OPEC) does exists and is accepted . Do the same reasoning for the invisible Gold-cartel. Oil and Gold do have swing-producers !!!"

Here is my reaction:
There is no question that incremental oil production such as 2 million bpd can cause rapid and large price fluctuations. However, the above-ground inventory of oil is at best but a few months consumption while the above ground stores of gold are many years worth of production and consumption. Further complicating the comparison of oil to the gold market is that physical gold consumption in Asian countries such as India (value oriented markets) are highly sensitive to price increases or decreases in the classical economic relationship, higher price means lower demand, while Western paper gold markets are often driven by momentum, ie., higher price means higher demand.

I think that gold price-capping of the past several years has on balance not stimulated higher over-all production but has led to reduced exploration and new mine development, a cycle that requires five or more years to be felt in the markets. Having experienced a long period of low gold prices I believe that many mines have been stripped of their high grade ore and cannot react to short term price fluctuations. For instance, according to some recent estimates nearly one half of SA's current gold production is at a loss with the existing prices. The mine owners of these super-deep mines are reluctant to shut them down because the huge costs and problems that are faced to reopen them when prices recover. The SA Reserve Bank (SARB) is forcing the mines to walk at the edge of a potential production cliff because they cannot go on like this for too much longer.
As an owner of some SA mining shares I feel their pain and would welcome a weaker Rand (and/or stronger gold). I really don't see the logic of a strong Rand providing stimulus for higher SA production. I do see the possibility of a strategy to weaken SA miners and their shares in order to make them more amenable to Black Economic Empowerment (BEE) objectives and that could be a SARB motivator. But even that motivator is difficult to envision given the " elitist broader Anglo-club, through the SA CB " makeup of the Governor's Board. I am left with two remaining scenarios;
-SARB intends to drive the mines into the hands of the international banking cartel such as Ari has suggested
-SARB is carrying out its stated mission to curb inflation by maintaining high interest rates a-la Paul Volcker's Fed regime years ago.

This is a fascinating case study, sort of an ongoing soap opera, that will be revealed in time. I hope to live long enough to see the conclusion.
Cheers and a good week to you Sir!

Following on from my recent post discussing the revelation by a Chinese newspaper that in 2003 demand for gold in Guandong province in China was140 tons per annum.Well, THERE ARE 31 PROVINCES IN CHINA !!!!!!!!!!!!
I remind you that officially Chinese gold demand has been mysteriouslly static at 200 tons per annum since 1992 !!!!!!
If the other 30 provinces' demand was just 20% of Guandong, TOTAL CHINESE DEMAND PER ANNUM WOULD BE 980 TONS PER ANNUM in 2003.
This figure does not take account of the Chinese National Bank which regularly accumulates large amounts of gold (e.g. 200 tons in 2002);
Can you imagine that not one single gold analyst has questioned these official figures.WHY AM I HAVING TO DO THE WORK FOR THE THESE HIGHLY PAID ANALYSTS? Would MR. NAQVI of Barclays Capital like to comment on this in view of his recent totally misleading analysis of Chinese gold demand.And at the same time would he kindly reveal the size of Barclays gold short position.Anything less would be criminal would it not Mr Naqvi?

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.

Goldmine forward goldsales (3,000 tonnes at its highest level) are evidence that the major goldmines are already (always were) under the control of the gold interventionists of duty ! Yearly goldmine output has more than doubled over the past 3 decades.

If,...IF the goldmine business were really a completely free business...within an uncontained POG environment,...they (the Anglo club) would already have maneuvered the Goldprice into the stratosphere with cartel like practices (cfr. platinum).
Never forget that goldminers are mining precious wealth that is part of the globe's National (CB) reserves ! Therefore the goldmining business is NOT (never was) like any other business. Think deep about the far reaching consequences of this.

@Smoochie : China Gold Association (China Daily-Bloomberg) : China is the third largest gold-consumer (230 tonnes in '03) and the fourth largest producer (200 tonnes).
These figures say "something". Much gold is smuggled in and out of China...unaccounted of course.

Warning : Statistical figures + their various interpretations are not recommended to build your strategic descissions on.

Reliable, strategically important and significant figures are rarely publizised !

http://www.usagold.com/Order_Form.htmlIf you are new to the gold market or feel you've been mistreated elsewhere, treat yourself to a genuine friend in the business. Your introductory step toward helpful information and investment assistance is just a simple click and short request-form away!

http://allafrica.com/stories/200407190956.htmlHEADLINE: Strong Rand Drops Mining Down Pecking Order of SA's Economy

(Johannesburg) Business Day, July 19, 2004 -- There was a sharp decline in the contribution made by mining to the South African economy last year, according to a new report by the Minerals Bureau, the statistical arm of the minerals and energy department, writes John Fraser.

...the strengthening of the rand, which has been an important element to the decline. ....... last year mining contributed R78,5 billion to gross domestic product, or 7.1%, compared to 7.7% in 2002.

"The decrease in contribution, the sharpest since 1996, is due to ... declining gold production and lower rand prices received for ... gold and platinum group metals," according to the report.

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

The bigger factor in GDP contribution by the gold sector is certainly the change in domestic price being received for the gold that is being mined. One doesn't need to track down the true production statistics to know ahead of time that any measured change in production level would pale in comparison to the 70% strengthening of the rand against the dollar in the past two years, and a 30% strengthening against gold itself over that same time period.

Typically, in such a strained-profit scenario, whatever production the various miners are capable of would tend to be pressed to the maximum of capacity in order to stay alive. As Belgian says, if prices were indeed higher, these companies could afford to relax and yet still enjoy the same cash flow at the end of the day.

R.

And another 1.1 million ounces withdrawn from the Comex Silver inventories today.

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.


---- U.S. closing market excerpts ----

COMEX gold futures softened on Monday, pressured by a timid rise in the dollar... but closed above the key $400-an-ounce level for a seventh-straight trading session....

August gold fell $1.00 to finish at $405.80 an ounce, after moving in a session band between $408.40 and $404.80.

According to a Reuters poll released Monday, gold prices are expected to hold above $400 an ounce for the foreseeable future as the dollar stays soft and world security worries keep large investors hedging their bets on where money is safest....

...investors kept an eye on moves in the U.S. dollar ahead of comments from Alan Greenspan this week. "Despite the lack of U.S. data out this week, the currencies are still set to have a heavy influence over the course of the week with Alan Greenspan set to address the Senate Banking Committee on Tuesday, and the House Financial Services on Wednesday with his semi-annual monetary policy testimony," said James Moore, an analyst at TheBullionDesk.com in London...

"Quietly, gold is inching back up to $410, [but] this time it's taking its time and filling in all the cracks in prices," said Kevin Kerr, a senior trader at Kwest International.

Kerr estimates that $425 is the next key level for gold after it moves past resistance at the $415 level. "More downward pressure on the dollar and continued 'flight to quality' are continuing to support the gold above $400," he said...

------(see url for access to full news and the USAGOLD 24-hr newswire)------

If we consider what it really means for gold or silver to be __"IN"__ the COMEX inventory, I can't see how it matters very much if the figures grow or shrink or do nothing at all. What's your take on it?

http://www.yomiuri.co.jp/newse/20040720wo12.htmHEADLINE: Future economic trends require watching

(excerpts) -- .....we should not sit back and watch idly as the Koizumi administration manages its policies.

The government will soon start discussing reforming the social security system, including the pension system, which was the focal point in the upper house election.

