USAGOLD Discussion - October 2004

All times are U.S. Mountain Time

Gandalf the White
(10/01/2004; 00:04:30 MDT - Msg ID: 124946)
$$$$$$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the December Comex contract (GC4Z) on Monday, October 4, 2004, ---BUT all entries must be posted to the TableRound before Midnight on Thursday, September 30th.

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive an one-tenth ounce GOLDEN Canadian Maple Leaf. There will be also be two runners-up prizes for the next closest prognostications --- each winning an one (1) one ounce Canadian Silver Maple Leaf.

Entries as of FRIDAY 10/1/04 at just about 00:01 Denver time !!!

OFFICIAL ENTRY LISTING ( but, I shall double check to see if I have missed anyone!)

Listed in order of decreasing values !
----

$$$$ $474.0 $$$$ goldenpeace (09/30/04; 13:05:51MT - usagold.com msg#: 124895)

$$$$ $468.4 $$$$ otish mountain (9/30/04; 01:18:04MT - usagold.com msg#: 124873)

$$$$ $440.0 $$$$ Caradoc (9/27/04; 21:49:35MT - usagold.com msg#: 124777)

$$$$ $438.2 $$$$ 7nomads (09/30/04; 14:05:25MT - usagold.com msg#: 124900)

$$$$ $437.5 $$$$ Cometose (9/23/04; 18:43:50MT - usagold.com msg#: 124657

$$$$ $435.0 $$$$ seeker (9/30/04; 22:01:54MT - usagold.com msg#: 124933)

$$$$ $431.0 $$$$ Life,Liberty,Property (9/30/04; 23:25:59MT - usagold.com msg#: 124942)

$$$$ $430.5 $$$$ Believer (9/30/04; 20:09:50MT - usagold.com msg#: 124921)

$$$$ $430.2 $$$$ OZ (9/30/04; 23:21:49MT - usagold.com msg#: 124941)

$$$$ $429.5 $$$$ Wky_Woodsman (9/30/04; 21:11:22MT - usagold.com msg#: 124925)

$$$$ $428.5 $$$$ Brett Woods (9/29/04; 20:11:00MT - usagold.com msg#: 124862)

$$$$ $427.4 $$$$ J-Bullion (9/23/04; 12:26:38MT - usagold.com msg#: 124639)

$$$$ $426.9 $$$$ Boilermaker (9/30/04; 16:14:03MT - usagold.com msg#: 124904)
$$$$ $426.8 $$$$ Beach (9/30/04; 16:36:09MT - usagold.com msg#: 124906)

$$$$ $426.1 $$$$ Goldendome (9/30/04; 23:39:31MT - usagold.com msg#: 124945)

$$$$ $425.4 $$$$ American Expression (9/30/04; 20:40:44MT - usagold.com msg#: 124924)

$$$$ $425.0 $$$$ innerline (9/30/04; 22:08:06MT - usagold.com msg#: 124935)

$$$$ $424.8 $$$$ goldenboy (9/30/04; 22:27:01MT - usagold.com msg#: 124939)
$$$$ $424.7 $$$$ Rocky (09/30/04; 13:17:38MT - usagold.com msg#: 124897)
$$$$ $424.6 $$$$ jenika (9/27/04; 20:00:09MT - usagold.com msg#: 124773)

$$$$ $423.8 $$$$ Toolie (9/30/04; 21:31:41MT - usagold.com msg#: 124928)

$$$$ $423.0 $$$$ Buongiorno! (9/28/04; 15:22:42MT - usagold.com msg#: 124811)

$$$$ $422.2 $$$$ Tevye (9/30/04; 18:54:48MT - usagold.com msg#: 124916)

$$$$ $421.7 $$$$ HOOSIER GOLDBUG (9/30/04; 18:18:41MT - usagold.com msg#: 124911)

$$$$ $420.9 $$$$ wehappyfew (9/30/04; 21:41:38MT - usagold.com msg#: 124930)
$$$$ $420.8 $$$$ phil288 (9/30/04; 21:36:22MT - usagold.com msg#: 124929)

$$$$ $420.0 $$$$ Sundeck (9/22/04; 22:29:51MT - usagold.com msg#: 124616)

$$$$ $419.1 $$$$ Rimh (9/27/04; 11:37:55MT - usagold.com msg#: 124753)

$$$$ $418.7 $$$$ ha_tey_o (9/27/04; 18:16:40MT - usagold.com msg#: 124772)
$$$$ $418.6 $$$$ Shermag (9/30/04; 19:07:17MT - usagold.com msg#: 124918)
$$$$ $418.5 $$$$ Waverider (9/23/04; 18:23:58MT - usagold.com msg#: 124656)
$$$$ $418.4 $$$$ Shanti (9/28/04; 14:11:42MT - usagold.com msg#: 124809)

$$$$ $418.0 $$$$ makcumka (9/28/04; 19:26:41MT - usagold.com msg#: 124816)

$$$$ $417.5 $$$$ price (9/29/04; 03:10:37MT - usagold.com msg#: 124825)

$$$$ $417.2 $$$$ Bound Spirit (9/30/04; 22:07:10MT - usagold.com msg#: 124934)
$$$$ $417.1 $$$$ Mumbai_Gold (9/30/04; 21:54:30MT - usagold.com msg#: 124932)
$$$$ $417.0 $$$$ GoldCoaster (09/30/04; 14:22:57MT - usagold.com msg#: 124902)

$$$$ $416.8 $$$$ Henri (9/30/04; 09:12:29MT - usagold.com msg#: 124880)

$$$$ $416.3 $$$$ Gandalf the White (9/26/04; 22:13:23MT - usagold.com msg#: 124734)
$$$$ $416.2 $$$$ Noble1 (9/26/04; 18:22:49MT - usagold.com msg#: 124731)

$$$$ $416.0 $$$$ mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)

$$$$ $415.7 $$$$ R Powell (9/29/04; 15:34:35MT - usagold.com msg#: 124843)

$$$$ $415.5 $$$$ Gondolin (9/29/04; 17:06:39MT - usagold.com msg#: 124851)

$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)

$$$$ $414.8 $$$$ commish (9/29/04; 20:35:07MT - usagold.com msg#: 124863)

$$$$ $414.5 $$$$ balzac (9/27/04; 23:04:06MT - usagold.com msg#: 124780)

$$$$ $414.0 $$$$ Clink! (09/29/04; 11:26:46MT - usagold.com msg#: 124833)

$$$$ $413.3 $$$$ TheJuniorMiner (9/29/04; 21:06:59MT - usagold.com msg#: 124864)
$$$$ $413.2 $$$$ Black Blade (9/29/04; 19:44:44MT - usagold.com msg#: 124861

$$$$ $413.0 $$$$ Lothar of the Hill People (09/28/04; 12:46:08MT - usagold.com msg#: 124805)

$$$$ $412.5 $$$$ Camel (9/27/04; 08:39:27MT - usagold.com msg#: 124750)
$$$$ $412.4 $$$$ misetich (9/30/04; 17:39:46MT - usagold.com msg#: 124909)

$$$$ $412.1 $$$$ yellowmetal (9/26/04; 13:38:26MT - usagold.com msg#:
$$$$ $412.0 $$$$ Felix the Cat (9/25/04; 23:00:56MT - usagold.com msg#: 124711)

$$$$ $411.7 $$$$ Remarx (9/27/04; 15:49:48MT - usagold.com msg#: 124762)

$$$$ $411.4 $$$$ pilgrims_gold (9/24/04; 19:51:33MT - usagold.com msg#: 124687)

$$$$ $410.5 $$$$ fever1 (9/30/04; 23:09:17MT - usagold.com msg#: 124940)

$$$$ $410.1 $$$$ Zhisheng (9/23/04; 10:23:56MT - usagold.com msg#: 124632)

$$$$ $409.7 $$$$ The Hoople (9/29/04; 14:24:55MT - usagold.com msg#: 124838)

$$$$ $409.5 $$$$ YGM (9/24/04; 14:41:52MT - usagold.com msg#: 124682)

$$$$ $409.0 $$$$ Dollar Bill (9/30/04; 19:06:39MT - usagold.com msg#: 124917)

$$$$ $407.7 $$$$ Liberty Head (9/26/04; 02:39:58MT - usagold.com msg#: 124713)

$$$$ $405.6 $$$$ Golden Lionheart (9/29/04; 23:25:12MT - usagold.com msg#: 124867)

$$$$ $404.9 $$$$ slingshot (9/25/04; 08:46:49MT - usagold.com msg#: 124700)

$$$$ $404.4 $$$$ nugget101 (9/28/04; 10:46:08MT - usagold.com msg#: 124801)

$$$$ $402.9 $$$$ TBatler (9/23/04; 13:49:55MT - usagold.com msg#: 124641)

$$$$ $399.3 $$$$ Federal_Reserves (9/23/04; 13:19:47MT - usagold.com msg#: 124640)

$$$$ $398.6 $$$$ Smeagol (9/23/04; 17:30:08MT - usagold.com msg#: 124651)

$$$$ $378.0 $$$$ Topaz (9/23/04; 01:40:13MT - usagold.com msg#: 124621)
===
GOOD LUCK ALL !
We await the Settlement on Monday October 4, 2004 !!
<;-)

Chris Powell
(10/01/2004; 00:05:06 MDT - Msg ID: 124947)
Friends and family in Connecticut gratefully recall Barbara Sinclair
http://groups.yahoo.com/group/gata/message/2413Latest GATA dispatch.


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Gandalf the White
(10/01/2004; 00:12:33 MDT - Msg ID: 124948)
REMEMBER about the "Essay writing Contest" !!! <;-)

DEADLINE is Midnight SUNDAY October 2, 2004 !!!

===
The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 2, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 3rd !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to each of the two runners-up.

===
Don't wait until late Sunday, as it takes a while to type and proofread your entry !
<;-)
The Invisible Hand
(10/01/2004; 03:51:39 MDT - Msg ID: 124949)
None of the above.
http://www.issues2000.org/2004/Michael_Badnarik_Budget_+_Economy.htm1. If elected, George Bush would be good for gold because___________________
2. If elected, John Kerry would be good for gold because_________________________
3. With respect to gold, the election doesn't matter because_______________
None of the above.
Only Michael Badnarik has the solution.
Who said again that politicians don't understand what they are talking about? And since when does the majority of the people who have expressed their votes have the right to oppress all the others?
"BE MORAL, DON�T VOTE!"

SNIP:
Base currency on gold, to avoid inflation
Q: I'd like you to tell me a little bit about the Federal Reserve banking system, and what, if anything, you think should be done about it.
A: Article 1, Section 8, clause 5 grants CONGRESS the power and responsibility "to coin money, and regulate the value thereof..." It does NOT give Congress the authority to transfer that responsibility to another branch of the government, much less to a private company such as the Federal Reserve. The Federal Reserve has been inflating our money supply ever since 1933, which makes our money worth less than Monopoly money. (I estimate that Parker Brothers prints far less money than the Federal Reserve!) In order for the US to survive economically, we need to reestablish a non-inflationary currency based on some commodity, not necessarily gold and silver, though I admit a preference to precious metals. Eliminating the unconstitutional Federal Reserve is a logical and necessary first step.
Topaz
(10/01/2004; 05:24:13 MDT - Msg ID: 124950)
point of order Mr Wiz!
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=LOWGandy, I'm puzzled what Americans call the Day between Sunday 2nd and Monday 4th? ... for it was "THAT" day, the missing 3rd, I'd based ALL my calculations for the price guessing contest ;-)

Odd Charts at the moment ... DX hasn't rebounded with Yields and Gold still weighing heavily. Repats (Q2) should run DX up today I'm thinkin!
Belgian
(10/01/2004; 07:41:18 MDT - Msg ID: 124951)
@ TIH
No need to abolish any CB. Leave those banks alone and advocate the FREE "marking to the market" of all Valuables.
The IMF is (might) not "re-valuating" its goldreserves from $42/Oz to $xyz/Oz...but simply bringing Gold's (book-keeping) price "CLOSER" to the the average goldmarket price. The price of papergold, traded in an organized papergold market.

CBs and treasuries are the official instances that are holding goldreserves the their currencies' background. It is "from above", as you stated, that the Free pricing of these goldreserves should come. People are NOT going to demand Free Priced Gold in a Physical market !!! The masses do fall victim of their own greed...the easy paper greed trap.

If Physical Gold cannot be...is not allowed..to be priced in an absolute Free Market environment, one gives absolute power to those who command...have access to the power leverages. Because the masses refuse to accept Free Physical Gold as the universal anchor of Wealth. Refuse drugs (confetti debauche) as to not run the risk of becoming an addict of paper wealth.

The IMF is NOT revaluating its Gold, because Gold IS Value. The IMF manages the reference (pricing) of this wealth by keeping it in a gold-market that is paperized.

This is a very old trick, used by the power leverage holders : They decide on the "pricing" of what is to be percepted as (fake) value. The paperized markets can easely be "steered" or guided.

To give Gold the FreeGold market that this standard wealth reference is meriting...is a positive intention from "above".

Since 1987, the PPT is steering/guiding the stockmarket(s)...IRs...$-currency ... pricing. It is impossible to abolish all these managing institutions that have the leverage powers. They are forced by the results of their irresponsible behavior, to go back to the core fundamentals and install the golden wealth-reference back to where it belongs. That's what the competing euro (with its ECB-BIS) is all about...in contrast with the dollar (with its IMF).

Goldbugs ( & al) only demand some very little additional paper-gold freedom and NOT a straithforward Free Physical Goldmarket. They want some more freedom to "play" a more moveable papergold market. And guess what...THEY ARE NOT GOING TO GET IT !!! That is the present building force of the physical gold accumulators. These (patient) holders are increasingly fed (FED)up with papergold,...permanently (mis)pricing their valuable Wealth. Obsolete Eurodollars + Asian dollar surplusses (Trillions of it) + oil wealth + dollar-debt-holders all over the planet...are longing for "consolidation" in a tangible nature of the worthless, permanently depreciating papers. The "gold-hedge" is increasingly being taken out as to force Another outcome (FreeGold). This action(s) come from the powerfull above and not from the powerless bottom...aka the general public.

Abolishing the FED is not going to change the system. On the contrary... let the FED lead the system to its end and change.

The Western model (system) of "financial economy" must and will run its course, whilst the Gold escape route...the hedge... will remained increasingly blocked ! You will not be given the marking to the (physical)market of "YOUR" Gold on a nice plate, together with an intact functioning of the financial economy running on its debt-dollar on top of it.

That's why I presented the question...will the dollar be allowed to devalue by 20% !? Thoughts anyone ?
1340cc
(10/01/2004; 08:24:23 MDT - Msg ID: 124952)
**** $419.5 ****
POG Contest: It's gotta be somewhere!
mas
(10/01/2004; 08:31:01 MDT - Msg ID: 124953)
Belgian good point.
That's why I presented the question...will the dollar be allowed to devalue by 20% !? Thoughts anyone ?

They have no choice. They are so far in debt it's impossible to reverse. They will be drug along to comply. In other words, America has become "enslaved". Sorry no offence intended but this is the way it looks from the outside.

20% devaluation, where did they get this number from? See we focus on what they say, but is this right? Same as gold, 334 euro's and 419 usd, makes me wonder how this works, but will figure/price explodes in both currencies soon?
We need to concentrate on Euro/Gold and Euro/Oil charts, this will show the Euro direction. 334/419/1.24/1 - euro/usd with 20% devaluation, meaning where will usd be after the "devaluation" .
Interesting times, yes?
Gold = mas.
Caradoc
(10/01/2004; 08:56:24 MDT - Msg ID: 124954)
20% question
20% from here (USDX ~.88)? Or an additional 20% from the prervious high?

Caradoc
Druid
(10/01/2004; 09:23:52 MDT - Msg ID: 124955)
Dollar Devaluation
Druid: My question would be, why would further devaluation lead to closing of the trade deficit? The deficit is increasing not decreasing. This mythology(school of thought) MIGHT work if we actually produced something of real value to export other then paper instruments. As long as China's currency is a function of the dollar, the HUGE disparity in labor rates and manufacturing production benifits China not the U.S.
Gandalf the White
(10/01/2004; 09:42:59 MDT - Msg ID: 124956)
TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !
Thanks to Sir Topaz, you all get ANOTHER day, OCTOBER 3rd !

REMEMBER about the "Essay writing Contest" !!! <;-)

DEADLINE is Midnight SUNDAY October 3, 2004 !!!

===
The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 3, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 4th !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to each of the two runners-up.
===
===
Don't wait until late Sunday, THE THIRD OF OCTOBER, as it takes a while to type and proofread your entry !
<;-)
Cometose
(10/01/2004; 09:53:14 MDT - Msg ID: 124957)
20%
The dissemination of this 20% is all coming from inside the Fed and the administration.......somewhere.....
That this is so closely alligned in time to a meeting of the G7 this weekend to which China has been invited.......gives this 20% devaluation a greater smell....

It is my guess that any devaluation.....of the US currency ........as the Fed pursues China this weekend is to be achieved only in relation to a 20% revaluation of the RMB, China's currency ...upward in relation to western currencies.......

One should listen to Marc Faber's address to the CHINA Central Committee to glean a greater appreciation for what China's stance on these issues may be.........
In this address , it was made clear that by keeping the Chinese currency at present levels ........the Chinese expect to Hollow out the entire US Service sector and the
Manufacturing sector..........

Will there be a compromise.........to avoid the problems that ultimately arise from the type of Trade War positioning which is on the horizon ..........

it will be very interesting to follow the developments coming toward us


d
Druid
(10/01/2004; 10:10:35 MDT - Msg ID: 124958)
20%, IMF
Druid: There must be some sort of correlation or linkage between this call for a 20% devaluation and a call for the IMF to "re-value" gold reserves for the heavily indebted countries of the world, of which, the U.S. is doing a fine job in setting an example. This is another move to buy time IMHO.
USAGOLD / Centennial Precious Metals, Inc.
(10/01/2004; 11:12:16 MDT - Msg ID: 124959)
SECOND EDITION: Newly Updated -- Written for Today's Market!
http://www.abcs-of-gold-investing.com/

Gold Investing - Second Edition
mikal
(10/01/2004; 11:22:57 MDT - Msg ID: 124960)
China makes RMB promise ahead of IMF and World Bank meetings this weekend and is attending a G7 meeting this afternoon
http://www.marketwatch.com/news/story.asp?guid={E92795E2-EF64-4D40-8CB3-E6E48B422957}&siteid=mktw&dist=bnbChina recommits to flexible yuan
by Rex Nutting- 10-01-04 CBSMarketwatch.com
Zhisheng
(10/01/2004; 11:34:15 MDT - Msg ID: 124961)
Up into the Close!
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Not bad with the dollar up about a third of a percent on the day: http://quotes.ino.com:801/chart/?s=NYBOT_DXY0
misetich
(10/01/2004; 12:15:14 MDT - Msg ID: 124962)
Saudi Arabia cuts oil sales to U.S., ups China
http://www.washtimes.com/upi-breaking/20040916-052200-9276r.htmSnip:

Washington, DC, Sep. 16 (UPI) -- Saudi Arabia, long the largest supplier of oil to the United States, has cut U.S. sales dramatically and may soon no longer be among the top five largest U.S. suppliers.

The Saudi kingdom's new largest customer is China.

"Saudi sales to the U.S. have fallen off the table," James Placke, a senior associate at Cambridge Energy Research Associates and former U.S. deputy assistant secretary of state for Near Eastern Affairs, said Thursday.

Saudi oil sales to the United States peaked in 2002 at 1.7 million barrels per day but had fallen to 1.1 million barrels per day in May, the last month for which U.S. Department of Energy figures are available, Placke said at a Washington forum.

Placke, who has monitored Saudi oil sales for decades, said Saudi Arabia's traditional large share of the U.S. oil market has been a function of the country's special close relationship with the United States -- a tie that may be weakening.

"Saudi Arabia has been at the top for several decades, and that's by design. To the Saudi establishment, that position was an important element in maintaining what was known as the 'strategic relationship,'" Placke said. He said the Saudis used subtle methods that are no longer in place to lower the prices of their oil for U.S. customers and increase their market share in the United States.

Placke said Saudi Arabia's turn away from the U.S. market began at the end of 2002 as the United States was preparing to go to war in Iraq.
.....................
Placke said Canada and Mexico -- which he said were almost tied for the largest U.S. supplier -- have picked up much of the slack left by Saudi Arabia's retreat, along with Nigeria.
..................
"The Saudis have basically played the role of the central bank," Gause said. "We're at a point where there's precious little surplus capacity."
*************
Misetich

Oil prices will continue to rise in coming months as hostilities are intensifying in Iraq.

The Iraq invasion is a do or die battle for oil dominance -
and the likelyhood of a quick resolve is NIL, thus The 2004 Oil Shock And Awe will continue....

Oil the gateway to FREE GOLD

All Aboard The Gold Bull Express - Part ll
American Expression
(10/01/2004; 12:37:34 MDT - Msg ID: 124963)
Analysis: US, China face off for Saudi oil supplies
http://www.dailytimes.com.pk/default.asp?page=story_29-9-2004_pg5_20
"They (the Saudis) were forgoing a larger (profit) they could have gotten from East Asia," said James Placke, a senior analyst at Cambridge Energy Research Associates. "In effect it was a subsidy to the American consumer." Skyrocketing demand in China and a shift in US-Saudi relations could make Riyadh less willing to make that trade, Placke said.

"The Chinese will buy (Saudi) oil and grant market access with no discussion whatsoever of human rights or social change, and they will also be happy to exchange weapons without concern for the strategic consequences," said David Goldwyn, president of Goldwyn International Strategies LLC.

-END SNIP-

There is much more occuring than meets the eye! The circle: China buys US Treasuries, trades T Bills to Saudi for oil, Saudi/OPEC oil removes supply competitor Russia and gains monopoly over China. Cheaper Russian oil is denied access to flood markets and lower global oil prices. Russia is prevented from amassing petro-wealth from the worlds largest market, the euro is denied global standing as a petro-currency! The Yuan peg will remain in place as part of the scheme to retain dollar hegemony against euro competitor. Euro will rise in notional terms to prevent European economic recovery. Dollar will remain standing as world reserve and petro-currency.

"Competition is a Sin" --Rockefeller
American Expression
(10/01/2004; 12:46:50 MDT - Msg ID: 124964)
Asian Doubts Regarding the Dollar
http://www.lewrockwell.com/north/north308.html
How long will the central bank of China continue to subsidize the dollar?

Answer: for as long as the Chinese government tells the central bankers what to do. Keeping the yuan fixed to the dollar lets Americans buy all those low-cost goodies. But this policy has a price: China's accumulation of T-bills.

There is another use of dollars, he says. "And using US assets to increase the strategic resource reserves, such as oil reserves, could be another alternative." In short, sell T-bills, buy oil, and stick the OPEC political regimes with a high-risk currency. That would move the flow of oil toward China rather than the rest of the world. Better to stock up on oil than T-bills.

But there is another possibility. Dr. Jiang's article may be serving the government as a trial balloon. If this is the case, then the days of dollar supremacy are numbered. If China floats the yuan, buys oil or euros, and sells off T-bills, the dollar will fall and U.S. interest rates will rise.

-END SNIP-

IOW don't expect the Yuan to delink from $$$ anytime soon! All of the talk about a floating Yuan is just that, "TALK!"
The Yuan has a much larger task to perform in its present linked valuation to the greenback.

JMO
Henri
(10/01/2004; 13:03:08 MDT - Msg ID: 124965)
Hmmm - American Expression
Yes, I agree with your comments...I was struck;however, by your opener...

You said
"How long will the central bank of China continue to subsidize the dollar?

Answer: for as long as the Chinese government tells the central bankers what to do."...

Isn't it odd that in the US we aren't really sure who is telling who what to do. Does the govt tell the fed what to do or vice versa?
TownCrier
(10/01/2004; 13:06:31 MDT - Msg ID: 124966)
USAGOLD forum readers sharper than average finance minister
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh66290_2004-10-01_18-47-34_n01326235_newsmlWASHINGTON, Oct 1 (Reuters) - Canada, a major gold miner, is opposed to revaluing International Monetary Fund gold reserves to offset possible debt forgiveness for poor countries, Finance Minister Ralph Goodale said on Friday.

The IMF values its gold reserves at a fraction of market prices. Gold was trading around $418.85 an ounce on Friday. A large selloff [sic] [?????] would depress prices and hurt the bottom line of gold-mining firms, which pay significant royalties and taxes.

Covering the cost of a debt write-off is the subject of debate as Canada and the United States, which operate on full-accrual accounting, would book a large write-down in the year a potential gold-backed write-off would occur.

"That is a significant issue for us because of the accounting issues and also because we are a mining country," Goodale told Reuters as he walked to the U.S. Treasury.

"There are significant issues with the issue of gold revaluation. Quite frankly, unless there's something in this that we don't fully understand yet, that would appear to us to be a bit of a nonstarter," Goodale said.

[Background...] The IMF seriously considered a proposal in 1999 to sell 10 percent of its remaining gold reserves to cover debt relief for heavily indebted poor countries (HIPC).

That proposal was, however, strongly opposed by many gold producing countries and by the mining industry. This influenced the IMF's decision to reject the idea of outright sales, and instead it resorted to off-market transactions to revalue.

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

To be sure, what "free-golders" are looking for are not token revaluations that are put forward occassionally, in fits and starts. The true test is that it is allowed to continuously float freely on a physical market basis, and thus provide a fair measurement -- from safely outside the system -- of the daily value of any given currency. A one-off revaluation is a temporary admission of the undeniable power of free gold, but at the same time it is also a cheap tactic simply trying to buy more time for the old, unfree system.

R.
TownCrier
(10/01/2004; 13:13:49 MDT - Msg ID: 124967)
UK's Brown Calls For IMF To Revalue Gold Holdings
http://www.futuresource.com/news/story.jsp?i=i4498103988901576768WASHINGTON (Dow Jones)--U.K. Chancellor of the Exchequer Gordon Brown said Friday he hopes the proposal to revalue gold held by the International Monetary Fund will gain some traction after discussions this weekend with his Group of Seven counterparts as well as the IMF and the World Bank.

"I think there is a big chance that we can make progress over the next few weeks," Brown said during a press briefing on the sidelines of the IMF/World Bank annual meetings.

The Chancellor is calling for multilateral debt relief for poorer nations that would forgive 100% of the loans made to the developing world. The revaluation of the IMF gold holdings could help fund such a program.

Brown said the IMF currently values its gold at one-eighth the market price.

"What is needed now is political will" to get additional funds for poorer nations, he said.

------(see url for full article)----

Political will... to cheaply buy time on life-support for the old system, or to face up to inevitably painful transition and do the right thing directly?

See comments attached to previous article.

R.
USAGOLD Daily Market Report
(10/01/2004; 13:29:04 MDT - Msg ID: 124968)
Page Update!
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----

COMEX gold closed firmer and stretched its rally to a fresh 5-1/2-month high Friday ... after gold futures trading ended, oil futures on the New York Mercantile Exchange closed above $50 for the first time ever.

COMEX December gold ended up 80 cents at $421.20.

Sources reported gold buying from Hong Kong and Switzerland overnight, on the heels of a fund purchase of more than 1 million ounces worth on Thursday.

Dealers took in stride early afternoon comments from Canada's finance minister Ralph Goodale that Canada opposed a plan to be discussed at weekend International Monetary Fund/World Banks talks in Washington to revalue the IMF gold reserves to finance poor nation debt forgiveness. "The whole concept of IMF revaluation I guess has been in the back of people's minds for some time. It's not like it's a startling revelation," Hunter said. "If they were to do something there might be small reaction one way or other, then they would just get back to focusing on the dollar."

Plus physical demand has stayed robust above $400 an ounce.

Top-consumer India is entering the festival season of peak demand and in the Middle East high oil prices have created wealth that is finding its way into gold bar investments....

"The real test of a market is when it continues to move higher in spite of a lack of support from other markets or economic news," said Dale Doelling, chief market commentator at Bullion.com. "This is the definition of a bull market, and that's what gold is currently experiencing."

----(see url for access to full news, price charts, 24-hr newswire)---
Gandalf the White
(10/01/2004; 13:43:41 MDT - Msg ID: 124969)
TODAY's "KING of the HILL" report ! <;-)

Gold (GCZ4) COMEX Dec.2004 Contract
Open $420.4 HIGH $421.0 low $418.5
SETTLEMENT $421.2 Change +$0.8

===
AND the new "KING OF THE HILL" is:
$$$$ $420.9 $$$$ (9/30/04; 21:41:38MT - usagold.com msg#: 124930)
---
Wehappyfew !!! (I LOVE that handle !) <;-)
We now await the SETTLEMENT on MONDAY, October 4th !
<;-)
American Expression
(10/01/2004; 14:14:33 MDT - Msg ID: 124970)
@TownCrier
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6344440
SNIP:

"Gordon Brown, Britain's finance minister plans to press for IMF gold reserves to be revalued to release cash for debt relief. Under a 1971 agreement, the fund's massive bullion deposits are valued at $40 per ounce or about 10 percent of their market value."

-END SNIP-

"be revalued to release cash" Revalued to release lease cash, not gold!

The article never mentions or even indicates that IMF gold would be sold, it merely suggests a plan to revalue IMF gold reserves.

Once IMF gold reserves are revalued, they c/would be employed as the underlying asset to create new paper SDR's or fiat intended to be utilized for third world debt relief. By this means the IMF would retain physical possession of their entire gold stock by issueing paper gold .... I for one do not believe the IMF would or will sell off their physical gold reserves for a third world free lunch give-away under current economic conditions. Why would they sell gold when they may issue paper claims that cannot be actually claimed upon their gold stock???

On the other hand, maybe "Another's" prediction is coming to pass, maybe their is no longer adequate unencumbered sovereign above ground gold stocks remaining to continue the oil/fiat game and now the IMF gold becomes the lessee/lender of last resort to temporarily continue the game a while longer.

The above argument seems to fail when considering that Argentina has recently reportedly purchased and accumulated 55 tonnes of gold. Did Argentina accumulate physical or paper gold??? I suspect it must be physical due to the verbiage "accumulated."

"The announcement by the Argentinian Central Bank that they had accumulated 42 tonnes of gold and then recently added to this position to 55.1 tonnes added to some official credibility for gold.

http://www.kitco.com/ind/Gerbino/sept292004.html

Remember this?

Goldcorp CEO McEwen: Gold To Hit $850 An Ounce
Tuesday September 28, 2:17 PM EDT

DENVER (Dow Jones)-One of the gold industry's biggest bulls believes gold prices will hit at least $850 a troy ounce within the next few years.

Goldcorp Inc. (GG) Chief Executive Rob McEwen said "gold is money" and warned that the ballooning U.S. budget deficit and inflated real-estate market will continue to eat away at the value of the U.S. dollar, which will make more investors turn to gold.

When investor confidence disappears, McEwen said, "paper money eventually returns to its intrinsic value, which is zero."

-END-

If McEwen, an insider believes $850 gold is possible, this would indicate dwindling above ground inventories in a supply v demand equation. As gold becomes scarce the price would rise.

Again I do not believe the IMF banksters would loan out their physical gold if fiat began to fail. They would require these reserves to restart the game at a later date.

It seems very plausable that the IMF may create more paper gold to control POG under a third world debt relief scheme. The $40 an ounce official valuation is no longer operable given the current weakness inherent in the system. One would view such a revaluation as just another tool to provide temporary relief and retain control over an out-of-control and unbalanced global economic system.

Once the repatriation of paper claims for physical gold begins, the con game is basically over. The FED, BOE, WB, BIS and IMF know and understand this. They may give up a tiny bit of gold reserves if it fits their interest at the time. However I cannot fathom them selling off any substantial amounts of physical gold that later on would prevent them from restarting the scheme again.

Just my thoughts on the matter.
Belgian
(10/01/2004; 14:17:32 MDT - Msg ID: 124971)
Dollar devaluation - 20% !?
Dollar-devaluation...AGAINST WHAT !? Dollar already depreciated 24% against its main competitor, the euro. Dollar has already been depreciated in oilprice and goldprice terms.
Now it wants to depreciate against the renmimbi, wich is firmly and remains, firmly attached to the dollar. This to make the dollar depreciation complete, against the major " former" dollar derivatives.
But the stubborn renmimbi is manufacturing, not only for the US, but for the entire planet with all its dollar derivative currencies. The chinese manufacturing power is storming on a global scale and invading/occupying/pushing, the dollar position as global currency.

The re-preciation of the remimbi against the global dollar would only weaken the renmimbi's position outside the US, where China is selling its products in competition with Japan, the dollar-ally and strongholder par excellence.

Change in the dollar-renmimbi exchange rate would help Japan's competiviness and bring some more (needed) price-inflation within US shores.
Financial economies are oxygenated with regular dosises of infla. Important goods at higher prices...might bring (statistical) relief ?

But...

Will China do the US...US$... a favor !? No way. Why should they. Think N. Korea...
Think about the steady replacement of Asian dollar-reserves by euro and Gold...
Think about China hollowing out the Western manufacturing basis, through workforce and currency (monetary) policies...

Does this looks like the dollar is encircled with many traps ? Condemned to stay into the ME desert with no exit possibility !? Is this the main reason that Kerry, impossibly can offer a serious (succesfull) alternative ?
$-POO over $50 again. �-$ = 1,24 and �-POG eyeing that �350/Oz ceiling.

Gold in chinese vaults will compensate for any $-depreciation. The chinese will not tolerate that their builded and aqcuired pole position in world trade will be challenged. I think there will be very little G-7 comments on monday.

Always keep bearing in mind that the pargold pricing is blocking/freezing the price of physical Gold and makes that even physical Gold is not acting as a hedge for the ongoing dollar depreciation due to permanent dollar-inflation !
This is as explosive as can be and will soon reach nuclear capacity.
That's why dollar hedging is guided into euro as insiders know that this is the currency that is associated with coming FreeGold. More reason for Asia and oil, not to give in on dollar (exchange rate) demands.

The world is being taken off the old dollar standard ! The new dollar world order is being deflected.
The dollar fatally refused the "remarking" of its Gold since 1971 ! Now it is too late.

In the Bush/Kerry debate...a "strong America" was heard too many times to have a convincing impact to the attentive listener. I was repeatingly asking myself..."strong" in what exactly !?

How much credibility is there left for the $-papergold hedging machine !? we will soon find out.
Belgian
(10/01/2004; 14:43:13 MDT - Msg ID: 124972)
@ American Expression msg #124963
I don't understand the logic in your reasoning. At the end...oil (Saudi and other) remains exchanged for US-backed dollar-paper !? How can you exclude Russian oil from reaching the markets ? How does a rising euro affects an EU internally euro growing economy ? I don't get it. Please elaborate ? TIA.
CoBra(too)
(10/01/2004; 17:33:56 MDT - Msg ID: 124973)
Steve Saville - Hits home!
http://www.gold-eagle.com/editorials_04/milhouse100104.html

I've been thinking on similar lines for some time and would personally give the above excerpt a lot of credence.

Have a great weekend - un-interrupted by any G7/IMF or other mishaps. cb2
Goldendome
(10/01/2004; 19:01:11 MDT - Msg ID: 124974)
Oh, Belgian

Oh Belgian, oracle from across the way- old country; you who follows the crossing paths of mortals and sees their related deeds with clear eyes. Again, you strip us naked and press us to view ourselves in the reflection of your orbs. You say, devalue against what or whom? Of course, our mighty currency has descended the requisite 20% against all Now! And still, the mighty stomach, that is America, continues to consume, as we produce so little.

They see this, our clay shod suits with translucent crystal balls. Yet they pine. Give us more room and we shall make this work...this dollar standard thing. Back off -- accept less for our Presidents past -- in the spirit of what has come before and will. We made you what we were, to give us sustenance, as we pass. We are rich, but drown in debt. We have all, producing little.
We are strong, but die in sand--alone. Friends, mocking.
Cytek
(10/01/2004; 20:26:55 MDT - Msg ID: 124975)
Powerful leverage in the Great Gold rush
http://www.realwealthreport.com/a/GreatGoldRush.pdfHere is an interesting read from Larry Edelson,David Dutkewych and Sean Brodrick.

Table of contents as follows.

- Why Gold Supplies Are Shrinking
- Peaking global production and the end of central bank selling and producer hedging.
- Why Demand Is Soaring
� China's challenge to the US for global economic dominance
� The shrinking dollar
� Surging investment demand
� The gold dinar and growing tension between Islam and the West
- Time-Tested Gold Investment Strategies
- Larry's proven system of fundamental value and technical indicators.
- Buying, Storing and Protecting Your Gold Bullion
- Minimize hassle and risk � here are the safest, smartest, most-convenient ways to handle bullion. (IMO USAGOLD.COM)
- Maximize Your Profit Potential

Cytek
mikal
(10/01/2004; 21:19:46 MDT - Msg ID: 124976)
Price of Oil
http://www.economist.com/agenda/displayStory.cfm?story_id=3238988Pumping Up the Oil Price
10-01-04 From the Economist Global Agenda
Today's article goes to great lengths to explain why OPEC will regain the reins of oil pricing from Nigerian "jokers". They've got an "agenda" I'd say.
spotlight
(10/01/2004; 21:57:41 MDT - Msg ID: 124977)
IMF gold sales
Re: IMF gold sales to aid poor countries.
I think it is very generous of the IMF. However, so as not to injure the poor mining countries around the world,by selling it piece meal resulting in depressing the price, they should auction the total amount of gold they wish to sell at a one time auction to the highest bidder/bidders. The only bidders allowed, should be the Central banks of the world. This,in the interest of those countries having a sounder backing for their currencies.
I'm sure the gold poor central banks of Japan, China the rest of Asia, Russia etc. would welcome the opportunity to exchange a small part of their trillions of dollar reserves for gold.
Come on IMF...BRING IT ON...think of the opportunity of getting rid of all that unwanted gold for dollars, which you can invest in good old reliable, trusty, US treasury bonds. It's a great idea...isn't it?
mikal
(10/01/2004; 22:43:23 MDT - Msg ID: 124978)
G-7 meeting comments
http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktw&guid=%7BEA24CA49%2DCAF8%2D4415%2D8647%2DB5D0D158B63A%7DAnalysis: G-7 decides not to rock the boat
CBSMarketwatch - 10-01-04
With Treasury Secretary Snow issuing a glowing
post-meeting statement and citing Opec for high
oil prices that threaten the world economy, I
only ask: What else is new?
ge
(10/02/2004; 00:09:30 MDT - Msg ID: 124979)
Options
Belgian usagold.com msg#: 124972

Practically speaking there are three partition options:

1/ Russia allies with Europe. US allies with Asia.
2/ Russia allies with Asia. US allies with Europe.
3/ US allies with Russia. In this case, Europe stops being a hunter and becomes a prey.

May be it all ends in single power domination:

4/ US dominates.
5/ EU dominates.

Items 1, & 2 result in a two-currency world, while items 4 & 5 in a single currency one. Item 3 is unclear. Yes? No?
968
(10/02/2004; 02:17:27 MDT - Msg ID: 124980)
Dubai gold statistics
http://www.dmcc.ae/GOLD_statistics.htmThe Dubai Gold and Minerals Centre has produced statistics for Q2 2004, from which can be calculated that net imports rose 21.4% in the first half 2004, by 24.1 tonnes to 136.8 tonnes. A huge increase given the gold price behavior, indicative that Oil wealth - and perhaps geopolitical considerations - is shifting the demand schedule for bullion in the Middle East.
The CoinGuy
(10/02/2004; 02:35:30 MDT - Msg ID: 124981)
ge...
I'll take #5, with Russia and Asia as trading partners.

The U.S. seems to be building walls. At least my international friends perceive this to be the case. I understand some factions are looking to centralize both the North and South continent's, I have my reservsations about this scheme, or it's success.

Best,

The CoinGuy
mas
(10/02/2004; 03:22:53 MDT - Msg ID: 124983)
I just don't get it!
Scores die' in Samarra assault
US and Iraqi troops returned to Samarra earlier this month
US and Iraqi forces have carried out a major offensive in the northern Iraqi town of Samarra to try to retake control from insurgents.
US troops say around 109 militants were killed, but doctors at the main hospital spoke of 80 dead and more than 100 hurt, among them civilians.

Does this mean they were never in control? And possibly they will never regain control? What a mess! How in the world do they think they can sort this out when there is no clear forward looking strategy, (of sorry they will have elections and then leave)? In certain areas (controlled, and that's in what sense)?

ge- there won't be any alignment. forget it. The rest of the world will do witout the US, sorry.
Belgian
(10/02/2004; 03:45:51 MDT - Msg ID: 124984)
@ COBRA(too)
Yes, the (easy and obvious) thoughts that S. Saville expresses in his latest article, are the classic thoughts of many...who think as "speculative investors" (TSI). Nothing wrong with this, of course...but...
Saville, the speculator, mentions WAG-CB sales and tutti quanti, but as many (if not all) also "refuses" to see, hear, mention...the marking to market (ECB)...of Gold ! This mtm does not "fit" into the many reasonings of paper speculators (gamblers). Because all, keep on believing into "the markets" as the holly grail. There are NO "virgin" markets ! Markets are constantly "regulated" and therefore distorted permanently. As are all forms of inflation.

That's WHY we are guided to and will land in the ultimate FREEGOLD market. A "universal"...multilateralist market where unilateral regulations will find very little interventional grips.

All remain convinced that the free goldmarket already exists (since 1971). That's why they all minimise the interventional forces and believe that markets "always" win, through their adjustment capacity. Not so. Take the dollar's declining buying power over the past 7 decades and the goldmarket hasn't been marking Gold's price to the market. Who designed this "wrong" goldmarket and for what reasons !? CBs perhaps ? WHY is it that Gold remained excluded from all other inflation !!!-???

I find S.Saville's thoughts very contradicting. He is a short sighted, speculative thinker and actor...wich isn't wrong for as long as he is on the right side on each and every turn. He goes with the inflation tides as an active follower. Will this remain the right formula for permanent wealth consolidation in the nearby future !?

The above, simply boils down to the question...Shall we sell Gold and its derivatives at POG's already commonly projected turns of $600...$850...$1300...or shall we continuiously accumulate Physical Gold as our Wealth-Holding and exchange it for the appropiate numeraire, if and when we decide to "consume" part of our wealth stash !? This is another approach towards the future of Gold, then the classical "speculative" ones.

The Gold ball or the Gold game !? I strongly suspect the the ball will be taken out of the game...no more speculative plays...up until the game has been changed completely.

Make your choice...

Gold...its price...hasn't been competing with paper for the past 70 years. Goldbugs are praying that Gold will have its day, like any other dog, and that they can ride another round (race) with the leveraged paper horses on the known, familiar oval race track. I think, this time, it will be a very different Gold festival. No race with a start and a finish but an unending walk on a new trail, where Gold will and shall be "marked to the NEW market".

It are the chances of new Gold ...NEW GOLDMARKET...that we are putting on the balance here at the forum.
Belgian
(10/02/2004; 05:13:44 MDT - Msg ID: 124985)
@ ge
"ALL" alliances (also the ones you are suggesting) do come and go. Alliances are in essence an " � la carte " thing.
Look at the constantly altering "coalitions" on the many fronts on this globe. And one particular alliance in itself my alter through its existance. These are only details...noise !

What really counts are the "mainstream" evolutions !

We are "all" increasingly concentrating on OIL and CURRENCIES ! Here, at USAGOLD, we discuss if and how GOLD fits into the ongoing mainstreams.

The alliances that you are suggesting, might speed up or slow down the ongoing. But I see nothing that might alter or undo the ongoing evolutions. Oil and currency wars around GOLD at the epicenter.

The case for oil is rather simple : No oil, no economy.
The real Big fight is centered around the currency competition...and the currencies' evolving relationship towards oil and Gold. Currency dominance means economical power.

Will the dollar keep on dominating in one of its former systems (gold exchange standard -oil standard - dollar standard) ? Or will the new competing euro-concept attrackt alliances whilst the dollar block's alliances crumble ? Or can both currency-systems compete without little or much support...supporters ?

There is no "yes" or "no" answer possible on your alliance suggestions. There are so many different little and big aspects involved in all those different alliances, that it remains extremely difficult to evaluate, where exactly things do stand at any given moment.

Can anyone predict if/when or how the occupation of the ME oilfields will turn out !? How will this affect the oil-attitude versus the currencies that are offered to it ?
Can the different stashes of dollars, outside the US, find a common Gold-ground that suits all sufficiently ...when ...how ?

How impatient are we, them...? Who will take a 180� turn on what ? etc...etc...

How is the global economy going to evolve...?

Behind all those questions, I constantly try to find the breaking points...in vain !
This planet remains a very flexible one. We absorbed two WWs in less than 50 years.

That's WHY I do keep stressing on the Gold- marking to market-concept ! THAT IS COMPLETELY NEW and NOT to be ignored or minimalized by any and all Gold affectionados.
See how much effort has to be brought up, overhere, to simply introduce the aspect of Gold's mtm idea (concept).

The mtm = the anticipation of dollar demise. Some divorces take a long time to finalize, others do happen overnight.

All the ongoing processes on OIL/CURRENCIES/ECONOMY/GOLD are mainly "political" ones. Are we always pulling the right conclusions from the facts that we are observing !?
How flexible are we in our interpretations ?

That's why I invited to look at B. Bloom's LT charts. Are they really as promessing as they look like !? I strongly suspect, they do. Because they are in line with the ongoing main-stream evolutions...oil...competing currencies...economic dominance...GOLD !

Mas : The ME-oilfields *must* remain under exclusive $-occupation (cfr. Kerry)! That's one of the last dollar lifelines. But most probably the straw that might break its back, sooner than anticipated. It must not surprise anyone that sudden changes on these matters, might cause dramatic changes. The "dollar" ...not the American folks...is at war !

White Rose
(10/02/2004; 08:43:04 MDT - Msg ID: 124986)
New Book: Crossing the Rubicon by Michael Ruppert
Michael Ruppert has written a new book "Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil". It is about the corruption of the American financial/intelligence/military/governmental/elite organizational systems in the form of an investigation into 9/11. It is brilliant. Yes, there are mentions that the price of gold is being suppressed, and the problems that will ensue if the price escapes control.

I am an avid collector of books about a broad range of subjects. Never have I been more impressed with a single volume as I have with this book. Yes, this is the book that idenifies DIck Cheney as **the** key player for executing the 9/11 attacks.

I wish I had the money and the mailing addresses to mail a copy to all the major posters on this site (I will arrange to mail a copy to our hosts, though). I particularly wish I could send a copy to "Belgium" and to "Black Blade".

Right now, the book is only available from the "fromthewilderness" website. [I wish our gracious hosts to think of this post as a means to give access to amazing information to those on this forum, and not as a promotion of another website. I have nothing to gain from this book personally. Thank you.]
Smeagol
(10/02/2004; 09:01:19 MDT - Msg ID: 124987)
MTMGold or/vs. 'Free' Gold?
Sso... here we all are, more or less patiently waiting the marking-to-market of the Precious... which we will call MTMGold, because it is not proven yet that It will be 'free' Gold in those days....but what will that really mean, eh, precious, if and when we get exactly what we think we want?

Who, or what, will fix the MTMGold-value in that time? You and uss, buying and selling on a free Gold-market? Each country's central bank? Each government? An agreement between ssome or all of those? The winner(s) of a fight between ssome or all of those? Will the MTMGold-value be fixed once, change regularly, or be determined by the market? Or by treaty? Or as countries add to or ssubtract from their Gold-reserves? A hodgepodge of all of the above?How much do reserves matter in the days after the revaluation? What will prevent It from being loaned - again?

We undersstand the revaluing part... we wishes to know jusst how MTMGold would work, day-to-day, practical-wise, AFTER the dusst settles... MTMGold should be ssimple... because It is ssimple.