Many people in recent times have tightened their belts due to widespread unease about the fate of the nation's social security system.

Public disappointment will only deepen if future government discussions fail to present any responsible blueprint and only end up showing a reform plan that has been reduced to no more than one merely postponing drastic reform.

Private consumption accounts for 60 percent of Japan's GDP. To avoid pushing private consumption down, the government needs to work out a social security system that the public can trust in the future.

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

Why not kill two birds with one stone? Encourage private savings in gold as a means to bolster citizen confidence in the well-being of their ear-marked retirement wealth, and at the same time these gold purchases will count towards propping up private consumption levels... for whatever benefit the economists see in those numbers.

The same rationale can be applied elsewhere that social retirement issues are smoldering.

R.

Just so there's two sides on the coin.......

Yes, hard to believe only 200 tons of investment demand from all of China. Yet hard to believe that 980 is a likely number given that's roughly one-third of annual production on the planet.

Suppose a typo on the 140 tons was actually 14.0. That times 31 provinces is 434 tonnes. More reasonable?

My point is any number is possible and coming out of China you'll NEVER know. That's why the analysts don't bother.

What would happen if all these Central bank sales in the last couple decades were ALL consumed by China and they have 30,000 tonnes and ALL the remaining central banks have less than 10,000? Possible? Laughable?

Some of the most repected like Howe, Venerosa, Bolser, Turk, etc., etc. write ultra-long winded essays on Central Bank gold holdings and the discussed (not even possible) ranges are alarming. If they don't know, no one does.

This gold craziness is going to roll along, roll along and then, one day BOOM, KABOOM, gold will be 4 digits, tripling or quadrupling in a week. Why? Because China and other suspected Asian Hung Fat and Dr. No's will pull the trigger. What trigger? The US dollar trigger my friend!

They will cash out of USD's my friend! Why? When? When they realize the massive beating that they take on US assets/dollars will be only a FRACTION of what they gain with GOLD!!

That's what you call WALKING IN THE FOOTSTEPS OF GIANTS DUDE!!!

'Til that day my man!

http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20040719/IRAN19//?query=Iran"It was Iran, not Iraq, that helped some of the hijackers involved in the attacks of Sept. 11, 2001, by allowing them to bypass border controls...."

"Against that backdrop, the new revelations about Iran fuelled criticism of Mr. Bush in Washington yesterday. "We focused so much energy on Iraq when other countries may have been more directly linked to 9/11," said Senator Richard Durbin, an Illinois Democrat."

-snip-

Three guesses what's next on 'the war on terror'.

Three guesses for the best hedge on mayhem.

Get you lots.

http://www.mineweb.net/sections/gold_silver/329795.htmPlease read the story at the URL shown and explain to me again how low Rand prices for SA produced gold are stimulating production.
I can find no evidence to support your opinions in this debate.
I would absolutely agree that some miners have sold their souls to the devil (gold cartel) but I have seen no evidence of continuing gold forward sales by miners. Most of them are touting their hedge book reductions.

http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktw&guid=%7B412F0DA8%2DC179%2D4E38%2D8B8C%2DD00BF912F964%7D Treasury prices dip on eve of Greenspan testimony
Kate Gibson - CBSMarketwatch.com
July 19, 2004 - Last Update 05:12 PM EST

Some of your comments, especially about forward sales, may have been directed more toward Belgian, and he may have more to say on that account for you.

In furtherance of my own comments, I had hoped it was clear enough that I was not intending to suggest that overall production levels couldn't in fact be in decline (coincidental with a strengthening rand) as might be simply unalterable due to depleting resources and production constraints.

What I had tried to reinforce was that while facing "WHATEVER production the various miners are capable of", and that includes declining resources, the lower profit margins would tend to make the miners sqeeze their production capacity for every drop they're worth -- hence, rendering production levels that haven't declined so steeply during the year as might have otherwise been the case had higher rand gold prices prevailed.

To help underscore the very existence of the businessness philosophy behind the point I tried to empasize, we can turn simply to this phase in the article you cited. An excerpt reads: "South African mining houses attempted to counteract the weak rand gold price [due to the strong rand/dollar exchange rate being discussed] by mining at higher average grades."

Waht I was referring to was exactly that, and various other techniques used by mining companies, too, to boost production against, ultimately, what we all must admit is in fact a losing (production) battle toward final mine depletion.

R.

I would very much like to have a dialoque with you about the subject...but...we are all guests on a "Gold"-forum and all our contributions "must" be strictly and absolutely Gold-related !

The closiest thing to Gold is, officially, still the dollar currency and America is still the epicenter of the dollar-currency and system. It is because we are all concerned with the dollar, that the globe is concerned with America.

But the world is "changing"...rapidly...! Turning away from decades of, conveniently accepted and imposed, *dollar-involvement*, as damageless as possible !!!
This process is imvho, irreversable, White Hills...as is evidenced by the daily (provocative) events, taking place, globally . Maybe, I'm surprising you by saying that I personally don't like to see this happening !?

Let me finalise this half baked response with a very strong personal perception of mine : America and Americans, the former symbol of absolute Freedom, is being deceived on a massive scale. And when the strong are weakening...there is an unfortunate threath in the making. And believe me, that I wished to be dead wrong on this strong perception. Regards B.

@Boilermaker : What should, could a goldmine do...when its *profitability* is constantly being eroded !? Close the mine and go home...and let the groundwater fill the shafts !? Mine less volume and exhaust the richest, finite, veins...cut costs to the bone and mine 24/7 as to scramble for some insignificant dividends to please (?) the shareholders... !?
Goldminers are at the mercy of the "goldprice", dictated by...the goldprice interventionists ! Where is the "pricing-power" of the miners !!!-???
Nice to hear that "you" feel the goldminers' pain..."they" don't feel your pain !
How do goldminers have to compensate for rising-inflating costs and less "cheap" underground gold (their product), within a decades during goldprice containment !!!-???
Are you servicing your clients, today, at the same prices that were profitable a decade ago !? Miners have to dig deaper and deaper for the same $-price of the nineties.

Are goldmines... growth stocks !?

POG=$400 today, is less than 10 times the goldprice in 1971 !!! Is there so much cheap underground gold left to mine !? What was the price of a tube of toothpaste in 1971 ?

Gold has purposely been *** marginalized *** for a whole generation (25 years), Sir !!! PURPOSELY...do you hear me shouting across the Atlantic... !!! And all the rallies in the goldmine sector (stocks) over the past 2 decades, have been "organized"...artificially induced !!!
It are those who manage the POG that provoked the goldmine forward sales of "thousands" of tonnes !!! Goldminers had NO other choice than to give in to this gigantic exhaustion maneuver. Goldmine enslavement. Do you know any other industry that is selling forward its product, more than one year of total global production !!!-??? The global goldmine business did...was forced to do so ! And now you are stating that a decline in gold-hedges is a positive !?

Think about the Chinese modus operandi as to mature to a dominating seat on the world stage. How can we (the West) possibly compete with 1,2 billion Eastern ants in a region where the sun never sets !?
See the connection with fiat exchange rates (management of) in analogy with the rand theory.

Very confusing...isn't it, mate ?

The world's CBs have 2 reserves at their disposal : 1/ The dollar-reserve - 2/ Gold-reserves.
Facts : Next to the dollar-reserve, an increasing amount of euro are joining the reserve packet and CBs do exchange-reshuffle, some of their gold-reserves, between each other.
This movement in itself is the clearest evidence that something very fundamental IS changing.

We are all (including the respected authorities) continiously struggling with the "correct" (or biased) interpretation(s) of these changes !!!

Is it a "change", oriented at further consolidation of the established dollar-system or is it a "change", designed to move away from that dollar-system !? It can't be a combination of these two mainstream tracks. Most are still heavily struggling with this facet. Very understandable of course.

Indeed Ned, I do regulary reread also what has already been said by the many respected authorities. I've come to the conclusion that it are the major CBs that are the globe's ultimate power-houses.
Let's put two (historical) statements from the major CBs against each other, again : Alan G. (FED)...CBs stand ready to sell Gold...and Wim D. (ECB)...Gold remains an important asset...!!! Those very secretive (ultra discrete) CB-power-houses, have been giving some very powerfull (opposing) signals on Gold...the management of Gold as the second biggest reserve-asset in their respective vaults ! When I do reread old essays, I must conclude that no authorities have been pulling the right conclusions, for the long(er) term, out of these subtle, strong, statements.
In the Far East (Japan) 1997, the then PM Hashimoto, caused furor with his statement (threat) on the dollar management (its exchange rate stability) and the sale of US treasury bonds for Gold !!!

The 3 major blocks (US/EU/Asia) have been telling the world how divided they are,...how they feel about the globe's ongoing dollar-system. All 3 have been expressing themselves, through *GOLD* the metal (not the many substitutes)...that barbaric, marginalized relic !!! Indeed Ned, these fellas were talking fundamentally,... about the dollar !!!

Who dares to state that the dollar is already a lost cause and that this dollar-affair is in the process of unwinding...gradually,...orderly !?
That the dollar is NOT the wealth we think it is...worse, the dollar is even losing its claim on wealth, rapidly !

I do keep on repeating the question, WHY the euro-Gold-concept (FreeGold), remains out of all the Big Pictures that these Gold authorities are painting !? The fact of ignoring (ridiculing) even the thought of it...makes me automatically very sceptic on the authenticity of the painted pictures.

http://fx.sauder.ubc.ca/cgi/fxplot?b=USD&c=ZAR&rd=*&fd=1&fm=1&fy=1995&ld=31&lm=12&ly=2004&y=daily&q=volume&f=png&a=lin&m=0&x=I do agree that miners, trying to make the best from a weak gold price will high-grade to the extent possible. They do not have the option as do manufacturers of moving their mine offshore to find lower labor costs. I also agree that for many years the miners have been enslaved by their bankers forcing forward sales.

I guess my main point was that in the specific case of SA and their central bank it appears that they are acting responsibly to reduce the rate of inflation that had been accelerating a couple of years ago due to the weak Rand at that time. See the URL for the Rand/Dollar chart.

SA miners (labor force) have been getting hefty wage increases lately and threatened to push inflation even higher. The mine owners, given a weak Rand and strong gold prices were in a position to grant higher wages (wage-price spiral effect). The SARB, seeing this has decided to increase the pain level of the mine owners and perhaps other sectors realizing that they are the ones who must resist the wage demands of labor.
I still do not believe the strong rand is a measure to influence gold production or drive the mines further into the clutches of the cartel. Perhaps we have become so cynical that we cannot accept the possibility that a central bank can act responsibly.

Greenspan will be at the Senate today and House tomorrow painting glowing pictures of strong economic activity with little signs of inflation. I am interested to see how the markets react. The SM has been weak recently and we should expect a nice rally. As for gold, I look for a thrashing of the recently placed paper longs.

http://centre.telemanage.ca/links.nsf/articles/BCC271ABCF5F6136852568E000613B47I read a few articles about who owns the Federal Reserve. According to these articles, the Fed is owned by "private shareholders". If this is the case, who owns America's Gold ? Is this the Fed's gold or belongs the gold to the American Goverment ? I know there is a similar discussion in Belgium (the Belgian National Bank is for 49% privately owned). After the last goldsale the private shareholders went to court because they wanted their piece of the pie.

Whether or not anyone on this board believes that the comex silver stocks going up/down are important doesn't matter. The clowns that trade the paper contracts on the Crimex believe in that stockpile. Markets are based on popular opinions/emotions etc, and in the silver market if those stockpiles continue to be depleted you'll see silver go ballistic, much like copper is doing lately.

"..We probably should expect gold and silver to be
hit hard Tuesday and Wednesday as Federal
Reserve Chairman Alan Greenspan testifies to
Congress -- the usual drill.."

Chris Powell in yesterdays GATA mail-now watch Gold and Silver today.No new tricks anymore.The emperor has no clothes.Interesting is that not many seem to play this,its like a dead market (or the summer doldrums).

http://www.womenswallstreet.com/WWS/article_landing.aspx?titleid=1&articleid=711Terror in the Skies, Again?

By Annie Jacobsen

A WWS Exclusive Article


Note from the E-ditors: You are about to read an account of what happened during a domestic flight that one of our writers, Annie Jacobsen, took from Detroit to Los Angeles. The WWS Editorial Team debated long and hard about how to handle this information and ultimately we decided it was something that should be shared. What does it have to do with finances? Nothing, and everything. Here is Annie's story.

On June 29, 2004, at 12:28 p.m., I flew on Northwest Airlines flight #327 from Detroit to Los Angeles with my husband and our young son. Also on our flight were 14 Middle Eastern men between the ages of approximately 20 and 50 years old. What I experienced during that flight has caused me to question whether the United States of America can realistically uphold the civil liberties of every individual, even non-citizens, and protect its citizens from terrorist threats.

On that Tuesday, our journey began uneventfully. Starting out that morning in Providence, Rhode Island, we went through security screening, flew to Detroit, and passed the time waiting for our connecting flight to Los Angeles by shopping at the airport stores and eating lunch at an airport diner. With no second security check required in Detroit we headed to our gate and waited for the pre-boarding announcement. Standing near us, also waiting to pre-board, was a group of six Middle Eastern men. They were carrying blue passports with Arabic writing. Two men wore tracksuits with Arabic writing across the back. Two carried musical instrument cases - thin, flat, 18" long. One wore a yellow T-shirt and held a McDonald's bag. And the sixth man had a bad leg -- he wore an orthopedic shoe and limped. When the pre-boarding announcement was made, we handed our tickets to the Northwest Airlines agent, and walked down the jetway with the group of men directly behind us.

My four-year-old son was determined to wheel his carry-on bag himself, so I turned to the men behind me and said, "You go ahead, this could be awhile." "No, you go ahead," one of the men replied. He smiled pleasantly and extended his arm for me to pass. He was young, maybe late 20's and had a goatee. I thanked him and we boarded the plane.

Once on the plane, we took our seats in coach (seats 17A, 17B and 17C). The man with the yellow shirt and the McDonald's bag sat across the aisle from us (in seat 17E). The pleasant man with the goatee sat a few rows back and across the aisle from us (in seat 21E). The rest of the men were seated throughout the plane, and several made their way to the back.


See link for more>

"Gold has purposely been *** marginalized *** for a whole generation (25 years), Sir !!! PURPOSELY...do you hear me shouting across the Atlantic... !!!"

yes, I hear you Belgian, and I appreciate that you don't grow tired of getting this important message across.

Those that understand this are in a very small minority.

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

http://www.usagold.com/ProductsPage.htmlLast week one of the Eurosystem's member national central banks bought, yes, you read that right, BOUGHT �1 million in gold coins. This is not a first or one-off affair; it is the second such action in recent weeks.