S.
Boilermaker
(10/02/2004; 09:12:58 MDT - Msg ID: 124988)
G7 Debt Relief for Poor Countries=Bankers' Bad Loan Bailouts
http://money.cnn.com/2004/10/02/news/international/group_debt.reut/snip;
Hopes of a deal to write off completely the debts of some of the world's poorest countries were dashed after the Group of Seven rich nations club failed to reach agreement
...............
"There is a British proposal on the table, and an American proposal. They are interesting proposals. But we think debt relief is not the only solution," said French finance minister Nicholas Sarkozy.

"What we want are real, supplementary ways to help these countries ... and we especially want to give this money to the countries to form education programs and socialization programs and not simply give it to the banks."

comment;
Sarkozy correctly sees (and expresses to the world) that the banks are the real recipients of so-called debt relief.

Belgian
(10/02/2004; 09:21:00 MDT - Msg ID: 124989)
@ mas
Samara (Beslan...) is only another atrocity in a very long and never ending list.
The occupation of Iraq and many other moves in oil-reserve rich places is the dollar-sward of Damocles that has been placed above the heads of dollarpriced oil owners.
You, cruel oil, shall exchange thy black gold for dollars and nothing else !

Nobody asks themselves WHY the dollar is concentrating (hyper-focussing) on oil en what might be so special about the euro, that this currency might be the next numeraire for oil !? Kerry suggested that under his handling of the WOT (Iraq)...folks would never suspect that this WOT might have something to do with "oil". That's why he brought N.Korea up and the proliferation of nuclear WMD. But the EU observers of the debate were not biting in Kerry's inconsistant (amalgamation) openings to internationalization of the WOT matters.

The euro-allies know whereto the *euro-Gold-oil* trail is leading. Oil for euro and euro FreeGold are the conditions for helping the dollar exiting its builded (building) $-sward of Damocles above the many oil heads.
Isn't it surprising that it is exactly G. Brown (Tony's real opponent) who is suggesting that the IMF should mark its Gold closer to the (paper)marketprice as to mobilize funds for Iraq. This same man, who commited UK Gold (under the � umbrella) at rockbottom prices, now urges the IMF to remark its Gold ! Very strange and confusing, indeed.

Ge : The UK is a typical example of a balancing, doublecrossing alliances. With the dollar for prestige reasons...with the euro for economic/monetary realities.

And indeed mas...for all these Big plays...so many innocent people are dragged into the slaughter houses around the world. But it takes the human persona a very long time before one does realizes the real "drama" that goes with the many appaling atrocities. Again and again and again.
Belgian
(10/02/2004; 09:53:23 MDT - Msg ID: 124990)
Re
White Rose : give us some snippits or compose some compilation of your choice.

Smeagoll : You are describing in question form what a real market...a free one...is...should be. Hart of the MTM matter is that this new Goldmarket will be a PHYSICAL one !
Just imagine that the today's daily papergold volumes ...the equivalent of ca 1,000 tonnes / day...would mutate from almost pure paper to physical metal that is shipped >>> delivered and fully paid for with the associated euro numeraire. No more lending, leasing or derivatizing. Pure bullion from possession to possession.
In many,...MANY parts of this planet...this is...has always been happening. Gold from hand to hand. It is only for Western hands, that this physical Gold is much to havy and inconvenient. Not for me anymore, Sir ! Gold is the most private property that I can imagine, today...here in collectivist Euroland. Billions of other people always thought and will always think, along this same precious Goldline . Gold is not a kind of timesharing stuff.

Gold will be brought back to the Western people and Westerners will go back to Gold ! Very easy cake...as soon as the political wills get aligned (TIH's from above).

Don't wait for the coming hyper-inflation (dollar crash-implosion) to break out, before having made physical Gold, your private property .
Don't wait until Gold will be marked to Another market...the physical one. The revaluation of Gold...or the expression of Gold's intrinsic Value, can only happen on a permanent basis with the MTM principle. Billions of people in far away places are applying this principle on a daily basis. They denomiate the buying power of their Gold amongst themselves in a market of themselves. They know the utility of paper and the Value of Gold Wealth.
We, westerners are the (paper)exotic ones, measured in Gold terms. Not those Gold Wealth users in far away places.
Chris Powell
(10/02/2004; 10:10:00 MDT - Msg ID: 124991)
Once again Invisible Hand misses the point
http://www.press.bayer.com/News/News.nsf/id/5486E0A70FAA2016C1256F1F005055BE?Open&ccm=010005000&l=ENInvisible Hand, yes, gold is being rigged by the
government -- by several governments,
actually. But the rig is accomplished through
PRIVATE COMPANIES in the gold business,
surreptitiousness being essential to the rigging
and those companies being essential to the
surreptitiousness.

Second, once again you've neglected to note
that, in pointing out these anti-trust
convictions, GATA has been replying to market
analyst Dennis Gartman's proclamation
that "conspiracies rarely exist." GATA's
assertion is that conspiracies are common
and documented all the time. A big one is
exposed practically every week.

Again you misstate the facts. Bayer didn't
plead "no contest." It pleaded GUILTY. The
company acknowledges that in its own press
release, whose Internet link is above.

Of course GATA couldn't care less about
the Bayer or Infineon cases particularly.
GATA's point is that people in commerce
conspire against the free market ALL THE
TIME, while other people prefer not to
know about it and so subscribe to whitewash
publications like The Gartman Letter.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
USAGOLD / Centennial Precious Metals, Inc.
(10/02/2004; 10:51:29 MDT - Msg ID: 124992)
Hard assets, easy access!
http://www.usagold.com/buy-gold-coins.html

gold -- a global calling card
Belgian
(10/02/2004; 10:53:33 MDT - Msg ID: 124993)
@ Smeagol(d)
Forgot the most important introduction phrase :

THE ECB...THAT EURO BANK WITH ITS 12,0000 TONNES OF GOLD...is...ISSSSSSS ALREADY MARKING ITS GOLD TO THE MARKET... !!!

And the reason why nobody is impressed by this...is because the marking is happening to the $-papergold-market ...AND NOT YET TO THE �-PHYSICAL-GOLDMARKET !!!

FOR THE TIME BEING, the euro allows the $-papergold-market to "function" and the marking of the ECB's goldreserves, done quarterly, against the dollar in its dollargoldmarket, is appropiate for the present euro position.

This is the main reason WHY observers don't stumble over this MTM concept. It remains within a dollar-context...and that's acceptable.

The inevitable dollar-crash at the end of the road, causing cruel price-hyper-inflation...will blow that already practised MTM into Another Goldmarket...the PHYSICAL ONE !

The $-papergold-market will be of no use anymore.

The Chinese are already guided to this new euro-goldmarket, with the liberalization of the goldmarket in China (1,2 billion souls...and growing fast).

That's why the dollar has to use (exploit) each and every lifeline that the dollar thinks, still exists...control of the planet's oil to avoid dollar-crash...blow up of the $-papergold-market...EURO FREEGOLD MARKET !

Ol Euroland already knew, since DeGaulle, that the dollar was NOT forever.

Sssssimple, no ?
Druid
(10/02/2004; 10:55:36 MDT - Msg ID: 124994)
Russian/Asian Oil

Druid: I would lean toward this reality but there has been a twist of sorts as of late. I thought it extremely intriguing that Conoco and Lukoil of Russia recently were allowed to become partners in a quest to develop fields in Russia and Iraq. This speaks volumes (as least for me) of trying to maintain oil prices in a tight range over the long run. Just think of the news that you can generate from this arrangement over the long haul to feed the markets in trying to squelch a runaway oil price. Also, in light of the recent action against Yukos what is Russia up too? Lower the oil price at all costs but let freegold have its day. High price oil upsets the world applecart in a BIG way, freegold doesn't.
Ned
(10/02/2004; 11:49:53 MDT - Msg ID: 124995)
White Rose
Have you read the book about Paul O'Neil. I believe it's entitled "The Price of Loyalty". I have eyed it several times at the bookstore but it's quite expensive.

Yes I intend to get "Crossing the Rubicon", I read Ruppert's PDF a few weeks back, quite a few hairs standing on end since the release of the 911 Commission report.

Any other recommendations?

Thanks.
Ned
(10/02/2004; 11:51:26 MDT - Msg ID: 124996)
Belgian
http://www.fromthewilderness.com/PDF/Commonwealth.pdfLots of snippets here my friend.
ge
(10/02/2004; 12:59:06 MDT - Msg ID: 124997)
The CoinGuy
Questions leading to other questions:

In a post-US Euro-Asia continent, shall there be fractures within the continent?

During the modern phase of European history, UK (an island), played land based European powers (France, Germany, Russia) against each other (balance of powers policy). Shall US (a continent ) play Euro-Asian powers against each other? First allying with one, and then, with the other?

Best Regards,
Druid
Chris Powell (10/2/04; 10:10:00MT - usagold.com msg#: 124991)

Druid: Chris Powell, your response is closer to the truth then most people know. Most people, by in large, "believe" that they operate in a capitalist society with a central bank at the heart of it. They can't even begin to remotely realize the paradox there. Collusion whether tacit or explicit is more along the lines the rule of the day rather than the exception (geeze I studied this form of economic arrangement in a formal econ. course years ago, Gartman's a joke). It makes people feel better about themselves to somehow "believe" that they are the masters of their own destinies. I stated this about some three or four years ago, that most people don't "believe" in fairly tales or Santa Clause (unless you're the international banker) yet center their lives on this type of metaphysical belief system every working day of their lives. Very few people substitute knowledge for "belief". Keep up the good work.
CoBra(too)
@Belgian ... no real title except - Free Gold!
I may be a nitwit or even outright dumb -may that be as it is; I still don't get your call for FREE GOLD - and as I understand you're not alone here - though, maybe I am!

Free Gold would be just wonderful in a free world with free markets - it just has never happened in history. It's probably like a free lunch, or have the cake and eat it all.

Excuse the somewhat simplistic question, as to "What will be ultimately changed by Free Gold?" - as in the long run another John Law or similar fraud will find another way around the equation. It has always happened hitherto and always will again. Otherwise, we'd still be in Paradise - if Eve wouln't have been tempted to eat from the forbidden tree.

... And man will always be tempted to beat the system or try the forbidden fruit. Free Gold is probably the greatest challenge for the engineers to todays monetary system. A system supported by the Bretton Woods Agreement based on the relative value of economic capacity to exchange final value of borrowing power of last resort (SDR's). A system, which has proven decadent and faulty, in particular by the hegemonial US Dollar Reserve Standard. A standard, which has now been been over-utilized, to say the least in the least abrasive way.

Say, it may just be ultimate timeline of another great fiat monetary system to bite the inevitable dust, as all confetti systems have prior to this brave IMF and WB sponsored fraud of dispossesing its advocates by overtaxing them by inflation.
Of course, only to alleviate the accumulated and unrepayable debt. The other option would be to kill the creditor outright.
Third world countries, even rich in resources have met their hangmen in form of the IMF, and some have escaped the noose, though barely. Argentina comes to mind, having pegged their Peso to the US$ and went broke - after all the country was dubbed the Switzerland of South America not so long ago and now is repudiating their, or is it the IMF's excesses. They are replenishing their countriy's gold reserve against the express rules of the Bretton Woods, IMF and Dollar Reserve System.

That's what free gold means to me - make your choice - and maybe be free from a system of renewed serfdom.

I'll reiterate, gold will always be free to be held by the few who hold freedom, liberty and real values in high esteem. It will also always be the final arbitrator of real value in the long run, though gold is too scarce to be totally free in a globalized world.

A world, which may even have outgrown its capacity to sustain its current population - given the peak in very strategic commodities.

Just some rambling thoughts - no real sequence - will try better "another" time - cb2










ge
Belgian
Based on the discussions at this forum, our destiny appears to be:

Gold Revaluation --> Debt Settlement --> New Fiat Money Expansion

Historical precedents suggest that the first leg (debt settlement by gold revaluation) appears to be unavoidable.

"Who shall control the new fiat expansion?" A creditor country, again history suggests.

Keep on posting Sir, reading your discussions converts my foggy ideas into clear vision. I always look for your posts to read.

Best Regards,
Gandalf the White
TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

Let us NOT forget that we have ANOTHER ESSAY writing Contest !
===
Don't wait until late Sunday, as it takes a while to type and proofread your entry !
<;-)

The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 3, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 4th !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to each of the two runners-up.
===
<;-)
Belgian
FreeGold for COBRA too....
I'm sure you are aware that house-property has been and always will be stimulated for a very wide variety of different beneficial reasons ! This happens everywhere for the same universal reasons. It is about private "Property" and "Possession". The many different housing markets are being stimulated...guided...managed...encouraged or disencouraged...slowed down or fastened up...etc...

All markets are under altering influence and enjoy periods of relative freedom and unfreedom.
There are rules...changing rules. Economical, social...and many other motives attached to this form (and other) of tangible property .

Most of the time, the "Value" of real estate is a relative constant. But the prices are fluctuating but most of the time in an upward trend due to...permanent fiat-currency-depreciation.

Now you can easely come up with a list of measures that would kill the desire to acquire such a property. Imagine you have to pay taxes on the plus-price that your house fetches when the currency depreciates and the houseprice rises ! The housing market is made less free by taking away some fundamental encouragements. A majority will start renting houses (play the price of Gold) and only Giants will be the owners of the properties (Physical Gold).

When I was a kid, my parents were regulary buying very small amounts of Gold (coins)...not because they understood Gold...but because Gold was offered...encouraged from "above". And many others were also having some coins, stashed away.

In that same period, where the Value of Gold was experienced in almost every household, there didn't exist any form of debt-culture...

As time passed by, gold-ownership (coins) was disencouraged and the debt-culture was introduced and "cultivated"...

Sir COBRA,...it is VERY...Very... easy to guide (misguide) the masses !!! Very easy to fool them all, again and again!

If you exclude categorically that financial/monetary and Gold-conservatism, never will come back...than you have to provide us with a logic coherent explanation for all the official gold-facts of the past decade !
Start with Argentina...that tok the freedom to buy physical gold and hold it !

There is more than enough gold, aboveground...BUT IT IS MUCH...MUCH TOO HEAVY FOR ITS PRICE !!! FreeGold will become featherlight.

You are way too Gold pessimistic, Sir. The ongoing realities of today are telling us something different. I think this is a worthy cause to put effort into investigating it thoroughly.

@Ned, thanks mate.

Belgian
@ ge
The ECB-BIS tandem will become the guardian of the euro-numeraire. This numeraire will increasingly be "used" for trade settlement, because of all the associations that are going to be attached to this new euro-numeraire. This new fiat will build up a reputation, just like the dollar has been doing for decades. The euro is not going to compete with freegold on a money basis. The euro will have to earn its reputation and work hard to keep it up as to remain associated with freegold from wich it will pull strength.
A win-win concept. Exactly the opposite of the dollar-gold, system.

Euro and Gold, together as reserve. Freegold will tell how good or bad the management of the euro is. Expansion of the trade settlement numeraire must be proportionate to the expansion of the trade. FreeGold will not tolerate and immediately indicate if the numeraire is abused and will therefore lose Gold's associative strength.

Mismanagement of the euro will result in a flight into Gold ...PHYSICAL GOLD THIS TIME...and in a dis-association of euro and Gold. One will not exchange Gold wealth for a rotting euro anymore ! But this is already the possible end of the euro-Gold story. And indeed, all stories do have an end. Today we experience the end of the dollar story.

The end of the dollar story also means the end of the $-papergold-market that underscored the dollar.
The more dollars that are entering the global fiat arena...the bigger the problem becomes to get rid of these dollar floods. Especially for those who are accumulating these dollars in excess/extravagant surplusess. We don't find a "use" for all those dollarfloods and therefore increasingly and rapidly lose worth. A self-destructing process that cannot be turned around and will therefore meet price-hyper-inflation. Argentina found refuge in...physical gold as the ultimate reserve.

Most of the $-debt will die without a serious form of settlement. The dollar=debt. How can you settle debt...with debt...with more debt >>> infernal spiral. Hyper-inflate this debtmonster away, retreat... and take a new start under a new monetary (�) system...this time associated "with" Gold and not "against" it !

It doesn't matter that very few of the masses will "understand" the purpose of freegold. They will follow anyway. The decades' old dollar memories will fade when the euro-gold sun will rise on a new horizon announcing a new gold season.

So we keep on watching how the euro dissociates from the dollar and associates with gold !
Druid
Wacked out thoughts...
Druid: Sir Belgian, this call for a MTM revaluation for IMF gold reserves suggests to me that the action by the Argentinian Central Bank to recently acquire bullion en masse has created a serious problem for the world financial architecture. The IMF through its surrogates are trying like hell to curtail this situation before it gets out of hand and takes on a life of its own. The debt traders both public and private are strangling both Brazil and Argentina financially and are pushing both countries into a very difficult corner. Could a call for a collective devaluation of the dollar be a way to rough up the bond speculators?? A way to use the printing press from on high as opposed to the usual mechanism. This would lead into an illusionary PRICE increase in gold thereby changing the debt/GDP ratio for both countries reserves assets. Would they not be able to "revalue" (how about reprice) these countries gold reserves and then slowly sell them off in order to repay their debt?? Thoughts??
Chris Powell
Technical analysis in manipulated markets
http://groups.yahoo.com/group/gata/message/2418An interview with GATA's Mike Bolser.


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

gata-subscribe@yahoogroups.com

CoBra(too)
Free Gold for CB2
@ Sir Belgian - I'm not quite sure if you've been addressing some of my ramblings as I can't find too much coherence to my queries.

Let's start from the beginning, though.

House & property "managed" market is a pretty recent development, as throughout history dwellings and arable land, hunting and fishery rights et. have been subject to
taxes by the landlord. The free and clear owned property, even in the land of the brave and the free is still subject to taxation, somewhat heavy taxation in comparison to other legislations.

... Oh, yes I'm quite aware that real estate value is a relative constant and its relative causes. I've even followed your advice before reading you. I also have put most of the revenue into gold - some silver as well (MK may be able to vindicate some of the truth of this statement) - though, that's beside the point, as we all are still serfs of an ultimately unfair fiat (moron) system. Alltogether not too dis-similar to the system of agrarian times of serfdom.

Or is it the Kings ransom? Do I know? Probably, as my heritage was a bit "silver spooned" until the 'Repuclicans' took over. At least in Belgium you still have a constitutional monarchy - far better than no constitution at all ;-( !

... and yes there never was a culture of debt in the old continent, nor in the new. There never was a culture of financial assets, its deravites and any other sublime idiocy to succumb to such perversity as to mistake productivity for the real act of production of wealth.

... And finally, my friend, as I still hope, I've probably been a gold advocate longer than you can think. But that may be totally beside the point and I'm not really enjoying to play the 'devil's advocate' - a role you seem to have ensigned to me - I'm still awaiting and - breathlessly at that - to fill in the great unwashed, including myself - what-ever is our mystery of FREE GOLD?

cb2 - and don't shoot the messenger right away - he may have - a-hem - at least the right of dawaay - yawash - go slow as the Iranians would say - OK - No more poltics - except the last emperor of my country gets sainted tomorrow by the Vatican - OK- shoot the messenger cleanly, please!



The Invisible Hand
Gata still doesn't answer my points

My points are that
1. Gata should not only prove the existence of conspiracies, but also prove that conspiracies work
2. antitrust laws are not objective and that there are no objective standards of guilt or innocence in antitrust law.
GATA, WHERE IS YOUR ANSWER?


GATA ALLEGES
Invisible Hand, yes, gold is being rigged by the
government -- by several governments,
actually. But the rig is accomplished through
PRIVATE COMPANIES in the gold business,
surreptitiousness being essential to the rigging
and those companies being essential to the
surreptitiousness.

THE INVISIBLE HAND REPLIES
If guvt hadn't started it, the private crooks could not have done everything.
Of course, Big Brother shows the example and citizen follow>?
By the way, doesn't guvt always act through private individuals?
I don't want to contest (nolo contendere) that there are many crooks in private business who can only achieve their ends thanks to guvt help and/or protection.
The solution is not to blame the companies, but to abolish guvt.

GATA ALLEGES
GATA's assertion is that conspiracies are common
and documented all the time. A big one is
exposed practically every week.

THE INVISIBLE HAND REPLIES
Gata should prove that conspiracies work

GATA ALLEGES
Again you misstate the facts. Bayer didn't
plead "no contest." It pleaded GUILTY. The
company acknowledges that in its own press
release, whose Internet link is above.

THE INVISIBLE HAND REPLIES
"Nolo contendere" means "I don't want to contend". Have you ever throught why Beyer would accept the indictment?
What's the use of the antitrust laws? Those laws should have been repealed long ago except against the gvt, but the guvt should also be repealed
Moreover, a careful reading of the press release displays:
"Under the terms of the agreement, Bayer Corporation AGREED TO PLEAD GUILTY and to pay a fine of $33 million. The company will set up a respective provision in the third quarter of 2004.
Bayer Corporation HAS COOPERATED WITH THE DEPARTMENT during the investigation. "
This is not pleading guilty. This is being forced to plead guilty to avoid jail.

GATA ALLEGES
Of course GATA couldn't care less about
the Bayer or Infineon cases particularly.
GATA's point is that people in commerce
conspire against the free market ALL THE
TIME, while other people prefer not to
know about it and so subscribe to whitewash
publications like The Gartman Letter.

THE INVISIBLE HAND REPLIES
How can there be a free market when there is a guvt?
Is it written in the Constitution of the US of A that there is a free market?
Has the Constitution been amended by the Sherman Act of 1890?
What you mean? "freedom enforced by guvt"?
How can bureaucrats who make their living by taxes (the thief doesn't come back periodically, neither does the thief pretend to be stealing in the general interest) pretend to be promoting the free market? Or do you mean the free market in theft?

===


One more quote, this time from the back cover of Dominick Armentano's book "Antitrust Policy � The Case for Repeal" (Cato Institute, 1986):
"In this book Armentano states his challenge squarely: antitrust laws have been employed repeatedly to restrict the competitive market process. There is no longer any respectable economic theory or empirical evidence to support antitrust laws. The antitrust laws are inconsistent with liberty and justice � as Adam Smith predicted � and they should be repealed."

One last quote from the beginning of Armentano's book � a quote from Adam Smith's "The Wealth of Nations":
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. IT IS IMPOSSIBLE, INDEED TO PREVENT SUCH MEETINGS, BY ANY LAW WHICH EITHER COULD BE EXECUTED, OR WOULD BE CONSISTENT WITH LIBERTY AND JUSTICE. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less render them necessary."

REPEAT
My points are that
1. Gata should not only prove the existence of conspiracies, but also prove that they work
2. antitrust laws are not objective and that there are no objective standards of guilt or innocence in antitrust law.
GATA, WHERE IS YOUR ANSWER?

Come on, gata, what's your reply to the fact that antitrust laws are immoral?
The Invisible Hand
Sunday morning reading � dollar 30% down � screw ECB
NOT 20 BUT 30 %
From the Economist - today's update
http://www.economist.com/agenda/displayStory.cfm?story_id=3258391
SNIPS
The Americans feel that East Asian currencies are too cheap, held down by governments fearful of market forces. As a consequence, the dollar is too expensive, undermining America's exporters and contributing to a vast deficit in the country's balance of trade. China, which has maintained a peg of 8.28 yuan to the dollar since 1995, is seen as the chief culprit.
+
The G7 once held great sway over exchange rates. When it met, in a previous incarnation, in New York in September 1985, it engineered a near-30% decline in the dollar. When it reconvened a year and a half later in Paris, it promptly halted that decline. By breaking bread with the Chinese on Friday, the current G7 is tacitly admitting that it can no longer achieve very much without them.

FORMER BOE GOVERNOR SIDES WITH FRANCE AND GERMANY AGAINST ECB
From today's The Sunday Times
http://www.timesonline.co.uk/newspaper/0,,2086-1290912,00.html
SNIP
[Former governor of the Bank of England, Sir Eddie] George said that the ECB, headed by Jean-Claude Trichet, had been wrong to insist on an over-rigid interpretation of the euro's stability and growth pact, which limits budget deficits of member countries to 3% of gross domestic product.
"You can't lay down hard-and-fast rules, but that's what the pact does," George said. "The important thing is this commitment to medium and long-term sustainability. If the economy is in decline by 10% and you have to observe a 3% deficit, that doesn't seem to me to be rational economics."
He comes out on the side of France and Germany which, he said, had acted "perfectly reasonably" in flouting the pact and taking issue with the ECB. Central bankers normally steer clear of public criticisms of their counterparts so his comments are unusually outspoken.
CoBra(too)
TIH - Stay that way - Invisible
Figure your anti GATA stance bears as much substance as your latest posts, or is it mine?
Fine -cb2
miner49er
Ok, Druid..., some whacked out thoughts in return...
First, unless I skimmed the news too quickly, G. Brown's statement re: IMF gold was not a call to "MTM" it, but simply a more vague "revaluation." This can mean almost anything. Currently IMF gold (3.2k+ metric tonnes), is valued around roughly 150 billion USD. The aim of Mr. Brown was for a 100 bln USD write-down of HIPC debt. Revaluing to current market would cause them to rebook their gold at $1.5 trillion, much more than needed to accomplish the "stated" objective -- and if to occur, would cause the dollar to disintegrate instantly. You talk about "roughing up" the bond holders. Yikes, dude! It would be a bloody, salt-the-earth massacre! There would be NO recovery.

For whatever Gordon Brown's pious statements are worth, if acted on, would only need result in a very modest increase in IMF reserve valuations (relative to spot anyway). If they mark the new price at $65 or so, that alone would generate the extra $100 bln in available funds. And the statement did not say that they would be looking for a re-marking of the IMF gold as the exclusive source of financing this new found generosity, just that they should "consider anew all options." They did not even say they should "sell" the gold. Revaluation makes more collateral available on the same assets. Undoubtedly, this would cause activity in the gold market, but the revalued gold would work its (re-)hypothecating magic, just as all the "sold" / leased / and otherwise collateralized gold over the past few years apparently has.

Would this not encourage the paper sellers to create a flurry of fresh paper, convinced they can boldly sell short and collectively overwhelm any long side strength? The relatively small demands for delivery that do call would be able to be satisfied, if needed, with a relatively small portion of this freed-up IMF gold (or gold freed up from obligations that can now be covered with the newly-priced IMF gold). Remember, one of the advantages of keeping gold reserves marked ridiculously low, is that if they can be revalued in stages, it is practically as good as adding new gold to the stock. Isn't this perhaps one of the real reasons behind Mr. Brown's epiphany? It stands to keep the current game going a little longer.

And doing this in the guise of holiness, lays the foundation for other "charitable" acts that may be performed by subsequently re-valuing gold upward -- in stages -- so as to work themselves out of the pathetically obsolete price they keep it at on the books currently (was this part of the plan all along?). And if the IMF re-books to something like $65, and the world looks on with a straight face, wouldn't that prepare the way for the US to do the same? And down the road, another justification for further stepped revaluations? Just release valve operations to slowly reconcile the books with reality, and generate more "credible" financing collateral -- and importantly -- to provide the leverage to help keep a lid on any sudden upheavals... So, the plan, anyway...

So, would the other G7 members go along with this? Well, it depends. We don't know their strategy. We can safely surmise that they probably want things to happen without incident if possible. So, they might go along with this, or some evolution of it, as the statement itself doesn't do anything in terms of gold movement. Re-pricing the gold upwards in baby steps would do no direct harm to the euro zone. All it really stands to do is prolong the current dollar-gold paradigm. This is a two-edged sword, however. On the one hand it serves as a throttle to keep things from getting out of hand. On the other hand, it can -- by suppressing the POG in the light of a genuine secular trend to noticeable and felt price increases all around -- serve to illustrate very pointedly the in-credibility of the $-priced paper-dominated markets.

Remember that going hand in hand with all this is is an escalating oil price that will, will, will manifest itself in consumer prices in a very marked way at some point. How many excuses can we come up with to explain the increase? Hurricanes, unrest here and there, speculators, summertime blends, cold winters, Iraq disruptions, tankers waylaid, strikes,and on and on... Each excuse perhaps true enough in that it does cause disruptions, but enough to explain a steady, irreversible march upward 5-fold in 5 years??

When prices are visibly escalating from these permanent new oil price floors, and (paper-leashed) gold remains languishing -- because it just keeps coming out of the woodwork in just enough quantities to maintain a superficial credibility of dollar strength vis-a-vis gold -- something will give. I believe that for a brief season two camps will emerge. Some not decoding the signs, will capitulate and sell -- this is what the dollar forces wish to promote. Others, recognizing the lack of credibility of the dollar priced markets, will begin buying very forcefully, and bring the matter to a head, causing spot-settled markets to come to prominence and become the authoritative quoted gold price, just as LBMA is today.

The ensuing confusion in this brief transition season will cause wild swings in the price, and probably end up with a period of no-offer, as gold holders will not in any effective way be able to even price their metal. All they will know is that it's worth a whole lot. Promise holders on the other hand will find only frustration in any attempts to satisfy a large physical demand at the now discredited prices, and will find no buyers to offload their long paper to. This is where markets that are set up to transact large volumes of physical with spot settlement will become the tool of choice and will bring back order to the gold markets -- but at a very substantially different price level.

One other brief comment on your comments: 1) "illusionary" price increase (?)... hmm, not sure what you mean by "illusionary." If you mean something artificial as a result of an IMF revaluation, I don't see how it would be artificial. (Heck, the price already is artificial.) Any upward revaluation in Argentina's reserves is a positive and permanent, unless you believe that POG will behave only as in the past 30 years -- spiking and retreating again.. It serves the same purpose as other gold/dollar reserve holding institutions wish it to -- a natural hedge for losses in the dollar portion of their reserves. As for selling the gold to pay off debt? Hmm, again... if you were holding debt in a rapidly devaluating currency, would you feel compelled to sell your premium assets to pay it down?? Why not just continue with your present repayment schedule and be thankful that every payment is relatively lighter than the previous.

Anyway, must run... cheers, Druid! -- miner

R Powell
Freegold
Interesting reading today...thanks!

I've followed the talk of "freegold" for as long as it's been going on but...without really getting any clear idea of what is meant by the term. The failure here is probably on my part as I tend to try to simplify the complex into what is understandable to my pragmatic outlook. Anyway....can anyone give me a simple definition....please nothing long and complicated...of the meaning of "Freegold".
Thanks + happy weekend to all!
rich
Boilermaker
Miner's msg# 125010
Check your calc's on the $ value of the IMF gold stash. I'm getting far lower numbers.
Toolie
Miner
Take a second look at your math.
3,200 tonnes X 32,000 (oz/ton)= 102,400,000 oz.
Current marked value $40
102,400,000 oz. X $40 = $4.1 billion

Miner said: The aim of Mr. Brown was for a 100 bln USD write-down of HIPC debt.
Wouldn't that require an additional $1000/oz.

OR
Am I the one that should look at my figures?
Topaz
What "FreeGold" means to me.
The term Freegold conjures up an image of a System where Gold in Physical form is held as an Asset "above and beyond" the said system.
To achieve this exclusivity, Gold would have to shake off it's current shackles - Book pricing, Paper associations of all types (derivs, loans, leases etc) and be ONLY bought and sold on a Cash basis.
In this form Gold would more closely reflect the collective and individual success or failure of those participating "IN" the System.

R Powell
Topaz
Thanks for that definition. Can you name a few assets of value that fit this definition...namely that only transfer ownership (are bought and sold) on a cash basis only?
phil288
Essay entry
With respect to gold, the election doesn't matter because gold is FOREVER, at least in terms of our lives and our country's (USA) brief history. For five thousand years governments and philosophies have come and gone, and some as formidable as ours haven fallen to the dust of history. Gold as pure wealth was there then and will still be here after carbon man reverts to history. So the current political situation as sad as it is is inconsequential in relation to gold's long and secure history. That's why we are here. We sense that the lifestyle we have all enjoyed for the last four or five generations is about to morph into something else. What that something is we do not know, and in fact only a few are even wondering. Since the West is arguably at the top of the food chain and the rest of the world is about to compete agressively for natural resources we are the target even if we were not trying to police the world. A leveling of the playing field will adversely affect those with the most to loose, that's us. The politicians can't change it, the dollar can't withstand it, real estate is overvalued and vulnerable. What is left? Family , friends, and the timeless security of gold in hand. So armed we go forward into the unknown, some praying for guidance. This election is insignificant when you step back and look at the bigger picture. Too little too late. Got Gold, get you some.
Chris Powell
Which is immoral -- anti-trust law or monopolies?
Invisible Hand says GATA must prove not only the existence of conspiracies but also that conspiracies work.

The hell GATA does. U.S. law and court cases going back to the Sherman Act in 1890 have done this already. And nobody can be convicted of an anti-trust law violation without a guilty plea or a civil lawsuit or criminal prosecution brought and concluded with due process of law. The burden of proof always rests with the prosecutorial authorities or the plaintiffs.

GATA sought to undertake the burden of proof with the
lawsuit of Howe vs. Bank for International Settlements
in U.S. District Court in Boston a few years ago but we were denied a chance to do so because of the principle of sovereign immunity; the court ruled that we couldn't sue the government.

So our lawsuit is being duplicated, without the government defendants, in the case of Blanchard & Co. vs. Barrick Gold and Morgan Chase in U.S. District Court in New Orleans. We hope and think that the Blanchard suit will prove its claims.

As for whether conspiracies work, in antitrust law
that point has to be proven to the satisfaction of a
court. But monopoly is the goal of economic conspiracy, and it should be self-evident that monopoly works. Avoiding monopoly is the purpose of anti-trust law.

If Invisible Hand does not believe that monopolies can be achieved and does not believe that they should be outlawed, he should say so plainly. That seems to be the essence of the disagreement here. He considers anti-trust law immoral. GATA considers monopolies immoral.

Invisible Hand is welcome to take orders from J.P. Morgan Chase, but that's not GATA's idea of a good time.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
miner49er
Shouldn't do math while chewing gum -- my fault
I was working on something else, and hastily miscalculated. I stand corrected. Reasoning was: metric tonne = 2200 lbs = 35,200 oz * 3,217 (GFMS estimates of IMF gold in metric tonnes) = 113,238,400 oz., and then the dumb miner decides to confuse ozs with grams and further multiplies * 32 to get 3,623,628,800 * $40 approx book value = the $144 bln.

Nevertheless, the point still being something akin to the concept behind IMF operations a few years back with Brazil. I don't recall the details, but effectively a type of sale/repurchase that didn't change the IMF gold holdings, but revalued a portion of the gold to finance the settlement of Brazilian obligations coming due. Unless they must, these institutions are not selling large volumes of their gold into the abyss of general consumer demand. This we know.

Thus, another call to deploy IMF gold to help the poor via debt forgiveness, will most likely not mean actual sales, but some kind of complex financing that ends up creating more dollars -- so everyone goes away whole -- on paper at any rate, and leaves the IMF net position likely the same. So, when I hear various factions decrying the statements, I realize they are only posturing just as much as Brown is posturing, each trying to discern what the other is really seeking, and how they can possibly use it or direct it to their benefit.

It would seem that this gesture has as its goal not helping the poor (unless there is some major default in the works that needs to be covered), but making more gold available to keep the current framework in place a bit longer. Not being able to secure the tonne here and there from small countries anymore, revaluation of under-valued gold can effectively make more gold "available" for the justification of more paper.

This brings the damned-if-do/damned-if-don't scenario of being able perhaps to suppress or contain the upside pressure a bit longer, but at the same time discrediting these markets as valid for price discovery, as a weakening dollar -- with irrefutable sustained price increases -- is not balanced by a commensurate increase in the gold price.

That Mr. Brown is coming out with this at all suggests a crisis brewing in the background. Who knows what it is. Neither the dollar or euro factions want anything to break suddenly, though. So, in the end we may likely see some variation of Brown's suggestion coming to pass. It would only be another finger in the dike, a buy-time measure for the dollar; and for the euro -- a means to watch the dollar faction (IMF) set the stage for further throttling the possibility of a too-sudden breakaway in the price -- something that may be useful still for the euro.

Once more apologies for the whacky math...

Topaz
@Rich.
Not offhand Rich, maybe certain Cashcrops of the illegal variety or hitech research material? Generally stuff that is traded outside the system already might provide a "here and now" parallel comparison with FreeGold.
mas
From the Privateer.
Here's a good point.

The US Current Account Deficit:
To correct the present US current account deficit (which widened to a record $US 166.2 Billion in the
second quarter of 2004), the US Dollar would have to fall about 20 percent on a full trade-weighted basis.
On the surface, that might not look too bad, for the US. But for all current FOREIGN holders of US
Dollars or US financial paper, it would amount to near catastrophic losses when measured in terms of
their own national currencies. For Americans, it would amount to having the global purchasing power of
the US Dollar fall by 20 percent. A 20 percent fall in the value of the US Dollar would actually increase
the price of US imports by 25 percent. If the $US fell, say, from 100 to 80, returning to 100 is actually a
25 percent rise.
Liberty Head
Monopolies - Chris Powell

Monopolies are the product of gov't intervention. They could not exist in a free market open to competition.
Your question - "Which is immoral -- anti-trust law or monopolies?" is loaded.
Only Gov't has the power to support monopolies by creating laws that restrict competition. Gov't also has the power to kill it's monopolistic off-spring through anti-trust.
The only way a monopoly could exist in a free market, is if a product was better and cheaper than the competition.
In this case though, "monopoly" would not be a dirty word.

Best Wishes
Topaz
further Rich.
...and thats the rub!! There's very little or no readily available comparative "asset" existing today that immunises against Systemic shortcomings.
The Freegold concept would go a long way to fill that void methinks given a well defined additional supply line, (say 3%/annum on a 150k ton base) the Punter of tomorrow will be able to opt out of the melee with paid in full Bullion as he so chooses. Works for me Rich;-).
Whether the System can be held together and transition to Euro/FreeGold reserve in a smooth manner is entirely another subject BUT! with Physical Gold in Possession NOW it really doesn't matter.
Belgian
FreeGold
It is "impossible" to define what FreeGold is or means in a one liner.
This is the same endless debate as trying to define " Freedom". Where does one's freedom start and ends !?

FreeGold means that Physical Gold can trade WITHOUT the constructed dictatorship of papergold. Physical goldtrade has to live under the absolutistic regime of paper-pricing.

It are the limitless amounts of printed dollar-papers that are permanently pricing my physical gold property. The dollarhegemons decide what the price is of mine gold wealth.
The dollar is permanently and arbitrary deciding on the expression of my wealth.

Under a FreeGold regime, this dollar-confetti dominance on Gold, is neutralized by another numeraire (�) that is architected to go hand in hand with unencumbered physical gold. Gold free from paper dictatorship.

FreeGold is paperfree Gold.

How will paper go away from Gold ? Constant decline in dollar exchange rate...>>> constant decline in dollar purchasing power...>>> dollar price hyper inflation : PAPERGOLD in the derivative papergold market is NOT hedging dollar losess anymore ! No physical gold will be delivered for the dollar contracts.
The dollar crashes and FreeGold is given birth ...traded...delivered physically in gram,ounce, kilogram... in an euro goldmarket (London/Frankfurt) .

It is very understandable that the dollar does not get the notion of FreeGold. Simply because the dollar succeeded in "paperizing" Gold. Control the "price"...the "pricing" of anything and you have the dominance.

Almost all the planet's currencies are dollar-derivatives.
That means that every currency's exchange rate + buying power is subordinated to the almighty dollar-paper functioning as the standard to wich must be refered. The non dollar currencies do have to live...are forced to live under "the dollar regime". The giant paper regulator that is defining how free or unfree its derivatives are...may be.

No problem for me. But having a dollar who is dictating permanently the price of my Gold Wealth, IS a huge problem...getting worse by the day. A $-debt paper, able to ...allowed to... say what my wealth is or isn't. Unacceptable anymore ! I don't want to become a dollar-slave. I am not alone, Rich.

FreeGold = a, fiat dollar-debt free, Gold.

DeGaulle forced the dollar to "DELIVER" physical Gold in order to further support and accept the dollar-system and its papergold market as an ally. W've come to the end of this acceptance and support. No papergold anymore...it's delivery time, again. Gold will be free to be priced to the genuine goldmarket and NOT to the artifical $-papergold market.

Amen

@ White Rose : Ruppert is (understandably) missing the main point in his analysis (investigation) : The dollar !
The failing of the "dollar-diplomacy".
Thanks.
mas
More from Privateer....
ge.... this may be of interest.

Re-Opening The US Iraq Files:
Across Europe the, entire Bush Presidential military escapade in Iraq is seen as a grotesque
miscalculation. All they have to do in Europe to confirm that to themselves is to look up in their files
what the US had thought would happen in Iraq, these files being based upon official US papers and public
statements. In these files, they will find it stated that Bush Administration officials expected to start
reducing the number of their armed forces in Iraq by the late summer of 2003, leading quickly to a
situation in which no more than 30,000 Americans remained in Iraq as a "stabilisation force". Over a
year later, the Europeans know (even though the US won't acknowledge it) that even with 130,000 troops,
the US is losing the initiative to an insurgency that seems to have come out of nowhere.
On re-reading these files, full of the claims by Bush Administration advocates for war with Iraq, the
Europeans see starkly the disastrous shear between what the people in power expected to happen and
what did happen and is still happening in Iraq. The Bush Administration expected a "cake walk". They
expected to be greeted with flowers thrown in the street. But what the Europeans really fear is that a US
which can so badly miscalculate the consequences of its actions will miscalculate again, with disastrous
global geo-political and geo-strategic consequences. They fear that another US mistake will spill over
into Europe. That is why their hopes, such as they are, for a US Kerry Administration are very low.
Across The Channel:
In Great Britain, Prime Minister Tony Blair has narrowly escaped a situation in which the British labour
unions were in full rebellion against him and his war in Iraq. The labour unions threatened to place on
the party conference agenda a call for the full withdrawal of British troops from Iraq. They did not make
good this threat. In the British House of Commons, there is an attempt to have Prime Minister Blair
impeached. This procedure has not been used in Great Britain since 1805, but it is still in the habits and
mores of the House as well as in all the volumes of law. As was stated by a Lord in the House of Lords,
if the Commons wish it, it will be done. If Tony Blair IS impeached after a debate and a vote in the
House of Commons, the actual trial will be held in the House of Lords, with the Commons acting as the
prosecution. This is not likely to happen. But there is a possibility of a debate in the House of Commons.
The "Father of The House" i.e. the longest sitting member of the House is an advocate for this debate. In
Britain, this matters greatly. Such a debate would devastate Tony Blair's political standing.
Europe Has Gone To Washington For Some "Chinese":
The G-7 meeting (plus China and Russia which turns the G-7 into a G-9) could end up being one of those
where the "final communique" - normally drafted and approved by all the participants weeks in advance
of the actual meeting - might end up being written in great haste on the back of a napkin. What if the US
delegation suddenly discovered that the "official" inflows of money from Asia would no longer be
arriving and that the US Dollar faced its greatest crisis since 1971when Nixon disconnected it from Gold?
This is not likely to happen this time, but it could happen. The US has been getting a global free ride on
the international reserve currency status of the US Dollar. For decades, it has grossly abused the special
standing of its currency which is really just the national paper money of the US. The US thought it could
perpetually increase the quantity of US Dollars without consequence. It was and is wrong.
Belgian
@ Druid msg#125004
There is ONLY ONE growing problem : The dollar's credibility !!!
The dollar = debt...and how creditworthy is that debt !?

Yes, (Rich)...this is a "long and complicated" debate !

Druid : Argentina, oil, China, Russia, Euroland...you, me, many forumers...all are increasingly wrestling with the dollar's credibility. The dollar in its function (and use) as the globe's numeraire for trade settlement and reserve...temporary store of wealth.

Not all are following austriches with their heads into the sand. We are increasingly putting the dollar-company's management into question. I don't want to work for...and deliver to this dollar-enterprise. I want to be paid in Valuable Gold, that is NOT priced by the dollar-company.

How and where am I going to find Another employer...wealth preserver !?

Organized Repricing of Gold under the dollar regime is an arbitrary affair...not at all corresponding to the real Value that Gold already should have been expressed in.
Those who really understand this, pray that the dollar-regime, fixing Gold's price, remains in place for a little longer as to be able to accumulate more from the scarsely available PHYSICAL Gold.

COBRA also has Gold, because his intuition is reliable, regardless of the notion of FreeGold !

Druid : Let all those maneuverings for what they are or aren't.
Once your physical Gold is safe in your hands...you are NOT going to be moved by any artificial, arbitrary "repricing".
Once you understand the gigantic power of physical gold as property in your possession...you wish to hold this wealth power.

The accumulating Giants of physical gold wealth, haven't been accumulating this tangible for having it exchanged for worthless debt paper, somewhat later at a price that has been engineered by that same debt paper...the dollar.

It is the amount of Gold that says how wealthy I am...and NOT the $-debt-numeraire that is presently "mis-pricing" my Gold. That's what Argentina understood after being burned with its dollar-fix.

The IMF maneuvering is Another attempt to confirm that Gold and dollar-debt are associated. It is the debt-dollar that is pricing (repricing) again the Gold wealth. Gold is being "fractionalized"...AGAIN ! More debt against the same amount of Gold.

Gold needs a new and worthy numeraire ! A real lover, not a....dadadababe.

Don't lose one more night of good sleep with the thoughts of goldsales with or without any repricing.

We are walking towards the rehabilitation of Gold "Physically" traded in association with a worthy numeraire.

Papergold is worthless unfree Gold. The so called money that one makes with papergold is simply more of the same debt, increasingly becoming uncredible and therefore going out of use ! Ask oil ...regardless if it has peaked or not yet ! Watch the chinese...regardless of their yuan being pegged to the debt numeraire or not ! Ask the ECB...regardless of the amount of eurodollars stashed as reserves ! Ask mother Russia...regardless who is allowed to take the oil out of her womb ! Ask other Asians how they are storing their wealth...regardless of how credible that dollar is or isn't. Ask...

Belgian
@ mas
The US (and Euroland) knew very well the scale/magnitude of the consequences that would follow Iraq's occupation !!!
This just sounds as cruel as it is. Don't let the decision takers pass for infantiles. You are doing them a favor !
Don't accept the "classical" softeners...
Stick to the very "cruel" ...appaling...realities. Wars are not a sequence of infantile mistakes. Find the bottomline reasons for "making" wars.

Of course, Euroland is extremely worried about the escalations in the ME AND many other oil-places !!! Euroland has much more to lose than the dollar has to gain !!! A very wacky rope to balance on.

And here it comes...Is this the reason WHY Gold cannot be marked to the market in euro !!!-??? (A/FOA timing)

That's WHY Euroland abstains from comments on 9/11...Iraq...ME...Russia (Caucasus-Caspian region).
The only ones silently talking are the oil-price and the �-$ exchange rate.

Tony's hartproblem is publicly steamed ready for an eventual elegant exit strategy.

Oh dear...what a "wilderness"...
mas
Belgian, your point noted.
So in fairness to all, how in the world do we escape the coming recession/depression. Only with gold at our side? I live in a place where we really struggle from day to day, so we are already practiced at the inflation problem. (Adding another zero to the end is not a problem).
It's not easy but when the below is mentioned it just tears at me to see the way the mechanism works and that we (third world) are expected to accept it!
Looks like we are all arriving at the same target, if this system is finished what will take it's place and how will it look? Free gold and? We need leaders to really sell this idea.

From the Privateer.
Looking Straight At Them:
Here is a fact contained in the Financial Report of the United States
Government, 2003, Financial Management Services, U.S. Treasury. It is
on page 4 of the report, in the "overall perspective" table:
"The $US 3.7 TRILLION deficit is the difference between �total assets�
minus �total liabilities & net responsibilities�, otherwise known as �net
worth� in 2003 versus 2002, deficit net worths respectively of $US 34.8
TRILLION and $US 31.1 TRILLION. That $US 3.7 TRILLION is true
actual shortfall in 2003 government operations. With 2003 gross domestic
product (GDP) at $US 10.83 TRILLION, that places the US annual budget
deficit and total government obligations at respectively 34.2% and 321.3%
of US GDP." (Yes, the grammar is bad, but this is a verbatim transcript.)
Belgian
@ mas
I prefer to call the coming period ..."a transition". Let the historians define (discuss), later, how this should be called.
Escape...or profit...from this coming transition ? Depends entirely on one's personal situation.
Swimming through the transition with speculation and gambling (wish them all the luck in the world)... or prepare for the worst with zero debt and as much Gold as is possible...under your matrass (cocoon).

Don't put any faith in so called high profile leaders or false positive perception building. Know that behind those leaders, there are wise (silent) realists that suggest appropiate answers to remedy the cruel realities as they evolve.

In these increasingly uncertain times, leading to transition, I do see, as objectively as possible, increasing responsibility efforts in Euroland.

Crisis : unemployment - job insecurity...
price inflations...
contracting economies becoming less and less profitable...
wild swings in currency exchange rates...
more debts and minimal sanitizing defaults...

Note, dearest mas, that everything possible will be done to produce-picture, reasons for positive outlooks. Makes it very difficult to assess the nature of the coming transition period. Violent/brutal or dragging ?

Euroland catholics are taking serious steps to "westernize" islamism. Difficult multilateral Dialoque or bombs !?

On the global economic front...all that matters is the currency contention, centered around the dollar's credibility. I only see Gold as the right anticipation of the dollar's demise. I don't want to carry debt-load when walking through the unknown desert. Where will I find drinkable water (job-income-profit) !?

An increasing amount of folks, with fiat savings, are getting increasingly nervous. Where do I invest-put my confetti (debt digits)!? Most savers are running out of alternatives with a reasonable risk/reward profile. How long will...can this degrading status quo go on !? I am talking about Eurolanders' sentiments. Can't talk for AA sentiments.

If this situation should aggravate over a substantial longer period...the Gold alternative might find very fertile ground to be presented to the broader masses !?

Mas, I don't have a crystal ball and am not sure that I learned enough of my mistakes...smile and live on the bright side of life, mate.
Sundeck
Essay Contest
With respect to gold, the election doesn't matter because the environment in which gold currently resides is of neither man's making; nor is it likely that either man can significantly change that environment in their time-span of office. To do so would require outstanding national and international leadership, of the kind George Bush definitely does not possess and John Kerry has not demonstrated to date. (I suppose it is possible that one or other leader might blunder catastrophically onto the world stage like a drunken gorilla � which could be "good for gold" � but I don't want to discuss that possibility.)

The systemic problems confronting the US-dollar have been building for more than fifty years � longer, in fact, than either man has been alive. The global perception of the dollar, and of the US, is deeply ingrained within trade, finance, cultural exchange and international rivalry. Gold is connected to all of these things � hiding behind the dollar's cloak, but there nonetheless. That cloak is becoming tattered, but it is not yet going to fall away in pieces. There are just too many nations and financial interests with a stake in keeping Uncle Sam moderately well-clad � even if the cloak be loaned and his pockets are empty. (Can you imagine seeing Uncle Sam in the all-togetherness? Egad! What a sight!) Hence, you might say that Uncle Sam is using credit to buy time while he finds another tailor. That won't be soon � no-matter who is in the White House.

But, you ask: "Might not Uncle Sam learn to be humble and to patch his own clothes himself?" Alas, it is unlikely that America's perception of itself is going to change quickly � certainly not within a generation or two. Rampant consumption and debt might be offset by industry and innovation, as occurred to some extent during the "silicon revolution" of the 80s and 90s, but the US no longer has a mortgage on industry and innovation (not that it ever did). Short of another similar technological revolution unfolding within America, such as that last one that fed the great share and bond market bubbles through monetary expansion and over-confidence (not just at home, but also internationally) in the "strong dollar", I'm afraid the US is going to be ground down inexorably: pressured by debt, cultural intransigence, covert global hostility, aging petroleum-based infrastructure and the belief that security can be acquired through overt military might rather than through personal and societal discipline and cohesion.

While either George or John fiddles, the dollar will burn � and gold will rise. Neither George Bush nor John Kerry, nor anyone else in America, can ever again delude the thinking world into believing that the dollar "is as good as gold".

;-)
R Powell
Freegold
Topaz has given me a definition of "freegold" as gold which is bought and sold on a cash basis only. Can anyone else offer a simple definition. Belgium offers that a simple definition is not possible.

I asked Topaz for some examples of items that are bought and/or sold on a cash basis only....
This was the reply...

"Not offhand Rich, maybe certain Cashcrops of the illegal variety or hitech research material? Generally stuff that is traded outside the system already might provide a "here and now" parallel comparison with FreeGold."

Thanks Topaz. My first reaction is to wonder if freegold would be included as an item bought and sold for cash only for the same reasons that illegal items are so transfered? As far as I know gold ownership is not illegal so I'll dismiss this connection. Why are there no other legal items (tangible possessions or commodities) that are bought and sold "on a cash basis only"?
rich
R Powell
Freegold (continued)
Thanks Belgian for the response.
You mentioned that "freegold" is not easily defined but you did offer this...

"FreeGold = a, fiat dollar-debt free, Gold"

This again begs for definitions. Can we define gold as a rare, precious metal, often held as a store of wealth?
And that dollar, or any form of money, can we simplify by stating that money is a means of exchange? How can gold be bought and sold if not by utilizing the convenience of some monetary form. Without such, aren't we back to bartering tangible items..ie so many baby pigs or bushels of corn for some weight of metal? This gets complicated when trying to buy a loaf of bread when all one has to barter is animals or building materials. How would you value gold if not in terms of a monetary unit...albeit monetary currencies are always in flux as to their relative values...albeit most fiat currencies tend to devalue over time...albeit monetary currencies are imperfect. However, don't they serve their purpose as a means of exchange, maybe transfering the ownership at a fair (agreed upon) price which price may change momentarily. Does not the monetary value of all tangibles change constantly?? Isn't this exactly why paper money makes for an excellent medium of exchange but an extremely poor store of wealth? Isn't this why gold makes for such an extremely safe store of wealth? But, be that as it may, How else would you transfer ownership without money??
Thanks for the conversation and happy weekend!
rich



Smeagol
FREEly available Gold, for cash on the barrel head only
Perhaps, in those days, one will not be able to buy Gold except at certain places, like banks or jewelry stores, and only cash in the form of the country's currency will be accepted for payment, by law? No credit cards. No paper-Gold. Because the Gold in your hand will BE the wealth behind the currency, and that is the only paper numeraire it can be exchanged for? Neither would this prevent It from being physically traded for other goods of equivalent value.

S.
Belgian
@ R. P.
Yes, we will continue to make all transfers through a numeraire (confetti-digit). But don't let any numeraire say what the "WRONG" price is of Gold. Don't accept a goldmarket that has been put upside down. Advocate a Free goldmarket, wich can only materialize if Gold is traded physically.
Maybe, if and when the monstrous derivative market collapses...we will go back to trade financials fully paid for and not with leverages. The enormous (disproportionate)financial industry has become a huge "price-playing-lotery". People aren't encouraged to "own" things anymore. Go and "play" the thing..."make" your confetti "work" and have a great time ! Paradise, Rich...paradise ???

We will see how it turns out,... all together.
Smeagol
Expanding on our previous Post...
We are assuming that the country's Gold-reserves will be a source of Gold to the public in those days, and that the value of the country's currency is reflected in the Gold-price. If one country inflates it's currency supply, the price of Gold in that country will rise, and the currency will lessen in value in regards to other currencies. Gold will be a currency-barometer. This would seem to encourage a country to desire to have as stable a currency as possible, that stability being something that will tend to attract people to that currency.

But then, looking at history.... (sssigh)

S.
Belgian
Indeed Smeagol....
Imagine you exchanged your physical for a packet of dollar notes or debt digits on friday...And on monday you see/hear/experience... that the dollar digits have devalued by 20% or that the exchange rate has declined Another 1%...
These are the realities. That's WHY the physical trade of Gold with the dollar numeraire has been discouraged and marginalized. Don't accumulate that dumb physical...be smart and play its price ! And keep on playing whilst the numeraire keeps on depreciating, endlessly ! Never consolidate your wealth through time. And if there are too much infidels who dare to accumulate and hold that physical...we will teach them a lesson >>> we will "under"price their Gold and stick it to them !!! Much later they will dig up their Gold and throw it on the market for two times nothing...hahahaha !

And then came WAG ! Bangggggg... !

Those many who abandoned in desperation their Gold Wealth will be knocked a second time when they see what is happening with Gold now !!! How could they have been so stupid !? The $-papergold machine has been crushing their resistance during a full 2 decades.

Probably Prechter was trying to sell some crystal ball stuff to these former goldholders ?
Smeagol
Never paper...
O Ssir Belgian... we have never bought Paper-Gold. We can't afford it!! ...we CAN afford real, yellow, heavy METAL, once in a while! (grin)

S.
Chris Powell
Reply to Liberty Head about monopolies
Liberty Head, I must disagree with you when you
write that "monopolies are the product of government
intervention." To the contrary, in an unregulated
capitalist system, monopolies happen all by
themselves and are even the INEVITABLE RESULT of an
unregulated capitalist system. That is American
economic history, as with the creation of the "trusts"
and the formulation of anti-trust law to break them
up.

In an unregulated capitalist system, business
owners combine, working together under joint
ownership or management to drive out competition
and to control prices. Business owners in the
United States today STILL combine surreptitiously
by fixing prices; that is what so many current
anti-trust cases are about.

Anti-trust law, faulty as it may be on the margins,
was devised to preserve capitalism and free
markets against monopolies. Government is the
only protection against monopolies; better
products have nothing to do with it. Indeed, without
anti-trust law the inventor of a better product will
quickly be bought out or coerced or, most likely,
simply squashed by the monopoly or trust controlling
the market for his product.

This can happen in ways you might not anticipate.
In my business, the newspaper business, I have
seen it often. For example, a dominant company
may squash a competitor with a better product by
forbidding the dominant company's vendors from
doing business with the competitor. Then the
competitor can't produce or market his better
product -- or at least the dominant company can
drive the barriers to entry to the business so high
that introducing the new product is too expensive
or impractical.

Where I live, in Connecticut, over the last decade
a couple of big media companies have simply
bought up and combined what had been many competing
newspapers and broadcasters. As a result, in most
Connecticut cities now the dominant daily paper
and the dominant weekly paper are owned by the
same company. Competition is gone, and the barriers
to entry into the business are so high that no one
has come in to restore competition. One company,
Tribune Co., now has combined, through acquisition,
Connecticut's only statewide newspaper, the state's
only statewide chain of weekly newspapers, two of
the state's five commercial television stations,
and the state's biggest direct-mail advertising
company.

Because the political influence of big business
is so great and because the political influence of
media companies is even greater, neither the
state nor the federal anti-trust authorities have
chosen to do anything about this -- combination
of competitors by acquisition and the destruction
of competition, the classic pattern of a century
ago.

Please don't let your ideology blind you to
experience and history. Democracy can prevail
and prosperity can be shared widely only when
the law prevents anyone from getting too big
and powerful. If you don't want government to
have any power, you can bet your life that
the same power soon will be exercised by J.P.
Morgan Chase. Indeed, it is already happening.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Boilermaker
Barron's
This week's edition of Barron's has a couple of articles that begin to address issues we goldbugs rant about ceaselessly, the pilaging of America's manufacturing sector by its financial sector and Jim Turk's interview about gold and the marvelous shrinking inflation stats by the BLS magicians.

Alan Abelson in his "Up and Down Wallstreet" column offers a chart by Ray Dalio of Bridgewater Associates that shows the percentage of total annual US profits that are contributed by the manufacturing vs. the financial sectors of our economy from post WW2 to now. It shows manufacturing declining steadily from the 50-60% range in the 1950's to the 25% range in the 1990's and diving recently to 10%. The financial sector was in the 10-15% range in the 50's but now accounts for more than 40% of profits.
Here's an excerpt;
"Ray explains this distressing growth of largess among people who labor in money rather than in things by the unyielding rise in financial assets and liabilities over the years, a rise that has far outpaced GDP as a whole, and the more lucrative fields of finance cultivated by investment types. He does point out that the only inhibiting element in the fabulous growth in profitability per money shuffler has been the rapid growth in their numbers."

In my own view this is a Ponzi scheme made possible by the reserve status of the $ and a gullible world willing to manufacture for us and let their chips return to fund the financial game. The ultimate loser will be the US which has sold the "farm" to the Asians. We won't be able to convert our oversupply of money changers into manufacturers fast enough to avoid a collapse when the $ fails/falls.

The other article, an interview with James Turk, has been referenced elsewhere and is most remarkable simply because Barron's, a highly-regarded mainstream financial weekly, has put it to print. It's sort of like the Republicans calling for higher taxes before the election.

Chris Powell
A postscript in reply to Liberty Head
Liberty Head, a delightful and instructive
antidote to your faith that a better product
will always triumph is the classic Alec
Guinness movie, "The Man in the White Suit."

Guinness plays a British tinkerer who invents
a fabric that repels dirt and never wears out.
At first he is embraced by a major textile
manufacturer that plans to put his product
into production. But then the manufacturer
and the whole British textile industry
realize that the success of his product will
dramatically reduce their business over the
long term; if clothes don't wear out,
nobody will buy a lot of clothes. Soon the
tinkerer's own company and the whole textile
industry are chasing him down to suppress
him, and, of course, the textile labor unions
join in.

The moral as I take it: Big business and big
labor are BOTH everyone's enemies -- anything
big is -- and some counterforce is necessary
to keep them in line.

What else is there but government?

Of course government can get too big too. So
we strive for the old American ideal of
limited government, and we try to maximize the
sphere of the individual.

That's where the private ownership of precious
metals and a free market in precious metals
come in.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Camel
Great posts Chris!
Very much appreciated.
Liberty Head
More on Monopolies and Anti-Trust

Karl Marx sure did a good job of disseminating the fear of monopolies. Truth is, the will of the masses cannot be constrained by any monopolistic construct for long.
When Enron's deceit was found out, market forces put them out of business over night. The wheels of the anti-trust vehicle turned very slowly. The government and it's major media cohorts needed time to construct the spin to cover their complicity and paint themselves as saviors.
Monopolistic constructs in the major print and TV media have driven truth seekers to the internet.
Anti-Trust law itself is one part of governments monopoly on the use of force.
A free market is the most efficient mechanism for restoring balance from market imbalances.
----------

Chris Powell,
Have you seen "Treasure of the Sierra Madre"?
My attitude towards anti-trust law is much like Pancho Villa's.
"Badges? We don't need no stinking badges." Ah ha ha ha.

Best Wishes
Aristotle
RPowell -- "Why are there no other legal items ... on a cash basis only?"

Art!!!!!!!!!!!!!!!!!!!!!!!!!!!

Every painting and sculpture in my library is not victimized by the paperization/monetization pricing debauches that we see all over the place in the system. It seems that we banking-minded westerners have a long historical penchant for fungiblizing everything into a bankable dollar-derivative, and once we can get it on a balance sheet, we can multiply it and trade it around the world flowing like a wind. The more that the wind blows up a dust storm of confetti, the harder it is to see through to the real value of the original physical item in question.

Gold was a natural, early candidate for this paperization/victimization because it is so uniquely, fungibly-suited for this purpose. And in the long view, that's all well and good for us, because it allowed the concept of *money* to be developed and refined in the first place! Can you imagine a world without money???! But now it's time to let money stand on its own two feet, and to free Gold from the sufferings of that long wrong-footed association. Gold must be allowed to be tangible again, or else we are all merely denying ourselves of a wonderfully valuable economic resource to provide safe physical savings to work in tandem with our convenient (but risky) checking accounts.

Art escaped that paperization-victimization due to its one-of-a-kind, non-fungible nature. But for most of us it's not a good choice for savings because it lacks liquidity -- arrange an auction or two and you quickly tire of the hassle. It's also at unacceptible risk to fire.

And so on, and so on.

Gold. Get you some. --- Aristotle
Gandalf the White
TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !
THE ESSAY CONTEST !!!

LESS than Twelve Hours until Entry Deadline at MIDNIGHT today !!

Let us NOT forget that we have AN ESSAY writing Contest !
===
Don't wait until TOOOOO late on Sunday, as it takes a while to type and proofread your entry !
<;-)

The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 3, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 4th !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to each of the two runners-up.
===
<;-)
Smeagol
Art and patio furniture
Ssirs Aristotle and R Powell, could not anything sold at auction qualify, even patio furniture (grin), since immediate payment is usually required?

How about anything that is sold secondhand, say at garage sales or on e-bay? Consider the amount of exchange that takes place in those venues, under the radar of the markets.

...but Ssir Ari is correct, Gold firmly anchors one end of the spectrum of fungibility... though some view It, knowingly or not, through a rose-colored paper-gold filter.

S.
ge
mas
Thanks. The Privateer is always interesting. Best Regards,
Chris Powell
Maybe the best words about monopolies
"I am against bigness and greatness in all their forms,
and with the invisible molecular moral forces that work
from individual to individual, stealing in through the
crannies of the world like so many soft rootlets, or
like the capillary oozing of water, and yet rending the
hardest monuments of man's pride, if you give them
time. The bigger the unit you deal with, the hollower,
the more brutal, the more mendacious is the life
displayed. So I am against all big organizations as
such, national ones first and foremost; against all
big successes and big results; and in favor of the
eternal forces of truth which always work in the
individual and immediately unsuccessful way,
underdogs always, till history comes, after they
are long dead, and puts them on top."

-- William James, letter to Mrs. Henry Whitman,
June 7, 1899, as quoted in "The Letters of
William James, Volume 2," 1926.
Great Albino Bat
The tale of 'The Man in the White Suit".....

Reminds me of the case related by Pancirolus (I love obscure authors!) in his book "Lost Inventions of Antiquity" or some such title...

In the time of Augustus Caesar, a man invented an unbreakable glass. It was flexible. This remarkable invention came to the attention of Augustus, and the man was summoned to his presence.

"Have you told anyone the secret of your invention?" asked Augustus.

"No, my lord, no one."

"Good." And then Augustus gave order that the man should be executed at once, for the reason that such an invention would destroy the glassmaking industry.

End of story.

The GAB

Great Albino Bat
Chris: you have the support of Adam Smith, on monopolies....

Somewhere in "The Wealth of Nations" Adam Smith mentioned (about 1760?) that whenever two or three businessmen gathered to discuss trade, they were probably hatching a plot to suppress the influence of the market, and arrange matters in their favor.
Chris Powell
Adam Smith presaged George Bernard Shaw
Thanks, GAB, for that great story
and the quote from Adam Smith. A
similar quote from George Bernard
Shaw sticks in my memory from my
days fighting the lawyer clique
that runs our judicial system:
"Every profession is a conspiracy
against the laity."
R Powell
Freegold (continued)
I've added another stipulation to the definition...as explained by Belgian...so now freegold is gold that can only be bought or sold on a cash basis and can have no claim of ownership through partial payment (as derivatives do). Is this correct?

Aristotle has thought of another item...works of art...that fit the definition. Thanks Ari.

Belgian has added the following...

"Maybe, if and when the monstrous derivative market collapses...we will go back to trade financials fully paid for and not with leverages. The enormous (disproportionate)financial industry has become a huge "price-playing-lotery". People aren't encouraged to "own" things anymore. Go and "play" the thing..."make" your confetti "work" and have a great time ! Paradise, Rich...paradise ???"

It is my opinion that should the markets collapse we will surely be back to a cash basis only exchange. If the economic situation deteriorates that much I doubt if any paper money or promises will hold any value. Brute force and firepower may be the ultimate possessions if we regress to that point. Paradise??? Belgian, I never mentioned any destinations at all!! I'm merely trying to understand the concept of "freegold", I'm not talking about religion, afterlife or anything else that I can connect to Paradise..????? Has Paradise something to do with freegold?

Art, as Aristotle has mentioned, does usually change ownship on a cash-on-the-barrelhead transaction. Should gold? As Aristotle also mentioned, pieces of Art are not very liquid in that buying and selling are not everyday occurances for the average person. Should other items also be bought and sold on a cash basis only? How many would own a home if all houses had to be bought and sold on a cash basis only....no mortgages (mortgages are derivatives!)...cash only? How many vehicles are bought with cash...no payment schedules as they are paper transactions...not payment in full. If gold should be "freegold" what items should not be "freeitems"? Should there be no credit cards? Should all transactions be "freebought" and "freesold"? Would this be beneficial? No loans made and no debt owed. How many of humanity's great advances would never have happened if there were absolutely no capital available for the Edisons, Fords, McCormacks, Whitneys and Gates in this world? Even the Middle Ages advanced the concept of letters of credit so that commerce could progress beyond two farmers trading potatos for apples. Paradise indeed!
Thoughts?
rich



Sovereign
"Freegold" and Mr. Belgian
According to Mr. Belgian, the euro, by virtue of merely pricing what is supposed to be the price of everything else -- i.e., gold -- is in effect doing gold a favor by sublimating it into this so-called freegold.

It's disingenous to claim that a currency that competes with gold as money is actually gold-friendly. The only circumstance under which ANY currency could be presented as gold-friendly is if said currency were convertible into gold. That the euro is going to "price" gold by adding an additional zero at its end does not make it superior to the American Federal Reserve Note. It in fact wastes extra ink.

The goal is not to be able to "punish" profligately-spending politicians by buying gold and selling the fiat that they overprint in order to pay for bread and circuses to keep their constituencies happy. The goal is to make this impossible for them by using money as money. And the only money is silver and gold.

S
Topaz
@Rich.
I get the impression a "simple" explanation of FreeGold leaves you still scratching the noggin in confusion Rich so, if I may, let's take a pragmatic look at Gold and perhaps open that third eye of yours ;-)
History records Golds rise to prominence as the definitive numerator in Trade up 'till early last century. Then we witnessed a slow progression over the next 100 odd yr's as Gold was replaced firstly by promises, then by "kinda-promises" (Gold Standard) to the present where Gold plays no official role in Trade settlement (the $/Oil Standard).
All through this transition the undercurrent collective desire to hold Gold has not diminished Rich and as Systemic Management grew and Grew, so too did the many and varied ways to re-channel this natural Gold tendency into more systemically acceptable alternatives.
Have they been successful in "harnessing" Gold these last 100 Yr's Rich?...
...or, has systemic management simply been successful in "hiding" Gold?
Given Bretton Woods, Gold window etc. I'd conclude a litany of failure re: Gold is close to the mark, Yes?
SO, our esteemed Architects could quite reasonably be expected to acknowledge this fact and devise a system, retaining ALL the bells and whistles developed throughout last century however also acknowledging this time-tested GOLD as the asset it IS, WAS, and WILL BE!

Kinda like keeping the Baby AND the Bathwater.
Druid
miner49er (10/2/04; 19:06:09MT - usagold.com msg#: 125010)

"Nevertheless, the point still being something akin to the concept behind IMF operations a few years back with Brazil. I don't recall the details, but effectively a type of sale/repurchase that didn't change the IMF gold holdings, but revalued a portion of the gold to finance the settlement of Brazilian obligations coming due. Unless they must, these institutions are not selling large volumes of their gold into the abyss of general consumer demand. This we know."

Druid: Miner49er many thanks for your reply. I always enjoy reading your commentary. I recall this "workout" years ago, however, I'm not so sure that this is going to be the same solution for the Argentinian problem. Maybe its my shortcomings, but why would the Argentinian Central Bank be buying bullion directly in fairly large quantities?

I know I may be way out on a limb here traversing a different part of the universe but I have to wildy speculate reference the daily news hands that are dealt because I sure in the heck don't believe most of the numbers and spin that are disseminated these days.

Who has actual physical control of the bullion that the IMF accounts for toward allocated reserves? Maybe relations have been stretched to thin such that a repricing solution can't be reached and one must give up one's stash of the yellow metal (being held hostage) to acquire ANOTHER stash. After all, we're all civil gentlemen in these agreements are we not? Maybe the end game by the Argentinian's is that we're tired of your debt hedgemony and we'll call and raise you bullion acquiring it with those precious notes we recieve in trade.

A reprice from the current fictional fixed price per ounce to the present paper market fiction would not roil the markets in any sort of a major way as this would be an internal action by the IMF used as a stop gap measure for this particular situation. However, taking FRN's and using them to acquire bullion instead of making bond payments has become an external problem and might be construed as insulting which becomes a whole other matter in and of itself.

This really makes me wonder about this call for a devaluation at this point in time? I know what the prevailing mythos is as it pertains to our trade deficit, however, the last three years of data suggest a whole different truth.

By in large, in my humble opinion, central bankers of the world have evolved into flat out pure market speculators albeit in a consortium type of arrangement. It appears that central planning for us serfs (the mainstay of their job descriptions) has been put aside for more pressing issues.

I certainly wouldn't want to be blamed for one hell of a mess I created so if I were in a position to jawbone and set into action one set of speculators against another set and then have "capitalism" take the hit, hey, what a deal.


@Rich, "FreeGold" means to me, having gold priced by a mechanism(market if you will) that separates out the players who can bid and pay for physical gold bullion in cash from the players who need credit. A culling process.

@ Belgian, keep it coming my man. You keep the old mental wheels a spinning.
Sovereign
Freegold means BIS/ECB/Euro win against IMF/The Fed/dollar?
Mr. Belgian and Others have claimed that these two factions do not share the same interests and are in fact rivals. Let me quote you from a mouthpiece of the Anglo-American (IMF/Fed) side, Carroll Quigley. He writes, in TRAGEDY AND HOPE, that the goal of the International Bankers was

"...nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the BANK FOR INTERNATIONAL SETTLEMENTS IN BASLE, SWITZERLAND, A PRIVATE BANK OWNED AND CONTROLLED BY THE WORLD'S CENTRAL BANKS WHICH WERE THEMSELVES PRIVATE CORPORATIONS [emphasis mine]. Each central bank, in the hands of men like Montague Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmer Schacht of the Reichs Bank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, amd to influence cooperative politicians by subsequent economic rewards in the business world." (p.324)

Stephen Birmingham (in his book, OUR CROWD, Dell Publishing CO., New York, 1967, p.400) says the person who played the most significant part in getting the Federal Reserve adopted was Paul Warburg. Paul was married to Nina Loeb of Kuhn, Loeb and Company. He represented the "old money" of Europe.

Mr. Belgian,

why do you claim that the BIS and the ECB have different masters than the Fed or the IMF?

S
misetich
China Rebuffs U.S., Refuses to Give Timetable on Yuan
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aqInugWKloSg&refer=homeSnip:

Oct. 3 (Bloomberg) -- China offered no new timetable for changing a nine-year-old peg of its currency to the dollar, and warned U.S. policy makers not to press too hard for a change.

``What we are trying to do is create the conditions for a market-based exchange rate,'' Central Bank Deputy Governor Li Ruogu told bankers at a luncheon in Washington. ``If you force China to change it will hurt the U.S. You destroy a goose that will give you a golden egg.''
.....................
The U.S. and Japan say China's currency is at a depressed level, giving Chinese producers an unfair advantage by making their goods cheaper abroad
................
Goldstein and the IMF say China needs to raise the value of the currency in order to ease inflationary pressure.

Li today countered that China has already taken enough measures to temper growth.

``Starting from last year, we did see some over investment in some areas,'' he said. ``We tried to mitigate the problems. Investments have come down, credits are gradually coming down, all these figures tell as so far so good.''
*************
Misetich

Just as expected China is standing firm -

It is interesting on how Japan is joining in crying foul.

Morgan Stanley's S. Roach, has ANOTHER excellent column

Snip:

Make no mistake -- China is increasingly in the driver's seat of an externally-dependent Asian economy. It is the region's low-cost producer, with unmatched scale and scope and with a production platform endowed with the latest in new technology and supported by spectacular infrastructure
....................
An interesting and important divergence in global currencies has come after the dollar's recent peak in early 2002. The bulk of the dollar's adjustment has occurred against the European axis. While the trade-weighted euro is up by about 20% since early 2002, over the same period, the trade-weighted yen has remained essentially unchanged
..................
The world cannot afford a destabilizing turn of events in the Chinese economy. Yes, China has a long history of boom-bust cycles -- the last serious one coming in the aftermath of the overheating of the early 1990s. But the Chinese volatility of yesteryear came when China played a very different role on the global stage
**************
End of snip

Chinese are confident their micro controls being applied is sufficient to curb overheated sectors and thus far they've been successful.

Their success gives them the momentum to keep forgin ahead building their infrastrure and thus keeping the pressure on commodity prices and most important OIL

Its unlikey anything will change in the short term - (3-6 months) thus the industrialized west needs to adapt - and as time rolls on China will be getting stronger

Taiwan is a main issue.

All Aboard The Gold Bull Express - Part ll
Goldendome
Contrary Investor -- October observations
http://www.contraryinvestor.com/mo.htm
In keeping with Halloween, the folks at Contrary Investor have titled their October observations: The Outer Limits.

They make the point, that what we are seeing with regard to regulatory scrutiny and criticism of Fanny Mae and by default, Freddie Mac., is likely to have far more reaching ramifications than what may appear presently. The use of home equity extraction to fund the U.S. consumer economy, will in all probability never be the same, as higher %'s of equity to loans outstanding will be demanded and balance sheet growth at the GSE's will be scaled back, possibly even reduced!

The C.I. report goes on to point out various areas within the economy that morphed to "the outer limits" and now appear to be on a return path to this universe. Some examples of economic areas that have traveled to the outer limits are: Dollars of debt required to produce a dollar of GDP, home sales, low fixed mortgage rates, auto sales, and low U.S. personal savings rates.

They also point out as a possible pointer that the economy is on a return from the outer limits, the fact that despite a move down in mortgage rates recently of 1/2%, re-fi applications have barely wiggled on the mat, after being knocked out earlier this year. The inflection point, they say, possibly-may only be accurately viewed historically, as it may be such a slow stop and reversal that it may be difficult to perceive the tipping point (like stopping and reversing course on a huge ocean liner.)

However, they point out that it has been the tax cuts, interest rate cuts, and the extreme financing of the GSE's that have made the consumer driven uptick in the recent year's economy possible. The tax cuts are done; the interest rates have reversed, and now the GSE's (the no-host, happy hour bar of financing) appears to be in the process of significant curtailment.
Aristotle
Rich, your close, but still missing the angle
Specifically:
"Art, as Aristotle has mentioned, does usually change ownship on a cash-on-the-barrelhead transaction. Should gold? As Aristotle also mentioned, pieces of Art are not very liquid in that buying and selling are not everyday occurances for the average person. Should other items also be bought and sold on a cash basis only? How many would own a home if all houses had to be bought and sold on a cash basis only..."


In the FreeGold paradigm of transactions I'm trying to get across to you, maybe you shouldn't put your interpretive emphasis on the *CASH* part of "cash-on-the-barrelhead." Rather, see it instead that the product being bought with the cash is itself physically provided right then and there on that same barrelhead!

Mortgages... fine. But understand, clearly please, that the house is "physically delivered" for the buyer's immediate use. Meanwhile, if you can imagine a hypothetical "physical dollar," on the other side of this transaction you can see in the growing supply of unfree "paper mortgage dollars" begins to take its depreciating toll on the value of the individual "physical dollar" -- as reflected in the rising price of houses.

A FreeGold market primarily demands that the Gold be handed over on the barrelhead. So, under a FreeGold paradigm, if *IF* indeed people could arrange through their dollar-lending banks to write "mortgages" on a chest of Gold coins, we'd simply see the price of Gold rise that much more.

The problem with the current Gold market isn't so much whether or not the cash is crossing the barrelhead, but rather, the problem specifically is that the Gold is not crossing the barrelhead. For most of the transactions, papergold is being served up in its place... and silly people are buying (falling for) it!!!!

Gold. Get you some. --- Aristotle
misetich
US Current Account Deficit could reach 61/2% GDP- (R. Brenner - Morgan Stanley)
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0Snip:

Only three months ago, I warned that the US current account deficit � the imbalance with the rest of the world in trade in goods and services, investment income, and transfers � might not peak until it reached 6% of GDP (see "When Will the Current Account Peak?" Global Economic Forum, June 25, 2004). I now think I was too optimistic. Despite a healthy July rebound in export growth, it now appears that the red ink could reach 6�% of GDP before stabilizing and subsequently shrinking.
...............

Three factors have darkened the outlook: First, global growth is now falling short of the US pace, dimming the odds that US export growth can outpace that of imports. Second, payments overseas from foreign investments in the US are now outpacing income receipts from abroad, reducing our income surplus. And third, crude oil prices have jumped by more than $10/barrel since June, and unless that rise is reversed, the US annual oil bill will increase by $40 billion more than appeared likely three months ago.
....................
Most are now bigger obstacles to current account stability than they seemed three months ago.
..............
With imports of goods, services and income now 40% bigger than exports, exports must grow that much faster than imports just to hold the current account constant. The bad news is that this ratio has begun to rise again after being stable for a year.
....................
That's because import prices rise relatively quickly in response to the declining currency, boosting nominal imports................Thus, I estimate that the 2.8% rise in nonfuel import prices over the year ended in June increased the nominal merchandise trade gap by roughly $28 billion over that period.
,.....................
Rates are rising globally, so US investors will also benefit from increased investment income receipts. And most of our debt holdings are in UK securities; rates are higher in the UK and have risen by much more than US rates will have risen by year-end. Nonetheless, in June my colleagues Rebecca McCaughrin and Shital Patel calculated that, other things equal, renormalizing US interest rates could add $60�80 billion (0.5�0.7% of GDP) to the current account gap over the next two years.
....................
The fourth factor that will widen the current account deficit is payments for war, relief and reconstruction in Iraq. The Congressional Budget Office estimated in January that reconstruction costs will run $34�40 billion over the next three years.
..................

As if these hurdles weren't enough, three new factors will increase the red ink over the next year. First, US-overseas growth differentials are starting to widen again. Courtesy of slower growth in Asia, real growth abroad, at 4.3%, has fallen short of the US rate by half a percentage point over the past year. As evidence of the impact, US exports to the Pacific Rim region rose by just 8.7% in the year ended in July, accounting for only 19% of the growth in overall US merchandise deliveries abroad, or far less than their 25% share in total exports.
..................
Second, America's surpluses in services and in income received from investments abroad are at risk. That combined surplus in 2003 netted to more than $84 billion, but it shrank to a $64 billion annual rate in the second quarter.
.................
Finally soaring oil prices have bloated the nominal US imported energy bill, adding $38 billion to the current account gap during the year ended in June. The $11/bbl additional rise in crude quotes since June, if sustained for a year, would add another $40 billion to the current account deficit.
................
************
Misetich

The "optimist" Mr. Brenner has recently turned more bearish - on the US economic growth and now on the Current Account Deficit

The storm is gathering momentum.

All Aboard The Gold Bull Express - Part ll
R Powell
Topaz
Thanks for the response (125053).
I'll agree that our currency is no longer exchangeable "to the bearer on demand" for gold. It hasn't been for a long time.
As to equating money and gold I can almost hear Aristotle saying...Let money be money and let gold be gold. Either can buy the other and either can be sold for the other but does that make them interchangeable or equal? Money can buy a bushel of corn and corn can be sold for money but I don't equate them since corn is not usually accepted for so many other items that money can buy. Corn and gold are not usually exchanged without first converting each into currency and then exchanging the money for the commodity, at an agreed upon rate. Currency, credit, fiat is a means of exchange. Gold is a physical metal. You and I might be happy to exchange an item for gold but not everyone else might. Money is just a medium of exchange, one whose value in relation to different items changes constantly. The fiats of different countries change in value in relation to each other on a daily basis. The amount of fiat necessary to purchase an item one day might change on the next. This may due to a change in the "value" of the item OR the value of the money OR both.
Do you think of gold as an item whose "value" changes at the market's whims on a daily basis?
rich
Sovereign
The synthetic dollar short argument is a fraud

Both borrowed US dollars AND the things on which they were spent, including houses and cars, are in fact CLAIMS against, and represent faith in, one and same thriving American economy. In other words, both the dollar and (at least US domestic) spending on houses and cars represent, and are "backed by," the US economy. As such, it is not possible to claim that the latter (dollar-financed consumption and spending) is a short against the former (the dollar currency) since both are different appelations for the same thing, i.e., a thriving US economy. The US economy is not a short on the US economy. The synthetic dollar short theory is absurd because it is not possible to sell America short against America even if one wanted to. It is not possible to cover this "short", which, by definition, one OUGHT to be able to do, if it really were a short. To sell a house (in America, at least) in order to obtain the dollars necessary to cover a so-called synthetic dollar short is equivalent to attempting to withdraw money from a bank account in order to deposit it in the same bank account. At best, it's a zero-sum game where no one wins. So what's the point of playing?

S



Topaz
Rich ...Gold and "MY" Gold.
The currently perceived "price" of Gold as you know changes daily as market whims take it. Does "value" necessarily change in concert with price? No, I don't believe so.
Someone once said "A Cynic knows the Price of everything and the Value of nothing" (not calling you cynical Rich) so MY Gold has no "price per-se" for the moment and hopefully when/if the time comes to dispossess myself of it, the going "price" will more closely reflect it's "long-term wealth asset value". If such is not the case, I'd expect my heirs to continue to possess it ad infinitum if necessary. I've still got a ways to go yet tho Rich, both in lifespan AND their education!



Aristotle
... or to put it yet another way...
Rich, what do you think would happen to housing prices if buyers couldn't have use of the house until it was paid for, aaaaand,,,,, since it would effectively exist for them on paper only during the span of their mortgage, let's say they also generally bought the house without seeing it -- having seen only an exchange statement of address and architects drawings. They simply assume the house will be there when they're ready to claim it.

Now, at the very same time, let's also imagine if we exploded the "supply" in such a way that the marketplace miraculously had an additional ten thousand paper houses (only drawings and titles, some with overlapping addresses) for each single *real* house (and title) on the planet, offered up for punter speculation to either short or go long the housing market. Wouldn't you tend to think the prices of all these so-called houses in vast supply would tend to be much, much lower than the physical-based FreeHouse market we see today? Under our imaginary scenario, physical house owners and advocates everywhere would surely complain vigorously about the depressing effect that all of the paper houses had upon them realizing the full potential purchasing power of their rare house in hand. But if you were able to see through the pricing/value haze, and knew that this was just a temporary thing, you'd be using the artificial low prices to your fullest advantage, buying up large tracts of housing paid-in-full with keys to the doors in your hand.

It's a bit bodged with holes and lacking polish at the edges, but there you have it... a ponderable parable to the Gold situation today.

Gold. Get you some. --- Aristotle
Aristotle
Rich, BTW
I agree totally with the words "Let money be money and let Gold be Gold."

That was a nice post in both clarity and brevity, a knack that usually finds me wanting.

Gold. Get you some. --- Ari
Gandalf the White
TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

"LAST CALL" for the ESSAY CONTEST !!!

LESS than FIVE (5) Hours until Entry Deadline at MIDNIGHT today !!

===
Don't wait until TOOOOO late on Sunday, as it takes a while to type and proofread your entry !
<;-)

The ESSAY CONTEST is a short ESSAY statement of at least twenty-five words, answering ONE of the THREE following Propositions:

1. If elected, George Bush would be good for gold because___________________

2. If elected, John Kerry would be good for gold because_________________________

3. With respect to gold, the election doesn't matter because_______________

This Essay contest will run until Midnight, Sunday Oct. 3, 2004 (Denver time).

AND, after consultation with the Castle Barrister, it has been decided that the USAGOLD Forum will forego the restrictions on political postings during the time period of THIS ESSAY Contest. (The automatic posting deleation machine will be restarted on October 4th !!!!)

The ESSAY Contest prizes are as follows:

A GOLD 10 Guilder Dutch King (0.1947 of Au) to the best Essay, and an one ounce Canadian Silver Maple Leaf to each of the two runners-up.
===
<;-)
Aristotle
Topaz, I've enjoyed your many posts today
On the latest one, consider this: temporal changes in societies' use for an item can/does drive changes to that item's value relative to all other items. Sometimes to the moon.

Think about the value of a tire, even theoretically as necessary, through time.

How much meat would a caveman likely be expected to trade for the value of a Goodyear tire, had the scenario arisen?

After the automobile was invented, how much more value does that same tire have?

If we put an irreparable hole in it, suddenly how much does it's value change simply because its *use* has necessarily changed due to our shady intervention?

If through new legislation flat-tire ownership could serve as a token of individual taxation immunity, suddenly its value would rise as everyone would want ownership of this powerfully liberating talisman.

Imagine arrival of a FreeGold environment where everyone who was previously blinded by derivatives suddenly sees the wisdom in a savings role for Gold? Couldn't we say that if Gold's prices are rising faster than any other prices that Gold's relative value is rising, too? But, technically, do we attribute this to a change in use? After all, some of us are, already, using Gold savings. Maybe rather than *change* in use, shifts in popularly recognized valuation can be attributed to a new *scale* of use in this case.

Thanks for letting me in on your conversation. Good times, good times...

Gold. Get you some. --- Aristotle
Aristotle
miner-man -- your two camps!
"When prices are visibly escalating from these permanent new oil price floors, and (paper-leashed) gold remains languishing -- because it just keeps coming out of the woodwork in just enough quantities to maintain a superficial credibility of dollar strength vis-a-vis gold -- something will give. I believe that for a brief season two camps will emerge. Some not decoding the signs, will capitulate and sell -- this is what the dollar forces wish to promote. Others, recognizing the lack of credibility of the dollar priced markets, will begin buying very forcefully, and bring the matter to a head, causing spot-settled markets to come to prominence and become the authoritative quoted gold price, just as LBMA is today.

"The ensuing confusion in this brief transition season will cause wild swings in the price, and probably end up with a period of no-offer, as gold holders will not in any effective way be able to even price their metal. All they will know is that it's worth a whole lot. Promise holders on the other hand will find only frustration in any attempts to satisfy a large physical demand at the now discredited prices, and will find no buyers to offload their long paper to. This is where markets that are set up to transact large volumes of physical with spot settlement will become the tool of choice and will bring back order to the gold markets -- but at a very substantially different price level."


BRAVO good sir! I wish I'd seen this earlier -- I'd have applauded sooner.

Gold. Yeaaah, you know the drill. --- Ari
Chris Powell
Russian central banker cites GATA and says gold market may be less than free
http://groups.yahoo.com/group/gata/message/2425Here's the speech that was suppressed
by the London Bullion Market Association.


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

gata-subscribe@yahoogroups.com
mikal
Essay Contest
With respect to gold, the election doesn't matter because everyone is enjoined to do their own due investment diligence, especially as a citizen, family member and sovereign individual. Because of inalienable God-given rights such as freedom of occupation and the responsibility that such power entails, men eventually build upon the honest money examples of their forebears without questioning the basis of it.
But only after man's very dignity and purpose itself is called into question as a result of long-term missuse of every basic fundamental
structure that holds society together.
Then as world crisis and the need for pervasive institutional and conscious paradigm shifts are realized by all, gold and scriptural values will return to greater heights of prominence.
Then, "gold standard" will not mean taking first place from someone else in a staged competition. It won't represent the price fix of gold to a fiat unit of account, exchangeale or not. But it'll mean different things to different people- all the best things it used to mean and then some, such as gold savings.
omegaman
With respect to gold, the election doesn't matter because___
Who really thinks Demopub or Republicrat makes a difference. Two sides of the same coin as far as I can tell. Same camp,different day.
Goldendome
(No Subject)
You got that right, Omegaman! 3rd party protest vote coming-maybe? No chance to win, but a vote of principal??
Topaz
@Ari
Thanks and thanks for that analogy ... mind you, a Caveman sitting there on a Rock extolling the virtues of his pristine Goodyear tyre, prior to the coming of the Auto, could be viewed as a bit of a wally too! Point taken though. (big grin)
Gandalf the White
TA TA TAAAAAAAAAAAAAAAA ---- Essay Contest now CLOSED ! <;-)
THANK you all for all those GREAT Entries !
I and the JUDGES will start our evaluations and notify you all of the results of the final coin-flips -- errrrr --- determinations !
<;-)
WHERE did all the Hobbits disappear too ?
<;-(
Belgian
@ Sovereign @ Rich
I am not claiming anything but simply observe the evolution of the ECB and FED. I wish to detect if...and in what both masterhouses are differing. I conclude that these two houses have embarked on a competitive process. ECB and FED, those 2 old buddies, are divorcing with as less fight (victimizing) as possible. The couple is permanently dis-agreeing !

Rich : Two generations ago, 80% of downpayment + collateral was needed to become credible for a house loan. Young builders were supported with the savings of their parents and their own savings. Today, one only needs to proof any income for the past 3 months and get a 120% loan. Then some insurances are added to cover loss of income and alike.

I smile when I do see the giant wall, called... MODERN (?) "financial industry". Paradise = toooooooo good to be true !
Belgian
Synthetic dollar
All dollars outside the US territory are synthetic...NO LEGAL TENDER...paper ! Have mercy....
Belgian
Question...not a contest !
To all who find the idea and prospect of FreeGold utterly nonsense :
WHY are you having "physical" Gold in your fist !? And WHAT are you expecting to happen with that Gold metal !?

I would like to learn how other gold-holders are thinking...what their motivations and expectations are.
Would like to learn how these different motivations/expectations are "argumented". Thanks.
Waverider
Gold May Top 15-Year High as Dollar Falls vs Euro, Survey Says
http://quote.bloomberg.com/apps/news?pid=10000087&sid=agB1AxUjojeA&refer=top_world_news"Gold prices may rise above the 15-year high of $433 an ounce this week on speculation the dollar will decline and spur investor demand for the precious metal, a Bloomberg survey showed...``There is a good chance gold will break out to a new high given weakness in the dollar,'' said George Ireland, 48, who manages about $100 million at Boston-based Ring Partners LP, which trades in bullion and shares of gold-mining companies.

Rising oil prices and a falling dollar are positive for gold, said Frank McGhee, head gold trader at brokerage Alliance Financial LLC in Chicago. ``If oil prices continue to rise, I would expect that you will see Arab buying of both the euro and gold as they look to defend the value of the petrodollars they are receiving,'' McGhee said.

Waverider: I would rephrase this to, "AS oil prices continue to rise...." Ten years ago China imported no oil at all but in 2003 it overtook Japan to become the world's second biggest importer. China currently has 10 million private cars and that number is estimated to rise to 120 million by 2020. Combine the explosive Chinese demand for energy with Hubbert's Peak and $50.00 oil could be looking real cheap. Even at $50.00, a mean reversion to the historical Gold:Oil ratio of 15.4 (read Adam Hamilton) should value Gold around $770.00.
Knallgold
G7
Pardon my ignorance,but what was the conclusion of the Washington meeting?Did we got any quota on the WA2?Are the camps so divided to only reach the statement "stability is not in threat" ?
Topaz
alt$Gold.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=If the barrage of chatter these last few weeks re: a weaker Dollar combined with this over-enthusiastic PoG can't rein in DX, I'd be thinking DX 92+ next week a sure thing.
A most interesting week ahead to be sure!
Maverick1
G-7
Did anyone really think the World Bankers were going to surrender to Gold this weekend? Until an investor realizes that public announcements are always going to be propaganda, he will consistently lose all he has ever worked for.
Waverider
The Danger of the Current World Monetary System
http://www.arabnews.com/?page=6§ion=0&article=52364&d=4&m=10&y=2004"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." (Daniel Webster)...

Without the misrepresentation just described and with full disclosure about the nature of the US dollar, it may very well be that some US citizens might continue to use and save fiat "dollars,".. But surely foreigners, who cannot be compelled by US legal tender laws to accept our fiat "dollar," would not save it, nor securities denominated in it, as they have been doing - to the tune of approximately $2 trillion. This non-disclosure of material facts contributes to the fiat money fraud. Why we are in danger from the fraudulent fiat monetary system: The problem with fiat money, the kind we have now, is that the temptation for its creators � bankers, central bankers and/or politicians � to manipulate it for their own benefit, fraudulently transferring the wealth of society to themselves by employing coercion, misrepresentation and nondisclosure-has been so overwhelming that they have never been able to resist that temptation.