Why not follow this good example of adding gold coins to your own holdings of reserve assets. Make a call to the friendly professional staff at USAGOLD~Centennial and discuss a diversification strategy that fits your investment goals. It's an ideal collaboration -- you bring unequalled knowledge of yourself to the table, and they bring expertise on gold coins & bullion and how to get it safely to you at best prices.

1-800-869-5115

R.

Not the Federal Reserve. I am not sure if it is still there anymore but the US bullion is supposed to be held by the US Treasury in custody for the American people.

"According to these articles, the Fed is owned by "private shareholders". If this is the case, who owns America's Gold?"


Ah-ha! Now that we're playing slow-pitch softball I'll gladly step up to the plate and take a swing.

The U.S. Department of Treasury owns "America's gold" (as you're calling it) ever since the federal government seized it from the banking system in 1933.

As a private "shareholder" in America, meaning I'm a citizen, I'm not even holding my breath to ever see my fair share of that gold. Does anyone???? That's fine with me and that's why I'm using this private channel to get my hands on gold personally because that's the only kind of gold in the world that can be used for the exact good of a person and his family. Meaning personally-owned gold, not collectively-owned gold.

That's a great point about it only matters what the clowns think, I forgot about that! But if I think about it at the same time, for every clown on the wrong side of the COMEX trade, isn't there somebody who knows better on the right side of the trade? So if the clowns are doing battle with people who know better, I can't see how the clowns can force prices ballistic on the basis of something that their smarter opposition knows is immaterial to the game at hand. How can the clowns win in a battle of wits when they're busy chasing rainbows?

Maestro Greenspan, always provides the music the organizing comit� wants the demanding public to hear. Banggggg...$-up...$-POG knock down $6 tones...and pianissimo on the $-POO...
The manipulation-reflexes are still functioning, Sir. But there are indeed good signs of a faster building/reacting counter force, when one keeps closely observing the intra-day price behaviors of our famous quartet ($-�-POG-POO).
Evidence that the manipulative interventions are coming under increased stress and are becoming less evident.

The FED's gratis paper-avalanches meet strong counterparties, increasingly ($)paper-averse, and both parties are constructing this funny market/orchestra, directed by Alan's talking ritme stick. And if maestro Alan desires some more stockato, he simply lowers the interbank IRs as to help liquidity by encouraging more fractional reserve lending. Exactly the opposite of the Basel II accords !!! Also remember misetich posting about the ECB's furious criticism on the IMF's adress ...monetary expansion-ism...-ISM !

If you want an easier to understand example of (concerted) intervention...Boeing and Airbus agreements on state subsidies.

At a given moment one or more parties start to exagerate in their cheating to such an extend that the others can't ignore/accept that cheating. That's when the joint interventionism breaks up and phase B starts (FreeGold against unfree gold).

@986 : Treasury Gold is de facto state property ! The Belgian National Bank shareholders can whistle after the Gold they could never have claimed, anyway...cfr. goldmine-shareholders can never claim the underground gold ! They also have to be happy with the dividends that the goldmining possibly produces as is the case for the Belgian shareholders of the BNB.

In the short term, the clowns can win because that is how the game is played with 'paper silver'. In the long-run if the physical silver is gone to support the paper pyramid they are toast. Which is exactly what will happen at some point in the near future for gold and silver (when I say near future it could be weeks to a few years). I believe that is the exact reason why everyone invests in silver/gold now. The nice thing about silver is that it is an industrial metal as well as a monetary metal, and the manufacturers will hit the comex eventually or go out of business (assuming they can't get physical silver elsewhere). Then the proverbial SWHTF, as when silver blows so goes gold and with it peoples faith in the paper fiat system. It's actually ironic as the longer they cap the price and suppress it, they make it unprofitable to mine, the quicker the melt-up will happen as there is less physical to support the growing demand.

A major gold mining fund has recently voted to increase the amount of physical gold the fund can own from 5% to 10%.
This allows the fund more flexabilty to avoid unreasonable risk.

I think this is a smart move and underscores the value of holding the physical.

Best Wishes

I can't agree with your prediction that manufactures will hit COMEX. They can't "hit" it for the same reason that the inventory numbers don't really matter, and the reason is that the COMEX doesn't own the inventory that's listed under the fancy umbrella of its namesake-approved depositories. Just because somebody keeps their bullion in a high-profile storefront window for the public to see doesn't mean it's available for the public to have. So in that sense, it doesn't really matter if it's in the window or not as long as the smart half of the players know it doesn't make any difference either way to the playing of the game.

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.


--- Closing US gold market excerpts ---

Gold futures closed lower Tuesday, with strength in the U.S. dollar pressuring investment demand for the precious metal. But the contract hasn't fallen below the $400 level since July 7. Gold prices are lower "out of concern that Federal Reserve Chairman Greenspan may say something positive about the economy," said Todd Hultman, president of Dailyfutures...

Gold futures on the Comex division of the New York Mercantile Exchange dropped nearly $4 Tuesday on light fund selling and a lack of buying interest spurred by the sturdier tone of the U.S. dollar and quieter overall conditions ahead of Federal Reserve Chairman Alan Greenspan's testimony to the Senate. The most-active Aug contract settled $3.70 lower at $402.10 per ounce.

Dealers stressed that while gold's price decline was notable actual sales volumes were fairly modest, and that a lack of buying interest was just as responsible for the losses as any heavy sales orders.

They said players appeared content to sit on their hands ahead of Greenspan's testimony on monetary policy later Tuesday and Wednesday, and await the U.S. dollar's reaction to any comments on the outlook for the U.S. economy and interest rates.

Support for Aug gold is expected around $399.70 and then at the 100-day moving average just below there. The 100-day moving average around $398.15 is deemed a likely cushion on any further short-term weakness...

-----(click url for access to full news and USAGOLD's 24-hr newswire)-----

Thanks for watching and reporting on the amount of silver held in the Comex warehouses.

Although I don't believe silver users obtain much, if any, supply from this source, there is some silver available there (not much as compared to yearly use), even if it might someday prove to be the silver of last resort.

Silver use is industrial and as such, silver should be priced according to the law of supply and demand. It's not that simple as investor sentiment often alters the price of anything, I suppose, both higher and lower. But, over the last few decades, yearly use has outstripped new supply so that the market has been forced to draw down from existing stores. How great these stores were at any time in the past OR how much available silver yet remains are the unknowns (unknowable?) clouding this market. I hold to the theory that existing supplies are not infinite and further that industry available silver may soon be much harder to obtain BUT the market analysts have long ago given up on analysing silver from any supply/demand viewpoint. So...will supply have to become critical before the price reflects the age old law of supply and demand??

It is this anomaly in silver analysis that separates silver (and gold?) from other similarly traded commodities. The copper market (one example) has a definite number (readily accessible) of existing copper. The decline in this number has moved the price of copper. Where are the silver stores? How much is still available? When the well runs dry, users will pay to take delivery from Comex, from the eligible category available there, no?