Gold-as-money � honest monetary weights and measures � has competition: fiat money. The creators of fiat money, banks and central banks, despite their vastly inferior product, have succeeded because of coercion, misrepresentation and nondisclosure. It is significant that, historically, gold did not become money because some potentate or government designated it so. Gold (and silver) have been the choice of the people in open markets from antiquity."

Waverider: Good article out of Arab News!
Clink!
What a difference a month makes !
After a weekend of virtually no computer access (but plenty of chainsaw work after Jeanne !), I was pleasantly surprised by the quality and quantity of posts - excellent stuff, guys ! As a comparison, I counted the posts a month ago Sunday, August 29th had 6 posts - yesterday was 54. Bill Murphy has his Cafe Sentiment Indicator, based on hits and new/renewed subscriptions - I guess we have another one of our own here.
C!
Knallgold
Maverick1
Whats perplexing is that we got NO announcement.It must be what Belgian called "don't move".

I expected at least officialising the quotas/details of the WA2-thats what they said to be on the agenda on this meeting,its now either bad information policy or they could not reach an agreement (no sales altogether?) .One could also have expected the engineering of the second leg up.But I guess there is no room for that without loosing it altogether.The antiGoldforces seem to have as much maneuvring space like a car in the scrap press.
Survivor
Knallgold, Maverick1

Perhaps there have been no public announcements from the weekend meetings, but I get the feeling there must have been some important private communication since I can see no other reason for the sudden increase in the US$ index and the $7 selloff in Gold.

Remember, by the time we hear about anything "interesting", it has already been acted on by insiders.

- Survivor
Knallgold
hmmm...
A sharp selloff in Gold at this time can also mean less support for the $ (whatever that translates into the $ index shortterm).

Inflation IS on the rise,though it has not reached savings accounts (searching for save-haven)yet as Belgian suggested.But the cost of living is rising whereever you look,here gets the package smaller for the same price,there gets a product more expensive.And there are some nasty changes in medical insurance here where your part to the cost is raised constantly and yet the insurance rises also.I'm seeing medical bills from my terminal ill father,nasty,one has to put aside money now to be able to at least being able to pay your #1 importance,health!I could name more examples.

Frankly,I personally start to feel the sling of inflation.It translates now to reduce/postpone/abandon consuming.Well,and (only)Gold is going down!This Forum will call this the failing of the paperGoldmarket.But tell this a sheeple!
Cytek
Russian Central Banker Cites GATA, Says Gold Market May Be Less Than Free
MANCHESTER, Conn.--(BUSINESS WIRE)--Oct. 4, 2004--Movements in the price of gold are sometimes "so enigmatic" and central banks and bullion banks are so involved with it that the gold market may be less than free, the deputy chairman of the Bank of Russia says in a speech obtained by the Gold Anti-Trust Action Committee.


The deputy chairman, Oleg V. Mozhaiskov, made the remarks at a meeting of the London Bullion Market Association in Moscow in June, but the LBMA and other participants in the meeting suppressed it, refusing repeated requests to release a copy. After months of negotiation, the Bank of Russia last week provided GATA with an English translation, which has been posted at GATA's Internet site here:

http://www.gata.org/RCBTakesNote.html

In his speech to the LBMA, Mozhaiskov cited GATA's work at length, and while not formally endorsing it, he showed that the Bank of Russia has been following it closely and knows that much more has been going on in the gold market than is widely acknowledged. Likening the central bank to a giraffe, Mozhaiskov quoted a poem well-known in Russia: "The giraffe is tall, and he sees all."

The central banker acknowledged that the great increase in the use of derivatives and central bank leasing of gold have depressed its price in recent years.

Mozhaiskov also denounced "the blatant lack of discipline" of United States fiscal policy and "the social and economic injustice of a world order that allows the richest country in the world to live in debt, undermining the vital interests of other countries and peoples."

Despite its use as jewelry, gold is mainly a financial asset, not merely a precious metal, Mozhaiskov said, and international financial circumstances are making gold particularly and hard assets generally ever more desirable for investment.

GATA is grateful to Mozhaiskov and the Bank of Russia for their willingness to address gold market issues openly, and we will encourage study and discussion of this speech.
Ned
@ Cytek
Thanks for the GATA/Russian CB story. Absolutely incredible!

@ All

This has got to be one of the most influencial statements in recent memory. IMHO, this is a pre-amble of many discussions (admissions?) to come in the near future. The Russian CB scathing accessment of U.S. fiscal policy is an eye opener. Hope to see/hear more in the very, near future.

Also of interest, which I found interesting, and possible a little anedote this weekend was the Chinese finance minister's reference to (paraphrasing) "harming the goose that lays the GOLDEN eggs" ! Isn't that a riot!

Could it be that the Chinese and Russians are about the pull the rug out?

makcumka
Russian CB Statement
I was in Moscow during the time the speech was made, and walked right by Baltschug Kempinsky Hotel several times and was absolutely amazed by the amount of security was put in place around the hotel. If i only knew it was for the participants of a GOLDEN discussion.

On the related topic, has anyone seen new Russian gold coins with signs of Zodiac? I had a chance to get a hold of few, and they have quite nice designs.
ge
@Belgian
As gold is revaluated, public shall start asking questions. What happened? What happened? Hundred times revaluation (x 100) as FOA suggests, if happens, shall attract a lot of attention. Pop stars and soccer players will be talking about that.

The answer has to be prepared beforehand. Free public discussion about the true nature of money can not be tolerated.

It will be answered that, nothing was wrong with respect to the inherent nature of fiat money, but the problem was that, gold was not free. Now that the problem has been solved, forget about this event, we shall take care of the details. Gold is free, be happy. Economics is a complicated subject after all.

In a fiat money regime, there are two groups of men. A small group, who have the privilege of creating money; and a large group who have to work hard to earn money.

In a commodity money regime, the field is levelled. Everyone has to work to earn money.

Buying gold now, is dealing with today's monetary regime. Being against freegold is taking a political stance in the design of tomorrow's monetary system.
TownCrier
Information and assistance at your fingertips
http://www.usagold.com/Order_Form.htmlNed,
It may be of service for you to know that all recipient's of USAGOLD-Centennial's private Client Letter were on the receiving end of this quote last Monday:

"Although there are only a few reserve currencies, an appalling lack of discipline is demonstrated by the US dollar. As things stand today, the United States is indebted to the external world to the tune of $3 trillion. This sum actually exceeds the total official currency reserves of all the nations of the world -- including the USA. . . The evolution of the reserve role of the American currency in recent years gives grounds for a pretty pessimistic prognosis. The relationship between the state of the dollar and the value of gold is obvious. In relation to our discussion today, this means that gold continues to have particular monetary attraction in the minds of all prudent financial investors."
--Oleg Mozhaiskov, Deputy Chairman, Bank of Russia

It's never too soon to prepare yourself for the journey ahead. Use the url to request an introductory information packet from the most professional gold brokerage I'm aware of -- USAGOLD-Centennial Precious Metals.

As you'll see, providing your phone number is optional; the staff at USAGOLD-Centennial are not in the business to call you with high-pressure sales tactics like we see coming from other firms. You, alone, are in the best position to know when the time is right for you to add gold to your portfolio, and it is for those such times that USAGOLD-Centennial is pleased to provide you with a toll free number to accept your incoming calls.

If you're new to this realm, take your next step toward financial sovereignty and make your request to have a free info packet mailed to you today!

R.
TownCrier
Federal Reserve buys outright $1.19 billion Treasuries
While the fed funds market traded today in line with the FOMC policy target (1.75%) the Fed's Trading Desk nonetheless intervened in the open market, concurrently boosting the 'permanent' money supply by $1.19 billion while mopping up that amount of Treasuries via a coupon pass for maturies in the May 2006 to May 2007 range.

The Fed also provided temporary cash through a $4 billion operation with overnight repurchase agreements.

New money created with greater ease than the typing of this post.

R.
Belgian
MTM...at the last day of each quarter....
Gold's strength ($420) up to the last day of Q3 + the strength of Gold's future (�) numeraire 1,24...was the result of ECB intervention in order to have the desired �-POG + �-exchange rate, for the correct marking to the market of the goldreserves !!!
Today, there is less urgency and the optimum level for �-exchange rate is guarded/defended with the mtm concept.
Take some time to digest this (important) given. Check this out into the nex quarter and view the interventions from the � standpoint sinstead of from the dollar angle.
The � will activate its gold-defense, when the exch. rate risks to go down near 1,18-1,20...
USAGOLD / Centennial Precious Metals, Inc.
A world of satisfied gold owners. Join us.
Gandalf the White
TA TA TAAAAAAAAAAAAAAAAAAA --- Price of GOLD Contest WINNERS !
WOWSERS -- What VOLATILITY !!!
WE HAVE WINNERS !!!!!

The following TWENTY-FOUR persons were at one time "KING of the HILL" today !

---
$$$$ $420.9 $$$$ wehappyfew (9/30/04; 21:41:38MT - usagold.com msg#: 124930)
$$$$ $420.8 $$$$ phil288 (9/30/04; 21:36:22MT - usagold.com msg#: 124929)
$$$$ $420.0 $$$$ Sundeck (9/22/04; 22:29:51MT - usagold.com msg#: 124616)
$$$$ $419.1 $$$$ Rimh (9/27/04; 11:37:55MT - usagold.com msg#: 124753)
$$$$ $418.7 $$$$ ha_tey_o (9/27/04; 18:16:40MT - usagold.com msg#: 124772)
$$$$ $418.6 $$$$ Shermag (9/30/04; 19:07:17MT - usagold.com msg#: 124918)
$$$$ $418.5 $$$$ Waverider (9/23/04; 18:23:58MT - usagold.com msg#: 124656)
$$$$ $418.4 $$$$ Shanti (9/28/04; 14:11:42MT - usagold.com msg#: 124809)
$$$$ $418.0 $$$$ makcumka (9/28/04; 19:26:41MT - usagold.com msg#: 124816)
$$$$ $417.5 $$$$ price (9/29/04; 03:10:37MT - usagold.com msg#: 124825)
$$$$ $417.2 $$$$ Bound Spirit (9/30/04; 22:07:10MT - usagold.com msg#: 124934)
$$$$ $417.1 $$$$ Mumbai_Gold (9/30/04; 21:54:30MT - usagold.com msg#: 24932)
$$$$ $417.0 $$$$ GoldCoaster (09/30/04; 14:22:57MT - usagold.com msg#: 124902)
$$$$ $416.8 $$$$ Henri (9/30/04; 09:12:29MT - usagold.com msg#: 124880)
$$$$ $416.3 $$$$ Gandalf the White (9/26/04; 22:13:23MT - usagold.com msg#: 124734)
$$$$ $416.2 $$$$ Noble1 (9/26/04; 18:22:49MT - usagold.com msg#: 124731)
$$$$ $416.0 $$$$ mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)
$$$$ $415.7 $$$$ R Powell (9/29/04; 15:34:35MT - usagold.com msg#: 124843)
$$$$ $415.5 $$$$ Gondolin (9/29/04; 17:06:39MT - usagold.com msg#: 124851)
$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)
$$$$ $414.8 $$$$ commish (9/29/04; 20:35:07MT - usagold.com msg#: 124863)
$$$$ $414.5 $$$$ balzac (9/27/04; 23:04:06MT - usagold.com msg#: 124780)
$$$$ $414.0 $$$$ Clink! (09/29/04; 11:26:46MT - usagold.com msg#: 124833)
$$$$ $413.3 $$$$ TheJuniorMiner (9/29/04; 21:06:59MT - usagold.com msg#: 124864)
====

Gold (GCZ4) Dec �04 COMEX Contract for Monday, 10/4/04
Open $420.9 HIGH $420.9 low $413.3
SETTLEMENT = $415.6 Change -$5.6
------

AND the WINNERS ARE:

For the GOLD -- A TIE !!!

$$$$ $415.7 $$$$ R Powell (9/29/04; 15:34:35MT - usagold.com msg#: 124843)

$$$$ $415.5 $$$$ Gondolin (9/29/04; 17:06:39MT - usagold.com msg#: 124851)

Now either we could have Sir R Powell and Lady Gondolin fight this out with Swords --- OR

USAGOLD -- Centennial Precious Metals, Inc. could award TWO GOLDEN First Prizes !!

Sir MK has decided to make TWO AWARDS of an one-tenth ounce GOLDEN Canadian Maple Leaf to EACH Sir R Powell and Lady Gondolin !

AND in addition TWO AWARDS to the closest two runners-up !!

$$$$ $416.0 $$$$ mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)
$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)

Sir Mudr and Sir DryWasher shall each WIN an one (1) one ounce Canadian Silver Maple Leaf.

CONGRATULATIONS all you WINNERS !
<;-)
Gandalf the White
ATTENTION POG Contest WINNERS ! <;-)
Will each of the FOUR WINNERS of the POG Contest please send via email to Marie at USAGOLD, ---
1) Their FORUM HANDLE
2) Their real Name,
3) together with a SNAILMAIL address,
for posting of the prizes !

CONGRATULATIONS to:

$$$$ $415.7 $$$$ R Powell (9/29/04; 15:34:35MT - usagold.com msg#: 124843)
$$$$ $415.5 $$$$ Gondolin (9/29/04; 17:06:39MT - usagold.com msg#: 124851)
--
$$$$ $416.0 $$$$ mudr (9/28/04; 09:39:39MT - usagold.com msg#: 124797)
$$$$ $415.0 $$$$ DryWasher (9/25/04; 15:54:00MT - usagold.com msg#: 124708)
===
<;-)
Gandalf the White
OOPS --- Marie's email address IS:
marie@usagold.com
<;-)
Gandalf the White
POOR Ol'e Wiz !!! ANOTHER error !! !
ANOTHER POG Contest Winner !
I have now figured out that Tied with Sir DryWasher is Sir Noble1 !!!

$$$$ $416.2 $$$$ Noble1 (9/26/04; 18:22:49MT - usagold.com msg#: 124731

AND therefore, Sir Noble1 is one of the
"TWO CLOSEST RUNNERS-UP" !
SOOOOO, Sir Noble! is also a WINNER of an one-ounce Canadian SILVER Maple Leaf !
CONGRATULATIONS Sir Noble!
<;-)
PS: I also know now, that SIR Gondolin is not a LADY !
I will now go hide in the closet !
<;-(
PPS: OH, so close to winning a prize for the Hobbits !
I told you all that Sir Noble1 had taken "MY NUMBER" !
That is why one should be like Sir Zhisheng, and enter early (and often) !
<;-(
R Powell
An apology and a thank you
The apology I owe to everyone here. I humbly beg your pardon for hammering down the POG today. It was necessary after I realized that my contest guess was too low, so I sold another 100 tons to Argentina...er...an undisclosed buyer.

However, now that I've been lucky enough to share the win with Sir Gondolin, I'll be back at work as usual tomorrow, lowering the dollar's gold-relative value, and thus raising the POG.

The thank you goes to all but especially Michael for deciding to award two coins rather than listen to Gandalf's suggestion of poor, old, undersized Rich trying to defend himself...with a sword no less!...against one of the finest...Sir Gondolin! Have any of you ever seen that Gondy fight? Mention a gold coin to the winner and I'd certainly be dead in an instant.

Again, sorry about the POG adjustment. I'll return it back higher tomorrow, I promise. And, thanks for prize.

P.S. If the castle gold coffers are low, Rich would be more than happy to accept a dollar eqivalent's worth of silver. Silly fool, he still thinks the day may come when silver costs as much as gold! Freesilver, he calls it! Some call him a real fool. Myself, I don't know..??
slingshot
Belgian Msg# 125076
FreeGold. Gold that has been liberated from the open market and government sales, whereby ones takes physical possesion and liquidates as one deems necessary. It may be possible to acquire Gold for all the wrong reasons,not fully understanding what they hold in their fist. Today people turn to the stock market or savings (if they have any) credit cards and second mortages to check the constant erosion to their lifestyles. They fail to see gold and its
preserving attributes because all they have dealt with are paper or digital transactions. The "Get Rich Fast" frame of mind and unwilling to wait for their investment to come to fruition is the trend. I expect Gold to do well in the coming years for I do not see a change that can reverse the slow and steady climb, only a steep advance should the House of Cards fall. Motivation is protection of family and what wealth I have obtained over the years and provide financial stablity in the future years. You know, Beligan, people buy insurance for everything. Why will they not buy financial insurance? Insurance that is transferable to family. My motivations may be sincere but my expectations are well founded.
Slingshot-----------<>
USAGOLD Daily Market Report
Page Update!
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 climbs nearly $12 during week, gives back $5.60 on Monday

A jump in the U.S. dollar versus the euro Monday sparked active long liquidation by fund and speculative players in the gold and silver futures markets, which sent metals prices lower at the final bell.

Comex Dec gold settled down $5.60 at $415.60.

Gold, which is priced in U.S. dollars, becomes more expensive for foreign buyers as the currency strengthens, which in turn can decrease demand for the yellow metal. Late in the day, the euro stood at $1.2274, down $0.0118 on the day.

"Dollar movement continues to be the main factor for the gold market," said Dave Meger, analyst at Alaron Trading.

Also, analysts said many players had put on fresh long positions in the gold market, ahead of the weekend round of Group of Seven meetings in Washington. Dec gold futures had been rallying in recent weeks, rising from the Sept. 8 low at $396.90 to Friday's high at $421.90.

During that period, non-commercial net long players, as measured by the Commodity Futures Trading Commission's Commitments of Traders report, had been building long positions. In Friday's Commitments of Traders report, which measures activity through Sept. 28, the fund net long position had increased to a total of 110,909 in the gold futures market.

"That's relatively high," said Dave Rinehimer, director of futures research at Citigroup. The large long position in the gold market "creates a situation for long liquidation or profit taking on price breaks," explained Meger, which was seen on Monday.

-----(see url for access to full news, price charts, 24-hr newswire)---
TownCrier
Currency speculators lose battles in Asia
http://www.deepikaglobal.com/ENG3_sub.asp?catcode=⊂catcode=≠wscode=74482excerpts

SINGAPORE, Oct 4 (Reuters) The Philippine peso could have earned the dubious accolade of becoming the first Asian victim of a speculative attack in the 21st century.

But after three battles with the central bank, speculators have made negligible gains, and may have even lost money.

It's a similar story in Japan and China, where the stakes are much higher.

So far, 2004 has not been the year of the speculator in Asia, and it is clear that the region is no longer the pushover for speculators that it was in 1997.

Six years ago, disproportionate levels of short-term dollar debt and low reserves forced the virtually pegged currencies in Asia to succumb to speculative pressure.

That has changed radically.

...Most currencies, barring the Chinese yuan, Malaysian ringgit and Hong Kong dollar, are floating. Speculators can never tell if a currency has moved too far.

[CHANGING "THE RULES OF THE GAME"...]

Speculators are up against a much tougher challenge in Asia than they were in the late 1990s because central banks are better equipped to head them off with regulatory restrictions.

''The ability to legislate and introduce exchange rate requirements etc... generally Asia has been able to use those more successfully this time around,'' said Robert Rennie, currency strategist with Westpac Bank, Sydney.

...''It is mind-boggling. Which trader out there is going to even dream of taking on a force such as that?'' Rennie said.

Big speculators have made more money this year betting on oil...

Even George Soros, arguably the world's most famous currency speculator after making a fortune from Europe's currency crises in the early 1990s, vented his frustration last week. ''We currency speculators are more likely to die of boredom,'' he said.

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

Think about this when you consider Belgian's recent postings about expressions of political will from above. We see oil allowed to run, while individual currency exchange rates are held in check. Similarly, gold purchases are still effectively subsidized for those with the savvy to back their truck up to the loading docks.

BEEP BEEP BEEP BEEP... "C'mon back." USAGOLD-Centennial is your place to load up.

R.
R Powell
Freegold (continued)
Aristotle, thanks for the answers (125058) and (125063)

My definition of freegold has evolved again. It's meaning is not so much gold that can only be bought and sold for cash as much as it is gold that does not trade in any derivative form. Okay, I had thought the search would lead here. The implication is, of course, that the dollar denominated value of gold is being distorted (some would say manipulated) by the papergold markets.

My own view is that market prices for most all commodities are eternally evolving and may often be overpriced or underpriced for a short period of time but, the invisible hand of equilibrium between supply and demand, always present, tends to....forces perhaps...the price towards its true market value. This works for gold, houses or any other item whose price is determined through the price discovery process. Any discrepency between the physical and the paper contract price that is large enough to warrent intervention is quickly corrected through the applied greed of arbitrage. If there is any profit to be made by buying physical while selling paper OR by selling physical while buying paper, the arbitragers will swoop in like vultures. This is true in any market and acts to keep equilibrium of value in different markets. Small discrepencies always exist caused by transportation or carrying costs, storage fees, brokerage fees, regional demand, etc. but overall, if physical gold, bought and sold on a cash basis was truly greater than the paper market discovery price, the force of buying in the paper markets would force the paper price up to that of the physical market price. What might happen if/when such is the case is that this situation would probably force delivery from the paper markets. Now, wouldn't that be nice.
As always, this is just one poor man's opinion, with which I know many do not agree.

Also, the idea that investors will be disappointed or even defaulted upon by the paper markets is based on one huge, incorrect assumption. Those who want physical metal usually buy just that...physical metal. Those playing (investing?) in the paper markets of stocks, gold funds, futures or options are risking capital (money, $$$) with the expectation of making/ losing or breaking even. The expected payoff or loss is also cash, capital or credit. The speculative interest in corn, soybeanoil, bonds, coffee or gold does NOT expect payment in kind but rather an increase or loss on the balance sheet. It is really a paper game with cash changing hands but, just like bettors at a horse race, money is exchanged, not horses. If you want real physical metal...good! talk to USAGold...but don't expect the markets to surrender the right to speculate on the price of anything...it's been happening for centuries, providing the necessary protection of hedging for both producers and end-users, which facilitates commerce by providing liquidity to the markets so that buying + selling are possible and possible at times other than say just at harvest..with the grains, other than just after refinement for the metals, etc. This speculation also surpresses huge, uncontroled, disruptive price swings by adding immense open interest.
If, "freegold" requires no paper market speculation in gold, then I doubt (imho) that freegold will ever be seen. Whether the basis for wanting "freegold" lies in a less manipulated gold discovery process, I guess that remains to be seen. However, arbitrage and other methods imployed by venture capitalists are fairly efficient at keeping item prices fairly constant so that there are rarely any great discrepancies among item prices in the physical vs. paper markets.
Just one man's opinions, and, as always, open to discussion. ....Hahoo! I finally won a pricing contest!!!
rich
Gondolin
Yo Beudy!!
Thanks for the correction Gandy, wasn't sure whether I was that happy to see my name there at first!

Am also quite chuffed to be in such esteemed company of Sir Rich Powell as a winner with my guess(and it was a guess!!). Thanks again to our hosts for another gripping competition.
Gondolin
Rich Powell
Sir Rich, You flatter me, besides, surely it would have been wooden practice swords only.... and I'm well out of practice, have been wielding the pen far more these days.
Ned
T.C.
"Thee quote".......

"Although there are only a few reserve currencies, an appalling lack of discipline is demonstrated by the US dollar. As things stand today, the United States is indebted to the external world to the tune of $3 trillion. This sum actually exceeds the total official currency reserves of all the nations of the world -- including the USA. . . The evolution of the reserve role of the American currency in recent years gives grounds for a pretty pessimistic prognosis. The relationship between the state of the dollar and the value of gold is obvious. In relation to our discussion today, this means that gold continues to have particular monetary attraction in the minds of all prudent financial investors."
--Oleg Mozhaiskov, Deputy Chairman, Bank of Russia


Holy mackeral! If that's not calling the dollar confetti (or toast?) I'm not sure what is....and from the Russian CB, no less!!

Thanks TC for the quote and thank you for the 'Order'/Info link. Appreciate it.

Ned.
CoBra(too)
Free Gold @ Belgian
I'm usually late in responding and am not glued to the monitor much these days. I'd rather tend my garden, go golfing or have a few drinks with friends in my spare time.

Anyway, I'm happy this topic evolved again and as my notion of free gold may be as faulty as anyone's I can't really see a set of circumstances to arrive at purely "free gold", nor can I see the beneficial positives to free gold in todays world.

While gold always was and will be the demarcation of real wealth, vs. the paper confetti currency systems, I would again stress only for the truly free would free gold offer the means for free, independent and creative being. What would I do being one of the (precious) few...?

As I've tried to state before there never was a people totally free from encumbrances by its (even chosen) leaders and even the founding American Fathers not only have been aware of the problem but warned about the consequences of coining money by third parties. Well it happened throughout history and we all know the consequences ... No, only a few again remember history and try to protect themselves and their families.

Throughout history, even with gold standards, gold exchange standards and pure gold exchange you've had the robber barons shaving gold coins for their benefit. We now have no standards, except debt standards dubbed credit in the Western World. We are paying lip service to lift the debt burden of the poor (though in many cases resource rich) countries by, among other measures, to mobilize the IMF gold, before we dump them totally - which we can't as we'd have to admit a moratorium. No Western Bank would survive - see Latin American Petro Dollars of the 70's. Seems we're
damned to keep up the pretense as long as possible.
Well, Argentina, and probably Brazil have seemingly learned their lesson and dropped the confetti for gold - which may be only worth 25% of their overall debt. Pretty neat observation, maybe just a trifle too high!?

The real question will emerge when China and SE Asia will play their cards - and I would suggest they'd also play the gold card - as all alleged western CB sales had to go somewhere. ... And would you have even any inkling where the gold of the Souks is held? - Well, surely not in JPM, or HSBC vaults.

OK, that's a bit out of context so let me come back to the main. Physical gold in your hand is always free and has proven its unique wealth preserving quality over eons.

So, why would I care for free gold as it then must become a lien to the beholder.

cb2

PS: Of course I'm aware of the managing of gold and any other market by the PPT or any other entity. Play in their hands and "free" gold from the shackles and you're in for a bigger problem. Just leave it to gold to free itself!



Druid
Argentina's Kirchner Snubs Fiorina, IMF, for `Political Appeal'
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=aG6AIFgcOfcESnip:

Oct. 1 (Bloomberg) -- When Carly Fiorina, Hewlett-Packard Co.'s chief executive officer, went to Buenos Aires to visit Argentine President Nestor Kirchner in July, he kept her waiting almost an hour.

Fiorina -- who runs the world's No. 2 personal-computer maker -- left without seeing him, says Aldo Leporati, spokesman for Hewlett-Packard in Argentina, where the company has had sales offices for more than 30 years.

``Kirchner has managed to anger the investment community,'' says Alejandro Reynal, chief executive of MBA Banco de Inversiones SA, an Argentine investment bank in Buenos Aires. ``Investors are in a gigantic wait-and-see.''

Since his April 2003 election, Kirchner, 54, has refused to negotiate with bondholders seeking compensation for defaulted government debt, has declined to help utilities made insolvent by a currency devaluation in 2002 and has blamed the International Monetary Fund, which will discuss Argentina's debt at its annual meeting this weekend, for the country's woes.

Kirchner's standoff with creditors, investors and the IMF, which suspended a $13.3 billion loan accord in July, is stunting a recovery in South America's second-biggest economy, says Reynal, 59, whose bank is majority-owned by San Mateo, California- based Franklin Resources Inc. and has former U.S. Treasury Secretary Nicholas Brady as an adviser.

`Only Offer'

The IMF withheld a loan payment to Argentina in August after the country failed to move forward on negotiations with bondholders over $100 billion of defaulted debt. The government in June proposed paying investors 25 cents per $1 of defaulted bonds. Kirchner says the offer isn't negotiable.

``The current offer is the only one we will make,'' Kirchner said in a Sept. 22 speech at the Council of the Americas in New York. ``It's the offer that will go to the markets.''


Druid: The President of Argentina seems to be fostering long-term relationships with the country's creditors. I'm not exactly sensing a kind of spiritual warm fuzzy bonding taking place between all parties involved.
CoBra(too)
Hugo Salinas on Gresham's Law
http://www.plata.com.mx/plata/plata/comHSP50a.htm

... Asking some important questions and providing his answers ... cb2
DryWasher
THANK YOU USA GOLD

Congratulations all, and thank you USA Gold.

I shall treasure the Canadian SILVER Maple Leaf and each time I look at it I will be reminded of the many pleasant hours I have spent reading and learning from this great forum.

And thank you Sir Gandy for your tireless efforts on behalf of the forum. You are indeed a wonderful wizard.

On the current discussion about "free gold" let me just say that you will know that gold has truly been set free when you hear those around you speaking about the value of various things, such as an automobile, a bag of beans, or a home in terms of an equivalent weight of gold.

Thanks again,
DryWasher.
Goldendome
Sir Druid-- Brovo for Kirchner

Druid: I can say that I'm not surprised that a significant country is finally standing their ground and telling the foreign loan pushers to stick their paper where the sun don't shine! Kirchner wasn't the leader when all hell broke lose, but I give him credit for standing his ground for his country and it's people in the economic problems of Argentina. These international hot money vendors are like pushers peddling free dope. Getting foreigners hooked on the credit, telling them how great they're doing, telling them how much better they could do things only if they borrowed a little bit more...then first sign of trouble: they all want they're money back right now, sell the currency, sell the bonds, ruin the economy...then act like they had nothing to do with the problems that develope!

It makes a person wonder how the United States authorities would act were they placed in a similar predicament--many wondering why we haven't been already. Oh! I have it! The big difference is that the United States can actually print the U.S. dollars to pay off whatever- when needed; while the Argentine government could not print the dollars needed!

Bravo! for Kirchner. With their large purchases of gold, it looks that the Argentine government is now willing to trust mute and inanimate gold before the glib and guile of international bankers!
Chris Powell
Canadians dislike China's bid for Noranda but share responsibility for it
http://groups.yahoo.com/group/gata/message/2430Latest GATA dispatch.


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

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Golden Lionheart
Golden Houses.........
Sir DryWasher your recent post with the mention of Free Gold reminded me of something. Not so many years ago when houses were bought on the Greek Islands and in the Greek countryside the medium used to pay for the purchase was English Gold Sovereigns and not Drachmas. I think I am correct in saying this. Although for the life of me I can't really see why this was done. The buyer had to buy the gold coins and probably the seller converted the coins back to cash. (or did they bury them in the garden?)


Noble1
Wow!!!

What a pleasant surprise to come home from work and find that I am a runner-up in the price guessing contest. If you can imagine an ear-to-ear smile you have the picture. Many thanks to our gracious and generous host, MK, for these dynamic pages and exciting contests that continue to stimulate many of our daily lives. Thank you, Sir Gandalf, for your continuing efforts to provide the color and keep us abreast of the score (sorry for taking cuts in line).

On ANOTHER note. The other day I ran across the invoice for my very first purchase of gold from USAG. It was for a roll of French Roosters. The price? $55.00 each! Ooh, if I only knew then what I know now. But, there is no question in my mind that gold remains a bargain. Use any corrective action (like today's) as a buying opportunity and you will not be dissapointed. Looking ahead is not like reading tea leaves. It's not even like writing on the wall. It is carved in stone. Think deeply. You know exactly what I am talking about.

Remember: As Mr. Alan G. pointed out to Congress, "Fiat in extremis is accepted by no one. Gold is aways accepted".

Noble1
Druid
Pimco's El-Erian Shuns Banks That Break His Rules (Correct)
http://quote.bloomberg.com/apps/news?pid=nifea&&sid=aXl5CT7L.1xASnip:

"El-Erian remains in close contact with the IMF: He is a member of the group's capital markets consultative group, which brings bankers and investors together with policy makers twice a year to discuss market developments. In April, he was nominated to be head of the IMF by Egypt's Shalaan.

Since the IMF was created in 1944, the job has always gone to a European, and Shalaan wanted to show that developing countries have qualified candidates. El-Erian was interviewed by the IMF board, which then voted in favor of the European candidate, former Spanish Economy Minister Rodrigo Rato."

Druid: I found this little snippet informative in that it blatantly informs you about the revolving door between public and private entities, which facilitates some impressive networking. In addition, I also found interesting that the head job for this sharing and caring organization since inception has always been a European. Hmm, how interesting.

@Lady Goldendome, I agree with your every word. Debt, the real dope.
Smeagol
"Freesilver"?
http://www.plata.com.mx/plata/plata/comHSP48a.htm
Thanks you, Ssir Cobra(too) for that interssting link... while we were there we looked at thiss article by the ssame man... could this be a model for "FreeGold"? We sseem to remember reading ssomewhere here that Gold would circulate alongside fiat in the "Freegold" era... are we wrong?

also, *CONGRATULATIONS!* to the winning Price-Guessers!

S.
Great Albino Bat
Congratulations to Burt Rutan!!!

American genius at its best, Burt Rutan!

Now if only someone with such genius would put his mind to the problem of the International Monetary System...

The multibillionaires of the world seem to be the servants of their money, and not its masters. With so much power in the billions of digits they control, one would think they might act like men, but one would be wrong. Theirs are mini-minds, after all.

The GAB
Sundeck
James Turk interview reproduced in AFR
Boilermaker #125039

For information, the Barron's transcript of the interview with James Turk was reproduced in today's Australian Financial Review...

Again...indicating the growing "mainstream" acceptance of gold as an alternative to the shaky US-dollar...

Cheers
968
@ Belgian / Freegold.
Morning Belgian,

- If the dollar system goes into failure, how are all the US-debts going to be settled ? How can the US evolve to a new currency system without settling a huge part of the debt mountain first ?
- Will the US in the long run revalue their +/- 8000 tons of gold from 42$/ounce to marketprice (cfr. IMF) in an extreme effort to polish up their budgets ?
Belgian
@ 968
Easy cake, 986 : Everything dollar, not within US territory and therefore not falling under US legal tender laws,... is declared officially worthless.
The non American part of the planet will be left on its own to sort out the dollar-problem amongst themselves. That's WHY the US keeps on hammering the ECB in saying that it (ECB) lives on Another planet ! We do indeed live on the "FreeGold" planet ...huge smile !

Listen to Sir Alan, tonight...High oilprices and rising oilprices are NOOOOOOO problem at all for US companies !
Alan's monetary policies are and remain "perfect" ...for the US economy, financial industry and monetary affairs !

Everything will be pushed beyond the outer limits and be sold as "normality". Watch all those LT statistical charts !

The dollar is not (yet) the US' problem. It is the rest of the planet that got stuck with the green cheese. That's why the US doesn't need to find a solution for the dollar, that is not considered problematic by the US.

I don't see US Treasury Gold being mobilized substantionally. Why should they ? What is the purpose of repricing UST-Gold !? I don't care what book-keeping price the US gives to its Goldreserves. If the US wishes the world to keep "using" its dollar and extend the dollar's protocolary value for further International trade settlement...Ship-Deliver, all your US Gold or mobilize more Gold from US goldmines (ABX) or any other dollar-supportive source (AngloAshanti & Co). Perform with metal instead of with paper !

Watch for early signs of US$ exchange controls resulting in dollar entrance embargos. Currency and trade wars are only at their very beginning ! That's why you don't see any crashings. There still is too much opportunistic, selfserving, diversified political good-will, hanging around. Let the "things" go beyond the up until now known, outer limits. POO, adds to the pressures, today....nooooo problemas...
White Rose
What is Barrick Gold anyway?
http://www.indymedia.org.uk/en/2004/10/298507.htmlI have a theory about Barrick Gold.

I think it is a CIA front operation. In the early 1980's, the CIA wanted to bankrupt the Russias. We got the Saudis to pump oil like there was no tommorrow. And they invented Barrick. I think that when the central banks sell gold, it tends to raise the price of gold ("less overhang that can hit the market"). I think that when a big new mine opens and starts selling, it tends to lower the price of gold ('new gold that was not in the existing spreadsheets"). I think that Barrick was buying central bank gold and then selling it as the output as brand new gold from their wonderful Nevada mine that they mysteriously bought for pennies on the dollar.

That is way they were doing forward sales from day one. They needed to play financial games to buy their gold.

Does it surprise me that the US treasury has sold its gold in exchange for the "gold in Barrick mines". No. But is there any gold in those mines? Now that would make a very interesting story.

I am sure that Barrick is doing **some** gold mining. But I think this is where the bulk of their gold comes from. This explains why Bush senior, various spooks, JP Morgan is on tehir board. Barrick is not a sideshow. It is a key element of the financial ringleaders that are looting our planet in the precious months before Peak Oil becomes official.

The link gives some background on the formation of Barrick. I think the present reality is just as "spooky".
Knallgold
NO MORE CB Gold sales!?
http://news.goldseek.com/AuthenticMoney/1096909091.phpYesterday I speculated that the no news on the WA2 quotas from the G7 meeting could also mean no new sales.Julian Philips seems to think equal.
Well,56t per year is like lifting the ceiling altogether!OF COURSE THAT IS NOT BEING ANNOUNCED!Officialdom seems not in the way of higher Goldprices anymore-a step closer to,dare I mention it,FreeGold?

From the link:"....Why the silence?

Could the ?deafening silence? be because further announcements not to sell, after Italy?s statement of no sales would send the gold price up dramatically? The failure to confirm these sales indicates that no sales will take place in addition to those so far announced.

The present picture is that Switzerland will continue selling around 7 ? 8 tonnes of gold per week and Holland will sell up to 150 tonnes when it deems fit, probably only when price ?spikes? are seen. Apart from these, it is reasonable to conclude that Central Bank Gold sales have virtually ceased, until there is a ?spike" in the gold price.

We were told so long in advance of the new agreement and its ceilings. So much talk has been going on about ?options to sell?, and intentions to sell from France and Germany and that Italy would not be selling. But in the light of their procrastination, we cannot accept that sales will take place from these nations until their word become solid commitments!
Previously we have said that the Central Bankers involved would not make a statement that would disrupt the market. It is true to say that the only disruption that could now occur to the gold markets, cannot be on the announcements on what is to be sold, but on the amounts not to be sold. At what point should the market itself recognise that no more sales are on the way?

Many are still waiting for the signatories of the 2004 Central Gold Agreement to announce their future gold sales. But the new agreement came into being over a week ago. It has commenced, so what sales have been announced, so far?
Switzerland?s sales should be completed by early January 2005.

To make the point more forcefully, the new agreement having started, finds that of the permitted 500 tonnes sales per annum permitted, there is, presently, a shortfall on the total ceiling, on the five years total, of 2,220 tonnes!

Sales announcements can still come, but we were assured by the signatories to the original ?Washington Agreement? that the intention of the agreement was to give transparency to their intentions regarding gold. So their silence should be taken as transparent as well. Hence, if no further sales announcements have been made, then no further sales will take place, unless such transparency has been abandoned? ..."



Knallgold
!
This smells like a burning fuse ...
Belgian
@ WR
If,...IF the bulk of UST-Gold, through "deep storage Gold" has already been shipped/delivered...than there is very, VERY little Gold left to let oil flow abundantly and cheaply !? Is it "this", what the POO is telling the planet ?
What is it then, that remains left of the already shaken credibility of the US$ outside its US territory ?
This means that the survival of the dollar's reserve status is absolutely in non US hands ?

Most probably, the UST gold has been commited and the actual delivery will go painstakingly slow at very low goldprices, Co-organized by dollar and euro !?
A low POG means that more gold weight must be delivered !?

Goldmines (dollar supportive ones) can continue to operate at razor thin profit margins as long as they co-operate with forward sales !?

Spooky gold-trails, indeed WR. Thanks
Rimh
White Rose, Barrick Gold
Just a reminder that Barrick has already admitted to judge in the Blanchard lawsuit that has been acting as an agent for certain central banks (hoping to join in on the central banks' immunity clause). If that's not dirty laundry, I don't know what is....
Belgian
@ Knallgold
FreeGold : Gold that is FREELY priced ! The burning fuse you are smelling is imvho, the political will about Gold, goldpricing... reaching critical mass !?

Culminating point : Freely priced Gold is more beneficial for a greater majority of interests than the benefits of further contained goldprices for a minority !?

Free(priced)Gold for reasonably cheap oil...Value priced Gold as reserve-wealth-asset...

The yadayada-media are deafening silent about today oil's new high...ATH ! One barril equivalent to 4 grams Gold.
The black liquid goldmines, ***deliver*** a total of 82 million barrils per day...the theorethical equivalent of 320 million grams of Gold per day...= 320 tonnes of Gold per day...at today's "unfree" obscene goldprice !?

En avant la musique ...!
Gandalf the White
THANKS, Sir Rich !!!
Knallgold
Belgian
the recent words from China and Russia have not even been diplomatised,no wonders the critical mass breaks now in the open...

That Europe says nothing-says also something.
USAGOLD / Centennial Precious Metals, Inc.
... In Order to Form a More Perfect Union... (between You and Your Savings)
Great Albino Bat
Good posts, White Rose and Knallgold!

Interesting day!

Oil well over $50 US/barrel.

Gold spiking up most unusually; is the news that Knallgold mentions - the CBs that didn't announce intentions = the dog that didn't bark - sinking in?

White Rose: I think your conjecture is reasonable. Why the enigmantic "deep storage"? What a joke!

If everything begins to unravel before schedule - such things do happen - the world will not be a merry place. We might even lose the Internet. Hard to imagine that, it's become as expected as light coming on when you flick a switch on the wall. But, it might happen.

Exchange controls, Belgian. Yes, in the autumn breezes I sense exchange controls in the air. Just a whiff, but they are there.

Well, "thanks for the memories!"

The GAB
White Rose
Barrick Gold fraud (again)
Think about it. If US Treasury gold has been "mobilized" (sold) in exchangee for Barrick "deep storage gold" **AND IF** Barrick does not really have the gold mining capacity to reproduce that amount of gold **THEN** when this fraud is made plain, there will be a very, very strong reaction in the gold price.

I thin Barrick was started as a weapon of the cold war against Russia. It morphed into a weapon of massive greed which fit exactly with the needs to loot wealth on a planetary scale in the twilight years before Peak Oil is revealed.

Remember, there are about one trillion barrels of oil that can be recoved. World consumption is now 80 million barrels a day, and that is before India and China get to massively deploy a consumer (automobile) culture. We are a few months or a year away from a realization that the economy is going to fall off a cliff.

Things can get very interesting.
Knallgold
Ag
Interesting is also that Silver spikes with Gold.It has been stipulated (pandagold and others)that if one would invent a scheme to manipulate Gold,Silver would have also to be targeted.Market behaviour confirmed this again and again.Now if the Goldscheme blows up,Silver would surely participate (initially).
Zhisheng
Spike in Gold
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1 As the Great Albino Bat observes, gold is up most unusually: much more than the drop in the dollar would indicate.
Could it simply be that the gold market was manipulated down yesterday by one or more of the participants in our contest? And is now returning to normalcy?
TownCrier
Trichet speaks... read between the lines
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh18434_2004-10-05_14-01-56_n05287679_newsmlPHILADELPHIA, Oct 5 (Reuters) - The European Central Bank had no policy of promoting the euro as an international currency, although it was glad to see it had been widely accepted, ECB President Jean-Claude Trichet said on Tuesday.

"We are very neutral as regards the international use of the euro," Trichet said as he answered questions after a speech to the National Association for Business Economics. "We have absolutely no policy to promote the international use of the euro. We have no policy to discourage it."

"We entirely rely on decisions that are made by market participants," he said.

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

It is as though he is saying, but in other words, "give consideration to a new paradigm... consider economic life in conjuction with an anti-dollar and yourself thus unleashed, unmastered".

So, how much time do you have to seek out your lifeboat of gold for the looming paradigm shift? Trichet also talked about the potential for speed of change in his speech:

(ecb.int) --- "Only six years ago Europe engaged in a grand enterprise of institutional design..... The European single currency, the euro, has in the meantime become a visible token of Europeans' drive towards unification..... I guess the rest of the world sees the euro not only as Europe's single currency, but also as a symbol of Europeans' strong determination to plan their future and to realise their dreams.
+
"Taking issue with this historical transition to the European single currency, I intend to focus my remarks on the challenges presented by the creation of the euro and the execution of monetary policy in a rapidly changing world: a world in which high-speed structural change -- whether spurred by spontaneous economic forces or institutional evolution -- may put tested economic models at risk and defy policy-makers' searches for well-trusted policy recipes."

"...At the very least, the second half of the 1990s and the early years of this century have sent us stark reminders that the economic structure does not hold still for long. Our recent experience in coping with economic changes has provided more than one stress test of the macroeconomic models that are in use in our institutions.
+
"Let me mention some sources of structural change that are specific to Europe. The setting up of a true single market out of the various economies member of the European Union is a very ambitious endeavour, which has no historical precedent and is triggering large scale structural changes in the European economy.
+
"Fully part of these bold transformations are reforms in the labour and goods markets. These reforms aim to reduce distortions induced by regulation, strengthening the euro area's competitive position and its resilience to shocks....
+
"One recent additional source of structural change in Europe lies with the enlargement of the European Union that took place in May 2004. The European Union has witnessed its greatest ever enlargement with the accession of ten new countries .... [that] will eventually adopt the euro, when the time is right...
+
"Europe and its institutions are not new to having to cope with rapid change. The introduction of the single currency, the euro, has been a defining experience which has trained policymakers and the citizens of Europe alike to be careful planners and skilled managers of uncertain circumstances."

"No doubt, a great deal of the success had a solid foundation."

"...Above all, there is no simple escape for a central bank from a rigorous analysis of the shocks hitting the economy and the underlying changes affecting the economic structure."

Crier's bottom line: Choose gold. And choose USAGOLD-Centennial as your trusted source of metal.

R.
TownCrier
From day low, gold up 3.5 euro, up 6 dollars
http://www.usagold.com/gold-price.htmlsee charts at url (click reload/refresh if necessary)

R.
American Expression
Statutory limit on federal debt? U.S. Treasury near debt ceiling limit
http://www.publicdebt.treas.gov/opd/opdpenny.htm
The Debt To the Penny

10/04/2004: $7,414,024,541,823.04

Debt ceiling $7.384 trillion (It's the LAW not to exceed the debt ceiling w/o official congressional approval).

Yet not a word of this in the news or financial media!

U.S. Treasury near debt ceiling limit
Mon Oct 4, 2004 05:42 PM ET

SNIP:

"The time-frame is October, early October. We'll obviously notify Congress at the appropriate time," Assistant Treasury Secretary Rob Nichols told reporters.

"Right before we hit it, we will notify Congress. That forecast is made on a day-to-day basis," Nichols added.

As of Friday, the government was within about $20 billion of hitting the debt ceiling that is set at $7.384 trillion.

The government borrows by issuing U.S. Treasury securities that effectively are IOUs backed by the full faith and credit of the U.S. government.

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6409705

The executive and treasury have violated the law by exceeding the official debt ceiling. This speaks right to the heart of what is wrong with government and corporate America today.

"Decency, security and liberty alike demand that government officials shall be subjected to the same rules of conduct that are commands to the citizen. In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that, in the administration of the criminal law, the end justifies the means�would bring terrible retribution. Against that pernicious doctrine this Court should resolutely set its face." --Miranda v Arizona, U.S. 436 (1966)(USSC+)

"You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold." --George Bernard Shaw
American Expression
True stream of public debt runs deep: What most folks understand is just tip of the iceberg
http://www.chron.com/cs/CDA/ssistory.mpl/business/mym/2828012
SNIP:

The visible tip of an iceberg represents only a tenth of the actual object, the informal debt of the United States government is 10 times as large as the visible formal debt. Official and conservatively measured government documents --the annual reports from the trustees of Social Security and Medicare -- tell us that the unfunded informal obligations of the U.S. government to its citizens now amount to a staggering $72 trillion.