The industry prices silver...this is reflected in the Comex price. No amount of paper trading will/can overpower the law of supply/demand. This is, as always, just one poor man's opinion even if not consistent with the conspiracy, price manipulation believers.
rich

Greenspan, * the central banker * was answering this question with the evidency of $-� parity in the background (his mind) ! Then he smartly refers to a $-� flat exchange rate period, where there is "of course" no visible evidence of OPEC pricing oil in function of the euro.
Greenspan is as smart as a very experienced old fox ! IBM was supporting his optimism with deeds and instant Dow results. Yes, indeed Sir Alan...the "extra-ordinarry", concerted flexibility is truly amazing !!! Nobody else could bring this on a plate as smartly as Alan does. Bravo !

http://www.federalreserve.gov/BoardDocs/HH/2004/July/testimony.htmFrom testimony of Fed Chairman Alan Greenspan presenting the Board's semiannual 'Monetary Policy Report to the Congress', appearing before the Senate Committee on Banking, Housing, and Urban Affairs:

"...the low interest rates of recent years have allowed many households to lower the burdens of their financial obligations. Although mortgage rates are up from recent lows, they remain quite attractive from a longer-run perspective and are providing solid support to home sales. Despite the softness of recent retail sales, the combination of higher current and anticipated future income, strengthened balance sheets, and still-low interest rates bodes well for consumer spending.

"Consumer prices excluding food and energy--so-called core prices--have been rising more rapidly this year than in 2003. For example, the twelve-month change in the core personal consumption expenditures price index stood at 0.8 percent in December of last year and climbed to 1.6 percent by May of this year. Core inflation, of course, has been elevated by the indirect effects of higher energy prices on business costs and by increases in non-oil import prices that reflect past dollar depreciation and the surge in global prices for primary commodities. But the acceleration of core prices has been augmented by a marked rise in profit margins, even excluding domestic energy corporations."

"...the increases in average hourly earnings of nonsupervisory workers have been subdued in recent months and barely budged in June. But other compensation has accelerated this year, reflecting continued sizable increases in health insurance costs, a sharp increase in business contributions to pension funds, and an apparently more robust rate of growth of hourly earnings of supervisory workers. The larger wage gains for supervisory workers together with anecdotal reports of growing skill shortages are consistent with earlier evidence of rising wage premiums for skilled workers relative to less-skilled workers."

"...the economy is not yet operating at its productive capacity, which should help to contain cost pressures. But we cannot be certain that this benign environment will persist and that there are not more deep-seated forces emerging as a consequence of prolonged monetary accommodation."

----(text of testimony at url)---

Beware the forces with "deep seats"!

R.

http://www.federalreserve.gov/BoardDocs/HH/2004/July/testimony.htmHere is Chairman Greenspan's stylized articulation that the principal component of bonds (that is, bond prices) are in store for a fall in value.

"(I)n the process of returning the stance of policy to a more neutral setting, at least some of the capital gains on debt instruments registered in recent years will inevitably be reversed."

With bonds so clearly facing into a bear market, gold is the natural choice as your safe haven.

R.

http://www.federalreserve.gov/BoardDocs/HH/2004/July/testimony.htm
AG: "To be sure, financial intermediaries and other creditors that extended loans or purchased securities in recent years at relatively low long-term interest rates will sustain capital losses as rates rise."

With bonds facing a bear, holders can decide to continue holding and take their lumps, or exit for a more suitable alternative. Choose gold. Now more than ever.

R.

http://www.celticsurf.net/freeworld/money/index1.htmlYour comments on who owns the Federal Reserve hit the nail on the head. This applies not just to the Fed but to all the Central Banks. I recently read an interesting website, titled the Secret History of Money which whilst I don't agree with all the contents had interesting facts on the creation of the Bank of England, upon which all other Central Banks are modelled.

I'm sure many of the esteemed contributors to this site are familiar with much of this, but much of this was new to me, and it also explained in very easy language a lot about how our Financial Systems (Govt bonds,Taxes,Fractional Banking) work at their most basic level. I'm sure many will comment on the contents and would welcome any debate, in either support or refute of the claims to further enlighten myself and any others.

Excerpts as follows:

...After a while, the goldsmith's must have noticed that only a small percentage of their depositor's ever came in to demand their gold at any one time. So cleverly the goldsmith's made out some receipts for gold which didn't even exsist, and then they loaned it out to earn interest.

A nod and a wink amongst themselves, they incorporated this practice into the banking system. They even gave it a name to make it seem more acceptable, christening the practice 'Fractional Reserve Banking' which translates to mean, lending out many times more money than you have assets on deposit.

Today banks are allowed to loan out at least ten times the amount they actually are holding, so while you wonder how they get rich charging you 11% interest, it's not 11% a year they make on that amount but actually 110%.

THE TALLY STICKS (1100 - 1854)

King Henry the First produced sticks of polished wood, with notches cut along one edge to signify the denominations. The stick was then split full length so each piece still had a record of the notches.

The King kept one half for proof against counterfeiting, and then spent the other half into the market place where it would continue to circulate as money.

Because only Tally Sticks were accepted by Henry for payment of taxes, there was a built in demand for them, which gave people confidence to accept these as money.

He could have used anything really, so long as the people agreed it had value, and his willingness to accept these sticks as legal tender made it easy for the people to agree. Money is only as valuable as peoples faith in it, and without that faith even today's money is just paper.

The tally stick system worked really well for 726 years. It was the most successful form of currency in recent history and the British Empire was actually built under the Tally Stick system, but how is it that most of us are not aware of its exsistence?

Perhaps the fact that in 1694 the Bank of England at it's formation attacked the Tally Stick System gives us a clue as to why most of us have never heard of them. They realised it was money outside the power of the money changers, (the very thing King Henry had intended).

What better way to eliminate the vital faith people had in this rival currency than to pretend it simply never existed and not discuss it. That seems to be what happened when the first shareholder's in the Bank of England bought their original shares with notched pieces of wood and retired the system. You heard correctly, they bought shares. The Bank of England is a privately owned bank which was actually set up by investors buying shares.

These investors, who's names were kept secret, were meant to invest one and a quarter million pounds, but only three quarters of a million was received when it was chartered in 1694.

It then began to lend out many times more than it had in reserve, collecting interest on the lot.

This is not something you could just impose on people without preparation. The money changers needed to created the climate to make the formation of this private concern seem acceptable.

Here's how they did it.

With King Henry VIII relaxing the Usury Laws in the 1500's, the money changers flooded the market with their gold and silver coins becoming richer by the minute.

The English Revolution of 1642 was financed by the money changers backing Oliver Cromwell's successful attempt to purge the parliment and kill King Charles. What followed was 50 years of costly wars. Costly to those fighting them and profitable to those financing them.

So profitable that it allowed the money changers to take over a square mile of property still known as the City of London, which remains one of the three main financial centres in the world today.

The 50 years of war left England in financial ruin. The government officials went begging for loans from guess who, and the deal proposed resulted in a government sanctioned, privately owned bank which could produce money from nothing, essentially legally counterfeiting a national currency for private gain.

This privately owned bank was and still is known as The Bank of England.

Now the politicians had a source from which to borrow all the money they wanted to borrow, and the debt created was secured against public taxes.

You would think someone would have seen through this, and realised they could produce their own money and owe no interest, but instead the Bank of England has been used as a model and now nearly every nation has a Central Bank which is privately controlled.

These central banks have the power to take over a nations economy and become that nations real governing force. What we have here is a scam of mammoth proportions covering what is actually a hidden tax, being collected by private concerns.

The country sells bonds to the bank in return for money it cannot raise in taxes. The bonds are paid for by money produced from thin air. The government pays interest on the money it borrowed by borrowing more money in the same way. There is no way this debt can ever be paid, it has and will continue to increase.

If the government did find a way to pay off the debt, the result would be that there would be no bonds to back the currency, so to pay the debt would be to kill the currency.


end Excerpt.

Gondolin: The site then goes on to describe the massive conspiracy of the Rotheschilds et. al. being the major shareholders owning the Central Banks and their own Merchant banks, and their private Merchant Banks then lending money to both sides in the Napoleonic Wars, the American Civil War not to mention WW1, long after sides had lost any chance of winning these wars, perpetuating longer and costlier wars that we are now paying our massive taxes to pay off till this day. Additionally they suggest that Nicholas II's refusal to allow a Central bank to operate in Russia was sufficient cause for massive backing of the Bolsheviks and the overthrow of White Russia.

Admittedly this does all reek of massive conspiracy theory, but it only takes 2 to make a conspiracy...

However the link also points out that the gold Standard was a tool used and favoure by the banks as the limited supply of gold would allow them to control a monopoly over, with an in depth of the creation and demise of the US greenback,the demonetisation of silver at BoE request, creation of the fed etc.and the continued thread of Bankers manipulative and reprehensible actions for their own advantageat the expense of the world.

Any comments on the accuracy of this portrayal of monetary history would be welcome.

I'll conclude with a couple of the many quotes from within this interesting link:

"Let me issue and control a nations money and I care not who writes the laws."
Amshall Rothschild

"If the American people only understood the rank injustice of our money and banking system - there would be a revolution before morning..."
Andrew Jackson

"The hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency: their sole object is gain."
Napoleon Bonaparte

Today Greenspan claimed the recent rise in inflation, and the June/July economic slowdown are short term problems. Growth is going to rise, AND inflation fall in the 2nd half.

Know this: Greenspans private economic forecasting firm (before he became a public servant) went broke from lack of clients, and he has never predicted a recession before it arrived. Greenspan's speciality is waiting for the hammer to come down, then he reacts to take care of the "damage".

We were told in April and May the Fed was going to aggressively hike rates to stem rising inflation. Result...gold down.

Greenscam says today, au contaire, that inflation is going to fall. Result....gold down.

So what's it going to be boys inflation up or inflation down? And for Pete's sake don't be fickle about your theory regarding the POG/inflation..

..IT'S CAN'T BE BOTH WAYS MORONS!!

Presenting the other side of the coin again in fairness...

You said,

"Alan G. (FED)...CBs stand ready to sell Gold...and Wim D. (ECB)...Gold remains an important asset...!!!"

The US has not said (recently at least) that it wants to sell gold. Germany (many times) and France (once recently) have publicly announced the possibility of selling gold. The Swiss, the stalwards of gold are selling "tonnes"!

Alan said, "CB's stand ready to sell gold" . For some odd reason it's not (at least knowingly) his CB doing it. Why?


And the special phrase(s) about Alan's statement come in the sentences after "...stand ready to sell gold should the price rise." There is a nifty afterburner if someone has the full quote/speech.

Regards.

Even Turgon himself up there in his secret city probably knew a guy couldn't walk or mingle very long in Gold circles without eventually coming face to face with some variation on that anti-banking theme you've cited. We've seen it before and we'll all see it again, so it's best if we all figure out sooner or later what to properly make of it.

The history always stands up reasonably well to scrutiny, so I'll grant them that much. Unfortunately, the same can't be said about the rigors of their logic leading to the diabolical conclusions they offer their gentle readers/listeners.

In poker terms, I'll "see" your three famous quotes and "raise" you this one of my own.

"If our so-called "corrupt" banking institutions did not, in fact, enjoy among their customers a foundation of popular support, the system as we know it could not and would not have been elevated to the heights at which we see it integrated into our modern markets." --- Aristotle

So who has it wrong -- is it the masses who use the System to their personal benefit, or is it the small handful of anti-banking poison pens who would rather have none of it?

Now before I get a raft of crap from that camp, let me just as quickly add that there's certainly room for improvement in the current state of our banking/money evolution, but that, my friends, is ANOTHER story. One I hope you know well enough to know that it's on it's way to restore a more perfect harmony the the order of these affairs of the realm.

Gold. Get you some. --- Aristotle

Federal Reserve Chairman Alan Greenspan's famous comment revealing that the purpose of central bank gold leasing is to suppress the gold price was made to the House Banking and Financial Services Committee on July 24, 1998. Greenspan's full statement that day can be found at the Fed's Internet site here:

http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

The relevant paragraph:

"The vast majority of privately negotiated OTC contracts are settled in cash rather than through delivery. Cash settlement typically is based on a rate or price in a highly liquid market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the spot dollar-yen exchange rate. To be sure, there are a limited number of OTC derivative contracts that apply to nonfinancial underlying assets. There is a significant business in oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop season, private counterparties in oil contracts have virtually no ability to restrict the worldwide supply of this commodity. (Even OPEC has been less than successful over the years.) Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=39450Attached is a link from one of the best news sources on the web, one that is often months ahead of the traditional news outlets. Perhaps I am overly pessimistic, but I disagree with the presmise that it is immune to the Zimbabwe syndrome. South Africa might remain a source of gold during the likely forthcoming problems, but I will predict only with private military forces (like the one mentioned in the article) protecting them. I believe the situation is likely to get worse than the article hopes, meaning South African production may decrease or become somewhat eratic.

I imagine our banking system does "enjoy " quite a bit of support among certain circles. At last count corporate debt in America came to about 9 trillion. How wonderful to be able to have that kind of money to throw around. What great fun to be able to mastermind all these mega-billion dollar expansion projects around the globe. I recall hearing one high Walmart executive explain how they had the city of Austin mapped out in a grid with the nodes of the grid three miles apart and that they planned to build a new Walmart at every point on the grid.In other words completely blanket the city with Walmarts every three miles in every direction

In the past I've likened this to the beast from the movie Forbidden Planet. Monsters from the Id materialized by a labyrinth of unlimited energy only in this case the beast is fueled by unlimited credit. Unlimited credit bestows unlimited power and it is this unlimited power that seeks to rule the world.

There's no need to merely "imagine" the popular support when all you need to do to field test the notion is to ask around.

We'd be hard pressed to survey Main St. USA and find any significant proportion of people who haven't made use of any one of the following. Home mortgage. Car loan. Checking account. Savings account. Certificate of deposit. Wire transfers. ATM card. Credit card.

Let's face it. People do like their conveniences. So do I. But I've taken a deeper look at the ins and outs of the "beast" and have seen where there's a sickly cancer that needs gotten rid of. It isn't fiat currency, but Gold "Money" (Gold credit, Gold derivatives, etc) that's got to go. Never elsewhere have I seen so much Wealth treated so shabbily, to the unforgivable detriment of of us wee folk and peasants worldwide who have no idea that their immediate access to a better purchasing power is currently fettered by artificial Gold-related financial devices.

But in all fairness, some of them, myself included, through this very same device have been able to get hands on far more Gold than would have otherwise been possible. So I guess the thing to do is eat the apple staying mindful of the worm that caused it to fall early from the tree, and gather our strength for a more proper harvest when the time is ripe.

Gold. Get you some. --- Ari

Of course, your remark seems a very logical one, as the other side of the coin. But I was writing in the context of "interpreting" what happens within the incredible "labyrinths" of CBs and their Gold. WHAT EXACTLY HAPPENS TO EURO GOLD ?...WHAT IS THE PURPOSE ?...etc...
The dollar wishes Gold down...the euro is percepted as a gold seller, but marks it market and says it is an important reserve !!! A labyrinth of paradoxes ! And we have to try to pull a straith line through this. Quo vadis Gold ?