You can get an idea of how great a burden this true debt is by asking yourself if you personally could make payments on debt more than seven times your annual income.

misetich
US Economy Continues Decelaration as Deficits Soar
Headline Snips of various reports

Factory Orders Are Down for the First Time in 4 Months, With Demand Falling for Commercial Planes

WASHINGTON (AP) -- Orders placed with U.S. factories fell for the first time in four months, the Commerce Department said Monday, with demand dropping sharply for commercial airplanes and parts.
http://biz.yahoo.com/ap/041004/economy_16.html

U.S. ISM Non-Factory Index Falls to 56.7 in September

Oct. 5 (Bloomberg) -- Growth in U.S. services slowed for a second consecutive month in September, suggesting the rise in energy prices this year is limiting the economic expansion.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aEeTICSUDv8c&refer=home

Holiday spending seen curbed
Survey: Higher gasoline prices are a factor

NEW YORK - Most Americans are planning to curb their holiday spending this year, making it a challenging shopping season for U.S. retailers, according to a holiday buying survey by The NPD Group.

Nine out of 10 consumers said they will spend the same or less when they shop for the holidays than they did in 2003. On average, Americans plan to spend an average of $655 during this holiday season, the survey showed.
................

http://www.msnbc.msn.com/id/6182788/

Insider activity turns 'bearish' in Sept.

SAN FRANCISCO (CBS.MW) -- After two months of positive trends, corporate insider activity turned bearish in September as executives cut purchases of their own companies' stock to half of the previous month's level.

According to data from Thomson Financial, insider buying totaled $91 million in September - its lowest level since last October and down 50% from August. The number of insiders making buys also hit a record low of 596 compared with 1,364 in August.
http://custom.marketwatch.com/custom/myway-com/news-story.asp?guid={335A2C65-BD2A-47C4-AF93-DAF7A5F2CAFC}
****************
Misetich

Lets summarize

1) US consumer spending is slowing each and every day
2) Stock Market insiders are selling and not purchasing
3) Price inflation is roaring ahead as Oil prices are set to climb MUCH HIGHER than the present $51
4) Current Account Deficit is to climp over 6% of GDP very shortly
5) Trade deficit is soaring as is the Budget Deficit
6) Iraq quagmiere is still ongoing and soon ANOTHER request for $$50 + billions will be on the table

What does Maestro thinks of all this ?

Snip:

U.S. banking is �strong, vibrant and profitable�
Greenspan upbeat following recession, corporate bankruptcies


WASHINGTON - The U.S. banking system, having weathered a recession and the bankruptcies of several big corporations, is in very good shape, Federal Reserve Chairman Alan Greenspan said Tuesday.

Technology and the use of sophisticated financial instruments to hedge risks have helped banks navigate through sometimes difficult economic and financial waters, the Fed chief said in remarks to the American Bankers Association's annual convention in New York. A copy of his remarks was distributed in Washington.
...............
http://www.msnbc.msn.com/id/6183744/

End of snip

....the celebratory run around the track is too early Sir Maestro...the worst is still to come, as foreigners are evaluating their positions vis-a-vis the US $ and the switch is being made daily from US $ to GOLD, Euros

All Aboard The Gold Bull Express - Part ll
misetich
U.S. Job Cuts Hit 8-Month High
http://www.ksat.com/money/3783876/detail.htmlSnip:

NEW YORK -- A new report says the number of announced job cuts rose sharply in September to nearly 108,000 an eight-month high.

The outplacement firm Challenger, Gray and Christmas said Tuesday the number of planned cuts was a 41 percent increase from a year earlier.

The level of job cut announcements was also 45 percent above the previous month.

Challenger said more than 724,000 job cuts have been announced so far this year.

Job losses in September were particularly heavy in the computer, transportation, telecommunications and consumer products industries, the report said.

At the same time, employers revealed only 16,000 new job openings, according to the Challenger report. That was a slight increase from the previous month.
**************
Misetich

The jobless recovery continues. The stage is set as typically the 4th Qtr is the strongest and by all anecotdal reports it appears the stage is set for a SM rout in months to come

All Aboard The Gold Bull Express - Part ll
Federal_Reserves
Fiscal/Monetary Policies.
Using stop/go fiscal and monetary policy to run the economy is like driving a car with the steering wheel in the back seat looking out through the rear view window, trying to drive the car forward. In the end, its all manipulation and eyewash. We would be far better of running a slight budget deficit (very small) focusing expenditures on capital stock (roads, dams, harbors, environmental protection) rather than transfer payments, and keeping money growth at or around the long term growth rate we want in the economy. We should learn to live with the business cycle, learn it is there for a purpose, that is to elminate those who take imprudent risks, and stop trying to bail them out and manipulate our way out of it.
Discretionary stop/go fiscal and monetary policies don't deliver, and in fact destabilize the economy long term.
USAGOLD Daily Market Report
Page Update!
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 excertps---

Gold futures rebounded on Tuesday, after pulling back from last week's highs, shored up by weakness in the dollar, another record oil price and speculation that these could foreshadow inflation to come.

December gold on COMEX rose $4.20 to $419.80 an ounce, recouping most of Monday's $5.60 fall, as the euro's rise back above $1.23 made gold cheaper in Europe.

Gold and silver futures climbed near their highest levels in almost six months Tuesday as strength in oil sent traders reeling back to the metals market as an investment hedge.

"Crude-oil concerns [are] translating to inflationary pressures, convincing more and more investors to add precious metals to their portfolios," said John Person head analyst at Infinity Brokerage Services. "Buyers are reemerging today in the precious metal market in full force."...

At the NYMEX energy pits, oil reached above $51 a barrel. Gold has been following crude oil recently. Investors see it as a store of value, if soaring energy costs spread in the economy and undermine the dollar's purchasing power.

Gold has also been supported by instability in Iraq, fears of al Qaeda and uncertainty before the November U.S. presidential election.

----(See url for access to full news, gold price charts, 24-hr newswire)----
TownCrier
HEADLINE: Stick with energy; add gold
AUSTIN (ASFT) -- With the broad stock indexes trapped in trading ranges for months now, the action has been in the sectors. But which sectors?

Energy has been the obvious winner, but now the trend is widening to include other natural resources like gold and base metals. Commodities are now the place to be.

What's going on? The answer, in a word, is China. The Chinese economy continues growing at a blistering annual rate of more than 9 percent even though authorities there have taken steps to slow the rate of growth.

In just a few short years China has gone from net oil exporter to the third-largest oil importer (behind the U.S. and Japan). Much of this economic activity is now being fed not only by Western technology, but also raw materials.

China's appetite for steel, copper, aluminum, lumber, and other building blocks has driven up prices in all these commodities and more. Add in the slower but still significant growth here at home, and this bull looks like it will run a long way, no matter what the stock market does.

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

Talk of hard asset investments is rising, but it still has a long way yet to go to become a household word amid the nicely manicured lawns along Main Street USA. Enjoy the cheap pricing and buy smartly while the bull is still just a nursing calf.

R.
TownCrier
This will help you better understand the strength of gold's allure elsewhere in the world today
http://asia.news.yahoo.com/041005/ap/d85h884g0.html(AP) Tuesday October 5

HEADLINE: Officials warn gold panners in filthy Manila river

Philippine officials on Tuesday warned scores of people searching for gold in a filthy suburban Manila river that they face a better chance of getting sick than finding the precious metal.

Impoverished squatters in the Del Monte and Masambong districts have descended upon the Dario River in suburban Quezon City since children accidentally discovered tiny pieces of gold from debris and scrap metal dumped there last week. ...

The river has become a large sewage canal over the years -- its murky water littered with garbage and residential waste, including sewage that flows from nearby homes.

Edwin Rillon, senior geologist for the Bureau of Mines and Geosciences, said the river area is made of adobe rock, which is "not a good host" for gold mineralization. He believes the gold came from debris dumped by a local junk dealer, who won a bid to buy 500 barrels of scrap metal from the Central Bank following a fire in 2001.

He said the gold may have come from "sweepings" -- waste material from cleaning the bank's gold refinery....

Using a megaphone to address the "gold panners," Environment Secretary Michael Defensor warned that whatever nuggets they find may not be enough to pay for their hospital bills if they get sick with hepatitis, diarrhea, skin and fungal infections, and allergies....

...Masambong district leader Enya Flores said she is concerned about possible fights or violence if authorities stop people from going to the river.

"I hear some of them say, 'This is our fortune, why would you take it away from us?'" she said....

Her fellow district leader, Jun Santa Maria of neighboring Del Monte, said the gold diggers are stubborn.

"They will not get anything there except human waste," he said.

...However, he said there was a positive side to the "gold rush," citing the many eateries that have sprouted up to cater to the growing crowd, which includes jewelers and gold buyers.

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

The true power and allure of gold shows itself in this unstoppable carnival atmosphere amid the very gritty conditions described here.

Think of the contrast with your own condition. With a nod to the inevitable -- gold ascendant after decades of suppression -- you can cleanly pick up the phone and call USAGOLD-Centennial for ounces upon ounces at scarely over $400 per. No muss, no fuss. Compared to conditions elsewhere in the world, such as this Phillipine example, it is clear what a true bargain gold currently remains for western investors at these price levels.

Call today.

R.
Belgian
@ TC
Trichet, as an �narque elitist, is a man (Breton) with a history. His personality (and history) fits with the Gold cause. He isn't standing alone ...and they will get (realise) what they want ! Learning about the nature of the Trichet clan gives more perspective on what he says and the way he says it. Indeed,...one has to read the substance that is hidden between the lines. He will make a step in history within his 8 years of ECB presidency.
TownCrier
"No doubt, a great deal of the success had a solid foundation. " -- Trichet
Reading between the lines, yes, thanks, Belgian. Here, repeated from earlier, even though I've plucked this from it's immediately adjoining policy/treaty context, a gold advocate can surely find cause to smile at the "weight" hidden behind a comment such as this.

One of my favorite ads for gold that occasionaly runs at the forum is the one that encourages people to "put a solid foundation under their portfolio".

No muss, no fuss, just an easy phone call away.

R.
Cometose
Insider selling
Yesterday , Martin Wiess , in his Monday blue light buffet, for light reading only , announced that INSIDERinsider SELLINGselling in the latest period reached a stellar height of $75.00 of sale orders for every $1 of buy orders...........
Makes one wonder why they are selling .....in such a robust recovery ..........
It's the election stupid........

You're pooped if he loses and
You are pooped if he wins.........

I mean ........your portfolio is pooped ......
No, that's poopicah .........poop on the income statement
Poop on the balance sheet ......Poop on the Accounting firm...POOP on the bottom line.........Poop on Fannie Mae and Freddie Mac//////
Poop on the Regulators.....
Poop over here and Poop over there........Poop up High and Poop down low.......Poop in the SKY and Poop in your eye;
There's poopy.......By Gosh...
Green Eggs and BROWN SNOW everywhere....It's a veritable SNOW JOB.........

Ladies and Gentlemen , Prepare for a BROWN OUT CHRISTMAS........All boats are leaving port for
the *&^%! storm of the century ....

THE POOP IS GOING TO BE TOO DEEP for any Politician to wade through and explain or to find a paddle in .....

............IN MY OPINION .................

in the future, there are going to be a lot more individuals figuring out that ..........their security is
in independent thinking and acting out of SELF INTEREST (while tuning off the NOISE/ just as on the river in the Phillipines/PANNING GOLD PANNING GOLD PANNING GOLD PANNING GOLD PANNING GOLD PANNING GOLD PANNING GOLD PANNING GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD GOLD)........in the direction of
protecting themselves from the SELF SERVING MANIACS that are LEADING THE LEMMINGS off the CLIFF into the SESSPOOL where paper promises abound and persist ( and are proven hollow only after it is too late )...........

Anyone here ever seen the movie : MAGIC CHRISTIAN .........
I have a copy on order.........It's very rare ....
but it's images are more prevalent today than ever before.
It is a tremendous movie ( Peter Sellers and Ringo Star) about 20th century dollars and 20th century greed......
You may find it a your local MOVIE RENTAL STORE...

Get your GOLDEN CRUISER READY to Navigate a sea of POOPICAH.......... the result of decades of paper nonsense which was brought to you by POLITICIANS AND BANKERS that CAME FROM BLUE BLOOD REGISTER FAMILIES and ATTENDED THE MOST ELITIST UNIVERSITIES in the world......

proving that ........sincerity , power , wealth , prestige, intelligence and education ....
come with no guarantees you will find the truth without searching for the TRUTH........and also proving that just because these blue bloods achieved these positions doesn't mean that these "leaders" have a foundation that wasn't built on quicksand ......or that believing those people was a good bet...........

KNOW THE TRUTH .......
BELIEVE THE TRUTH ........
and then YOU WILL HAVE A STANDARD from which to DISCERN
TRUTH FROM ERROR.........
THEN YOU WILL KNOW WHAT A LIE SOUNDS LIKE WHEN YOU HEAR IT.

YOU WILL ALSO KNOW INSIDE when you are seeing all the evidence on exhibit that indicates the

TShasHTF

DON'T HESITATE ONE MORE DAY ........on acting on your HUNCH.......that we are headed down the wrong road and that you are not secure in the paper promises you have heard...................


or you may wind up waking up some day in a NIGHTMARE asking someone to PINCH YOU TO WAKE YOU UP ........and FIND OUT ........THE NIGHTMARE IS REAL ......WE JUST COULDN"T SEE IT BEFORE BECAUSE IT WAS DRESSED UP IN a happy FACE and NICE CLOTHES.............

YOU WOULDN'T SLEEP WITH A PIG IN LIPSTICK ...........
SO WHY DO YOU TRUST YOUR FUTURE TO A BUNCH OF LYING ROGUES.....who are pretending........
Pretending from their PAID POSITIONS .....
THAT THEY HAVE THE ANSWERS.................
misetich
Global growth to slow next year
http://www.chinadaily.com.cn/english/doc/2004-10/05/content_379810.htmSnip:

The fastest global economic growth in three decades will slow next year, complicating efforts by the Group of Seven industrial nations to pare budget deficits and unemployment.
..................
Morgan Stanley says there is a 40 per cent chance of a worldwide recession next year.

"The economy is keeling over," billionaire financier George Soros said in an interview last week. "The markets are reacting to rather dim economic prospects."
................
An economic slowdown of any size may mean fewer jobs and tax revenues, with European unemployment already at a 4 1/2 year high of 9 per cent, Japan still battling deflation and the US facing a record budget deficit
....................
Several chief economists cut their 2005 forecasts in the past month and are less optimistic than the IMF, which on September 29 predicted growth will slow to 4.3 per cent next year from 5 per cent this year, which would be the strongest since 1973. The reduced forecasts for 2005 include 3.9 per cent from Stephen Roach at Morgan Stanley in New York and Jim O'Neill at Goldman Sachs in London, and 3.4 per cent from Norbert Walter at Deutsche Bank AG in Frankfurt.
..................
Any cooling may undermine stock prices and boost bonds, said O'Neill, head of global economic research at Goldman Sachs.
...............
"Deceleration has already started and a further slowdown is definitely in the cards," said Kathleen Stephansen, director of economic research at Credit Suisse First Boston in New York.
*************
Misetich

According to "experts" the US GDP growth for the 3rd Qtr is heading toward 4-41/2% - hedonically adjusted of course-

Meanwhile back in the world of reality -

-Unemployment is rising
-Forecasted corporate earnings for the 1st half of 2005 are in single digits "Pro-Forma" to boot

The US need to attract 1-3 billions daily to offset budget and trade deficit and MAINTAIN current levels

IR are already at emergency rates

Oil is set to surge higher in the next few months

High risk of an extraneous event

In times of stress GOLD IS THE ULTIMATE CURRENCY

All Aboard The Gold Bull Express - Part ll
Boilermaker
Mt. St. Helens and Gold
"On May 18th, 1980 the eruption of Mt. St. Helens in southwest Washington state disrupted the lives of thousands and changed more than 200 square miles of rich forest into a grey, lifeless landscape. Now, twenty-four years later, the land around the mountain is slowly healing herself. Nature is covering the scars of the eruption but many people will never forget what happened that spring day."

The POG also popped in 1980 in a relatively free market. Mt. St. Helens is aboil again. Gold is not free but is like a volcano that will ultimately set itself free. No man-made force can contain it. Get some now before she blows.
R Powell
Demand from China
From the TownCrier, earlier today...thanks Townie!

"What's going on? The answer, in a word, is China. The Chinese economy continues growing at a blistering annual rate of more than 9 percent even though authorities there have taken steps to slow the rate of growth."

All commodities (gold and silver included) took a sudden downturn a few months ago when such rumors hit the markets. I'm pretty sure that this intention was confirmed by Chinese authorities, I'm not at all sure that they meant what they said, but they did seriously low the prices of the steel, copper, soybeans, cotton and other raw materials that they were buying.

Many grown commodities will soon digest large crop harvest predictions. Then, perhaps soon, the question of demand will re-emerge, especially in those items that China needs huge amounts of, including precious metals. Will demand overshadow some large crop harvest numbers? Will extra demand for silver find enough silver available? And gold? I guess there is enough gold but I don't think there will be enough $420/ounce gold available...is there enough available at $480/ounce? If not, then at what price will there be enough??
rich
R Powell
Knallgold
You noted...

"Interesting is also that Silver spikes with Gold."

Are you sure about this? I was wondering if perhaps gold rallied in an effort to catch up with the metal of the moon. (;>
R Powell
Gandalf
You are very welcome. It was easy, the hounds were anxious to go! Thanks for lending them to me so that I could repair the damage done Monday. And thanks to yourself for once again keeping score in the contest. You do good work!
Cytek
@ Cometose
Upon reading your latest post. I was truly (LOL) Laughing out Loud. Looks like we will all need a pair of waiters if the POOP gets that deep. It's funny now, but when this whole house of cards comes tumbling down, not too many people will be laughing. That's when we will have a TRUE NEW WORLD ORDER. Unfortunatley, my feeling is, it's not too far away.

Cytek
slingshot
Cometose
Yepper, the POOPMETER is pegged out and the fan is about to go into Hyperdrive. Have to hand it to those pre-lubed sealed bearings. They can handle a heavy load;0)
Needed a good laugh.
Slingshot----<>
Toolie
Big Phil
http://www3.cjad.com/content/cp_article.asp?id=/global_feeds/canadianpress/worldnews/w100571A.htmSnip: NEW YORK (AP) - The Austrian Mint unveiled a new coin Tuesday at a Manhattan art gallery - 31 kilograms of 24-carat gold worth about $630,000 Cdn.
Dubbed the Big Phil, it was touted as the world's biggest gold coin and a powerful investment tool.
"The world needs a common currency beyond each national one," said Robert Mundell, a Nobel laureate in economics whose ideas laid the groundwork for Europe's common currency, the euro.
��

Most governments no longer base their treasuries on the so-called gold standard in effect for centuries. However, many countries have kept a gold reserve.
"Gold doesn't yield dividends like bonds, and it fluctuates a lot," Mundell said.
"But the other side of the coin is that gold is a measure of national reserves, more than ever."
With the U.S. dollar more "shaky" in today's world, the Nobel laureate said, countries like China, Taiwan and Japan are looking to buy more gold.
Besides, Mundell added, rubbing his fingers across the gleaming gold, "they look so nice." (end snip)

31 Kg that's about 65 lbs or so. I'd buy a couple rolls if it weren't for the delivery costs. ;-)
Cytek
The looming national benefit crisis

By Dennis Cauchon and John Waggoner, USA TODAY
The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that start to come due in four years when baby boomers begin to retire.
The "Greatest Generation" and its baby-boom children have promised themselves benefits unprecedented in size and scope. Many leading economists say that even the world's most prosperous economy cannot fulfill these promises without a crushing increase in taxes � and perhaps not even then.

Neither President Bush nor John Kerry is addressing the issue in detail as they campaign for the White House.

A USA TODAY analysis found that the nation's HIDDEN debt � Americans' obligation today as taxpayers � is more than five times the $9.5 trillion they owe on mortgages, car loans, credit cards and other personal debt.

This hidden debt equals $473,456 per household, dwarfing the $84,454 each household owes in personal debt.

The $53 trillion is what federal, state and local governments need immediately � stashed away, earning interest, beyond the $3 trillion in taxes collected last year � to repay debts and honor future benefits promised under Medicare, Social Security and government pensions. And like an unpaid credit card balance accumulating interest, the problem grows by more than $1 trillion every year that action to pay down the debt is delayed.

"As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfill," Federal Reserve Chairman Alan Greenspan told the House Budget Committee last month.
Ned
WOW!
Just got home from work......hee,hee....might not be doing THAT much longer!

Great day for gold, stellar for silver. Russian and Chinese central bankers and finance ministers rattling more chains ;)

Silver pops 7 beans and is reaching for 8....perfect!

Wonder if Bad Al and the boys are going to keep her together until the first week of Nov. or is she going to blow?

Crash helmets on.
Waverider
Austria weighs in with new, 68-pound coin
http://seattlepi.nwsource.com/business/apbiz_story.asp?category=1310&slug=Mammoth%20Money"The Austrian Mint on Tuesday unveiled its new coin - a 68-pound, 24-carat gleaming gold disc worth about $500,000 - touting it as the world's largest and a powerful investment tool."

Waverider: This story was previously posted by Toolie but check out the picture at this link!

BTW: CONGRATULATIONS to all the CONTEST WINNERS yesterday - well done!!
goldquest
68-pound coin
Gee, if the coins are that big, I wonder how big the vending machines have to be to handle the coins!!!!!!!!!!!!!
Goldendome
Sir Cytek: Great answer for Sir Belgian.

Cytek: The posting on the looming national benefits crisis is old news, but certainly is well worth repeating--and often. The thing that is new is the continually growing benefits funding gap. At about $44,000,000,000,000.00, only a year ago; now with the help of of the new medicare drug benefit--primarily, it has grown to the over $53,000,000,000,000.00 gap that you point out in your post.

Sir Belgian, just yesterday, in Mes. # 125076, asked: why others at the forum were holding gold in our hands; and what did we expect to happen with that gold metal?

Well, Sir Belgian: Cytek here, points out a brilliant cause for the appreciation and accumulation of gold! One of the glowing stars of reference that I always-Always, gaze to, when I might suffer short term myopic vision, loosing longer term perspective with the sometimes painful minute-daily price fluctuations. **Keep your eyes on the longer term. Do not lose focus on the corner that the government has painted itself into, with respect to longer term debt and obligations--(promises)**

There are only two ways that the U.S. government is going to be able to deal with these obligations in the long run. 1) Create the money to pay for them; or, 2) Renege on them in part or whole. There is no third way! Even the gullible foreigners can't come up with that kind of money for us to borrow! To renege in a meaningful manner will be political suicide, and we all know how politicians hate Pain!!!

I am guessing the politicos will try "some" of number two--nibble around the edges a little--means testing, for example--which by the way, is another good reason to have unaccounted for wealth accumulation--stashed in the old cistern out back. Raising age requirements for SSI benefits, that sort of thing.

But, the easiest, *Easiest* way for the government to meet all those promised obligations, that the U.S. population has been paying and praying to collect in old age? Create the money; send out the checks...continue to act like inflation isn't really happening because of money creation. Inflation--when it happens--blame it on something else, if possible. However, by this time--Sir Belgian--the jig, as we say, will be up.

There you have it Sir, a very good reason for anyone in the good ole USA to hold gold,
53,000,000,000,000.00 of them in fact and growing. And, as Sir Cytek, points out: these don't even count the roughly $33,000,000,000,000.00 of Federal, State, Corporate, and Private debt that **IS** officially on the books!!!
Belgian
@ Cytek/Goldendome
Fully agreed and I particulary like "politicians hate pain" ! Here's their medication : Let GOLD...its price... float Internationally...Stop stabilizing the growing debt by pushing GOLD underwater !

FreeGold and its floating price must "BALANCE" against the swelling debtbergs !!! Otherwise, you shall have to cancel the legal tender status of the currency that you, the politicians, own !
LET GOLD BE TRADED UNRESTRAINED !!!!!

Note, how nobody panicked with the trial/test/balloon of 20% dollar-devaluation just before G-7 ! I bet that a lot of dollar-reserve holders were saying...OK, go ahead and devalue 20%...we will BALANCE this loss and the debt that these dollar-reserves represent...with FreeGold...floating goldprices !

The US has the choice : Defend the dollar's reserve status with the delivery of Gold (make it available) for the International $-reserve holders (accumulators)...or let US remaining goldreserves be priced freely (float) and lose dollar reserve status to FreeGold.

Politicians hate pain....Wich ones are hating it more than others ?
ski
Worth Noting??


1. In looking at the price action of AU and AG in New York on Tuesday, AG sharply took off in price about an hour AHEAD of gold.

2. In looking at the one year silver chart, the $7 level looked like a fairly strong RESISTANCE. Yet, silver sliced right through it.

(For what its worth, I generally think that using technical analysis in a manipulate market is a huge mistake. It is subject to a giant errors and false signals. However, if enough traders believe in using technical analysis in a manipuated market, the market will reflect their belief. So, silver's penetration if $7 resistance on Tuesday is important to me only because others believe that it is important to them.)

silver ... a once in a lifetime investment.
Belgian
Dan Norcini....
Is kindly reminding us about a "UNIQUE" situation that has been going on for almost 4 years now : Rising goldprices from $253/Oz AND rising open interest (Comex) !?
Does the artificial $6-phenomenon has something to do with this unique anomaly ...to keep it going ?

Is it the euro's actions (exch. rate management) that are indirectly responsible for this aberration ?

Are the paper-shorts, permanently being shaved !? How come ?
Are the paper-forces losing their grip on the pricing !?

Rich, what is your take on this ?
968
Mozhaiskov speech
"Data available to me suggest that these banks deposited about 1,000 tonnes in 1991, and 10 years later the
volume of the deposits reached 4,800 tonnes. Naturally,
the central banks' activity increased market liquidity and
thus also put downward pressure on the gold price. The
influence of these operations, however, must not be
exaggerated. It is even incomparable with the pressure
that was exerted on the market of gold derivatives."

Wat does Mozhaiskov mean by this ? Does he mean that the total amount of gold leased by Central Banks to commercial banks in 2001 is 4800 tonnes, or that the amount of gold only leased in 2001 to commercial banks amounts 4800 tons ?
Belgian
@ Ski
I don't want to reopen the debate on TA/TI...but...don't put things upside down : A chart is a picture...and a picture says (shows) what "is" happening. Fundamentalists confirm or doubt the truth (credibility) of the picture. The pictured realities are "interpreted" as to get a handle on the projections, backed or not, by the underlying fundamentals.

CRB has been rising. Are GOLD and/or silver, fundamentally different from the CRB and each other, or not !? What are the respective "pictures" suggesting and is this in line with the (changing) fundamentals ?

Today, D-Day for Turkey. Bulgaria and Rumania in EU 2007/8.
misetich
Reality Check: U.S. Retailers Say Consumers Held Back in September Oct 5 / 10:28 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1096986480000&sn=1&banner=mainwireSnip:

NEW YORK (MktNews) - U.S. retailers saw little to gloat
about in September, with some seeing signs of consumers tightening their purse strings in the face of economic uncertainty, geopolitical turmoil and uncooperative weather.

The late start to the Labor Day weekend, when combined with an earlier start to back to school, was seen as more of a detriment than a plus as it probably pulled some September shopping back into August.
......................
Wal-Mart downgraded to a 2.3% comp-sales increase for September after earlier projecting a 2% to 4% increase. The discount giant said sales in hurricane areas were negatively impacted but then picked up after the hurricanes passed. "Hurricanes are events which affect the timing of sales but are in the end mildly accretive to sales."
****************
Misetich

The theme remains the same. Corporate world reporting a decelerating US and global economy whilst the US Feds especially, are set to report a "glowing 3rd Qtr GDP" !

The foundation of a country's currency is its economy. A real economy, rather than one built on Enroneconomics.

The "gambit" of a strong US $ policy and corresponding stock market bubblemania wherein the US sucked most of the world investments to its shores is unravelling as it was/is unsustainable.

The "housing bubble" has provided temporary respite for a deflating stock market.

Thus far a lot of ammunition has been wasted in recent years to avoid a HARD LANDING.

1) Eleven IR cuts followed by 3 upticks of 1/4 point - thus still at emergency rates (Japan and EU still accommodative)
2) Tax cuts - resulting in higher budget deficits for years to come
3) Partial devaluation of US $ vis-a-vis EU primarily

Bottom Line

The achilli of the US economy -being the engine of the global economy is the disappearance of millions of jobs primarily in the manufacturing sector off-shored to China, India.

The 2004 Oil Shock And Awe is continuing and its effects are being underestimated by the markets. Its going to keep ongoing until something major occurs.

Asset Deflation is the biggest threat and a decelerating global economy is not what the doctor ordered or is it?

All Aboard The Gold Bull Express - Part ll
Shapur
One for Belgian
Austria issues 24-karat gold coin weighing 31 kilograms, worth $630,000 Cdn

Canadian Press - Tuesday October 5, 2004


NEW YORK ( AP ) - The Austrian Mint unveiled a new coin Tuesday at a Manhattan art gallery - 31 kilograms of 24-carat gold worth about $630,000 Cdn.

Dubbed the Big Phil, it was touted as the world's biggest gold coin and a powerful investment tool.

"The world needs a common currency beyond each national one," said Robert Mundell, a Nobel laureate in economics whose ideas laid the groundwork for Europe's common currency, the euro.

The Columbia University professor joined the chairman of the Austrian Mint in Vienna, Wolfgang Duchatczek, in presenting the coin at a Fifth Avenue gallery, in a room where multimillion-dollar paintings by Gustav Klimt surrounded armed guards in civilian suits.

White gloves were handed to anyone in the invitation-only crowd who wished to touch or hoist the coin - adding a grunt or two to lift the dead weight.

Two other such coins were introduced Tuesday in Tokyo and Vienna and a fourth is to be unveiled Wednesday in Munich, Germany.

Investing in gold acts as a hedge against the roller-coaster global economy.

"You can buy a car these days with the value of about the same amount of gold as in, say, the 1960s," said Kirsten Petersen, an Austrian Mint spokeswoman.

"Gold is truly a storehouse of value."

Only 15 of the gleaming discs were created this year by the 800-year-old Austrian Mint, each with a face value of 100,000 euros ( about $155,000 Cdn ) and bearing a replica of the Vienna Philharmonic Orchestra's famed hall on one side and orchestral instruments on the other. ( Hence the nickname Big Phil ) .

While a face value of 100,000 euros is etched into the coin, its retail price of about $500,000 US reflects the price of an ounce of gold on any given day in London - $415.40 US on Tuesday - plus a minting premium to cover the manufacturing cost.

On Tuesday, the Neue Galerie on Fifth Avenue, which houses entrepreneur Ronald Lauder's collection of Austrian art by Klimt and Egon Schiele, was busy with representatives of top Wall Street firms who came to see the financial novelty. Most of the limited-edition coins already have been sold to investors and institutions whose identities remain private, Petersen said.

A more common purchase is the one-ounce denomination of the Austrian Philharmonic coins, now selling at more than $400 US each. Roughly comparable to the American Gold Eagle and the Canadian Maple Leaf, the smaller Austrian gold coin was released in 1989 as Europe's first 24-carat legal tender bullion.

Most governments no longer base their treasuries on the so-called gold standard in effect for centuries. However, many countries have kept a gold reserve.

"Gold doesn't yield dividends like bonds, and it fluctuates a lot," Mundell said.

"But the other side of the coin is that gold is a measure of national reserves, more than ever."

With the U.S. dollar more "shaky" in today's world, the Nobel laureate said, countries like China, Taiwan and Japan are looking to buy more gold.

Besides, Mundell added, rubbing his fingers across the gleaming gold, "they look so nice."

*************
Paragraph 3 says it all!!!! Mundell is a goldbug, no doubt!
Cometose
Major Signal in Transports Index
WIth Oil Prices higher than they have ever been and Relative Prices moving toward record territory........
Fundamentally the Costs of running these Transport Co's is rising......and based on the last airlines ticket purchased, these companies profit margins are getting squeezed hard.........Net Income is Falling and Bankruptzy in this sector is germinating as if it were the springtime of the year in failures.....Companies are valued according to their Bottom line Net Income number improving ....not falling out of bed.....So why is the value of these companies going up (being appraised higher by the market?) while the benchmark for value at these companies is falling apart?

WHAT DOES THIS PORTEND?
what is it that this index is SIGNALING.........?

A PROFITS NO LONGER MATTER? We have entered a new season of Profit Moratorium CARNIVAL......

B VIRTUAL PROFIT and VIRTUAL GROWTH are technically more important than real profits and Real Growth ......We have entered a period of " I THINK I CAN VIRTUAL LAUNCHPAD GROWTH "........since capital spending for innovation R and D is out of the question ......since we can't even fund our Pension PROMISES....

C. THE PROFIT AT THE END OF THE RAINBOW is more important than PROFIT in the INTERIM......Technology stocks don't profit / why should Profit in Transports matter......
THE IMPORTANT THING TO REALIZE IS THAT , Profit will return ......when the price of oil normalizes.......In the meantime , moving the TRANSPORT sector into the TECHNOLOGY SECTOR of the NASDAQ IS BEING CONSIDERED BY THE SEC

D. Profit doesn't matter anymore because the GOV'T in effect is nationalizing the Companies in the Transport index.........or some of them ...

E. The Transport average is being manipulated higher by the PPT until they have time to figure out what to do about the sagging economy , the price of oil, and until after the elections.........IT IS A NATIONAL SECURITY ISSUE .....that the AXIS OF EVIL has thrown upon us ...as a result of their GOAL to hold OIL PRICES HIGH and Break the back of the TRANSPORT industry via outrageous costs...
The Gov't is adopting the TRANPORTS in it's new role as MOMMY .

F. THE STOCK MARKET IS A LEADING INDICATOR and therefore the Transports have broken out signalling that economic recovery is under way .........and the rest of the indexes will follow right after the election .....and usher in the new bull market where money will grow on trees
Jobs will spring out of nowhere and NEW CAPITAL INVESTMENT WILL bring huge new discoveries technological which will spawn a new age in development and growth deriving from American innovation and ingenuity . The seeds of this are now being planted at a think tank in Washington where a group of Faithful hired by foundations meet and
HOPE AND WISH IT WILL BE So on a daily basis , forty hours a week.

Pick one...............

Looks like another bubble to me .
968
@ Belgian : Russian Central Bank gold holdings/statistics.
http://www.cbr.ru/eng/statistics/credit_statistics/print.asp?file=inter_res_04_e.htmUntil 1998, the Russian CB has valued their goldreserves at a rate of 300 US$ per troy ounce. From 1999 nothing is said about the goldvaluation. The Russian CB only says "Starting from August 1, 1998, gold in metallic accounts is included in foreign currency assets".
Do you know if the Russian CB now values its goldholdings on a MTM-basis ? If the gold is priced on an MTM-basis, the Russian CB must have been a seller of gold instead of a buyer.
TownCrier
Russian misc.
968,
At the time of my most recent official confirmation on the matter (approx 2-3 months ago) the gold reserves of the Russian CB were not (yet) under MTM mamagement practice.

In regard to Mozhaiskov's deposit figures, the 4800 tonnes is consistent with levels of __aggregate__ CB accounts on deposit at 2001, not an annual addition to gold already on account.

Most remarkably, he tries to assure you that the market effect of this deposit element is small, negligible when compared to the bloated size and impact of all commercial gold derivative trade.

R.
968
@ TC
Thanks for the explanation.
968
@ TC
Sorry, I hit the "submit"-button too soon.
Under what price management valuation are the gold reserves then ?
When you look at the statistics, the value of the goldreserves in US$ over the years has diminished a bit (in a period when the POG has gone from 260$ to 400$). If they use a fixed price in their valuations, this means they have sold gold.
USAGOLD / Centennial Precious Metals, Inc.
A risk-free request, helping you enter the gold market with grace and confidence.
Great Albino Bat
The Austrian Monstrosity...

A sense of proportion is a mark of good taste. Bigness is many times a sign of barbarism.

The Austrian mega-coin is an example. What was the purpose of producing this monstrosity? Publicity? What for?

The coin is said to be 68 lbs. in weight, or 31 kgs. - I think it must actually be a round 1,000 Troy oz. in weight.

Well, all talk of gold is beneficial to "the cause".

Gold is behaving with uncharacteristic vigor. Hmmmm...something brewing? More war, maybe?

The GAB
Knallgold
I should be thankful for Another day of cheap Gold,but
Resistance at 421.006,target 454.72,Goldstockers post still their chatter on the other Forums,more TA nonsense, hypocratical invertical rectal-cranial parabolismus blabla bla-I don't get it:nobody takes note of that most important Goldstatement of the year:CB's ARE NO MORE SELLERS OF GOLD!The first year quota (56t) has already been soaked up by Argentina!

I know now what pandagold meant with "everybody will be caught napping".

I'm aware that this reality has to sink in first.And frankly,this (non) announcement was a clever move,you just can't say more with less!Without touching the bomb.The slow market penetrating nature of it guarantees some kind of natural appearing market.Those two camps emerging described by miner49,well,maybe its already visible?

Nobody knows how long this fuse is.But the smell is unmistakably.
Knallgold
GATA
And where is GATA?
TownCrier
968, on the essence of sales, "sales", and accounting.
$300 per ounce, as you've previously stated.

For fun, we can compare your two recent comments.

From msg#: 125168:
"If the gold is priced on an MTM-basis, the Russian CB must have been a seller of gold"

From msg#: 125171:
"If they use a fixed price in their valuations, this means they have sold gold."

To go with your flow, under which scenario would the most quantity have been "sold" to see the present numbers as is?

I think you will agree that under our current regime of rising gold prices, MTM would tend to show increased gold value on the books (vs that fixed accounting) for a given quantity, thus requiring a greater volume sold to acheive the end numbers. You can therefore conclude, based on fixed $300 valuation, that less gold has been "sold" during this time period than you might otherwise calculate under MTM.

But before you take that to the bank, you might want to ensure you fully understand how the Russian CB accounts for gold reserves to begin with. It might just be possible that a sudden asbsence of gold on the books (which you might interpret as a sale) is really just a fair accounting for a reallocation of a quantity of gold into a temporary swap agreement or even a deposit account such as the kind we previously discussed.

There's a difference to be acknowledged between a true sale operation (out the door, "bye-bye") and a financial one that results in an odd little bird called a "gold receivable".

Just as it is at the individual discretion of any given CB to choose whether to book gold reserves at MTM or fixed prices, it is also at their discretion to choose whether or not to let "receivables" sing from the same page as unencumbered gold -- even if they are still sitting side by side in the same cage(!).

The fact that you'll never be able to root out the full story to connect all the dots is what makes this all so much fun. At some point, to preserve sanity, you have to resign yourself to the elements which remain unknowable, and adopt, as strange as it may seem, the same attituded expressed recently by Russian CB deputy chairman Moshaiskov himself:

"I would like to thank the conference organisers for this opportunity to share my thoughts on such a complex, even mythical subject as gold and the prospects for the near and medium-term. I assume that the request was made for one simple reason: that I, as a senior executive of the Bank of Russia, should know more than other ordinary mortals.

"In general, this logic is flawed, although there is sense to it: It is necessary to understand the Central Bank perspective regarding this precious metal, particularly given that it does have approximately 500 tonnes of the metal in its vaults.

"...Like any reserve, it needs to be conserved, in terms of both actual physical form and its value. To a lesser extent, we need to be concerned about its liquidity, or more precisely, market price developments.

"...The central bank's specialists do not have to follow real-time price movements every day and every minute, or react instantaneously to every little twist and turn in the market. We are concerned with other, less immediate problems regarding gold. In a figurative sense the central bank's attitude can be compared with that to a giraffe. ... On the one hand, when Russians say that someone is reacting like a giraffe, they are highlighting that person's slow reaction. It even suggests a degree of slow-wittedness. On the other hand, the evident magnificence of the animal commands respect. "The giraffe is tall, and he sees all" -- the words of the Russian bard Vladimir Vysotskii are well known throughout Russia."

To keep a long story short, while the CB has what might seem like half an ear out for the rumbles and squeaks of daily life and price movements in the Serengeti of markets, both eyes are trained keenly on any approaching element that would materially affect the security of the ground upon which it stands.

R.
TownCrier
I forgot to add...
Whatever that thing may be that approaches, it will not necessarily have the final say in the events taking place upon that ground in question. Have you ever been kicked by a giraffe?

R.
Zhisheng
Up into the Close!
http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1 Roller coaster ride today in gold--but not the dollar.
Some doing behind the scenes.
Caradoc
"up into the close"
Yes, up. And even confirmed by al jazeera as closing at $418. Interesting that another source showed much less volatility during the last two or three minutes and even now shows gold down 10 cents closing at $417.70.

Caradoc
Cometose
DOLLAR GOLD OIL SILVER
Mr Sinclair states and I believe him , that the Gold Price is all in the dollar.......

and it appears that we have arrived at a platform ........
and patiently await the arrival of the train.......

which is on scheldule but ,,,,,,,,,none of us know what that schedule is ........only that we don't want to miss our train and therefore we must at this specific juncture be and remain vigilant.........as we should always be vigilant in our watching

we may have touched overbought on the SILVER and the GOLD momentum wise in the charts.........however that has happened before prior to big upward moves and more often prior to ambushes on the SILVER AND THE GOLD.........

THese things are all happening on the backdrop of HUI having broken through some resistance level .........last week or early this week....and silver going on a tear.

I believe however,,,,,,that we are now on a new treshold of strong support underneath this platform as we wait the arrival of the train ...........

Support that is undergirded by OIL trading and maintianing a level over $50.00 per barrel.
GOLD AND SILVER FOLLOWED OIL the last time around (1970's).
It would appear that OIL is OUT OF THE BOX .....has GONE AND IS STAYING OUT OF THE 9 DOTS ......IS NONCONFORMING to the WISHES OF WORLD CENTRAL BANKERS......

THIS IS THE WAR DESCRIBED and CONTENTION UNDERLINED AND EMPHASIZED IN THE WRITINGS OF ANOTHER .....the SECRET AND MYSTERIOUS CONFLICT IN THE CHANGING OF THE GUARD .....and the INFLUENCE OF THE RESERVE CURRENCY OF THE WORLD ....it would appear.........

POWER CORRUPTS and ABSOLUTE POWER CORRUPTS ABSOLUTELY someone has said .....and this also applies to the MEN of Banking at the FEDERAL RESERVE who dispatch the RESERVE CURRENCY OF THE WORLD .........under whose watch .. have been designed , planned , and executed many dirty tricks ...in the name of democracy and and better world or
in the name of "FREEDOM" .........


THE BIBLE talks about the fourth empire........in TIME and influence and described it as Stronger than the rest of the Empires that preceded it ..........and that It was composed from the Head to the FEET of various METAL parts.
and the feet were made of IRON and CLAY.........Daniel 2:29

This is a vision that the king of BABYLON had thousands of years ago ...that Daniel, a man of GOD, was called in to interpret when the astrologers /soothsayers failed . This is a very interesting record . One should read it as a foretelling of something that was to happen in the future distant from the time when the vision event originally occured.

I believe that the times we are living in are represented by the Feet of IRON and CLAY...........

The Clay's susceptibility to outside influence / Spiritual influence, Spiritual Light will cause the iron part of this Empire to collapse.

Jesus said to Build upon the ROCK .......and your foundation would be sure so that when the storm came it would not dissolve your foundation ........or wipe out your building .......

We Have found the CLAY ...........

CLAY OF HUMAN FRAILTY ............
CLAY OF MISTAKES..................
CLAY OF DERIVITIVES...............
CLAY OF TRUSTING IN THE FLESH OF THE ARM
STRENGTH POWER and INFLUENCE OF THE
FIVE SENSE INTELLECT OF MAN NEGLECTING
UNIVERSAL SPIRITUAL LAW AND PRINCIPLES
in our MIDST AVAILABLE TO KNOW and to
APPLY
CLAY OF GREED
CLAY OF SOCIAL ENGINEERING MODELS AND PROTOCOLS
CLAY OF BANKING ENGINEERING MODELS AND PROTOCOLS
CLAY OF CONQUERING EVERY FRONTIER OF KNOWLEDGE
and yet REMAINING IGNORANT
but REMAINING PRIDEFUL OF WHAT WE KNOW
instead of(HUMBLED) AWED BY WHAT WE most IMPORTANTLY DO NOT KNOW.

CLAY OF NEEDING TO CONTROL.
CLAY OF LOOKING BACK AND IN VACUUM (OF FALSE NEED OF SECURITY CAUSED THEREBY) ATTEMPTING TO MAINTAIN THE STATUS QUO
CLAY OF ACTING COUNTER TO BEING PROACTIVE AND MOVING AHEAD
and therefore regressing..
CLAY OF NETWORKING inside FALSE PROMISES of MATRIX SYSTEMS
ABILITY TO GIVE YOU NOURISHMENT
CLAY OF FABRIC OF LYING Philosophies, Ideas, GOALS and Objectives Supporting such MATIX SYSTEMS' NETWORKS


Chris Powell
Knallgold asks: Where is GATA?
Where it always is, in all the usual
places, one of which is this forum.
I'm not sure I understand the point
of the question. If it is to suggest
that GATA is supposed to shake the
gold market each and every day, I'm
afraid that once per months is
about the best our little 501-c-3
organization can aim for. That might
change if we got hold of a substantial
contribution of a million dollars or
so. With a thousand here and a
thousand there, we try to deliver
pretty good bang for the buck.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
USAGOLD Daily Market Report
Page Update!
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----

COMEX gold settled little changed on Wednesday, capped after hitting a six-month high overnight by a firmer dollar and by profit-taking after a one-month gain of better than 6 percent. December gold hit $422.20 an ounce in ACCESS electronic trade overnight, besting Friday's $421.90 peak.

The contract closed up 20 cents at $420.00, after bottoming at $417.50 in open-outcry trade.

Investment funds and traders have April's $436.50 peak for the December contract in the cross hairs. Bulls are counting on continued weakness in the dollar, record high oil prices and geopolitical tensions before the November U.S. presidential elections to keep gold in favor as a safe haven.

"There is not that much selling over the market," a COMEX broker said. "Everybody is looking at the crude. People are getting convinced here that you can't sell it, so you're getting some added buying inside here. We're just asking ourselves: 'Where is this thing going to go?'"

The net speculative long position in futures is getting huge again. But traders said this week that funds have room to keep buying before they reach the extremely overextended situation seen during the run to the 2004 highs...

----(see url for access to full news, price charts and 24-hr newswire)----
TownCrier
HEADLINE: Crude oil hits record $52 on slim stocks
Belgian
Miscellany....
Qatar oil-minister repeated that the OPEC is pumping its share of oil. There should be no supply problem ! Read between the lines...get used to high/higher prices as the intro to something different...

@ 968 : TC's...in the Serengeti of markets...
Gold has many,...MANY different prices !

Reread Shapur's post on Mundell and the Giant Gold coin !!!
Try to catch the "symbolism" behind this event...with a cause !!! The axis of GOLD building...Vienna...Tokyo...Munich. Another goldmarket is being prepared. That coin is about 31 kilograms of metal and not about tonnes of paper or flashy digits.

@ TC : The Serengeti (and many other same gardens of eden) was one of my favorite refuges into natural beauty. Perfect markets (wilderniss)...heavens on earth...Golden !
Good night from Euroland.
Belgian
@ GAB
Gold, the metal, on show for the public ! "This is GOLD"...what do you think about it, folks ? I interprete this as one, out of many to come, re-introductions of the notion that goes with Gold ! Not a monstrosity, Sir.
Part of Gold re-education for excellent reasons, not that far away. The Gold coin is directly adding weight to Mundell's thoughts expressed to the public in a less academic format. A VERY good sign (symbolism), imvho, at the right starting point...Manhattan.
Boilermaker
Hedging Oil and Killing the Competition
http://www.tennessean.com/business/archives/04/09/58072382.shtmlA friend of mine who's a mechanic for Continental Airlines told me that their big competitor, Southwest Airlines, was driving them and others into bankruptcy by virtue of Southwest's low price oil hedges which allow them to profit with low fares. I checked to see what this was all about and found the following; (see link)
"Southwest, the sixth-largest U.S. carrier, used options on New York crude-oil futures contracts to lock in prices for 80% of its 2004 and 2005 fuel needs at $24 and $25 a barrel, company filings show."
There's a lesson here for business folks and others who wish to survive in a changing world. The smart ones do what their gut and their acumen tells them, buy low, sell high. It's like making a decision to sell $ to buy gold at $418/oz when you study the market prospects for the $ and for gold. No brainer. BUT!!! Unlike oil you must take delivery of your gold. The folks at the paper pits have no honor.


TownCrier
A fond farewell to Rodney (1921 - 2004)

As a kid I played hide and seek; they wouldn't even look for me. I tell ya, I get no respect.

When I started in show business, I played clubs that were so far out in the sticks my act was reviewed in Field and Stream.

Every time I get in an elevator, the operator says the same thing to me: 'Basement?'

But hey, I kept at it and finally moved up in the world. To manage my finances I went out and bought an Apple Computer; it had a worm in it.

On an advisor's advice I tried to diversify into gold. One day I found a bullion shop with a sign on the door "personal checks and credit cards welcome". I went in and said to the owner, 'I need two thousand ounces of gold,' and tried to hand him my check.

He stopped me and said, 'Hey, you're Rodney Dangerfield.'

'That's right,' I said, 'you want an autograph?'

He said, 'No, and I don't want your checks, either.'

So I tried to hand him my credit card, but the man said he didn't trust my card, either.

So I says to the man, 'Look, so you won't take my checks, you won't take my card. Are you going to sell me some gold or what?'

He looks me right in the eye and says, 'Rodney, I'll sell you the gold. But you'll need to pay me with gold.'

"I get no respect."

-----------

Rodney, around here you'll always be respected... and missed!

R.
Great Albino Bat
Belgian @ The gold coin monstrosity....

The 1,000 oz. gold "monstrosity" is certainly useful for publicity purposes, but not much else.

I'd much rather own 1,000 gold one ounce Philharmoncis, than one 1,000 oz. "monstrosity".

Wouldn't you?

And 8,850 ducats (the aprox. 3.5 gr. coin of Venice in old times) would be even more useful.

Be happy. Gold is showing signs of life.

"No news is extremely good news" with regard to silence about future sales on the part of participants in Washington Agreement II.

This, and Russia's statement by the Deputy Chair of B. of Russia, unearthed by persistent work on the part of GATA,

And, Argentina's purchase of gold reserves...

These are clear signs of fracture of opinion within the international banking community. "Blue skies, smilin' at me, nothin' but blue skies, do I see..."

BIG changes are a-comin'.

The GAB
Boilermaker
Rodney
TC
Rodney Dangerfield was a metaphor for gold these last 20+ years.... But times they are a changin'.
Ag Mountain
@GAB's monstrosity
Have you even seen it? In case you have no real idea the coin is only about the size of a good dictionary. That hardly qualifies for your scorn. Are you objecting because it's in the form of a coin instead of 2 and a half boring LGD bars?
Goldendome
GAB--With Gold, big CAN be better!!!
Good God GAB! Gold is Gold! Big or Small! I'd love to have that 1000 oz. art work hanging on my living room wall! No one would try to steal it, assuming it to be only brass or something else; everyone knows, that I ain't got that kinda dough. Of course, if you owned it--wouldn't it say something about your financial condition? I'd like to see it- and publicity stunt or no, it HAS to make a statement for Gold. Should they wish to sell it, I'm certain they would have pleanty of offers.
Ned
@ Boilermaker
Was that Barrick Oil that hedged forward all that oil at $24 & $25 per barrel?

;)
Boilermaker
@ Ned
All I know is that it wasn't me. My oil is going at the pysical market and being exchanged for the precious. ;)
CoBra(too)
Fannie and Freddie -
Or is it Humpty Dumpty? ... Broken shells even Alan G., Dr Magoo can't put together again. He even went to extremes to avoid seeing the problem during his watch. No oversight by the authorities, ever. After all these are GSE's and are adequately looking after their risk control ... by socializing hedging to the hilt.

- Seems a bit odd, as the TSY; FED and the rest of the 'official' financial sector has already crowded that niche. Though, in the end you never know where you might find you counterparties! ... if ever that is! Or let me ask you who's got a spare few hunnered Trillion in a global economy of maybe 40 Trillion or so?...

My lovely black cat says - chasing my own tail is fun - for a time, chasing mice and other vermin is even more stimulating. Or is it?

Our gracious host has minted the verbiage some time ago:"We may only be one (or two)'Enron's' away from a meltup of gold!" - MK, may have meant Ashanti and Gold consorts, though mortgage beasts are paving the way to total financial destruction.

- Or a similar phrase; Guess what, we're there - almost. Fannie and li'l bro Freddie are doing their best to fill the void. Probably followed by the behemoths a.k.a. JPM, alledgedly holding 60% of the US derivative notional value. Its ilk the rest of the gang are a bit behind, though in terms of balance sheets it won't really matter much.

OK, if no external upheaval happens before Nov. 2, the we may get away another few weeks. We also may have "another" ballot problem, which may stretch the voting day for-ever, or even worse.

Last chance to load up some bullion (coins or whatever you prefer) and many thanks for MK going international on a sound basis again!

cb2
Lupo
Power corrupts
Power corrupts, and absolute power corrupts absolutely. Lord Acton (1834-1902)
R Powell
Ski // Belgian
It's good to hear from Ski, who has a list about a half mile long of reasons why silver may be that "investment of a lifetime." Maybe he'll give us an updated repost of it, perhaps over the weekend? Just for the sake of objectivity, I'll ask him to play devil's advocate with his own opinion and list some reasons why silver might not be that lifestyle changing investment. (g)
However, I believe he is right as I can still find no reasons to refute the laws of supply and demand. In playing devil's advocate as to why the price of silver has not yet skyrocketed, I believe I've come to a better understanding of both the fundamental situation and of the silver markets function and functioning. The potential still exists but the past numbers have left the market in a situation where, lacking an investment mania, it may need a catalyst...a confirmed realization of the ever tighening supply and demand situation. This has been obscured and is not an expected (in any timeframe) piece of information as are weekly, monthly reports found in copper supplies, grown crops, oil and natural gas stocks, unemployment numbers, PPI and CPI numbers etc. Gold numbers are similarily hard to verify, even if the market choose to evaluate them. Simply put, imho, the silver market trades without such information OR there is something else people like ski and I have totally overlooked..???

Belgian: I saw your questions (125162) and immediately thought of how much was being asked. There are been volumnes devoted to delving into questions such as ....Are the so-called commercial traders more knowledgeable than the speculative ones which, in the gold market, applies to your question of "Are the paper shorts permanently being shaved?" Obviously, using hindsight, we can say that buying when the POG was about $250/ounce was a correct decision. Have the shorts been on the wrong side of gold since that $252 low mark? Simple answer...yes, more realistic answer...depends on other facts. The question concerning open interest is also not easily dealt with due to number of other variables and/or influences that are reflected through buying vs. selling pressure whose net result determines the price. I've written down your questions and need to ask for some time to respond. This will be fun, (thanks for asking) as these are factors that I try...have tried to, am trying to, will probably always be trying to...evaluate. I can offer only some opinions but hope that others will also join in...keeping the focus, of course, on precious metals.
rich
R Powell
Silvernews
http://www.silverinstitute.org/news/pr06oct04.html
"The link below will take you to a press release issued today by the Silver
Institute on the upcoming Third Annual China International Silver
Conference. Registration, hotel, agenda and speaker information can be
found as well in the press release."

http://www.silverinstitute.org/news/pr06oct04.html
MK
Cobra
It is good to see you posting again.

On being one Enron away from a melt-up in gold, I was thinking of three financial institutions at the time and Fannie/Freddie was not one of them -- though one headquarters not that far from you, one has made headlines in recent days here, there and everywhere, and the last has been quiet, perhaps chastened, in recent months. I'll let all of you make your guesses about whom I speak.

On international gold deliveries from USAGOLD, we refuse to be discouraged by various hindrances and remain determined to offer gold in Europe at a good price, with good service. I am sure that there are those who wish we would just go away and leave Europe to the buy and store crowd. . . .unallocated of course. But we are a reality in Europe and have no intention of going away anytime soon, unless of course the various states completely refuse to adhere to their own stated policies with respect to customs, duties and VAT. Physical metal for Europeans. . . .Like here, it is the only way.

Going to the high country for a long weekend. Hearing that the snow can be seen in the higher altitudes, though golf is still being played in the valleys. Looks like its going to be a wet, cold winter with the downhillers here in happy anticipation. What does it look like in Austria? There is a movement here to keep Bode skiing under the Stars and Stripes though the eagle might wish to change that allegiance.

Wonder how making an emperor a saint squares with that business about camels, eye of the needle, et al. . . . . .Though the whole affair has caught my attention. Any details for us?

Congrats to the Vienna mint on the largest coin ever minted. Will there be someone willing to pay a premium to own the coin likely to make the Guiness Book of Records as the largest gold coin in the world? We need to know if they struck both sides and who paid to have the blank and die manufactured? Was that coin really struck??? Saw our friend Kirsten Petersen, from the mint, was there for the unveiling.

Best to you and yours, CB. And the Vienna Woods.







USAGOLD / Centennial Precious Metals, Inc.
A world of satisfied gold owners. Join us.
Cometose
Power Corrupts/ Lupo
THank you!
Great Albino Bat
Bigness....

Bad taste is bad taste.

De gustibus non disputadum est.

GAB
Belgian
@ Rich
The "uniqum" of higher goldprices + higher open interest, for such a long time...must have a consistant explanation.
We cannot keep on hiding behind the extreme complexities of the gigantic derivative business as an excuse for not finding the logic of this phenomenon. The same goes for the supply/demand anomaly in silver.

There is a fitting "fundamental" explanation for the 3 decades of cheap oil !

I am a derivative analphabet and therefore ask for educational assistance from experts. Maybe the explanations for the gold/silver phenomenons are not to be found in the pure technical aspects of the paper trades (derivatives)?
We must be turning in circles somewhere...with the classic reasonings (mantras)?

What "is" this gold-market and is it changing !? Gold is moving with a higher and different frequency.

Lots of people do play the markets...I would like to hear from those who can explain "the nature" of those markets.
Not the classic yadayada, but the what's and why's.

WHY are the derivative markets (hedge funds) expanding as they do !? We are watching $ Trillion affairs, here.

There is a gigantic wall between paper and gold the metal, Rich ! This is NOT without a purpose !

Thanks for responding. B.
Belgian
@ Knallgold msg #125174
A very short but excellent post, Sir !
You (and miner49er) observe :...The slow market penetrating nature of it (WAG II goldsales) guarantees some kind of natural appearing market...

There is something going on with that wall between paper and Gold. Fist we need to know "what" the markets are, before we can detect that they are (possibly) changing !

I keep on having that strange intuitive feeling that the financial paper industry is going to "stagnate" for a decade or something. Gold will softly penetrate into this much less and less volatile financial paper giant. Take the volatility away from markets and things are brought back to their real proportions. Simply "stabilize" and get real !

Most probably a very boring prospect for many paper affectionados !?

The grand finale of the dollar fiat paper might be an exception on this stagnant volatility...hyperkinetic financial dogtail.
TheJuniorMiner
R Powell

I sense you are still hanging in there on silver. Been a wild ride this year but it seems to be settling down. I stated to you once that until they start taking it off the COMEX we wouldn't see a real breakout. We have gone from 122 million to under 107 million during the last few months. I am encouraged but still a little skeptical as copper, lead, tin and nickel stocks have hit lows on the London metal exchange and then all of a sudden in comes thousands of tons in a one day event.

Demand in so many base metals is very high and supplies appear to be dwindling it seems only logical that silver is feeling the same stress. If the Chinese quit dumping and the last six months it seems like they have, then silver should continue to be extracted from the Comex warehouses.

At some point the fundamentals will override the games being played. Waiting takes a lot of patience and may take years to unfold but �

The opportunity to be in a high demand base metal and a precious metal simultaneously seems too good... to be real.

Best o luck in your silver endeavors.
YGM
Chris Powell....... Re; GATA.....
Chris you & Bill deserve much gratitude from the Gold world with regards to your years of selfless efforts on behalf of all 'goldbugs'.....
(I do so hate that word)
Even from the much maligning and desparagement of GATA from the Bankers, Financiers etc etc etc (mostly closet Goldbugs all) GATA has brought so much publicity to Gold and and also to those few souls striving to awaken the masses to the reality of the "Great Deception" that the war on Gold shall be much shortened by your (GATA's) efforts....I doubt there's a Banker, Swiss or otherwise that doesn't hate GATA and its small army of supporting voices....One thing is very certain, from day one the impact of GATA and its claims has never been diminished. The awareness and support grows like the morning sun on a new day, and soon, very soon, those efforts and truths will be rewarded and recognized by those in denial and those involved in high crime!!!

As always...YGM

PS: Ferdinand Lips "Gold Wars" is blacklisted in Canada. Not available in Chapters or other chain bookstores here.
Now I wonder who could have pulled that string?
Belgian
RTRS
>>>Senior OPEC people state that they will rise oil output (!?)
How credible are these kind of press releases ? POO = $52,34
pmurgsRSA
Are higher oil prices in US governments interest?
http://www.gre.ac.uk/~fa03/iwgvt/files/9-gowan.rtfPeter Gowan in "The Globalization Gamble: The Dollar-Wall Street Regime and its Consequences" writes on about page 17:

"The Nixon administration was planning to get OPEC to greatly increase its oil prices a full two years before OPEC did so and as early as 1972 the Nixon administration planned for the US private banks to recycle the petrodollars when OPEC finally did take US advice and jack up oil prices. The Nixon administration understood the way in which the US state could use expanding private financial markets as a political multiplier of the impact of US Treasury moves with the dollar. But according to the Nixon's Ambassador in Saudi Arabia at the time, the principal political objective behind Nixon's drive for the OPEC oil price rise was to deal a crippling blow to the Japanese and European economies, both overwhelmingly dependent on Middle East Oil, rather than to decisively transform international financial affairs."

Thanks to Remarx (9/28/04; 09:18:20MT - usagold.com msg#: 124795) for the link to Peter Gowan's article. I have found it very educational. See http://www.gre.ac.uk/~fa03/iwgvt/files/9-gowan.rtf

The last sentence quoted from Peter Gowan above got me thinking about the effects of increased oil prices and their effect of increasing the number of dollars which will be kept by the rest of the world to pay for oil and the oil exporting nations budget surplus which results from an increase in oil income revenues of which a significant amount is likely to be left in the US until required by the oil exporting state.

These actions should result in a higher dollar exchange rate unless the FED prints more money to offset this. To my understanding, the US government clearly does not want the dollar to appreciate at the moment and would prefer depreciation, so if the Fed did print more money, which it seems to be doing, to offset the increased oil dollar flow to the US, one of the results is that the rest of the world will be helping to fund the US budget deficit.

Could it be current secret US policy for Saudi Arabia to purposely restrict the amount of oil being supplied to the world in order to increase the world oil price to bring about an increased level of funding for the US budget deficit? I know at first glace this sounds counter productive as it will put additional pressure on the US economy in the form of higher oil prices, but might the US be willing to accept this in lieu of the world abandoning the dollar as the reserve currency in the near future? And if so, might the US administration not also be able to use this to allow the gold price to rise, in step with the oil price as per Another's cheap oil for cheap gold theory? This would keep the currently marginal gold mines from closing and keep them producing gold to help keep sufficient amounts of physical gold supplied to the world markets so a default on Comex contracts that actually take delivery does not occur?

Any comments on this?

On a personal note, I've been unemployed for a while now and cannot justify the cost of my own internet connection (in South Africa we have effectively a telecommunications monopoly with high prices and poor service, 30% of which I believe is owned by a SBS, a US company based in Texas which I believe only operates in monopoly markets), so I have to download the forums discussions every few days when I visit my folks. This basically prevents me from taking part in the discussions here but I do still read everything posted and wish to express my thanks again to all the posters here for helping to educate me on the true state of the world today and for helping to bring the day closer when South Africa receives a fair price for it's gold exports. I also wish to thank USAGOLD / Centennial Precious Metals for providing this forum. If I was in the US, I would have bought my physical gold from you.
Knallgold
Chris Powell
I should have been more clear on my point.I think we should be able to start a discussion on the recent WAG2 (non) statement,this is in my view the years most important happening in the Gold market and goes to the core of the manipulation issue.Central Banks are practically done with selling!!

I have detected instead a perplexing complacency and ignorance in most Goldbugs the last days-I remember the inspired and lengthy talks after the WAG1.Admittedly,the indirectness of WAG2 makes it a bit difficult to state strong opinions by oneself,and I may be wrong or too emotional about it,but as long as CB's don't add more we can fix them on it,no?

Your distribution of the Philipps article started it with me,while I had the thought myself (no sales altogether),I just didn't took it too seriously to think it to the end.The same complacency by me!If my english/writing would be better I might write Another essay for distribution,but frankly,Philipps did it perfectly.If people only would read it and think about!If we think to free Gold,now is the moment "to bring the matter to a head" (miner49er)!So we have to wake up more people now'somehow,its not only about shaking the market but to tell the still unrecognised (though official!) truth. I will distribute the article further.And I will send you 500$,thats what I can mobilise now.

Now that the Central Banks have liftet the ceiling,the sling is getting tighter on the bullion banks instead.Freegold,here we come,kicking cabalbutt!
Belgian
@ pmurgsRSA
There is a lot of substance in your thoughts, Sir.
The US, as the main manager of the global US$, has and still is acting (managing) as the guardian of that global US$ currency. But herein lies exactly the problem : The US manages the US$ almost entirely for its own benefits. The US certainly continue to do this (as you describe) in the face of its �-competitor to be labeled/branded as a "would be" or "me too" candidate.

That's where we stand "now" and is totally different as where we stood then (Nixon).

Your theory is based on the assumption that "the dollar" is still in control of the oilprices...pricing. Is that so ?
Oilprices are not inflationary up to the price-level of $60/pb, stated by the dollar ? How true is this in a continued contracting economy ?

For as long as the dollar enjoys reserve-status, no goldmines will be closed, thanks to the papergold.

How can a "DEBT-Paper", the dollar, possibly remain in function !? Answer : By adding more of the same, through whatever expansionary mechanism !

Bear in mind that Saudi Arabia's role as the former swing producer, is not as evident today as it was in the past decade.
Raising oilproduction for the nearby future, means investment. It are the "oil-owners" that pick the investors of their choice. And then those privileged investors remain subordinated to the authority/arbitraryness of the oil-owners.

A giant power-play, pmurgs !

Gold Giants want to collect as much Gold as they can get for as cheap as possible. Once the Goldflows become too low, they want free-priced Gold...and not a little arbitrary pricerise organized by the papergold market.
First, all the low hanging, easy fruits...then a high cost fight for what's left.

All prices are distributed at the end of the race ! One day, your marvellous country will be very "wealthy", again !

Golden Lionheart
Free Gold
Been trying to get my old head around the concept of Free Gold.
When gold becomes Free Gold and I want to acquire some gold I assume I would have to pay for the gold with an equal amount of gold.....Yes? Don't make sense to me.
Knallgold
GLH
FreeGold'short for Free-of-derivatives-Gold.
misetich
China's oil demand unlikely to decline
http://english.peopledaily.com.cn/200410/07/eng20041007_159213.htmlSnip:

A surge in Chinese and Indian oil demand, which has helped push world prices to record highs, is not a passing phenomenon, analysts suggest.
......................
IEA estimates Chinese and Indian demand will grow 970,000 barrels per day (bpd) this year -- nearly 40 per cent of total world growth.

China accounts for the lion's share, with 840,000 bpd of incremental demand.
................
Growth in Chinese car sales, which almost doubled last year, has decelerated this year. Even so, sales are forecast to increase 10 to 20 per cent this year.

Sales of passenger vehicles in India rose more than 18 per cent, year-on-year, in July.
................
"Inflation is causing some worries. But I do not see any major decline in oil demand growth in the next two or three years," said R. K. Pachauri, director general of The Energy and Resources Institute in New Delhi.

There is debate over whether China's massive crude imports for this year -- up about 40 per cent from 2003 -- represent real demand.

Some analysts reckon the Chinese Government has ordered State oil companies to hold inventory.

JP Morgan has estimated China may have stocked as much as 285 million barrels of oil since early last year.

Chinese officials have said work is going on to build the initial phase of a strategic oil stockpile, which could start to be filled within the next year.
******************
Misetich

The red dragon's economy, the manufacturing arm of the USA- keeps on rolling -

If the statement above is correct regarding "initial phase of a strategic oil stockpile, which could start to be filled within the next year." troubles looms ahead for the industrialized western economies

Other energy related news

Snip:

Energy Dept. Predicts Rise In Winter Bills
Heating Oil Marked For Significant Climb

http://www.washingtonpost.com/wp-dyn/articles/A13529-2004Oct6.html

The Energy Information Administration, an arm of the Energy Department, said the average costs of heating oil, natural gas, propane and electricity are expected to rise across the country from October through March.
..................
The most significant cost increase for households is expected in heating oil, which is predicted to rise 28 percent in the Northeast. The cost of natural gas is expected to increase by 15 percent in the Midwest. The report predicts the household cost of fuels in the regions where they are most commonly used.
***********
End of snip

Other Real Price Inflation News

Copper, Aluminum Rise to 9-Year Highs as Inventories Slump

Oct. 7 (Bloomberg) -- Copper and aluminum futures rose to nine-year highs in London as growth in worldwide demand, led by China, forced users to drain inventories of metals needed in construction and manufacturing.

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aT5ZNYK9AWzs&refer=home

The Feds were out in full force this weeks proclaiming, inflation - and inflation expectations were not a threat -

That type of jawboning only makes this worse as the DURATION and INTENSTITY of The 2004 Oil Shock And Awe are being underestimated by the markets

Asset Deflation is the biggest fear.

All Aboard The Gold Bull Express - Part ll
Golden Lionheart
Free Gold
Thanks Knallgold. You have enlightened me with eight simple words. Thanks. I have read numerous posts in the past few months and nobody spelt it out like you just did.
Knallgold
Golden Lionheart
I have been there myself.And Freegold does not necessary mean its free of manipulation (what is?),there will be games to influence its price/corner the market as before.The difference is,everybody has the same long spears.
misetich
Reality Check: U.S. Recruiters Report a Soft September Job Market Oct 6 / 10:34 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1097073240000&sn=1&banner=mainwireSnip:

NEW YORK (MktNews) - The job market remained flat, sluggish
or even down in September, as a "wait and see" attitude prevailed among employers on questions over the direction of the American economy and who would win the November election, say staffing firm executives.
....................
***********
Misetich

The Maestro's THOUGHT that he'd be able to cope with a SM bubble burst than Japan did in the early 90's - YET the same path is being followed

The Maestro's superego must be bruised - as job creation has not materialized as required to keep on going the flameout caused to GDP growth derived from artificial boosts

The Feds take comfort that the housing market has "saved the day" - though it remains to be seen whether the industry can keep on going as price inflation roars ahead and consumers and government debt levels continue on rising though jobs are scarce

All Aboard The Gold Bull Express - Part ll
Chris Powell
What will the central banks do?
Thanks, Knallgold, for your clarification.

GATA has no particular insight as to what
the central banks will do about gold,
other than that we believe that they have
leased or otherwise compromised far more
of their reserves than they acknowledge
and thus are closer to exhaustion than is
generally thought.

It seems obvious that anyone, central
banks included, lately would want to hold
less of a depreciating asset subject to
terrible mismanagement, the U.S. dollar,
and more of an appreciating asset that
is no one else's liability, gold -- if,
that is, anyone is acting in his own
interest.

Why other countries would want to be
slaves to Americans in the most primitive
sense -- working harder so Americans
don't have to -- has always been a
mystery to us.
Boilermaker
Protecting Your Paper
Belgian and Rich
Here's my simplistic take on the question why the gold shorts have stayed on the losing side of the gold market for years.

The polite American financial community views gold as an anachronism to be swept aside and goldbugs as those nasty cockroaches who love the stuff and insist on having a place at their investment table.
The derivatives market in gold is like the Orkin Man. It is the pest control gear and insecticide that keeps the roaches at bay. The cost of shorting gold on a continuously losing basis is payment to the Orkin Man. It is a pittance in relation to the larger game that is protected. You can also think of it as protection money paid to the mob to keep them from trashing your business.

But now the cockroaches are developing a tolerance for the paper insecticide administered by the Orkin Man.
Others have begun to embrace the idea of gold as a refuge. They see a dollar careening out of control like a truck with no brakes gathering speed down a mountain road. Outside the US the gold market quietly sucks up grams and tons like termites eating away at the foundation of the dollar. The ancient heritage of cockroaches, termites and gold are massing at the gates of the paper wall. No contest. The paper will fail and the physical will prevail.
Belgian
Question for Chris Powell
WHY,...for what reason,... are CBs closer to the exhaustion of their goldreserves ? Are they dummies...is it accidental...or is there a (common) purpose behind this fact ? Is it dollar-gold or euro-gold that is close to exhaustion ? TIA.
Belgian
@ Boilermaker : Gold viewed as an anachronism...?
Yes, by the general public...thanks to the polite financial society ! But the society itself trades 600 tonnes of papergold (only the visible part) on LBMA per day !!! So much trade in an anachronism !?
***WHY*** is there 100 times more papergold trade than trade in physical !?
WHAT IS WRONG WITH HAVING A HIGH GOLDPRICE !!!-???
Thanks Boilermaker.
Belgian
NYMEX oil
Up $0,90 - $52,90
Nigerian (OPEC member) oilworkers' strike !?
Review (positive) of US oilreserves !?
Organized price-spike (going exponentional) as to provoke massive profit taking !?
Cruel oil attack provoking disorder !?
Trichet, schrugging off the oil impact (indirect tax increases) seems suspicious to me !?

Cometose
Real Estate cooling
http://realtytimes.com/rtmcrcond/Nevada~Las_Vegas~reu2_seanbrownoff in Las Vegas Pulte division and Del Web communities
Great Albino Bat
@ Boilermaker: "Oh Lord! this too shall pass..."

We have been goldbugs for more than thirty years, but now - we are not goldbugs, now we are - get this - COCKROACHES!

The Gold Cabal is having the DT's - Delirium Tremens - and the cockroaches are swarming all over, thousands of the beasties. Yeck! Can't you visualize AG screaming in terror?

This is a scene from "The Lost Weekend" - for the Cabal, because WE are the cockroaches, the scum of the earth, the great unwashed who haven't beeen to Harvard, the anti-intellectual reactionary kulaks that don't care for the deathly New World Order.

AS the GAB contemplates the heavens on a clear and moonless night, he says to himself: "We know there is Life up there, the Universe teems with Life, and there is Good and Evil all through the Universe; and Central Bankers and Cockroaches are there too."

"You know you have been visiting the wrong forums when you want to write "prolly" instead of "probably".

Cockroaches of the world unite! Buy physical gold today!

The GAB
Druid
Resolving Large Financial Intermediaries: Banks Versus Housing Enterprises
http://www.frbatlanta.org/invoke.cfm?objectid=1C086490-9E82-8219-C1E018591D9E4A36&method=display
Druid: It's good to see that the FED, among all the other issues it must be focused on, will now somehow address this issue.
USAGOLD / Centennial Precious Metals, Inc.
Put a Solid Foundation Under Your Portfolio
http://www.usagold.com/ProductsPage.html

Swiss Gold Francs

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misetich
Trichet: growth, inflation impact �will not be negligible� if oil stays high
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1097156300-9e32d306-27620Snip:

Trichet: growth, inflation impact 'will not be negligible' if oil stays high BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said that if oil prices remain at their current levels, the impact on both global growth and inflation "will not be negligible." Trichet was speaking at a news conference in Brussels following the ECB's decision to hold its key interest rate unchanged at 2.0 pct
***************
Misetich

Compare Trichet's comments with the US Feds
http://www.fxstreet.com/nou/continguts/authorities.asp

Snips:

William Poole, St. Louis Federal Reserve Bank President.
Thursday, October 7, 2004 09:26 GMT
Reuters - "I think we're in a pretty solid situation and can look forward to a good long business expansion, provided we don't have any more unforeseen shocks."
**********

Thomas Hoenig, Kansas City Federal Reserve Bank President.
Thursday, October 7, 2004 09:38 GMT
Reuters - "We have the opportunity to have growth of 3.5 to 4 percent. We have the opportunity to have that growth in an environment where core inflation is less than two percent. As long as oil prices don't get significantly higher than they are now, about $50 a barrel, their likely effects should remain relatively modest."
****************

``The economy is taking this higher level of oil prices in stride,'' Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, said in a Bloomberg television interview. ``The economy was hurt and slowed down somewhat because of the movements in oil, but we seem to be looking beyond that.''
*****************

In a speech in Washington, Fed Governor Ben S. Bernanke said oil prices ``have to stay up before they become no longer transitory'' and ``we think the economy can accommodate them at the current levels at least as long as they don't rise substantially more.''
****************
``The inflation numbers are looking better,'' Fed Governor Susan Bies told reporters today after a speech to the National Association for Business Economics in Philadelphia. ``We're down from where we were.''
****************
William Poole, president of the Federal Reserve Bank of St. Louis, said in an interview that confidence numbers ``are heavily affected by the flow of news and are not a very good guide to how households are behaving.''

The best measure of confidence is the housing market because of the financial commitment required to buy a house, Poole said. Sales of new homes rose 9.4 percent in August, the Commerce Department reported last week.
***************

Current-account gap no 'asteroid,' official says
The large and growing U.S. current-account deficit isn't an "asteroid heading for the planet," said Assistant Treasury Secretary Randal Quarles on Thursday.
***********
End of snips

Misetich

Meanwhile back into the world of reality

Headline snips

-Crude Oil Rises to $53 on Concern U.S. Supply Won't Meet Winter Demand
-Commodities Index Rises to 23-Year High as Demand Surges for Oil, Metals
-Bank of America Plans to Cut 4,500 Jobs, Pay Severance of $150 Million
-Wal-Mart, U.S. Retailers' Sales Slow a Third Month, Hurt by Gas, Storms
-Bombardier Aerospace Cutting 2,000 Jobs
-IMF fears tight oil supplies could last for years
-Unisys rises on affirmed Q3 outlook, job-cut plans

**********

The "transitory headwind phase" is longer and deeper than being expected

The 2004 Oil Shock And Awe is gathering momentum- and oil prices will be heading further northbound in weeks to come and will stay up longer than expected

Oil the gateway to Free Gold

All Aboard The Gold Bull Express - Partll
968
Trichet : Key issues for monetary policy: an ECB view
http://www.ecb.int/press/key/date/2004/html/sp041005.en.htmlSNIP : "Our monetary analysis, with its focus on money and credit developments, can be valuable in such situations. As it has been extensively documented in several recent economic studies, asset-price booms and busts � especially the ones that have led to the worst macroeconomic and financial imbalances � have generally been accompanied by excessive money and credit growth. Thus, a monetary policy that ensures that money and credit do not grow unchecked may also help, as a side-effect, to reduce the likelihood of those abnormally large asset-price swings, with their medium and long term adverse consequences on price stability."

"To be complete, I also see two differences, which may explain why, despite our strong similarities, observers sometimes argue that the ECB and the Fed have adopted different monetary policy concepts.

First, we have made public our precise quantitative definition of price stability whereas the Fed has not done it so far. Given its long track record, the Fed may be in a different position than other central banks. It is not for me to judge. Let me only point out the reasons for the ECB's position. Providing a definition of price stability fosters transparency: everybody knows precisely what we are aiming at. This is beneficial for meaningful accountability: the public can judge whether or to what extent we are achieving our goals in comparison with the yardstick we have set ourselves. This is also beneficial for medium and long-term credibility: inflationary expectations can find an anchor more easily.

The second difference with the Federal Reserve as I touched upon previously, is the explicit cross-checking, from a medium to long-term perspective, of our economic analysis with a detailed monetary analysis. We see three advantages to this approach. First, it reflects that inflation is ultimately a monetary phenomenon, a notion very widely acknowledged by central bankers and academics. Second, by preventing abnormal abundance or the drying-up of liquidity, it may, at least to some extent, prevent abnormal boom-bust episodes in asset prices. Third, and perhaps most importantly, it helps better anchor medium to long-term inflationary expectations, which is of vital importance for all central banks and all the more important for the ECB which could not rely on a long track record." END SNIP
------------------------------------------------------------------------------------------------------------------------
In his speech on october 5th, JC made some interesting statements on the differences between the ECB and the Fed.
Note that not one word is said (about the major differences regarding to) gold.
Knallgold
Big Phil
In the mainstream newspapers here are a pictures from this big Philharmoniker with a short description.Thats new to me to see Goldpictures there!

31000g-I know this # in Another context :-)

This coin is about a factor of 30-100 too heavy for half a million of currency-oops,there we have it again.
ge
Marc Faber on Oil
http://www.quamnet.com/fcgi-bin/columnists.fpl?par2=5∥3=2∥4=05∥5=10∥6=2004"First of all, if we look at oil prices in real terms - that is oil prices adjusted for inflation - the real prices is right now still about 50% lower than it was at its January 1980 peak (see figure 2). In fact, oil is now not much higher than it was in the early 1970s, when the last big oil bull market got underway."...

[Secondly] "But, what is important to understand is that whereas the 1970 oil price increases were coming from a supply shock..." "... today's oil price increase is structural in nature."

Per Capita Oil Consumption Figures

"...if we look at what happened to per capita oil consumption during phases of industrialization in the US between 1900 and 1970, we see that per capita consumption rose from one barrel per year to around 28 barrels. In the case of Japan's industrialization between 1950 and 1970 and South-Korea's between 1965 and 1990, per capita oil consumption rose from one barrel to 17 barrels (see figure 3)."

"...In the case of China, oil demand per capita is still only 1.7 barrels per year, and for India it has only reached 0.7 barrels. By comparison Mexico consumes annually about 7 barrels of oil per capita and the entire Latin American continent around 4.5 barrels."...
968
ECB's Board Member Otmar Issing on oil-prices.
http://www.ecb.int/press/key/date/2004/html/sp041003.en.htmlSNIP : "Another downside risk to the growth projections relates to oil prices. In particular, the oil price increase observed over the last year and particularly the fact that oil prices have remained at a higher than expected level for quite some time could imply risks to growth. However, when assessing its impact, it should be taken into account that the recent rise in oil prices has been significantly smaller than in previous episodes when oil price increases had a major impact on the world economy. This is not only true when looking at developments in oil prices in USD terms, but particularly when expressed in euro terms, as the past appreciation of the euro had a dampening effect. In addition, in real terms, oil prices are significantly below the peaks they have reached in the past. Moreover, when compared with the 1970s and 1980s, the oil intensity of production in the euro area and elsewhere has fallen significantly. In 2001, the oil intensity of the euro area, measured as oil consumption in relation to real GDP, decreased by almost 49%, compared with its peak in 1973. Finally, while previous oil price increases have mainly been driven by supply factors, the recent increase is also partly due to higher demand for oil, on the back of the strong global expansion. All these factors put the downside risks to economic activity coming from oil prices, which I do not neglect, into perspective. Nevertheless, persistently high and even further increasing oil prices would be a reason for concern."
------------------------------------------------------------------------------------------------------------------------
Even in the eurozone, with the dampening effect of the euro, the high oil prices cause problems.


Chris Powell
Belgian asks why central banks are closer to exhaustion of their gold reserves
Belgian, you ask why central banks are closer to
the exhaustion of their gold reserves.

GATA has long supposed that the central banks,
particularly the European ones, were swapping
gold with the United States and leasing the swapped
gold to prop up the U.S. dollar and cooperate with
U.S. economic and political domination of the world.

I believe that GATA consultant Frank Veneroso
thought, originally, that the central banks got into
gold leasing independently of each other to make a
little money and suddenly discovered that, because
everybody was doing so much of it, it had gotten out
of hand -- that it was indeed a bit accidental.

I've always been more inclined to believe that
gold leasing is naturally a part of maximizing
central bank power over the world economy
rather than a matter of maximizing any return on
central bank assets. After all, gold leasing
revenue is peanuts on the central bank scale.

Which gold is close to exhaustion, dollar-gold
or euro-gold? I'm not sure that those terms
apply to the gold GATA has spoken of -- the
hard metal bars sitting (or formerly sitting) in
central bank vaults. GATA HAS established
that there is deceitful accounting for the gold
in or formerly in central bank vaults and that
there is a question of just who has legal title
to the gold in any particular central bank vault
-- whether, for example, the gold at the U.S.
depository at West Point, N.Y., belongs to the
United States or is really swapped gold, European
central bank gold.

That there is so much secrecy and deception
around the gold reserves may be taken as proof
that SOMETHING is going on and that everything
is not as the central banks would like it to
seem.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Waverider
Ivan causes oil pipeline leaks in Gulf
http://www.boston.com/business/articles/2004/10/07/ivan_causes_oil_pipeline_leaks_in_gulf/"Hurricane Ivan punched holes in the network of oil and natural gas pipelines in the Gulf of Mexico, causing oil and gas to leak out at numerous points along the thousands of miles of pipelines. In the wake of the hurricane, oil production in the Gulf is more than 3 million barrels per week below average, putting U.S. crude inventories at historically tight levels and contributing to the record price of oil. "We all know there was certainly a lot of damage caused by Ivan to the pipeline system," said Caryl Fagot, a spokeswoman for the Minerals Management Service. "I do not have a good count as to how many leaks there have been." The Minerals Management Service has asked companies to inspect oil rigs and pipelines in the path of Ivan for damage. That work, much of it done underwater, may take months to finish."

Waverider: Misetich - here's another variable contributing to sustained high oil prices - betcha we see $60.00 within the next few weeks...question is when will Gold catch up?
TownCrier
Pssssssst. . . . here's a friendly "heads up" of a forthcoming formal announcement
http://www.usagold.com/gold/special/group.htmlMK, Jonathan and I (very small role for me) put our heads together this past week and conjured up a great October Buyers' Group offer with an amazing incentive plan on top of it all. Does a deal get any sweeter than this? You buy what you want, you actually get it, and then you have a chance to win some more, too!

It's low-hanging fruit folks. Let the picking begin.

R.
Ag Mountain
@Chris Powell "there is so much secrecy and deception around"
Take this in the helpful spirit it is given. Along the philosophy that you can catch more flies with sugar than with vinegar it's also good to remember you can make more impact having credibility on main street than by being perceived and shunned as part of a lunatic fringe.

There's a fine line whenever inquiring minds form their interpretations of events, and the difference always comes down to the lunatic fringe making accusations of "secrecy and deception" while the rest of the world sees normal privacy in action.

When your dealing with financial matters your first self admission has to be that most things you encounter are going to exist behind the high wall of privacy unless you happen to be on of the principle parties involved. And you can't lay a claim to an absolute right to know central bank business on account of their public role. The official school of thought is divided on whether complete transparency is actually too much when it comes to central banks policy and action so some things remain in the domain of privacy for reasons NOT inherently malevolent.

To catch your flies I would say to try harder to err on the sugary side of credibility. You will appeal to a wider audience which will in turn give you more power to lobby for more transparency W/R/T central bank gold.
Rimh
Re: Secrecy and deception
Ag Mountain, while I appreciate the spirit in which your post was given, I must come to Chris' defense to say that members of Gata have clearly caught the the Central Bankers in lies or deceit where they booked leased gold or "gold receivables" with gold on hand as one line item in their financials.

While there will always be barriers to information due to privacy concerns, the body of evidence collected by Gata clearly implies actions taken by Central Banks that are not in the best interests of the citizens of those countries they are supposed to represent. Why should any citizen have blind faith in an organization run by men who are just as equally prone to abuse their positions of power just as you or I would be? How can there be any accountability if there is no openness, even just a little?

Chris' words are not idly spoken, he's just callin' it like he sees it and he has evidence to back it up.
Sovereign
@Usagold Forum and Mr. Michael Kosares
Dear Sirs,

During the course of the so-called Freegold discussion, the divorce of gold from national currencies has been advocated by several posters here. I believe one poster called Aristotle said that it was best for gold to be "unshackled" from money.

Mr. Kosares, as the gracious host of this forum on gold, I call you to carpet. Is it USAGOLD's position that gold is not, or ought not necessarily be, money -- monetized -- when:

1)gold is the undisputed economic basis of democracy itself for it does not permit the coexistence of one privileged class of people who have the power to print money and take advantage of another, subservient class who must work to earn it; 2)gold is the global economic police that prevents inflation and illicit and hidden taxation of the latter by the former class; and 3)the US constitution says that gold is money.

Mr. Kosares and USAGOLD posters,
are you for democracy and the rule of law and therefore advocate gold as money, or is gold just another means of generating paper profits for you?

Sincerely

S
misetich
CEOs Expect Growth of Less Than 2% in '05
http://www.latimes.com/business/la-fi-rup7.2oct07,1,2202863.story?coll=la-headlines-businessSnip:

U.S. chief executives say the economy will grow less than 2% next year, according to a survey.

The poll of 50 executives by the Business Council cited terrorism and defense as the largest short-term risks for the economy. The group, whose members include executives at General Motors Corp. and Coca-Cola Co., released the results at a meeting in Irving, Texas.

The executives are less optimistic than this week's forecast by a group of corporate economists for 3.7% growth in 2005 and the Fed's latest official forecast of 4%.
**********
Misetich

Corporate earnings growth is optimistically forecasted in single digits for the 1st half of 2005

As real price inflation soars ahead, hitting corporate bottom lines a well established pattern of layoffs will ensue - further eroding consumer spending

This self-destructive process is operating in slow-motion as most are in a wait-and-see attitude, hoping oil prices will tumble

Most underestimate the various "wars" being played out - from currencies to oil domination - thus they're in for a rude awakening since oil is being used as an "equalizer"

All Aboard The Gold Bull Express - Part ll
YGM
CB Secrecy, Deceptions and Gold etc........
I would say that the 100's of books and articles dealing with these topics are not the work of nuts or conspiratorial minds but of facts...ie: the deceptions used to give the Federal Reserve the right to print the currency of the USA (Creature from Jeckyll Island) comes to mind, not to mention that all CB's are private institutions with shareholders from the elite families of the world...... Canada's Gold reserves sold off in almost total secrecy by a PM who later became a director for 'Barrick' (one of the key players named in the Gold Conspiracy by GATA)Just one small example of secrecy and deception....Try getting ANY Canadian Politician in power or opposition to explain that and you'll run into the same brick wall I've hit many times...Secrecy, no we have to order books such as "Gold Wars" by Ferdinand Lips, from the USA as they are not carried in Canadian "Chapters" book stores. A employee of same said "You'd be amazed at how many books are blacklisted about Gold issues in Canada" as well as other topics......I say secrecy and deception ABOUND all around us and it is more often than not 'Malevolent'....IMHO....YGM
TownCrier
Very cheeky, Sovereign
http://www.abcs-of-gold-investing.com/I would like to call to items to your attention.

In MK's post to CoBra(too) yesterday, he indicated he was heading into the mountains to enjoy a long weekend. Therefore, your question couldn't have been more poorly timed. Maybe you would consider phoning him next week to discuss your concerns.

Which brings us to the final element. Please direct your attention to the footnote at the bottom of the forum which states clearly:

"The opinions posted by all guests at this forum are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of this forum shall therefore not be construed as equivalent to endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here."

Beyond that, if you would trouble yourself enough to read his book, his newsletters, or his many past posts on the nature of the gold market you wouldn't be making a fool of yourself attempting to "call him to the carpet" in front of everybody (and by that I mean clients and long-time visitors) who already know his position better than you likely ever will judging by how far out you currently are.

R.
YGM
Federal Reserve Bank.....
Someone can probably give the proper figures but what comes to my mind from a few years back was that the Fed has approx 40 shareholders and the Fed is owed something like 30 or 40 percent of the US debt....Hmmmmmm!
Rimh
Townie:ABC's link
Thanks for the link, Towncrier. I found myself drawn in to the story in the first chapter link and snipped a piece of it that made an impression:

"Had the couple escaped with South Vietnamese paper money instead of gold, I could have done nothing for them. There was no exchange rate for the South Vietnamese currency because there was no longer a South Vietnam!"

Paper money is fleeting. Gold has intrinsic value (and portability) no matter the time or place. The story was a powerful reminder of that!
YGM
Cobra
Good to read your thoughts again as it is also good to be back here from a long sojourn..The leaves are falling in the Rockies as I'm sure they are in your area...Time still for long walks and quiet reflection & a little fly fishing...Or is it reinvigoration of spirit??? Best Regards....KR.
(no longer in Yukon)

"GO GATA" for truth!
TownCrier
Fed adds $15.5 billion to nation's banking system
With the market in fed funds trading in line with the FOMC policy directive of 1.75%, the Trading Desk for the Federal Reserve nonetheless felt compelled to intervene in the open market today, adding $9 billion in fresh cash (largely at a sub-target rate of 1.728%) through 14-day repurchase agreements, and $6.5 billion through overnight repos.

Pushing on a string and money rain is as easy as a few keyboard clicks away. Choose gold for purchasing power integrity time over time.

R.
Belgian
@ Chris P.
Thanks for responding...let's take the next step together...
*WHY* would any EU National Bank (under ECB) sell/commit any goldreserves in order to support the US...the US$...the US dominated global economy !? Taking into consideration that EMU and Euroland are being build as to have their place under the sun.

Are you suggesting that there is a euro-dollar cartel ?

*HOW* do you place the ECB's MTM concept into the assumption that Euroland's goldreserves have been (are ?) co-operative with US-US$ interests (monetary or economical) ?

WHY aren't (can't) Gold pirates corner gold, given the CB's (supposed) near exhaustion of Gold ? Any theories ?

However complicated the CBs and their Gold-stories might be...there must be a general "consistant" red tape in all this ...don't you think so, Chris ?
It all has to add up somehow.

TIA. Regards B.
Gandalf the White
Looking "GOOD" ! The GOLD P&F Chart had a BREAKOUT yesterday !
http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLTB[PA][DA][F!3!!]⪯f=GYES, there is a LITTLE GREEN "letter A" (Standing for the Month of Oct.) as the signal for the BREAKOUT !
The PROJECTED target is now $476. --- BUT, the Hobbits and I would like to see the INTERIUM level of $436. broken FIRST !
JUMP SPOT, JUMP !
<;-)
USAGOLD Daily Market Report
Page Update!
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----

COMEX gold futures settled with modest losses in a thinly traded session on Thursday as most market players waited on the sidelines ahead of Friday's September U.S. employment data.

December gold ended down 50 cents at $419.50 a ounce, after moving in a tight $418.80-$421.70 range.

The contract hit $422.20 on Wednesday, the highest price since April 13, when it was retreating from 16-year highs on the first of that month. "If you look at the recent tops, $421.70 was yesterday's high and we got up there today, but there was no followthrough so we have a two-day double top and we're having some resistance against that level," said one metals analyst.

All eyes will be fixed on Friday's U.S. employment data and how it affects the dollar when it is released at 8:30 a.m. EDT.

"I think if tomorrow's employment number is weak and the euro rallies, all bets are off and gold will break through $422 very easily," a dealer said.

Recent weakness in the dollar, another record oil price at $53 a barrel, instability in Iraq and uncertainty ahead of November's U.S. presidential election have been supportive factors for the 6 percent rise in gold prices in recent weeks.

-----(see url for access to full news, price charts, 24-hr newswire)----
Chris Powell
What are the Europeans really up to?
Belgian asks: Why would the European central
banks compromise their gold to support the
dollar?

If the European central banks have swapped gold with
the United States, as seems likely, maybe they are really
leasing U.S. gold, just giving the U.S. government some
political cover.

Maybe the Europeans are helping out with gold because
the U.S. government asked them to and has military bases
and nuclear weapons all over Europe.

Maybe the Europeans have assisted the gold price
suppression scheme because they want the dollar to get
really dependent on external support before pulling
the plug, crashing the dollar, and claiming reserve
currency supremacy for the euro.

Maybe the European central banks don't like the
idea of subservience to the United States anymore
but, with gold sales, are mainly bailing out their
own bullion banks, most central bank gold sales
today being only the closing of leases of gold that
is long gone and not recoverable without causing
a catastrophic short squeeze and the bankruptcy of
some major European financial institutions.