All those Gold statements have one thing in common : pluri-interpretability ! Nobody ever gets the chance to ask, what is exactly meant by each and every statement...which correct context is behind it. Did you ever heard someone asking where all that Gold has gone ...and in what form ?

We permanently ask ourselves...WHAT IS GOING ON WITH GOLD ?
Most correct answer is : A LOT !!!
Then we try to guess who's for or against Gold and in what sense. And more importantly,...how are these two opposing forces evolving through the thick fogs !? Who is deceiving who and who is, an outlined Gold policy, dissident !? Most recently, Noyer said that goldsales were out of the question. Again, without any further specifications (full context) that could possibly dissolve some Gold fog. Grrrrrrrrush...
They simply don't want us to know (suspect), where the possibilities for Gold in the many futures might go ! This in itself is already extremely interesting, especially after 25 years of Gold marginalization !

We keep on searching all together, Ned !

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373854535&p=1012571727088Snip:

He played down the importance of recent weaker consumer spending, which he said probably reflected the impact of higher energy prices.

The Fed chairman said that that stronger demand growth had contributed to higher than expected inflation in the first half of the year. He stressed that transitory factors including higher energy prices had boosted the inflation rate.
*****************
Misetich

On one hand a few months ago, Sir Greenspan said higher energy prices were here to stay - on the other he now calls it "transitory factors"

He admits consumer spending is deteriorating ("probably)due to high energy prices though he expects "sustainable growth".

The US economy according to the Feds has been growing in the 4-5% range in 2004 YET unemployment hasn't budged. He now forecasts the economy to grow in the 3 1/2 % range in 2005 with unemployment falling by 1/4 to 1/2%

Jobs...jobs...jobs and lack thereof is NOT TRANSITORY - it is the real dilemma - the real new economy which is creating havoc for Sir Greenspan & Co and it will become his nightmare in the months ahead, once the election campaign is over

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:

NEW YORK (MktNews) - The spring sales season ended on a
flat note in June with large and small builders offering an unusually mixed assessment of a market that had been running on all cylinders for the past two years, say American residential builders.

The slowness appeared to be confined to Ohio and other secondary markets as chinks began to appear at the lowest-price ranges, where volume sales are often the highest, builders say.
............................
Most think the market remains healthy, with too much emphasis being placed on a few troubled markets, like Ohio and Dallas, while much of the rest of the nation continues to hum. Nationally, inventory levels are restrained, with only scant pockets of inventory overhangs in some
small markets.
.......................
A small North Carolina builder, however, described June as a "fair" month.
....................
Morrison has also seen "slight shortages" on concrete that have prompted minor delays in construction.
................
"Market conditions in our three Midwest markets (Columbus, Cincinnati and Indianapolis) have weakened, particularly as
they relate to our entry-level business,"
***************
Misetich

Housing has been the best sector in the last few years and the slowdown from the torrid growth pace must be expected in light of higher borrowing costs, higher input material prices

The real question is whether a SATURATION POINT has been reached since supposedly the % of Americans owning homes has now reached 70% or thereabaouts

The bastion of economic growth have been housing and the resilience of the automobile industry - BOTH of these sectors have benefitted by low IR environment and in the auto sector earnings have been derived from financing activities rather than profits in the manufacturing sector where considerable market share has been lost to foreing sources

The underpinning of a country's currency is its economic growth - yet the US $ has been depreciating in spite of 'above average economic growth" reported in the last year

Since growth is being forecasted to slow in the year ahead, the value of the US $ is expected to correct further

All Aboard The Gold Bull Express - Part ll

http://www.businessweek.com/bwdaily/dnflash/jul2004/nf20040719_0441_db014.htmSnip:

For about a dozen years Chuck Hill has been Wall Street's dean of earnings estimates.
.......................
Hill thinks earnings season is going gangbusters so far but sees signs of a rapid slowdown in 2005 that investors don't seem to have priced into current stock valuations.
...........................
In general, numbers for the quarter are terrific. Analysts started out thinking Standard & Poor's [500-stock index] earnings would be up 19.6%. We will certainly beat those numbers -- by more than normal -- ending up 24%
..................
But earnings growth is decelerating to a level that could be less than what we typically see following a recession. From 24% earnings growth in the second quarter, analysts are expecting 14.9% for the third quarter. I think that will end up at 16%. For the fourth quarter, analysts are now expecting 15.5%. I think we'll end up at 14%.

The real issue is the first quarter of next year. We expect only 5% earnings growth. Analysts are at 7.3%. That's a pretty rapid drop-off -- down to the mid-single digits.
.....................
Where are the trouble spots?

Well, Intel's (INTC ) results were sort of lukewarm. It's an indication that all this upgrading of PCs is not materializing to the degree anticipated
........................
With retailers, it's not so much earnings that are the problem as weak same-store sales reports..........That, coupled with weak auto sales for June, waves a caution flag.
......................
It's when we get into 2005 that I wonder if the market is really prepared for the kind of slowdown we think is likely to be under way.
..................
**************
Misetich

Asset Deflation remains the real threat going forward as the economy slowsdown - It was expected for corporate spending to increase - yet it has not materialized to the expected levels

In a scenario where corporate earnings growth is expected in the 5-7% range for 2005 it is doubtful job creation will be created

The irrational exhuberance shown by Sir Greenspan celebratory vicotry lap "of deflation has been beaten" may have been a bit too premature

All Aboard The Gold Bull Express - Part ll

Hello Ari. I see your point in message # 123150, the Fed is there for you and me. But I'm surprised you see the gold derivatives market as the principle cancer in the US banking system. Like Camel said, the Fed created a credit bubble of enormous proportions. And like Belgian said, "the CB are the powerhouses of our globe". Doesn't it scares you the Federal Reserve, which is the powerhouse of the powerhouses, is owned by private banks ? Billions of dollars of US taxpayers money goes to the Fed for paying interest on bonds the Fed has bought with money created out of thin air ?
Perhaps all this explains a bit of the different money management systems of the Fed and the ECB !!!
@Belgian : don't you think the private Belgian shareholders of the BNB will get a (paper) compensation ? I agree they will lose every lawsuit in Belgium, but on a European level ? Even the BIS lost a lawsuit against Deminor on the Hague Tribunal.

Well, okay, we can keep peeling this onion.

You may think you've reached the bitter core of the matter with your comment, "Billions of dollars of US taxpayers money goes to the Fed for paying interest on bonds the Fed has bought with money created out of thin air," however, there's more to it that might mitigate some of your ill will.

First of all, the Fed should kick it's PR department in the pants because apparently you, along with most other dissidents, are not aware that the Federal Reserve turns over the lion's share of its profits to the U.S. Treasury each year.

I can't speak for you specifically, but I would tend to think that the folks that held your negative opinion would be greatly appeased by that revelation. The typical taxpayer tends to prefer his taxes being kept low, and current evidence shows he isn't inclined to riot if the Government borrows rather than taxes. You can almost hear Johnny McMainstreet whispering his silent prayer, "Thank God the Treasury is able to sell its bonds to *somebody* to raise billion$ because I'm all tapped out."

Look, I'm not trying to convince you that central and commercial banks here and abroad are next in line for deification. They're not. But they do have popular support, for generally good reason, and there's no getting around it. It begs the question, "Why would you even want to???" (Get around it, that is.)