As for the European Central Bank's practice of
regularly marking its gold to market prices, this
may be an empty bookkeeping exercise if the gold
really isn't in European vaults and there is no
good way of recovering swapped gold from West
Point without sending another British fleet up
the Hudson to get it.

In any case, yes, the U.S. government's motive
for suppressing gold has been much more apparent
than the motive of the Europeans and South
Africans in cooperating with the scheme. Maybe,
as Belgian has been suggesting, there is some
wonderfully gold-friendly explanation -- even if
the plan is, like everything else in gold
officialdom, surreptitious, secretly formulated
public policy in what are supposed to be
democracies. But in the absence of that
explanation, any European or South African who
thought about it might be hard-pressed to see
how it wasn't treason.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
TownCrier
From Tuesday's desparate panners in a filthy Manila river, to today's smugglers in Andhra Pradesh...
http://www.business-standard.com/smartinvestor/storypage.php?storyflag=y≤ftnm=lmnu6≤ftindx=6&lselect=11&chklogin=N&autono=169002... the focus on physical gold elsewhere in the world is seething with activity.

(Excerpts)

Rampant and unabated smuggling of gold biscuits from Rajasthan and Gujarat into Andhra Pradesh during the last few months has left many bullion traders, jewellers and importers all over the state a very upset lot.

...It is learnt that a smuggler brings at least 20 gold biscuits per trip. This apart, a sales tax (ST) difference of 0.5-0.75 per cent assures him of five to seven times more profit than the normal margin a local trader gets.

Gujarat, being an immediate neighbour of Rajasthan, was the first victim of the latter's slab system. But the Gujarat state government, responding to the pleas of the bullion industry, slashed the sales tax (ST) from one per cent to 0.25 per cent from July 30. Now the smugglers have apparently found a second haven for their operations.

As a sequel, bullion traders of Andhra Pradesh and other southern states have found their business going down drastically... Alarmed by the crisis, the Andhra Pradesh Bullion Importers Association led by its president Mahabaleswara Rao recently submitted a memorandum to the state government, appealing for a cut in the sales tax (ST) collected by it from one per cent to at least 0.5 per cent. They stated that the profit margin in bullion trade is as low as 0.1 per cent.

The traders' bodies of Delhi and Tamil Nadu have already submitted memoranda to their respective governments, seeking redress in this regard...

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

Have you ever heard of any interest anywhere in a smuggled derivative? By its very nature gold has a street value that a contract can never have. Choose the real thing.

R.
CoBra(too)
WAG II - A secret Agreement?
@ Chris Powell, Belgian at all - An interesting discourse.

Maybe we can start with the fact that CB's started to sell their gold reserves since the late 60's, which was essentially the US (London Gold Pool). This lead to the total abandonment of the Bretton Woods Agreement by Nixon in Aug. 1971, effectively seperating any gold backing from the Dollar.

We all know what has happened so far with IMF's SDR's and how the developing world fared under their regime as well as a US $ hegemonial Reserve system.

Back in the mid 1990's the POG raised its head briefly.It was right away slammed by the Oz CB, followed by the Cdn.CB to declare to get rid of their gold reserve. The real shocker came from Gordie Brown in 1999 stating that the old
Bank on Threadfneedle Street will auction off more than half of its already pityng gold reserve - a great job considering the lowest prices were achieved in more than 20 years.

This was followed by WAG I in early Oct. 1999 as Gold was spiking briefly followed by more CB aspirants wanting to sell. Lastly the S(wiss)NB was put into a position of no alternative - some say blackmail- to sell half of its hoard for humanitarian reclamation.

Since then, only smaller CB's have been openly prone to discuss the any gold sales; Portugal comes to mind as being the victim of a gold lease scam and lost their gold to a call for bullion.

Major holders like Germany, Italy and even France have been quoted repeatedly by some sources to have an interest to reserve the right to sell a quota of their holdings. All of that hasn't come to pass and rumours started that the somewhat higher WAG II quota (500tpa vs 400tpa) potentially can't even be filled ... and now we wait for the formal announcement of WAG II!

My notion is that WAG I was already a ploy to deflect the reality. The Reality, that the Gold sold or auctioned under the agreement was already gone or encumbered by derivative contracts. Contracts the IMF and even BIS(as far as I know) allowed to be booked as gold in vault. UBS and DB come to mind MK, to answer your question.

And as it is getting kind'a late over here I'd like to close with the thought that there may not be enough gold to go around to remedy the gold short the western CB's may be obliged to fill!

WAG II - a case of impossibility! We'll see!

cb2

PS: YGM - good to see ya also. Will be in Vancouver Nov. after N.O.

MK: Kaiser Karl - Needle eye and camel is correct, though more to it. Will revert personally. Also will try out new int'l. facilities soon.




Goldendome
What is depressing gasoline prices?

Three months ago with crude oil in the low 40's, the gasoline prices (in my local)were about $2.16/gal. Now, with crude oil in the low 50's the gasoline prices are about $1.96/gal--fully a a 20 cent drop during a time that crude has surged 20%. Seems to me an odd anomoly. I've heard that diversion of crude from heating oil to the production of gasoline is occuring; that would ease demand presures, but raw material prices are still what they are, and worldwide demand is still rising. Were the wholesalers just way out front with their early price increases and now backing off to reality?

Are oil companies cutting margins to avoid political presures? Our supposed productivity miracle couldn't account for this? Cheers, enjoying the lowered prices while they last anyway! It certainly isn't like 1998 at the pump though.
Boilermaker
Playing the Black Box Games
Just noticed that the POG has closed in a flat line for a few days. Based on the recent buildup of spec longs recently it looks like the short crowd are going to try to flush out "stale" longs tomorrow. I enjoy watching this game from the sidelines knowing the home team is winning. Financial Elites vs. Golden Cockroaches. No contest.
Dollar Bill
.,.
Sovereign, as one poster, I say gold holds value.
Inflation is coming. Is here also.
The big boys are trying to wing it by making fiat work on a global scale by getting one currency -dollar- to be the agreed upon tool used to move us to the one world thing.
The klingons, jedi, romulans, ect, got thier planet all organized, the humans of earth are giving it a go right now.
I think we will blow it on this our first try.
Gold will be might handy when the big experiment of fiat goes through its probably ugly evolution.
And demise?

I didnt really cover your actual questions, others here can do that better, but you did ask for the forum posters to chime it.
Great Albino Bat
GO Cockroaches!!

Well, looks like the Cabal is at work, selling cheap, cheap for all comers. Wow! Good news for us cockroaches! Stock up tomorrow, should be a good day as the Cabal attempts to break $410, which appears quite possible.

There will be a rout and panic among the paper-longs, of course. How about $403 as a low? A nice $13 drop - good savings like this don't come along every day. Some people desperately need a rise in gold, because they have no income and absolutely need to make a "profit" on a rise in gold. My sympathy for such individuals, I well understand their situation. Happily, I can take falls in the price of gold quite in stride; I can gaze on this comedy without anguish when the price goes down. It only means the sellers are desperate, not that there aren't any buyers - there are plenty!

I guess some smart individuals do know how to make paper profits by playing the COMEX, manipulated as it is; I am not one of them and don't want to be one of them.

I do not buy mining stocks, either - nothing wrong with that if you know what you are doing. But, stocks of any sort are not for me.

So, get your checkbooks and credit cards ready to turn digits into gold. Buy the dips at CPM!

The GAB
Chris Powell
Dallas Fed official says dollar has to weaken
http://groups.yahoo.com/group/gata/message/2439Somebody should tell Morgan Chase over
at the Comex.


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Chris Powell
Dallas Fed official says dollar has to weaken
http://groups.yahoo.com/group/gata/message/2438Correcting the link.



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Chris Powell
Foreign central banks start selling U.S. govt. debt
http://groups.yahoo.com/group/gata/message/2439Just their not buying U.S. debt could
have a big effect on the dollar and U.S.
interest rates.


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Camel
GAB
Seems like when Au is in these trading ranges the chartists and professional traders take the gullible for a cleaners, all the way up and all the way down, over and over again.

My guess is that the Bush Administration has let the dollar fall into the 90 range to see if it could get the economy to move in the right direction( reduce the trade deficit.) It hasn't happened so they are going to take it down some more, all carefully scripted of course. In the interim the professional traders prevail.
Sovereign
@ Mr. Towncrier and Mr. Dollar bill
Mr. Towncrier,

From what I gather, you, Sir, are one of the "official" figures around here. As such, you are not only well qualified, but I'd say -- if straight talk is OK with you --obligated to make your opinion public on the matters that I raised. I'm sure you realize how crucial these questions are. After all, gold is about honesty and truth, isn't it?

Many of you talk around here like you are winning because you had the wisdom to buy gold etc., forgetting what hole you crawled out from after an agonizing two-decade-long bear market. Will you sound so jubilant in case the "fools" who are providing cheap gold for you now (what an arrogant and presumptious way to put things...) change their mind and go back to business as usual per 1996-2001 and make you crawl back in it? As Al Pacino put it, "Pride is my favorite sin." I'm sure you all know who he was portraying when he said that.

Thank you Mr. Dollar bill for responding. But as anyone can surely tell, the moment independent thought is aired in these hallowed chambers, one gets the distinct impression that this forum starts sounding like a practice run for the coming "town hall" debate (or "presentation" as Lou Dobbs puts it) between Kerry and Bush rather than a forum about honest money. But I guess Mr. Aristotle would like to unshackle 'money' from 'honest' as well.

S
Cytek
AT&T Cuts 7,400 Jobs, Asset Value by $11B
Associated Press

Thursday October 7, 8:45 pm ET
By Bruce Meyerson, AP Business Writer
AT&T Expands Job Cut Plan by 7,400 and Plans to Slash Asset Value by $11.4 Billion

NEW YORK (AP) -- AT&T Corp. is cutting at least 7,500 more jobs and slashing the book value of its assets by $11.4 billion, drastic moves prompted by the company's plan to retreat from the traditional consumer telephone business following a lost court battle.

The company announced Thursday that it now plans to shrink its work force by more than a fifth, or about 12,500 jobs, during 2004 -- up from a previous target of about 4,900 jobs.

Most of the jobs cuts are layoffs. About 9,000 of the people affected have already left the company or been notified. AT&T now expects to finish the year with about 49,000 workers, down from nearly 62,000 at the start of 2004.

Cytek - Let's see them rosey coat this. Wonder what the spin on the job number's tomorrow will show. Just looking at the Dow, it'looking like it's heading for the lower trend line for the next stop, about 9700 which i'm guessin around October 21st or 22nd. The Trany's just did a parabolic spike on the uptrend line, but with an average PE of 26 (not including 4 company's that have no PE and a negative EPS)and the MACD and RSI being overbought next stop should be below 3000. If this happen's it will be just in time for a rally into the election's.
Ned
This guy's not pulling any punches.......
http://www.gold-eagle.com/editorials_04/jmackenzie100504.html"This is the worst of all possible environments.

Panic should begin to take hold shortly and by June - August of 2005 it will be acknowledged by most everyone as to precisely where we are heading."

Ned
Thanks Chris Powell !!
"The widening U.S. current account
deficit will require a decline in the value of
the dollar, a top Federal Reserve official said
on Thursday." (Dallas Fed President Robert McTeer)

Well lets take a little count here in the last week. Russian deputy CB chair says (paraphrase), "...US has absolutely no fiscal discipline...US dollar is overvalued"
FED man McTeer says a "decline of the US dollar is required." Chinese finance minister "...don't mess with the goose that lays the golden eggs..." ! (I wonder where he was going with that !!!

Even though I got kicked out of Grade 3 for not shaving, I can tell ya, if the paper is goin' to burn get something that won't.

Gold doesn't burn! We are being warned from all fronts.
Topaz
alt Currency Gold.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=This is truly an amasing run we're having with Gold! I really feel that without this burdensome weight, DX would be powering upward well into the 90's now.
It's worth noting how the nascent (thanks TC) US recovery has and is so dependent on a 90-85 DX level and how the Market, sans all the contrary hype, is determined to take the dollar above this range.
Job figures tomorrow are an each-way bet. Management desperately want ugly whilst Market/Bush camp seem to be looking for Rosy. Given the election ramifications line ball/ fence sitting looks good!
YGM
Profound Admissions on GATA and Gold by A Central Banker...
Possibly the most profound "Favourable & Truthful Gold comments" to be revealed from behind the usually closed and airtight boardroom doors.....Not only does he reveal why he believes Euro CB's are selling down some Gold reserves but he acknowedges the possibility that GATA has credibility in it's claims....

This is an excerpt from Oleg V. Mozhaiskov's
(Deputy Chairman of the Bank of Russia) speech to the London Bullion Market Assoc. (LBMA) in June /04....The translated speech in whole is at GATA egroup dispatch site previously listed by Chris Powell....

Quoted Excerpt....
"First, the participating countries own between them 12,300 tonnes of gold. The share of the metal in their official monetary reserves has reached 36 percent. This is significantly higher than the average for all the world's countries (10-12 percent). So the sales can be seen as optimisation of the reserves structure.

Secondly, the countries making the sales (France, Germany, and some others) are currently enduring budget deficits exceeding the limits laid down by the Maastricht Treaty. Hence, this may explain the temptation to solve their budgetary problems without reducing expenditure or raising taxes.

The current decisions by the monetary authorities in European countries could therefore be considered sensible, like the actions of certain Asiatic states that in recent years increased the gold portion within their monetary reserves.

"The internal imperfections of the international monetary system (which I spoke about earlier) have already led to a number of regional financial crises and still carry the danger of larger upheavals". "Under these conditions, the growing interest of investors in real assets, gold in particular, is more than justified." -End Quote.

****Dare I say you may wait along time to hear words like these from a Banker again???? I can imagine this speech made more than one Bank a/o Hedge Fund Derivatives player sweat. No wonder it took GATA some months to get the speech!!..............YGM

Smeagol
To Ssir Sovereign, our dollar's worth (2 cents x inflation)
You assks, >>>...and USAGOLD posters,
are you for democracy and the rule of law and therefore advocate gold as money...?

...1)gold is the undisputed economic basis of democracy itself for it does not permit the coexistence of one privileged class of people who have the power to print money and take advantage of another, subservient class who must work to earn it;
2)gold is the global economic police that prevents inflation and illicit and hidden taxation of the latter by the former class; and
3)the US constitution says that gold is money.<<<

Ssss! We are not for democracy, precious. If you live in a democracy why should you care what the US country's consstitution says, when it has nothing to do with ssuch?
"it's a Republic, if you can keep it".

Point by point -

1) Gold represented wealth long before man invented the plunder-mill of democracy. When the rule of law allows legalized plunder it is no longer worthy of rule.

2) Gold cannot prevent inflation or the levying of taxes, nor can it prevent anything that people choose to accept, whether by force, deceit or tacit ssilence; only people can hold their ssupposed 'leaders' accountable. Gold is neutral and has no allegiance.

3) So?

resspectfully,
S.
YGM
Anglo Saxon Gold Penny sale.....
http://news.bbc.co.uk/2/hi/uk_news/england/beds/bucks/herts/3721964.stmFetched L230,000. That works out to nearly $3 million p/oz.
Gold numismatic collecting anyone?
Survivor
@ Sovereign Msg#: 125257

Many thoughtful, interesting, controversial, and even strange ideas are expressed here. There is no shortage of opinion and a fair share of understanding. Some are here to share knowledge and ideas, others come to debate. The discussion about the whys and hows of money and value and economics comes from many directions and takes many twists and turns.

But, there is a common thread here that fundamental value persists in ownership of the yellow metal. This was true at $100, at $800, and at $253. It continues to be true during these "interesting" times. In good times, gold is easy to own because good times furnish plenty of fiat use as needed, and extra fiat to trade for the metal. It is reassuring to own in bad times because the value can never go away completely and it is portable and liquid. It is insurance in the simplest of forms. Understanding this is to understand the basic platform from which we speak, and for whatever reason, it seems to keep the debate friendly on most days.

Cheers
- Survivor
Waverider
The Battle of the Pump
The Battle of the Pump
By THOMAS L. FRIEDMAN
NYTimes
Published: October 7, 2004

"Of all the shortsighted policies of President Bush and Vice President Dick Cheney, none have been worse than their opposition to energy conservation and a gasoline tax. If we had imposed a new gasoline tax after 9/11, demand would have been dampened and gas today would probably still be $2 a gallon. But instead of the extra dollar going to Saudi Arabia - where it ends up with mullahs who build madrasas that preach intolerance - that dollar would have gone to our own Treasury to pay down our own deficit and finance our own schools. In fact, the Bush energy policy should be called No Mullah Left Behind.

Our own No Child Left Behind program has not been fully financed because the tax revenue is not there. But thanks to the Bush-Cheney energy policy, No Mullah Left Behind has been fully financed and is now the gift that keeps on giving: terrorism.

Mr. Bush says we're in "a global war on terrorism.'' That's right. But that war is rooted in the Arab-Muslim world. That means there is no war on terrorism that doesn't involve helping this region onto a more promising path for its huge population of young people - too many of whom are unemployed or unemployable because their oil-rich regimes are resistant to change and their religious leaders are resisting modernity.

A former Kuwaiti information minister, Sad bin Tefla, wrote an article in a London Arabic daily, Al Sharq Al Awsat, last Sept. 11 entitled "We Are All Bin Laden.'' He asked why Muslim scholars and clerics had eagerly supported fatwas condemning Salman Rushdie to death after he wrote a novel deemed insulting to Islam, "The Satanic Verses,'' but to this day no Muslim cleric has issued a fatwa condemning Osama bin Laden for murdering nearly 3,000 innocent civilians, badly damaging Islam.

Building a decent Iraq is necessary to help reverse such trends, but it is not sufficient. We need a much more comprehensive approach, particularly if we fail in Iraq. The Bush team does not offer one. It has treated the Arab-Israeli issue with benign neglect, failed to find any way to communicate with the Arab world and adopted an energy policy that is supporting the worst Arab oil regimes and the worst trends. Phil Verleger, one of the nation's top energy consultants and a longtime advocate of a gas tax, puts it succinctly: "U.S. energy policy today is in support of terrorism - not the war on terrorism."

We need to dramatically cut our consumption of oil and bring the price back down to $20 a barrel. Nothing would do more to stimulate reform in the Arab-Muslim world. Oil regimes do not have to modernize or govern well. They just buy off their people and their mullahs. Governments without oil have to reform to create jobs. People do not change when you tell them they should - they change when they tell themselves they must.

The Arab-Muslim world is in a must-change human development crisis, "but oil is like a narcotic that kills a lot of the pain for them and prevents real change,'' says David Rothkopf, a visiting scholar at the Carnegie Endowment for International Peace.

Where is all the innovation in the Arab world today? In the places with little or no oil: Bahrain is working on labor reform, just signed a free-trade agreement with the U.S. and held the first elections in the Arab gulf, allowing women to run and vote. Dubai has made itself into a regional service center. And Jordan has a free-trade agreement with the U.S. and is trying to transform itself into a knowledge economy. Who is paralyzed or rolling back reforms? Saudi Arabia, Syria and Iran, all now awash in oil money.

When did Jordan begin privatizing and deregulating its economy and upgrading its education system? In 1989 - after oil prices had slumped and the Arab oil states cut off Jordan's subsidies. In 1999, before Jordan signed its U.S. free-trade accord, its exports to America totaled $13 million. This year, Jordan will export over $1 billion worth of goods to the U.S. In the wake of King Abdullah II's reforms, Jordan's economy is growing at an annual rate of over 7 percent, the government is installing computers and broadband Internet links in every school, and it will soon require anyone who wants to study Islamic law and become a mosque preacher to first get a B.A. in something else, so mosque leaders won't just come from those who can't do anything else. "We had to go through a crisis to accept the need for reform," says Jordan's planning minister, Bassem Awadallah.

We have the power right now to stimulate similar trends across the Arab world. It's the best way to fight a global war on terrorism. If only we had a president and vice president tough enough to fight this war."

Poster�s Note - ...Do you remember the oil market action at the start of the onslaught of Ivan? Oil and gas futures markets got absolutely pounded lower. Did that make any sense? I continue to think some type of gov intervention attempts to take the steam out of these potentially catostrophic economic events. Of course it burns early length and makes the longs goosey but these kind of adverse fundamentals eventually prevail and they are.

This is it gang. We�re bouncing up against the energy limits to growth and instead of dumbass secret gov tactics that attempt to manipulate markets, we need an energy policy, as Friedman points out here. Yet neither [candidate] is offering one...

Waverider: This very interesting article from the NY Times was posted on another forum by DeRonin and I have copied it here, along with a portion of his comments. It certainly puts a different spin on the POO!! While I know I'm bordering on the limits of geopolitical discussion here, (my apologies in advance TC if the post is deleted) energy policy, POO, etc. directly impact economic growth (or lack of) preempt recessions (as Black Blade has reminded us on several occassions), stimulate stagflation, and ultimately impact POG.
Sundeck
FED comments on the level of the dollar...
@Chris Powell msg#: 125254

There have been several comments by Fed officials over the last few weeks along the lines that the dollar has to weaken...

I recall, a year or so ago, there was fairly firm discussion hereabouts, and in the general media, that a tightly held convention is that only the Pres and/or the Secretary of the Treasury (Snow) can or should comment on the DX rate.

Why the change?

Being a fairly sensitive issue (understatement), I suspect that there is general agreement in officialdom (FED plus Treas) that the dollar should be lower. Were the Pres or Snow to clearly intimate this, there may be an avalanche. Hence, the job of floating out the sentiment gently onto the financial waves has been passed to the Fed ... not Big Al mind you (that would be a bit too dramatic), but to lesser mortals in the Fed hierarchy...

Pres and Snow pushing on the closet door while Fed gets the baseball mit from inside...

Just thinkin out loud....

On a related issue, Ben Bernanke was quoted in this morning's media (Oz radio) as saying somethin like "if rising POO has a too detrimental effect on US economy, then the FED may pause current round or monetary tightening."

Perhaps these "feelings? vibes?? are what is keeping the POG rather bouyant given the present level of the USDX... Topaz msg#: 125261

;-)



Belgian
@ Chris Powell - Re msg#125246
Alinea per alinea :
The EU National Banks (not the ECB !!!)
versus the US >>>
Can you,please, elaborate on the Gold "swap"...lease US Gold for political cover ? I really don't get this and it seems a big fundamental on wich many of your assumptions are builded.

Are you suggesting that European National Banks are providing goldreserves (near exhaustion) for US military protection ?

Has the EU set up a dollar-trap that is backfiring (boomeraming) ? Much of the 12,000 tonnes eurogold, locked in West Point and not recoverable without manu military ?
Stupid Eurolanders ?

If the ECB's MTM is an empty bookkeeping excersise...Why does the euro exchange rate remains 20% above the dollar ?

Chris, how can you possibly rhyme all the above with the possibility of a wonderfully gold-friendly explanation ?

Am I interpreting it right that you don't see a consistant "red tape" through the gold matters of the past 2 decades in general and the past 6 years in particular ?

Thanks

Rimh
Sovereign
Well, you certainly stirred the pot up! Interesting questions, but I'm not sure what point you're trying to make, especially suggesting that we all crawled out from under a rock. A certain level of respect is necessary in maintaining the "honest" debate and discussion here. If you feel you have a better solution or a contrary position to most opinions here, please share it with us so that it can be debated.

We are generally enthusiastic about the rise in the gold price lately because it represents the growing global understanding that gold holds value, intrinsic value which is not someone else's liability. The paper money, which has no attachment to anything of intrinsic value, represents a debt, an I.O.U.

The difference between, say, the US dollar (or any other paper/fiat currency for that matter) and gold is, at the end of the cycle gold will still have intrinsic value, the paper currency will not (never did, really). The paper currency exists only as a medium of exchange to facilitate trade, not a substance of value in and of itself. But over the course of a currency's life cycle people forget that principle and begin treating the paper as something of value.

In the end it will be market forces that finally determine the relative values of all "goods", be it gold or paper. If you have information to support a return to the 1996-2001 period for gold pricing, by all means, lets hear it. This forum is here for debate.


Belgian
@ 986
Yesterday, Trichet made the fundamental differences (strenths and weaknesses) between EU and US, rather clear :
US (US$) is strong because of its flexibility wich is the EU's weakness by not reaching enough structural reforms that lead to economic flexibility. This is nothing new of course and therefore less relevant. But the central banker emphasized the other side of the coin : EU's strength in savings (capital-assets)(trade surplus) and the US' deficits (debts).

Trichet refused (Q & A) to suggest some advise for the US, before the EU has solved (acted upon) its weakness.

What has this to do with Gold ? Whilst trying to solve Euroland's main weakness (inflexibility)...everything should be done to protect and maintain its savings' strength. How can one better protect one's savings than with Gold in an appropiate goldmarket...by preference a euro physical goldmarket. Makes sense, no.
Liberty Head
Freedom Good, Coercion Bad

That's as simple and basic as it can be stated.
It amazes me that so many folks can't accept something this simple.
We get fooled onto believing coercion can be good and freedom can be bad.
Coercion begets counter-coercion, begets more coercion, while freedoms are trampled in the name of fairness. Things quickly become grossly out of balance.
Potential energy builds until it becomes too big to contain then, WHAM, lightning strikes. Proving once again, keeping things in balance is the nature of the universe.
I would think more folks would wise up after being struck by lightning a few times.
If dishonesty and incompetence were not enough to persuade us to change our thinking, I wouldn't bet much on our future.

Government is pure coercion. Coercive forces in the private sector always want the government on their side. This creates very fertile ground for hatching huge coercive monopolies. The hapless victims who seek remedy through the government find their claims have no standing.

The best way to protect oneself is to promote markets that are entirely free of government's coercive forces and based on sound currencies.
In a free market environment, huge coercive monopolies create huge demand for alternative choices. Less coercive entities can quickly take market share when government imposed barriers to competition are removed.
In a free market, corporations must focus directly on customer satisfaction instead of lobbying efforts with nicely dressed government thugs.

No market system is perfect, but a free market will return to a balance point quicker than any managed system can. Thank god ocean tides are managed by free gravity instead of fair gravity. Imagine what fair gravity would cost. :-)

Without ones involvement in living ones life according to free market principles, it's just another philosophy.
Make it real, today.
Fight the fight, speak out, and accumulate gold.

Best Wishes
Belgian
Observation/Reflexion
Since 1990, the "military logics" are increased and are dominating...again... the fragile balances of our planet !
We are losing our capacity to settle or correct imbalances with peacefull solutions. There are reasons for this escalating evolution. We must find the "real" reasons.

It are the "dollar" and "oil" that don't agree anymore, as was the case after the crisis in the early seventies was settled, relatively peacefully.

Oil and the dollar are dividing the planet on the many aspects that go with this divorce.
Soon, Australia as a key dollar-ally, will decide on its stance, through elections...

Today, Gold is certainly ,"indirectly", involved in this dollar-oil war...as Gold was indirectly involved in the oil/dollar peace for 15 years ('75 > '90).

The above generalised thought is my main argumentation for the inevitability of euro FreeGold as the basis for a new peacefull settlement on the dollar/oil war. Stop the wars with FreeGold !
Topaz
...some Quick-eze for an acid complaint.
http://eserver.org/books/poe/descent.htmlSir Sovereign:
I too am looking forward to hearing your thoughts on Gold is Money. It seems to me if Currency is Money and Gold, as alt DX, is marking time with the currency basket, Then by inference, Gold IS money NOW!
Might I suggest you join with me and kick back, light up, pour a dram or two and immerse yourself in a short story penned when Gold truly WAS money.
Belgian
WHAT does this mean....?
NYMEX oil diving under $52 AND dollar down > euro up > Gold up !!!
What does this say about the relationship(s) between oil-$-�-gold !?
"Another" confirmation of what exactly !? Watch it happening and think about all the theories that have been outlined, here...for quite some time now.
The Invisible Hand
The stone age
Did the stone age end due to a lack of stones?
No, says a gentleman called Van der Veer from Shell.
Belgian
A few hours later....
The quatro, oil-$-�-gold, goes into reverse. Oil rises from below $52 back to $52,60.
These moves are more than 1% and are therefore more significant than ordinary, so called market volatility, normally suggests.

What can we possibly distil of this ? I stick to the oil-offensive strategy...oil taking the initiative.
Rather than the markets behind the dollar who accentuate oil's supply/demand situation for pure dollar-reasons >>> continued oilpricing in dollars through very high $-POO.

In another press release (???) an OPEC representative states that OPEC does not intend to raise output. What is going on here ? Thoughts ?
Toolie
PBS offers a glimpse of what we are missing.
http://www.pbs.org/now/sched.htmlNEW YORK, Oct. 5 /PRNewswire/ � Friday on PBS� NOW with Bill Moyers, the four major third-party candidates take on the issues they believe are being ignored by the two main political parties. On the evening of the second Presidential debate in St. Louis, NOW's David Brancaccio moderates a conversation between the candidates that were excluded: Reform Party Presidential nominee Ralph Nader and Green Party candidate David Cobb and between Constitution Party candidate Michael Peroutka and Libertarian Party candidate Michael Badnarik.

The link will result with your local airtime.

Also, PBS has a show on "Extreme Oil" starting this Sunday (for me).
http://www.pbs.org/wnet/extremeoil/journey/index.html


misetich
US Budget Deficit - When will foreigners reject US Debt? O'Neil warned of pending crisis
http://www.washingtonpost.com/wp-dyn/articles/A16134-2004Oct7.htmlSnip:

"The [deficit] pressures going forward are too great to allow us to borrow these kinds of moneys on the international market on a sustained basis," said Douglas Holtz-Eakin, a former White House economist who heads the Congressional Budget Office.
....................
"We have a deficit challenge in the short and medium term," said Joshua B. Bolten, the director of the White House Office of Management and Budget.
..................
Congress has allocated $174 billion so far for the Iraq war alone, with another emergency spending request expected early next year.
.................
Days later, at a meeting with the vice president, O'Neill "tipped his hand," said an administration participant in the session, and warned that the government was careening "toward a fiscal crisis." But by then, the Treasury secretary was virtually alone. On Dec. 6, he was fired.
..............
To finance its deficits, the Treasury has increasingly looked to investors overseas, especially foreign governments, to buy U.S. Treasury bonds. But recent economic data suggest foreign buyers may be losing interest, afraid that a sudden drop in the value of the dollar will upend portfolios swollen with U.S. currency.

According to a Treasury Department report released this month, net foreign purchases of U.S. bonds fell 45 percent in July, to $22.4 billion, while purchases by foreign central banks plummeted 76 percent, to $4 billion -- the lowest levels in a about a year. Sung Won Sohn, chief economist at Wells Fargo Bank, warned clients recently that foreign governments are already cutting back, leaving the Treasury dependent on unreliable bond traders.

"The U.S. will rely increasingly on less stable sources of funding and pay higher interest rates," he said. "It is a fait accompli that the dollar will depreciate further. The dollar depreciation will lead to higher inflation and interest rates, hurting the economy."
................
Foreign governments lent the Treasury $3.5 billion in 2001 and $7.1 billion in 2002. Last year, the figure soared fifteenfold, to $109 billion. Japanese reserves of U.S. Treasuries climbed from $317 billion when Bush came to office to $695 billion in July. During the president's term, China surpassed Britain as the United States' second largest foreign lender, with its holdings more than tripling from $50 billion in December 2000 to $166 billion in July.
...............
***************
Misetich

Oleg V. Mozhaiskov's (Deputy Chairman of the Bank of Russia) speech to the London Bullion Market Assoc. (LBMA) in June /04 said foreigners worry more about the state of the US $ than US Fed officials do....that the US $ lacked discipline

To make matters worse, the US trade deficit and hence current account deficit is establishing new record highs monthly

It is just a matter of time, till foreigners lose their appetite for US debt

All Aboard The Gold Bull Express - Part ll
Boilermaker
Gold, Gold, Who's Got the Gold.
After reading recent posts from Belgian and Chris Powell about CB gold and what's been happening with it these past 20 years I conclude that none of us know with any certainty. The circumstantial evidence exposed by Veneroso and GATA investigators is compelling that much CB gold has been sold, loaned or shipped outside their vaults.
Does anyone know if any CB's have permitted an independent physical audit of their gold? If not, shouldn't this be an annual exercise? If you entrusted your gold to your local friendly banker for safekeeping would you not visit your stash each year to see it? And what would you do if your friendly banker was promoted or let go and his replacement was not so friendly. And how could you tell if what you are shown is really your gold and not just a showpiece?

My point is, in the absence of a simultaneous physical audit of all CB gold holdings there is no certainty that the quantities reported actually exist. It certainly seems fishy that of all the WAG gold gone for sale none of it was shown leaving the vault, in transit, or arriving at its new owner. Perhaps it is just being moved by burly men in the basement of the New York Fed from room to room. Or perhaps, more likely, it is but a bookkeeping entry to account for gold previously shipped.

Of course this leads to the question why would these CB's sell/swap/loan their gold? I don't have an answer to this one but here is one theory. The cost of conducting the Cold War fell largely to the US. Perhaps the European gold was used to protect/support the dollar in a covert way as compensation for services rendered. Now that it is gone, the players have to rearrange the remainder so that the new Euro-Order will be started on a level field.
968
Are home prices the next "bubble" ?
http://www.ny.frb.org/research/epr/forthcoming/mccarthy.pdfA study forthcoming in the Federal Reserve Bank of New York's Economic Policy Review concludes that the rapid rise in housing prices in the past decade is not symptomatic of a housing bubble that will burst, and that there is not a risk of weakness to the aggregate U.S. economy resulting from a potential decline in regional housing prices.
In "Are Home Prices the Next �Bubble�?" economists Jonathan McCarthy and Richard W. Peach maintain that the strength of market fundamentals is responsible for the run-up in housing prices nationally. Although home prices have risen strongly, increases in family income and low nominal mortgage rates have meant that homes have remained affordable on a cash flow basis. Furthermore, their analysis shows that rents and prices are not out of line in an environment where nominal interest rates remain historically low. In discussing a possible bubble, the authors subscribe to a standard economic definition as stated by Nobelist Joseph Stiglitz: a bubble exists if prices are high today because investors believe future selling prices will be higher, even though fundamental factors do not justify the prices.
On the national level, the authors note that aggregate real home prices declined only moderately, even in periods of weak economic growth combined with high nominal interest rates. Regionally, McCarthy and Peach conclude that in states along the east and west coasts, where home price appreciation has been strongest recently, there is some potential for the price of housing to soften. They observe that prices in these areas are subject to a possible decline because housing is relatively inelastic and home prices historically have been volatile. However, they note that regional price declines in the past have not had significant negative effects on the broader economy.
------------------------------------------------------------------------------------------------------------------------
The conclusion starts with :"Our analysis of the U.S. housing market in recent years finds little evidence to support the existence of a national home price bubble."
Former German Reichskanzler Otto Von Bismarck once said : "If something is denied officially 3 times, it is true !"
misetich
UPDATE 2-US pension agency chief warns of solvency risk
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6443995Snip:

WASHINGTON, Oct 7 (Reuters) - The longer-term solvency of the U.S. agency that insures pensions is at risk, threatened by troubled airlines and other companies failing to fund their retirement plans, the agency's director said on Thursday.

Pension Benefit Guaranty Corp. Director Bradley Belt said he expects to report a significantly increased deficit for fiscal 2004, which ended Sept. 30, eclipsing 2003's record $11.2 billion deficit for the single employer insurance fund.

"The longer-term solvency of the pension insurance program ... is at risk," Belt told lawmakers in a Senate Commerce Committee hearing.

The pension agency slipped into a deficit in 2002 after having to bail out failed pension plans in the steel industry.

Since then, troubled airlines have been straining the safety net for traditional pensions that guarantee a set payout at retirement.
.................
His agency faces $31 billion in exposure to struggling airlines, but he declined to lay all the blame on the aviation sector for the state of the pension fund, saying the industry's woes are symptomatic of broader pension problems.

"It seems to me that there is a possibility of a looming train wreck here that could cost the taxpayers of America untold billions of dollars," said Arizona Republican Sen. John McCain, chairman of the Commerce Committee.
*************
Misetich

Baby-boomers retirements are just around the corner and the rats will have deserted the ship by then

All Aboard The Gold Bull Express - Part ll
Cometose
Towncrier
Please delete my last post ; as it may be a violation of Forum guidelines....
Rimh
RUSSIA ACCUMULATES RECORD HIGH GOLD AND CURRENCY RESERVES
http://en.rian.ru/rian/index.cfm?prd_id=160&msg_id=4948456☆trow=1&date=2004-10-08&do_alert=0
snip:
"Russia's gold and foreign currency reserves have grown considerably. Over the period from September 24 to October 1, they grew by $1 billion, to a total of $95.3 billion.

Interestingly, the trend is in its sixth straight week with the reserves growing by a total of $7 billion in this period. As a result, Russia has the world's fourth largest reserves of gold and hard currency (compared to the August 2004 figures), surpassing long-time leaders like the United States, Germany and France."

and
"The reason is record high global oil prices. Russian oil producers took advantage of the favourable situation on the market last month and increased oil exports considerably.

Accordingly, the dollar flow to Russia's financial market was much more intensive. Any one-dollar rise in oil prices immediately injects hundreds of millions of dollars into Russia, according to experts. When oil prices exceed $40 per barrel, the US currency simply floods the Russian market. Under the circumstances, the Central Bank can only "tie it up", thereby, boosting the national gold and currency reserves."

Rimh:
Interesting how they headline it as "Gold...and currency reserves", and given the Russian central banker's statements about the US' lack of dicipline regarding the dollar, what do you think they are doing with this "flood" of US currency?

The times, they are a' changin'!



Cometose
Silver
http://www.futuresource.com/charts/charts.jsp?s=SI&o=&a=D&z=610x300&d=medium&b=bar&st=Here is another chart that looks interesting with regard to last week's pennant formation and breakout in Crude Oil.


Does Silver know Crude oil.......
or are they brother's ................
and is Gold related to these brothers as well......??????

are are these actions in these charts and the chart of GOlD Random events that have occured to each of these commodity's relationship ......

to INFLATION
YGM
Prophetic words from Hans Sennholz Mar. 31/01
Quote---
Monetarists rejoice about the "dethroning of gold" which they believe "reduces the sensitivity of the stock of money to changes in external conditions." They refer to the imponderables of gold mining throughout the world and to political upheavals that may affect the flow of gold from country to country. Actually, the abolition of the last vestiges of the gold standard in 1971, when the U.S. Government defaulted to redeem its currency in gold, did not bring stability. On the contrary, it opened the gates for world-wide inflation and several currency crises. It made the U.S. dollar the reserve currency of the world, elevated the Federal Reserve System to the world central bank, and inundated the world with fiat dollars. The consequences of this course of events may haunt the United States in years to come.

*****Well Hans that time HAS come!!!...YGM

GOLD, the money of Kings and Peasants alike....GOLD, the greatest stable store of wealth since salt....GOLD, the most fundamental security in this new world of paper deceptions.....If everyone on earth had his or her fair share we'd all have a gram or two as the above ground supply is small.....Just imagine 12 to 14,000 tonnes (estimated) being sold on paper at present, and the world producing in the neighbourhood of 2700 T p/yr.....The "Gold Bubble" is near the bursting point.....This will be IMHO the "POP" heard around the world!!!....YGM
Cometose
Gold
http://www.futuresource.com/charts/charts.jsp?s=GC1%21&o=&a=D&z=610x300&d=medium&b=bar&st=Here is another chart which was unavailable earlier (when Gold lifted through resistance ) of the GOLD and todays action in it's relation to the pennant that formed in GOLD this week that interestingly enough followed the

Pennant formation and breakout that happened in oil last week......

This looks like a strong foundation upon which to build .......the coming move in GOLD .......


This should give some concern if these actions in SILVER GOLD AND OIL are linked and how this relationship may relate and effect the paper derivitives.......
Waverider
U.S. Sept. Payrolls Rise 96,000, Less Than Forecast
http://quote.bloomberg.com/apps/news?pid=10000087&sid=aHDdAuKltYxc&refer=top_world_news"U.S. employers added 96,000 jobs in September, fewer workers than expected, as a rebound in the economy failed to generate faster job growth a month before the presidential election... The result is the last Americans will see before deciding between President George W. Bush and Democratic Senator John Kerry in November. The gain fell short of the average 150,000 jobs a month some economists say is needed to absorb a growing labor force and keep the jobless rate steady."

Waverider: The US$ is getting a double whammy today - disappointing jobs report and comments from the President of the Federal Reserve Bank of Dallas (McTeer) who said the U.S. current account deficit will lead to an inevitable decline in the dollar's value. He also said that foreign investment to finance the current account deficit will come to an end, and "there will be crisis that will result in rapidly rising interest rates and a rapidly depreciating dollar that will be very disruptive." Most here have Gold but if you don't, then get it and get prepared (as per Black Blade's advice) - and if you're a lurker and don't know what the heck we're talking about here - get Mr Kosares's book "The ABC's of Gold Investing"- and jump on in 'cause the coffee's hot!
YGM
Questions, Questions......
Has the 'Mad Scramble' to dump US Fiat begun?... Will the Euro w/ 35% Gold backing become the currency of choice?... Will Russia accumulate enough Gold so as to strenghten it's Fiat to a level where it could join the Euro?... Will/are the Arabs taking Gold and Euros for Oil as opposed to Gold and US$$...One could get sore fingers and a headache trying to type all the unanswered questions that come to mind.....

As 'Another' and 'Friend of Another' liked to say "We live in interesting times" and "We watch together"....

Sadly they aren't around anymore, for as many questions as they raised between them they also gave many hints as to the future as they saw it.....YGM
Federal_Reserves
Moron
High oil not hit core US inflation-Fed's Bernanke
Fri Oct 8, 2004 12:05 PM ET
ST LOUIS Mo., Oct 8 (Reuters) - Federal Reserve credibility for keeping inflation low has helped cushion the economy from the shock of record oil prices, Fed Governor Ben Bernanke said on Friday.
Bernanke said this was illustrated by the "fact that the oil shock this year evidently has not been translated into a rise in core inflation."



??? HOW could high engery prices impact core inflation
??? By definition core excludes gas/energy.
??? Are these people morons or what?



Cometose
Federal Reserves
YES...YES....YES ....YES...
YES ...YES ...YES ....YES.....

YES YES YES YES YES YES YES YES YES YES YES YES
YES YES YES YES YES YES YES YES YES YES YES YES

YES YES YES YES
YES YES YES YES

YES YES YES YES YES YES

(to be accompanied by music from Bethoven's ?????.....9th)

in addition ................

INFLATION IS SCREAMING ......
FED RESERVE Dallas Chairman MCTEER IS SCREAMING...............

PROTECT YOURSELF
AVALANCHE LOOMING

CAN YOU hear IT????? SCREAMING OUT AT YOU!!!!!!!!!!!???????????????



NEMO me impune lacessit
Cometose
I think there was a YES to much on the second line. :)

N
NEMO me impune lacessit
Cometose
Sounds more like his 5th.

N
USAGOLD / Centennial Precious Metals, Inc.
Odds of winning are 1:147 or better; your odds of great prices are 100 percent!!
Cometose
Thank you NEMO...........I hoped you would help me out with my Bethoven Placement
http://www.futuresource.com/charts/charts.jsp?s=DX&o=&a=D&z=610x300&d=medium&b=bar&st=also

The dollar is now penetrating last weeks
Resistance at 8750....and heading through now down
104.........

The currencies took a breather here because they weren't sure it was going to break .....but it is...

This could become one big slide .......it will be snowballing from here I fear.........trust.......?X!!!?X&&**
USAGOLD - Centennial Precious Metals, Inc.
From the first chapter, 'ABCs of Gold Investing' (NEW - second edition)
http://www.abcs-of-gold-investing.com/(excerpts)

The telltale symptoms of a currency and an economy in stress dominate the U.S. financial and political scene. The litany is familiar: massive federal government deficits, a burdensome and virtually unpayable national debt, a rapidly growing foreign-held debt, unsustainable levels of private indebtedness, confiscatory taxation, high structural inflation rates, and declining productivity across the board. However, only a handful understand that these problems are interrelated and deeply rooted, and that they directly affect the viability and value of investment portfolios for all Americans. These problems have not suddenly appeared on the horizon, demanding attention. They have been with us for a long time, and they have been steadily eating away at the foundation of the American economy: the value of the U.S. dollar. Many are hoping this deteriorating situation will simply disappear, but most of us know that is unlikely. More likely, the situation will worsen....

In 1970, the budget deficit was a meager $2.8 billion. By December 2003, it had reached $477 billion - 170 times the 1970 figure.

In 1970, the accumulated federal debt was $436 billion. By December 2003, it threatened the $7 trillion mark. This figure does not include so-called off-budget items like long-term Social Security and Medicare obligations, which balloon that figure by multiples.

Exports and imports were roughly balanced in 1970. The last time the United States ran a trade surplus was 1975. By 2003 year's end, the trade deficit was estimated to be a dismal $490 billion for the year.

In the process, the United States has gone from being the greatest creditor nation on earth to being the world's greatest debtor nation. In 1970, U.S. debt held by foreigners was a mere $12.4 million. By the end of 2003, it approached a dizzying $1.5 trillion. The problem of foreign-held debt has become so acute that some experts wonder whether the United States will be capable of pursuing its own monetary policy in the future, or whether the dollar is now hostage to our foreign creditors.

Belying political claims that inflation is under control, the actual consumer price index has shot up 490 percent since 1970.

While proclaiming that the American consumer has never had it better, many politicians neglect to mention that since 1980, individual tax collections by the government, not including Social Security, have gone up over 350 percent on an annualized basis over the 1970 figure, while the median income has gone up only 240 percent. In other words, taxes have gone up nearly 1.5 times faster than income....

...not a single one of these trends shows even a hint of reversing. To the contrary, they seem to be worsening exponentially like a nuclear chain reaction. Rather than acting on these problems, politicians have changed tactics. They now use disinformation, even propaganda, in an attempt to make it appear as if the problems do not exist. Presidential candidate Ross Perot, during the 1992 presidential campaign, colorfully likened the situation to a crazy aunt locked in the attic-the one the neighbors know about, but no one in the family wants to acknowledge.

...In the end, the correlation between deficits and inflation is sacrosanct: deficits lead to inflation, and uncontrolled deficits lead to uncontrolled inflation. Whether or not there will be a Nightmare American Inflation remains to be seen. Let it be said, though, that the trend is not favorable. Those who survived the German debacle did so by purchasing gold and other tangible assets early in the process - one of the more famous proofs of the value of gold as a means to asset preservation.


(see link to access the full chapter)
mdgc
the plunging dollar
http://www.federalreserve.gov/releases/H10/hist/Today the Canadian dollar touched 80 cents for the first time since 1993.

The Canadian dollar was just below 62 cents in January 2001. That is, the Canadian dollar has appreciated 29% relative to the US dollar.

Today the Euro is at $1.24. In early 2001, the Euro was just above 94 cents. This is a rise in Euro of 32% during GW Bush.

Shrub's 30% devaluation exceeds that of any other president.

Another four years of George Bush, and another 29 percent devaluation, would take the Canadian dollar to $1.03. The American dollar would be 97 cents Canadian.

Another 32% devaluation with respect to the Euro would take the dollar down to about 61 centimes.

There has been no devaluation against the Chinese renminbi, yet.

historical exchanges rates from the Federal Reserve website

Little Feet
Now we know where all that Deep Storage Gold went.
http://www.msnbc.com/comics/daily.asp?sFile=ad041008Thanks to our host for the great forum and the great services. Get yours before Martha uses it all up. Now I will be quite again.
TownCrier
Gold graphs -- pretty as a picture.
http://www.usagold.com/gold-price.htmlIf cached images are displayed, position mouse over a chart then click and hold for a popup menu to reload images (if necessary).

R.
Federal_Reserves
Snow denies default risk
> It is shocking that it has come to this.
> Our country is going bankrupt - 1 trillion in
> fiscal and trade deficits each year!
> Hold your gold my friends.