And, no, it doesn't "scare" me that we find at the depths of the Fed a base of private shareholders. Of course not! Hell, I'd have thought any group of independent-minded Goldbugs would be the first to hold up privatization in high praise as the very best model for enterprises in a market economy. No? Well, I'm yet to be convinced that a government holding its own purse strings can be trusted not to abuse the privilege. Look at any number of banana republics, or anywhere else that a currency has lost itself in a sea of overprinting zeros. That's why so many CBs are independent these days, and that's also why the ECB isn't allowed to directly fund the government debt of any of its member countries. It's how it's gotta be -- prudence being the better part of valor in these scenarios.

All of this banking stuff doesn't scare me in the same way the ocean doesn't scare me. I know how to swim. More importantly, I know the difference between water and terra firma.

And THAT'S what brings me back to my single largest point of contention with the state of the banking system today. Insofar as it has derivatized and paperized Gold out of its physical essence and into a form of accounting credit, the banking system has (to continue the metaphor) blurred the distinction between ocean and coastline. The result is that all of us are left with no choice but to tread water in the middle of a boundless sea. Even the best of swimmers will drown eventually if they are given no spot to rest.

That's the role for Gold. Whereas the US/dollar/IMF style of banking puts us all forever out to drift, the European style that is still taking shape and gaining ground sees the prudence in restoring to the once endless sea a distinct Golden shoreline. Complete with a lighthouse, out there in the breakers, painted black on white, "Marked-2-Market."

Come ashore you tired and ragged castaways and enjoy a better way of life.

Gold. Get you some. --- Ari

"Whereas the US/dollar/IMF style of banking puts us all forever out to drift, the European style that is still taking shape and gaining ground sees the prudence in restoring to the once endless sea a distinct Golden shoreline. Complete with a lighthouse, out there in the breakers, painted black on white, "Marked-2-Market."

Thank you for once again providing a useful metaphor to help us all understand where we are at this stage of the game! Indeed, the 'paperization of gold' has made it hard for the uneducated public to have any appreciation for the real stuff, but it has given me opportunity to 'get it while it's still cheap'.

While I look forward to higher prices, I cannot resist the golden opportunity presented by those pesky derivatives to acquire the real thing. And I am confident that some day soon we will all look back on this time when gold was such a bargain and wish we had taken better advantage of it.

BNB shareholders will get (be compensated) what the BNB-paper (share) in fact was : An eternal (state)bond, carrying the interest of the day, through the dividend that the BNB share was producing.

This illustrates to me that the ownership (private) of a CB is subordinated to the state that controls it. W've already gone through the debate on "property"...degree of ownership. Even precious Gold as your private property has been confiscated by the state collectivity in the most free and liberal nation (USA) of the modern world.

In this context, I would remind all forumers for the umpthieth time, that all taxes on Gold Wealth are being eliminated ! Most recent example was Turkey (Towncrier). And as a matter of fact, Turkey is visiting France in the framework of its EU candidacy.
This means nothing else than that there is a *need* and a *will* to get back to an element of real, genuine, unencumbered ownership/property...for at least in the first stages of the renewed FREEGOLD ambition !!!

Thinking about the backgrounds of the present organization of TaxFree bullion is of much more fundamental importance than analysing ad nauseum, how POG is actually being contained through the paper maneuvers...since the eighties (1980 ATH) !!!

But this message of taxfree bullion (Physical Gold) is understandably, NOT appealing to the masses,...because those that know that Gold exists, only know it (associate it with) as paper gold...gold-derivatives. They don't care that the wealth-metal can be taken into ownership without paying taxes for those who do contain Gold's price...rule its pricing ...for the time being !

Funny that nobody ever remarked this blatant contradiction : Those who control the Goldprice abstain from collecting taxes on the metal (bullion) wich price, they do control !!!-???
And BTW, the costs to buy and keep any fund are 3 times higher than the cost of obtaining Physical Gold property in your possession !!! And any fund can become totally worthless (zero)...PHYSICAL GOLD NEVER DOES (did)!!!

In this upside down world, one prefers to pay more for less (paper) and refuses arrogantly-ignorantly to pay less for more (Gold). So be it...imvho, for-the-time-being !

Has anyone remarked that the $-POO is recouping its $1 loss from yesterday, despite a (temporary) stronger dollar (Green-effect) !? Can we conclude that the maestro-effect is fading out and the cruel reality (infladada) is knocking on the door as to demand its rights !?

Thanks a lot for your great insights, but I don't get smarter without asking questions ! After all, if noone asks questions, there wouldn't be a discussionforum here ! I admit I was wrong !

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

Why should YOU buy gold?

Because no one else will do it for you.

USAGOLD-Centennial can help.
1-800-869-5115 Extension 100

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=5&u=/nm/20040721/bs_nm/economy_greenspan_dcSnip:

WASHINGTON (Reuters) - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) told Congress on Wednesday U.S. businesses remain guarded in their spending and hiring, but said the economy could benefit next year if their caution lifts.

In a second day of testimony on the central bank's semi-annual monetary policy report, Greenspan told the House of Representatives Financial Services Committee corporate America had shown an unusual reluctance to make new capital investments, build inventories and take on permanent hires.

"We are far from behaving the way we typically did (in other expansions)," the Fed chief said in answering questions before the panel, pinning the corporate constraint on a number of "caution-creating factors."

"To the extent these are capable of being assuaged, what it probably will be doing is rather than creating a large surge in economic activity, is to gradually stretch it out, if indeed a degree of confidence gradually returns," Greenspan said. "That would be one the reasons why a gradual expansion which we now seem to be experiencing does bode well for next year."
*****************8
Misetich

Sir Greenspan is out of touch - his rosy scenario for 2005 contradicts the marketplace which sees corporate earnings slowind down significantly going forward to the 5-7% range in 2005

MS Roach recently referred to the Feds as the biggest hedge fund - attempting to control the uncontrollable -

To make matters worse for the chairman, CHINA'S growth continues - over 9% and thus assures continued rising commodities and energy prices

All Aboard The Gold Bull Express - Part ll

http://biz.yahoo.com/cbsm/040720/c62f376de50241cb982e5b680e913680_1.htmlSnip:

On Monday afternoon, one of the select few newsletters whose market timing advice has beaten a buy-and-hold over the past 15 years turned bearish.

This newsletter is Medical Technology Stock Letter, edited by John McCamant. He recommended sales for all but three positions from his letter's Aggressive Portfolio, and the liquidation of half of all positions in the service's Model Portfolio.
.................

McCamant says that he turned bearish because he "cannot discern a catalyst for a bullish turn."
.................
"The situation in Iraq is weighing heavily on the already shaky investors' psyche as any problem in the Middle East results in a spike in oil prices. A rise in the price of oil has a negative ripple effect throughout the entire economy as the rising costs of energy are a broad negative for the economy and its potential recovery. This, combined with the pending election creates as much uncertainty as we have seen in some time, and the market has no stomach for uncertainty. The resulting downturn in stock prices leaves the growth sector, of which most biotech companies are a part, particularly vulnerable...
**************
Misetich

The stock market has been behaving "unusally" - stuck within a narrow range -

The inevitable battle appears near - market forces vs "the phantom" hand

In normal circumstances the rush-out from the stock market would flow toward bonds or money market funds

With negative yields persisting - Physical Gold is the ultimate investment of choice

All Aboard The Gold Bull Express - Part ll