Snow denies default risk as US nears debt ceiling
Fri Oct 8, 2004 01:35 PM ET
By Laura MacInnis
TOLEDO, Ohio, Oct 8 (Reuters) - The United States is nearing the limit of debt it can legally issue but is not at risk of default, Treasury Secretary John Snow said on Friday.

Snow said the Treasury Department has been in touch with Congress about raising the government debt ceiling for the third time under the Bush administration's tenure.

"We have communicated with Congress and are continuing to discuss that with them," Snow told reporters after a roundtable meeting at the University of Toledo.

He later said he would notify Congress as soon as the government reaches the $7.384 trillion debt ceiling. "The Treasury will avoid a default," he said in an interview on Bloomberg Television.

Snow did not specify when exactly the government would hit the limit, though Treasury has said it expected to reach it early this month. As of Oct. 6, the United States was about $9 billion below the ceiling.

Republicans have been hoping to put off a vote on the debt limit until after next month's presidential election to avoid political clamor over the issue.

Democrats blame Bush's tax cuts for turning the budget surplus he inherited into a huge deficit and would likely seize the chance to challenge Bush's management of the economy.

Senate Republican Leader Bill Frist said on Friday that Congress would need to address the debt limit by mid-November.

"It will take close cooperation between the House (U.S. House of Representatives) and the Senate," Frist said. "We will be addressing it adequately and the markets have nothing to worry about in terms of our appropriate response."

The U.S. government borrows by issuing U.S. Treasury securities that effectively are IOUs backed by the full faith and credit of the U.S. government.

Borrowed funds are used to finance day-to-day operations of the government -- everything from paying for civil servants' salaries to buying the bullets that American soldiers use.

Piercing the debt ceiling would effectively amount to a default on America's ability to manage its debts. There has never been a default in the government's debt during the country's history.

The Treasury could stay beneath the ceiling until about mid-November by using extraordinary measures such as tapping a Treasury fund that normally is intended for purposes like currency stabilization.

Frist said on Friday that Congress has "three or four options" in addressing the debt ceiling, but did not elaborate.

Snow, speaking with business leaders in Toledo, said the U.S. budget deficit was "too large and unwelcome" but said the government was on the right fiscal course.

"The United States really is a fiscally responsible place. If we weren't, we wouldn't have the lowest interest rates in over 40 years," Snow said.

"It's the best paper in the world," he said, referring to U.S. Treasury securities. "It wouldn't be the best paper in the world if we didn't manage the debt and deficit with a lot of attention," he said.



TownCrier
Fed funds market trading at FOMC target
Federal Reserve with overnight RPs adds $7.75 billion, anyway, at sub-target rate of 1.72%.

With a keystroke here and a keystroke there, your dollar-based savings loses value. Choose a sturdy savings plan built around gold.

R.
Cometose
Crude Oil Pennant of last week
http://www.futuresource.com/charts/charts.jsp?s=CL&o=&a=D&z=610x300&d=medium&b=bar&st=I found this Crude oil Chart very significant this morning as it reveals that last week Crude developed a pennant formation prior to breaking out and exeeding $50 ....

I think my earlier statement had something to do with looking at this chart to SEE WHERE CRUDE HAD BEEN and HOW IT GOT to where it is today .......the emphasis was on how it got to where it is ............

the HOW relates to that pennant......

Pennants like this to me indicate strength...in the ongoing move........

I was going to attempt to arrange the posts regarding
CRUDE
SILVER and
GOLD
Together ...
unfortunately , things didn't work out that way .......

but I think it's worth taking a look at these three charts and these three commodities....and watching for their correlations ...and how they may be relating to each other.

What occurs to my now is

that according to JIM SINCLAIR ......

the dollar and the action in the dollar steers gold....

What is interesting about this statement is that the REVERSE IS NOT NECESSARILY SO ...........


THAT GOLD DOES NOT STEER THE DOLLAR.......

The manipulation of gold does not steer the dollar ultimately , though the dollar may react sympathetically to GOlD's down movements.

THere is much talk about the inverse relationship between the dollar and gold ........

According to Mr Sinclair's statement......attempts to manipulate the GOLD PRICE cannot impact steering the dollar ultimately .......(the relationship is only onesided/ dollar sided). Whoever controls the dollar , therefore controls gold and makes the rules.......

Control of the Dollar therefore has changed hands over the years...........

Dollar denominated assets , dollar reserves.......
are being moved now in a way that indicates that
those that control the dollar even though its traded in a free market ..........(perhaps) have been gradually allowing the price of GOLD TO MOVE UP ...and all indications are it will continue.........
because the FED PRINTED WAY TO MANY DOLLARS FOR WAY TOO MANY YEARS.............

Therefore what is holding the gold price down is those that control the sale of dollars......Not the Fed ....
not the CABAL.....The cabal is playing only a linear role in a three dimensional game that is being orchestrated by those that are sucking in the GOLD ......

Just working on my own clarification ...........
stating the obvious to some I am sure .....to you I apologize........This is truly mind expanding.....

I'm finally getting it.........

In spite of what the Intentions revealed by Marc Faber's address to the Chinese Central Committee to keep the price of the dollar (support the dollar) high so they could hollow out the US SERVICE AND MANUFACTURING SECTOR.........it may be clear, now
THAT THE CHINESE thirst for OIL is pulling up the price of OIL and with it is also going the price of GOLD AND SILVER.....IT's(CHINA'S) own PURCHASES will thwart it's long term goal of maintaining a stronger dollar........because the inflation that is being caused is making THRONGS ELSEWHERE desire to let GO of their DOLLAR RESERVES and EXCHANGE THEM FOR OIL......GOLD AND SILVER.............

These opposing global factions as regarding the dollar may be the only thing keeping the dollar from free falling ...

Shorting the DOLLAR by ALL, HOWEVER, is also a manner by which all holders of Dollar Reserves may hedge their DOLLAR RESERVE ASSETS....from LOSS......




as THIS LOCOMOTIVE IS GATHERING STEAM .........



we may be approaching CRITICAL MASS.........

or just continuing to TWO STEP OUR WAY up and around the
GUILDED SPIRAL STAIRCASE
Cometose
OIL
NOW AT 53.30



"CAPTAIN , SHE CAN'T TAKE MUCH MORE OF THIS!!!!!"

Cometose
"TEQUILA SUNRISE"
may be an adequate description , whether they knew it when they wrote it or not , of this COMING MONDAY MORNING.....

TO BE PREPARED ....in that EVENT .........I am going to the LIQUOR STORE NOW so I have my TEQUILA ON HAND .....
just in case I need it ...............MONDAY

if the VOLCANO BLOWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Boilermaker
Federal_Reserves
This part of your last post caught my eye

"The Treasury could stay beneath the ceiling until about mid-November by using extraordinary measures such as tapping a Treasury fund that normally is intended for purposes like currency stabilization."

Does this mean that the ESF currency stabilization program will have to retreat from existing currency and/or gold positions? If so, that could be very interesting.
Great Albino Bat
Cometose: Tequila is good any time, start now....

because I read somewhere that Monday is a Holiday - Columbus Day, I think. Will markets be closed?
USAGOLD Daily Market Report
Page Update!
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 on the Comex division bolted $5 an ounce higher Friday on fund and trade buying, spurred by the drop seen in the U.S. dollar in the wake of a weaker-than-expected U.S. employment report.

The most active Dec contract settled $5 higher at $424.50 per ounce.

U.S. non-farm payrolls grew by 96,000 jobs during September ... the report was weaker than what had been expected by analysts. The Labor Department said employers also created fewer jobs in August than first estimated. The unemployment rate held steady at 5.4%.

The news applied pressure to the U.S. currency, and rendered dollar alternatives such as gold more appealing to investors.

With sentiment in the gold market already firm because of the strength seen in oil prices, sellers of gold proved sporadic and were easily overrun by the fund and trade buying, dealers said.

However, earnest bullion bank and trade selling appeared at $426 to cap Dec futures prices on the early charge, and the selling in that area kept that level out of reach for the rest of the day.

But, as the U.S. dollar remains on the back foot and oil prices linger near historic highs, speculators are expected to remain friendly toward gold over coming days to cushion prices on any fall and keep overhead targets such as $428 and $430 in view.

----(see url for access to full news, price charts, 24-hr newswire)---
TownCrier
National pride for three tonnes of gold (6 cubic feet!)
http://allafrica.com/stories/200410080857.htmlHEADLINE: Niger: First Gold Bar Produced From New Mine

UN IRI Networks, October 8, 2004 -- Fifteen years after the discovery of a goldfield in western Niger, the country has produced its first gold bar and is looking forward to turning bullion exports into a new source of foreign exchange income.

The first 15-kg gold bar from the Samira mine near the western frontier with Burkina Faso was cast on Tuesday in the presence of President Mamadou Tandja and other dignatories.

"The mine will produce an average of 5,000 ounces of gold per year for six and a half years, giving a total of three tonnes," Oumarou Massalabi, the Director of Mines at the Ministry for Mines and Energy told IRIN on Friday.

"This will result in about 15 billion CFA francs (US$ 28 million) of export earnings," he added. ... the government of Niger has a 20 percent stake in the company.

Massalabi said it would create 140 new jobs directly and 220 more indirectly in associated businesses such as electricity generation and security services.

...last year the government encouraged gold traders in Niger to declare their earnings by reducing export taxes to five percent and the scheme has met with modest success.

"So far this year, 412 kg of gold exports have been officially registered, providing 2.8 billion CFA ($5.2 million) of export earnings, out of which the State got CFA 30 million ($600,000)," Massalabi said.

---(from url)----

Far from antipathy, government sees shine in the golden asset, even in quantities as small as this!

A world view makes a world of difference in shaping ones perspective of the noble metal.

R.
TownCrier
HEADLINE: Technical and fundamental factors buoy gold
http://www.thestreet.com/_tsclsii/comment/aarontaskfree/10186960.htmlBy Aaron Task (thestreet.com) 10/8/04 -- In the wake of Friday's disappointing jobs data, the fate of future Federal Reserve tightening beyond November can reasonably considered to be in doubt. So it's not surprising that the dollar retreated sharply after the report while gold futures rallied to a six-month high, recently up 1.2% at $424.50 per ounce. In the process, gold broke through $420 per ounce, piercing a downtrend line connecting to its April peak that recently had served as resistance.

Veteran technician Martin Pring of The InterMarket Review noted that the Amex Gold Bugs Index had broken above its 2004 downtrend line heading into this week, a positive development suggesting "the [metal's] rally still has plenty of potential before becoming overextended."

...Yet gold has seemingly become the forgotten sister of the commodity community, taking a back seat this year to more dramatic advances in oil, copper, steel and even silver. The relative absence of "buzz" about gold is arguably a good contrarian sign, but it's also understandable given the metal's recent history.

To briefly recap, gold and related stocks have dramatically outperformed equities in the past five years -- the Gold Bugs Index (HUI) is up 160% in that period -- and by a solid amount in the past 12 months. But after peaking in January, gold and related stocks have struggled in 2004...

The lackluster performance comes amid relative stability in the dollar...

Unless gold can break above its April peak of $430, Holmes believes the metal is going to remain rangebound until after the election. "Gold is basically the best hedge against the dollar declining, and odds favor the dollar will decline after the election," he said. "Gold is anticipating [this] and acting better because of those implications."

Rumors of the dollar's demise have proven premature in recent years, but it remains very much in a long-term downtrend, which has long-term bullish implications for gold.

On Thursday, Dallas Fed president Robert McTeer said: "Over time, there is only one way for the dollar to go -- lower," and warned "rapidly rising interest rates and a rapidly depreciating dollar" would result if and when the rest of the world stops funding the rapidly expanding U.S. current account deficit.

Such frank talk from a Fed official is unusual.

Notably, McTeer's comments came during a week in which several Fed officials -- notably governor Ben Bernanke -- made statements rightly or wrongly interpreted as meaning the Fed is rethinking its "measured" approach to tightening and might even pause after November (Friday's comments by Minneapolis Federal Reserve President Gary Stern to the contrary notwithstanding).

Such an outcome would presumably be negative for the dollar and positive for gold.

Add to that simmering concerns about the Fed's need to encourage inflation via a weaker dollar because of the ongoing dis-deflationary threats of China's and India's rapid growth, plus high levels of U.S. household indebtedness, and you have a formula for higher gold prices.

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

All roads lead to gold. If you are not diversified, how long you remain merely a sidelined spectator is up to you. USAGOLD-Centennial stands ready to assist whenever you're ready to make your entry. The phone call is free.
1-800-869-5115 Ext. 100

R.
mas
Could we break 350 next week?
TC, nice lift off at 11:30.

http://www.usagold.com/gold-price.html
Topaz
@Cometose
R Powell
Belgian // Open interest //
I believe I might be able to give an opinion on some of your questions from post 125162.

In regards to open interest or the number of contracts open in a market, I must assume some basic knowledge of commodity markets for the sake of brevity but will reiterate that both long and short open interest are always the same (equal in number) although the number of people holding longs vs. those short does not have to be equal. It probably very rarely is.

Usually open interest does not vary when the market price is not actively trending either up or down. However, when a market does become active or volatile, either up or down, then most always open interest will rise. Volatility attracts investors + hedgers. An active market that starts trending sideways with little price change and/or smaller price changes loses open interest.

When a market does become active many traders watch the open interest number closely. Any sharp price move (up or down) that is NOT accompanied by an increase in open interest is suspect and some traders will fade (invest contrary) such a move. Perhaps one of the best descriptions I seen of open interest is that of fuel. Think of open interest as gasoline necessary to sustain a price move. This is more so the case today with so many technical traders involved vs those who trade based on fundamental facts or their interpretation of those facts. The ratio of technical traders vs fundamental players has been increasing over the years, aided especially by complex computer programs (and, imho, an unwillingness to perform the work (research) necessary to form an intelligent price predictive opinion based on the facts.

Often a big market upside move will continue until there simply are no more (or very few) buyers left to enter the market and provide the energy (fuel) necessary to keep the momentum going. I believe this happened this past year with silver. Usually a market in this state is vulnerable to sharp breakdowns. The reverse is also true when a declining market runs out of sellers, (the present corn market?). A trending market with steady open interest now might be cotton. Determining these exhaustion points is almost impossible although many, many try! Gold right now is obviously trending up, approaching last year's high, with the trend following traders buying or adding to long positions and numerous indicators printing out "buy" signals. But, with so many other factors involved, this could change in a heartbeat....or intensify in one. The fundamentals driving this market are well known to all who frequent our forum.

I think of open interest as gas to any market move. Many traders will be watching to see if it is rising now in the gold paper market. But, I don't place too much importance on this or any other single market indicator. There are so many, and what each usually indicates is NOT always what the future brings (g).

I should also note that this opinion is just that and is presented knowing that it is incomplete and necessarily so due to not only my limited knowledge but also due to the lack of mention of so much other information that pertains to, alters, or otherwise influences open interest....and what open interest may tell us about a market.

I hope this helps some. Maybe some of the other traders (investors) who lurk here might be able to add something here or correct me if I've made any blatent errors?
Happy weekend....especially for Red Sox's fans Go Sox!!!!!!!
Topaz
alt Dollar Gold.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=LOW&b=LINE&st=Gold has just about returned to it's currency mean as indicated by the monthly Gold/DX comparison. Whilst it can be argued that this upleg in Gold is purely a DX hammer, (as I believe it is) the risks from Physical offtake are enormous and highlight the lengths they have to go to manage "things" these days.
R Powell
Sovereign
Yesterday you asked...

"are you for democracy and the rule of law and therefore advocate gold as money, or is gold just another means of generating paper profits for you?"

There was a period of time when our monetary system was "backed" by gold and silver, then by gold only and now by the faith of the users (fiat). When money or it's value was regulated by its exchangeability for a certain weight of metal, its value was more secure or less alterable by outside forces like government and banking interests. In this regard gold represented or endowed our money with a degree of honesty, integrity and constant value longevity which has long since vanished. I doubt...just my opinion...that gold could ever again bestow these gifts to our currency...NOT because gold has lost these qualities but because our present day system could not tolerate them! Maybe with some very drastic changes but ...... However physical gold ownership still provides insurance against a depreciating currency and safely against any degree of systemic breakdown.

"Or is gold just another means of generating paper profits for you?" you asked.

Why can't it be both??????????????????
Again...why not both???????? Why the "OR" ????

And, speaking again for myself only, to the question of generating paper profits from gold...YES, I certainly hope so! I've been trying to generate paper profits from gold and numerous other things all my life. I find paper profits just the ticket necessary to pay all those nasty paper bills that sustaining life necessitates...like eating, paying the mortgage, buying cloths and gasoline, paying for electricity and insurance, etc.
And if the price of gold happens to skyrocket upward, will I be unhappy that the dollar amount I might make (profit) from paper investments, at that future date, buys less? No, I know it will be worth less than the same amount would buy today but...I still be happy with it and happier still when I pay off all past dollar demoninated debt that has not increased in proportion to the depreciating value of the paper profits. In other words, a big score in paper gold will pay off my house mortgage, even if a cup of coffee is $20.00 at that time!!
thoughts?
happy weekend to all!
rich



R Powell
Rimh
Read your early post (125269) and agree entirely. Nicely stated!
Druid
The oil that drives the US military
http://atimes.com/atimes/Global_Economy/FJ09Dj01.htmlSnip:

"In the first US combat operation of the war in Iraq, navy commandos stormed an offshore oil-loading platform. "Swooping silently out of the Persian Gulf night," an overexcited reporter for the New York Times wrote on March 22, 2003, "Navy Seals [Sea, Air and Land special forces] seized two Iraqi oil terminals in bold raids that ended early this morning, overwhelming lightly armed Iraqi guards and claiming a bloodless victory in the battle for Iraq's vast oil empire."

A year and a half later, American soldiers are still struggling to maintain control over these vital petroleum facilities - and the fighting is no longer bloodless. On April 24, two American sailors and a coastguardsman were killed when a boat they sought to intercept, presumably carrying suicide bombers, exploded near the Khor al-Amaya loading platform. Other Americans have come under fire while protecting some of the many installations in Iraq's "oil empire".

Indeed, Iraq has developed into a two-front war: the battles for control over Iraq's cities and the constant struggle to protect its far-flung petroleum infrastructure against sabotage and attack. The first contest has been widely reported in the US press; the second has received far less attention. Yet the fate of Iraq's oil infrastructure could prove no less significant than that of its embattled cities. A failure to prevail in this contest would eliminate the economic basis upon which a stable Iraqi government could someday emerge. "In the grand scheme of things," a senior officer told the New York Times, "there may be no other place where our armed forces are deployed that has a greater strategic importance." In recognition of this, significant numbers of US soldiers have been assigned to oil-security functions.

Top officials insist that these duties will eventually be taken over by Iraqi forces, but day by day this glorious moment seems to recede ever further into the distance. So long as US forces remain in Iraq, a significant number of them will undoubtedly spend their time guarding highly vulnerable pipelines, refineries, loading facilities and other petroleum installations. With thousands of kilometers of pipeline and hundreds of major facilities at risk, this task will prove endlessly demanding - and unrelievedly hazardous. At the moment, the guerrillas seem capable of striking the country's oil lines at times and places of their choosing, their attacks often sparking massive explosions and fires."


Druid: Pretty good read. Given the latest increase in oil prices, it would appear we're running into some difficulty fulfilling this very large undertaking.
Belgian
@ Rich P. Gold's open interest.....
Four years that those on the short/sellers' side are making loses. Four years that the number of those sellers (losers) keeps increasing : There is a "regulator" in this market...one with printing presses. The "official" Gold-managers want an "orderly" market...markets !!!
This unique anomaly, where more and more participants (sellers), keep on losing money...must certainly serve higher official interests. A market is not attracting more and more people (contracts) to a 4 year constant losing position.

An orderly price-rise of Gold since the ATL of $253 ...the euro introduction...low in $-POO ('99=$10)...WAG I...'00 stockmarket top...
Rich, I remain convinced that we don't have the slightiest idea about the scale of market-regulations that are taking place.
Thanks for having responded and have a nice weekend.
Belgian
@ Druid
The "total" oil-chaos is only in the warming up phase ! Cfr. The Thatcher (son of) case.
We see very orderly markets in currencies-Gold-stockmarket-bonds...whilst the oil-pricing gets wilder and wilder. Friday was a very good example of this growing "disorder".
The dollar lost its decades' old grip on oil ! 9/11 made things worse. No chances for an orderly outcome...dollar solution. That's why so many different erratic statements remain increasing inconsistant.
With a war...wars... on terror, resulting in more terror and atrocities...there is something wrong that cannot go on.

One cannot keep on "regulating" markets as to behave orderly, when oil-tension keeps on rising.
The recent comments about $60/pb being the (new) infla-pain limit...is as good as an invitation...a challenge... to oil, in the sense off...show me you can get your price up to $60.

These are not regular markets but fierce fights. It evidences how abnormal the supply driven oil-market has been for the past 3 decades : CHEAP OIL in exchange for AVAILABLE CHEAP GOLD. A friendly regulation.

There is certainly an organised, fundamental, underlying reason, WHY the goldprice behaves so orderly !!!

All co-operants of these benign interventionist market regulations, don't have an infinite patience. I fear that the oil-offensive will not reside. I need to see a dramatic break down in the oilprice momentum as to change my intuitive opinion on this.
The Invisible Hand
Antitrust and monopoly

Sorry, my pay check from J.P. Morgan Chase was late. That's why I'm late in replying to
"Chris Powell (10/2/04; 21:05:46MT - usagold.com msg#: 125017)
Which is immoral -- anti-trust law or monopolies?"
in which Gata's secretary and treasurer said in part:
"As for whether conspiracies work, in antitrust law that point has to be proven to the satisfaction of a court. But monopoly is the goal of economic conspiracy, and it should be self-evident that monopoly works. Avoiding monopoly is the purpose of anti-trust law.
If Invisible Hand does not believe that monopolies can be achieved and does not believe that they should be outlawed, he should say so plainly. That seems to be the essence of the disagreement here. He considers anti-trust law immoral. GATA considers monopolies immoral.
Invisible Hand is welcome to take orders from J.P. Morgan Chase, but that's not GATA's idea of a good time."

Gata is this time invoking a article from the Houston Chronicle of October 6, 2004 saying that four former El Paso Corp. employees have agreed to plead guilty to reporting false natural gas trades and will help prosecutors in ongoing investigations. This is what ENRAGED ME again: Gata conspiring with guv't, which has a monopoly over antitrust prosecutions, to get a share of that monopoly (Gata is lucky, the prevention of monopoly is, as I will demonstrate in a moment, not the aim of antitrust law so Gata will not be jailed.)

Gata says that the point whether conspiracies work has to be proven in court. I quoted, and will requote, Alan Greenspan saying that there is no standard according to which this can be proven or disproven.

"The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat." It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict -- after the fact" .(Alan Greenspan, "Antitrust", in Ayn Rand (ed.), "Capitalism � the Unknown Ideal", Signet Books, 63, p.63)

Can Gata not read?

Gata says that avoiding monopoly is the purpose of anti-trust law. Sorry, the general prohibition of antitrust law concerns "restraints of trade".(A.D. Neale and D. G. Goyder, "The Antitrust Laws of the United States of America �A Study of Competition Enforced by Law", Cambridge University Press,. 1980, 3rd ed.. , p.16)

If I were the advocate of the devil, I would quote Chief Justice Hughes saying in a famous opinion: "The Sherman Act, as charter of freedom, has a generality and adaptability comparable to that found to be desirable in constitution provisions" (quoted by Neale and Goyder, op. cit., p.23)

There's more, there's a rule of reason in antitrust law (Neale and Goyder, op. cit, p.23), some monopolies (and some monopolizations � but surely Gata does not know what that is) are thus not held in restraint of trade.

Gata on the other hand considers every monopoly, thus also the monopoly of the firm which is the first to bring a product to the market, to be immoral.

Yes, this is the essence of the disagreement between Gata and me.

The Invisible Hand
Belgian
The Price of Gold....
Now that the POO goes + $50, we wonder WHY the POG hasn't responded accordingly as under the old regime of $-oil-gold evidencies.
Only chart-freaks observed the POG-POO relationship of x10 min. and x20 max. Why isn't POG between $500 and $1,000, today !?
Apart from the mathematical observation, nobody bothered to analyse the "fundamental" relationship between Oil and Gold ! How come ? Simple answer : We have no evidence and see no reason to investigate if such a Gold-Oil relationship is existing. Simplier answer : oil is finite, has a peak and Gold never disappears. Therefore, there is no relationship, other than the price-infla yadada.

What an enormous mistake !

The reason WHY POG hasn't yet catched up with the POO is that the "old $-regime" has come to an end. The regime of GOLD AND OIL EXPRESSED IN DOLLARS ! One CANNOT express the *CORRECT* POG in "dollars" anymore. GOLDVALUE needs Another numeraire as to have its VALUE beING expressed correctly.
A valuable cannot be priced in debt-terms. The price-behavior of oil is telling us so.

Under normal circumstances, with a dollar still having enough credibility, we would not have come to a situation where such a sudden oilprice-offensive would have materialized. Oil is much too important for harmonious development of world economy as to neglect the good management of the evolving supply/demand realities.

Gold AND Oil are "both" saying the same thing but in a different way : Oil wants more and more (debt) dollars, whilst Gold says, no need to give me more of the same $-debt-paper. Gold can easely take its time and wait for its "real" valuation in Another appropiate currency. Oil cannot afford such a waiting time and has therefore to express the dollar's loss of credibility, with exhorbitant price rises.

It is for the above reasons that 13,000 tonnes of CB-Gold(B. Murphy) have been "COMMITTED" !!! We have no idea about the "exact" nature of those commitments and the possible mistakes that got into this Big sheme. The debate on this becomes irrelevant. Let's interprete the facts, correctly against the right background.

The above might explain (grosso modo) WHY the POG evolves relatively orderly and the POO increasingly disorderly.


The debate on the survival of the dollar's reserve status and the consequences thereof remain superficial and still in the suggestive mode. Very understandable from whatever standpoint.

I do interprete the whole CB-Gold affair as a confirmation that the dollar's reserve status has "already" been given up...politically ! All are simply adjusting during the time of general denial to be ready for the day that the dollar reserve towel is been throwen into the currency ring.
Knallgold
We live in the reality.Get used to it.
"Coercion is bad,Freedom is good"-great'so lets all vote for the good!?
After the apple event,there was good and bad in this world.
Liberty Head
Question For Knallgold

Who's reality are you getting used to?

Best Wishes
USAGOLD / Centennial Precious Metals, Inc.
A risk-free request, helping you enter the gold market with grace and confidence.
R Powell
Belgian
From your post yesterday....

"@ Rich P. Gold's open interest.....
Four years that those on the short/sellers' side are making loses. Four years that the number of those sellers (losers) keeps increasing : There is a "regulator" in this market...one with printing presses. The "official" Gold-managers want an "orderly" market...markets !!!
This unique anomaly, where more and more participants (sellers), keep on losing money...must certainly serve higher official interests. A market is not attracting more and more people (contracts) to a 4 year constant losing position."

Many markets trend either upward or down in price. In each and every one of them there are investors holding to the long side and an equal amount of sales. The number of investors is NOT equal but the contracts are...ie one investor might sell 100 contracts to five different buyers whose total contracts held equals 100. Gold is no different than these othe commodities or, for that matter stocks or bonds, in that there are buyers (longs) and sellers (shorts). Price discovery continues with prices changing always searching for that ellusive equilibrium. Investor sentiment changes on a daily basis while the underlying fundamentals slowly change or slowly reveal themselves or slowly confirm or alter themselves. All this changes the price. Example...the corn market is slowly coming to grips with a huge 2004 corn crop. Each passing day brings the harvest closer to completion thus reducing the risk of crop damage and thus also confirming the huge (11 billion bushels) crop number. Soon the market will accept (price in) this crop and that of the rest of the world. Then the market's attention will be drawn more to the potential demand side.

What has this to do with gold? The gold market is unique in that it's underlying fundamentals are obscure and its market influences are unusal including politics, monetary considerations, gold's past direct connection with currency values, etc BUT the gold market is similar to corn in that price discovery is an ongoing process. The market is now telling us that there is not enough $390/ounce gold to meet demand. Are there enough sellers at $424/ounce now?

Why you ask is open interst increasing when sellers have been losing money as the POG has climbed? Why does anyone buy or hold stocks of a company when the stock price is trending down? Why would anyone now buy corn at about $2.10/bushel when corn was over $3.00/bushel just last Spring? Why...because there are always buyers and always sellers in EVERY market all the time whose different opinions (or hedging needs) provides the buying and selling pressure. The result of these pressures or forces determines the price. Gold is no different. Right now I'm a buyer of corn even though it has been declining in price for a long, long time. At about $440/ounce for gold I'll be a seller of gold call options to lock-in some profit from lower strike calls (previously bought long positions). This has nothing to do with my belief that the POG is heading much higher, it is a trading strategy used while chasing those oft disparaged paper profits.

You asked a few days ago.."Are paper shorts permanently being shaved? How come?"

Every investor whose short with prices are rising is being shaved, all the time. Every investor whose long while prices decline is being shaved. This is a constant truth in stocks, bonds, commodities, currencies, all markets. The one possible exception is the true hedger but a true hedger does not profit or lose from price movement in either direction!! So, in general, the answer is YES, the perma- shorts have been losing in gold since that $252 low. This doesn't bother you, does it? (grin).

You also asked "How come?"

The short answer is that they have been wrong, misjudged future price movement. But I think you're wondering why they are still short in an uptrending market. The immensity of this question is beyond my knowledge other than to say that with price tick change investors and their trading systems change their sentiment or market outlook. Also, would a $5.00 drop in the POG on Monday change your long term outlook on gold and gold's future price? Now, what if you believed just as strongly that gold is a barbaric relic of an obsolete monetary system and further that physical gold had very little value (perhaps nice looking jewelry only!)? Would you be short? Gold is unique in that it has more permanently bullish analysts and more permantently bearish than any other market that I'm familar with..! And finally, markets usually tend to change price in an orderly fashion so that even if the POG is heading for Brian's predicted number of $1091.xx/ounce, all along the way and when it gets there, there will still be shorts in the market. Sudden disruptions are the exception...gold actually moves very slowly compared to other markets like silver, corn, oil, gasoline, heating oil, soybeans, cocoa, etc. (based on a percentage basis).
I hope somewhere in this rambling I've offered something of value. I welcome comments, as always!
happy weekend
rich
Knallgold
Liberty Head
Cosmic'spiritual,philosophical'scienctific,who rules the world,Gold and so on-I've devoted my life to find the truth (it took me years to even find out this).

One of my basic findings is,the most precious thing man has,is its freedom!Now that you see that I'm not blind,we can start.

After thousands of years one can safely conclude that on this earth,there are 1. always governements and laws and 2. there are always bad guys.#2 here is not just the result of #1,good and bad is the nature of our being here,abandoning gov. won't change that.And,as a matter of fact,there are always leaders.

So we humans set our rules who define whats good and bad,educate our children and finally write it down (law).Authorities (court'sentence)'social control (GATA...) guards the laws.

But what brings us the highest amount of freedom is when we just live by the laws!Well,in its radicality almost an illusion,because'see above,there is always a bad guy trying to extract an unlawful profit.

Most of evil on earth starts with power,power excercised on other people.Unsurprisingly,often done by governments.So what would I do,aknowledging power is an inherent fact of,yes!,our freedom (of choice)?Limit this power by dividing it!

Having grown up in Switzerland,this is in my blood and I must tell you we have made good experience with it.There is not one president,there are 7,there is not one party in gov.,there are 4 etc.

On the other side,there are for example anti-trust laws to prevent individuals gaining too much power.Neither entities should grow too big'so a maximum of freedom is possible for all citicens.

Though,the last drops of freedom and welfare can only be enjoyed when all agree silently to live by the laws (being it the 10 commandements or whatever)!A long way to go,and the maximum mankind can achieve.

So the laws shall always be with us!Free (of governements) markets,that sometimes sounds like communism,the final ideal justifying the means.An illusion.

A FreeGold system will be object to manipulations as well.FOA/A/ANOTHER/ARISTOTLE/MINER49er
could help us and give us their views about anti-trust laws in FreeGold!

As you can see,like Chris Powell in his #125038,I'm living in and can accept (now!) the real world.Painful as it is sometimes.But when you can enjoy the beauty of the moment,you can always feel FREEDOM.

Druid
@Belgian

Druid: Belgian good Sir, many thanks for your informative reply. I quit trying to correlate the various markets some time ago as I tend to agree with you and many others at this fine forum that we're (Dollar centric world) going through a system change (dollar destruction)that will rewrite many if not all of the correlations of the past.

If we go through an orderly transition then maybe new correlations can be derived as this system switches over, however, the situation in IRAQ and the fact that we are trying to police various oil supply outlets all over the world would lead me to believe that "orderly" is out of the question.

Don't get me wrong, I certainly do enjoy when various bugs through statistical analysis derive the fact that they might be trying to trade against a printing press but I'll just opt for the easier route of acquiring the yellow metal directly.

The oil price is beginning to whisper to me that old relationships could be in the process of being severed for new ones. I believe it was Lady Goldendome who recently wrote a very eloquent thought as to the lack of correlation between the spot price of oil and the prices at the pump we pay here at home. How could this be? I had the same question asked of me a few months back by a colleague. I explained to him that the spot price for oil reflects the decisions by a world set of large participants holding incredible amounts of dollar reserves and that the local price at the pump can be dictated by any administration in Washington. He understood. By in large, people in this country don't undertsand that they are participants in a planned economy and sometimes get it confused with some sort of "free market" mythos.

One again, thank you Belgian for making me look at things financial/economic/political entirely different.
Liberty Head
Knallgold
http://www.libertyhaven.com/theoreticalorphilosophicalissues/economics/monopolyandindustrialorganization/antitrustfree.shtml
Thank you for expressing your views in more detail.

I would be pleased to continue the discussion.
I agree that the best way to limit power is to divide it.
So, why not keep dividing power until each individual has a full share of power as well as a full share of responsibility?
Why not allow the market place to be regulated by customers each one with a full share of power and responsibility?

40 years ago Alan Greenspan spoke these words:
"The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat. " It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict- after the fact. In view of the confusion, contradictions, and legalistic hairsplitting which characterize the realm of antitrust, I submit that the entire antitrust system must be opened for review."
----------

Best Wishes
Life,Liberty,Property
From Anti-monopoly to Tequila
I pretty much fall under the description of a lurker on the site, with only occasional posts. I just don't have the time to read all of the information let alone the links, but I do appreciate them and try to catch up on several days posts on the weekend. I do try to put in my two cents when I see an angle or explanation of a facet of the discussion has been missed, so here are a few musings.

On anti-monopoly laws: They have never worked and never will. Why? There is a fundamental misunderstanding of the nature of monopolies that is fostered and maintained by the educational system here in the U.S. (and judging by the press from around the world, we aren't alone). Where do monopolies come from? Here is the definition (from Dictionary.com):

1. Exclusive control by one group of the means of producing or selling a commodity or service: "Monopoly frequently... arises from government support or from collusive agreements among individuals" (Milton Friedman).
2. Law. A right granted by a government giving exclusive control over a specified commercial activity to a single party.
3. A company or group having exclusive control over a commercial activity. A commodity or service so controlled.

I have a lot of respect for Friedman, but I would have to say the only true monopoly is one granted by government. Why? Because in a free market, no one stays on top of it all forever. Period. Only when governments create and enforce monopolies can they continue, and always to the detriment of the buyers. I can offer many examples of companies that stood astride the market for a time but lost their hold due to competition. I can't name one that continues to exist that isn't government run or protected. So why don't anti-monopoly laws work? They are supposed to "stimulate" competition which is good right? Because it benefits the consumer/buyer? In actuallity they have the opposite effect. Government becomes the arbiter and judge of what is successful and good for the market, which NEVER works. If you want an odious example of a true monopoly (and here is the tie in for gold), look no further than the Federal Reserve. A "private" company that the average person thinks is part of the government. In reality they are a private company that has been in collusion with the government because the government provides their monopoly. As a result, each succeeding administration has used it since Nixon's to "fine tune" the economy. To help hide the results, the price of gold is supressed. It doesn't matter which party is in charge, the Republicrats or the Demicans, the results will be the same until THAT monopoly is busted and real instead of fiat money exists again in the U.S.

Regarding Tequila: only drink the good stuff, no salt, no lemon.
Ag Mountain
@RPowell
I'm sorry but it's almost comical to watch you spoonfeed Belgian with market 101 basics as your reply to his PhD level guidance for you to give this more thought. It's like you're talking to his kneecaps.
CoBra(too)
When it Snow's in the US...
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=6455361

...It's either close to presedential elections, or X-Mas these days.

Both occasions seem to contain some fa(-iry)talistic irrelevance to its historical precedence.

...So let it Snow ...
Waverider
PUMP DREAMS
http://www.newyorker.com/fact/content/?041011fa_fact"Although the Democratic and Republican energy plans differ widely, their underlying rationale is the same. In 2003, the United States consumed some twenty million barrels of oil a day, of which slightly more than half was imported from abroad, much of it from the Persian Gulf. By 2020, according to the Department of Energy, domestic oil producers will be meeting less than a third of United States needs, and the Gulf countries will be supplying up to two-thirds of the world's oil. "This imbalance, if allowed to continue, will inevitably undermine our economy, our standard of living, and our national security," the Bush Administration's National Energy Policy Development Group warned in a May, 2001, report. "But it is not beyond our power to correct. America leads the world in scientific achievement, technical skill, and entrepreneurial drive. Within our country are abundant natural resources, unrivaled technology, and unlimited human creativity. With forward-looking leadership and sensible policies, we can meet our future energy demands and promote energy conservation, and do so in environmentally responsible ways that set a standard for the world."

When energy independence is presented in this way, it is hard to object�who would advocate energy dependence?�but optimism and an appeal to American patriotism don't add up to a coherent policy. Moving beyond rhetoric and actually trying to make America less reliant on foreign oil involves confronting powerful commercial interests, solving difficult technological problems, and convincing the American public that cheap fuel is not a birthright..."

Waverider: Excellent (rather lengthly) article on oil geopolitics/ supply-demand issues, etc. - I can't do justice by trying to summarize it so please just click on the link...
Ag Mountain
@Life,Liberty,Property "real instead of fiat money"
When the whole basis of the monetary system is oriented around giving people the ability to borrow and lend as much or more than to settle terms of trade, IOUs are the defining ABCs of the system. If you can get your mind around that simple truth, your comment is exposed as superficial rhetoric. It begs the obvious question, since IOUs are specifically what gives money its quality of "moneyness" what kind of IOU is any more real than any other IOU? You say fiat like it makes the situation worse, but actually it provides a formal rule of law framework without which we'd all be stuck in the barter age. So to be fair the problem isn't really with fiat exactly but instead with social tendency to abuse the integrity of our IOU system whenever it suits the majority. To have gold as money is not a suitable solution because that lips service ultimately can do NOTHING to stop the social tendency to renege on its IOUs. The best way to mitigate the inevitable monetary depreciations is to let gold exist outside the system completely in a way that the rising price of its inherent value will be the counterpoint and will compensate its owner. The best way I've seen someone say it here is use money to spend, use gold to save. That's what I'd call keeping it REAL.
R Powell
AgMountain
You may very well be right. I'm well aware that Belgian has knowledge well beyond my own but perhaps our knowledge does not overlap? If you are indeed correct then I await the continuation of my education. I'm merely attempting to answer that which he has asked of me.

Also, I see no reason to berate what you call the basic information. Many do not possess it and make assumption or statements that simply are not true due to this lack, imho, of course.
rich
Liberty Head
Ag Mountain

Let gold exist outside the system?
Are you saying, let's just only free gold from the forces of coercion?
Could you go into more detail about that, please?


Belgian
@ Rich
You certainly are a "market" affectionado. Presently, I wish to know in "what" this "evolving" (changing) goldmarket is so unique versus all other markets. But on this important aspect, your general market-expertise, is leaving me on my hunger, Sir.
You have been describing a few generalist corners in the complex goldmarket...
Sorry Rich, but I can't find a fitting answer to my questions, in your response. But we keep on searching, happily together...Thanks Rich.
Ag Mountain
@LibertyHead about what it really means to be inside and outside the system
If you don't see what I obviously mean by having gold "outside the system" then maybe you'll have an easier time figuring it out when I remind you what it means to be trapped INSIDE the system.

Quarters, nickels and dimes, and 1s, 2s, 5s, 10s, 20s and 50s are all easy examples of things trapped inside the system. They can't "break free" and demonstrate that they have any value other than the officially organized value that was assigned to them within the system.

Four token quarters will always be priced at one dollar within the system. A pile of 20 nickels will always be priced at one dollar. Ten dimes will always be one dollar. Twenty dimes will always have the price of $2. One hundred $1s will always have the price of $100, and so will twenty $5s, or five $20s, or 2 $50s. They can't ever hope to express a free independent value because they are locked INSIDE the system. The dollar itself has whatever value it has because the accounting system ascribes an inertial value to it in association with the aggregate contracts that it denominates, but because the accounting system itself becomes for the dollar a self-fulfulling raison d'�tre, the value of quarters, dimes, nickels, 10s and twenties are always pathetically locked to the depreciating fate of the dollar as it suffers the abuses of our social tendencies to renege on cumbersome IOUs.

It wouldn't change a thing if quarters were made of gold or if $20s were made of gold, and history has proven this. Inflation still exists and the system eventually comes apart. When gold coins are used in the system, history shows the only way that the gold coins saves people from their collapsing currency is when the system breaks so far that the coins are no longer looked upon as token dollars but are valued independently for the metal they are worth. That's what it means to be OUTSIDE the system.
Belgian
Let Gold exist outside the system....
Ag Mountain/Liberty Head/Rich : I was thinking about the 3 of you and the subject phrase (Gold outside the system), whilst listening to a "serious" debate about Turkey and EU negotiations. Again, I realized how increasingly different Euroland thinks and acts.

Gold outside the ($) system...a pur sang physical goldmarket not entangled in paperwebs, must be a nightmare (non)notion for modern AA " paper-market " adepts.
I am 100% convinced that Eurolanders would jump massively into an established euro Physical FreeGold market. No, they are not going to call it FreeGold, because the masses simply don't know what kind of goldmarket w're in now. Who cares !? A market is a market...isn't it a market !?

The Turkey/EU debate learned me again about those under-streams that evolve under the generalised talks and cultivated perceptions for public consumption.
Never underestimate the shrewdness of the silent, low profile elites. They do have unspoken hidden agendas and arrange that, "nothing seems what it is", remains honered.

May I remind you all that lilliputan Belgium was one of the first sellers(?) of a huge part of its Gold Wealth. Postfactum, I must congratulate that tiny little, secretive, Belgian Gold circle, for having been arranging this commitment without causing one little wavelet in lilliputan land with its long tradition of goldbugs. They got away with it ! Investigators were easely being silenced. They got * POSITIVE * hints that were good enough reasons to drop the matter immediately and for ever.
Up until today, I stick to the opinion that the Belgian early Gold commitments have to be framed in a very, VERY positive picture of the Bigger Gold matters. I could distil a few plausible theories out of a series of local details, public and non public (typical Belgian) ones. As a non-connected shrimp, I can only use what's floating between my ears and cannot come up with proven insiders' facts that remain amongst the privileged elites.

In other words...I almost wish to express my happiness about the CBs' Gold commitments and keep seeing/interpreting them as a Gold positive, how contradictional this may sound.
Not in the sense that I expect Gold to be short squeezed due to CB recklessness. No, I'm still intuitively believing that there is something going on with Gold that is of a much higher ranking than ordinary market events.
Now that more and more Euroland builders are gaining confidence and dare to speak about a united Euroland as a "dream"...they are indirectly suggesting that the euro-Gold theories might be very plausible and increasingly faisable.

And as a final note...has anyone noticed that WAGII was not about 400 tonnes as in WAGI, but 500 tonnes ! I recognized a typical characteristic of my own, unknown Euroland. They are pulling our leg or should I say...they are putting us on the wrong foot. Goodnight to all and thanks for keeping those thoughts coming. Very stimulating !
Topaz
@Rich.
If it is the intention to trade Gold to make Money then the Gold futures (comex) pits are as good a place as any ... in fact, probably easier than most! But please don't confuse Currency Gold with Bullion Rich.
The LMBA/Comex, Libor/Gofo crowd are under ever increasing pressure from the Physical Market just as they were pre'29, pre'71 ... as we await what FreeGolders hope to be the final reckoning.
The scope for management in Gold futures is such that even Gold longs become unwitting accomplices in an engineered downdraft to effect price "discovery" Rich. I'd bet the "profits" from the long side these last 4 yr's have been a lot less than one would have thought as these dips are continually cleaning them out.

Gandalf the White
NICE weekly Chart, indicating to ME, that there is a WAYS to GO !
The Invisible Hand
Me worry about oil? I've got gold.
http://observer.guardian.co.uk/business/0,6903,156039,00.html
The London Observer runs in its "Business - Comments" section at least two articles where oil is being mentioned.
The first one is about last week-end's G7 meeting saying that there may be a problem with oil. The date of the crisis has now been postponed to after the US presidential election. But then again, I think it's election time in 2 or 3 weeks.
The second one is a short anonymous article comparing oil to a leviathan.
Crisis, you said! Let's keep our visible and invisible fingers crossed.

http://observer.guardian.co.uk/business/story/0,6903,1323678,00.html
SNIP
My sense of last weekend's meetings is that there is an atmosphere of suppressed panic about the oil price, and about the danger of a serious crisis. This is over and above the well-publicised concerns about potential storms in the foreign-exchange markets when the financial world finally becomes nervous about the manifestly unsustainable US budget and balance-of-payments deficits - a nervousness which may well surface shortly after the presidential election.

http://observer.guardian.co.uk/business/story/0,6903,1323654,00.html
Sunday October 10, 2004
The Observer
LET'S NOT SWEEP THE LEVIATHAN UNDER THE CARPET
'Our oil under their sand!' 'Drive at 90mph and freeze a Yank!'
Those are two rather tasteless and frivolous comments on currently the greatest economic problem the world is facing - the leviathan price of crude oil. Few are cognisant of the fact that oil represents 4 per cent of the world's GDP. Nymex crude currently stands at about $53 a barrel and is showing very little sign of easing from such an exalted pinnacle. On a comparative basis of inflation, this is some way short of the equivalent $75 a barrel which prevailed in 1980/81. Nonetheless this is a real problem, which the world seems happy enough to shrug off and bury under the carpet in the hope that it will eventually disappear. It also seems extraordinary to many that neither the President of the United States nor Senator John Kerry has an energy policy and the UK has not had an Energy Secretary since 1994.
With the exception of Exxon Mobil, most oil companies believe that there is no shortage of crude, but clearly the industry has been neglected for years. Opec has failed to invest in production since 1998. It is 27 years since an oil refinery was built in the US. Tankers and refineries are now outdated and it takes two and five years respectively to build them for specification and use.
It seems extraordinary to me that the world forgot about China and India in its recent calculations. It may come as a bolt from the blue that China is Saudi Arabia's largest customer. The demand for crude oil has increased from 1.2 billion barrels a day in 1985 to 2.75 billion barrels today
Can the price of oil fall in the immediate future? There are plenty of data suggesting the world will be lucky to see oil at $38 a barrel by the third quarter of 2005. The retail investor is long of oil at $42 and there is more than a little evidence that these positions have not been fully hedged with wholesale parties. Contracts in oil futures have doubled in record trading conditions in August and September, which could underpin the price.
THE END
Liberty Head
Ag Mountain

I DO understand the meaning of "outside the system".

I DO NOT understand how one, as simply as you said, lets gold be outside "the system".
"The System" will fight you tooth and nail.
"The System", "The Borg", "The Matrix", "The Deathstar", "The Machine" "The Bohemian Club", "The Skull and Bones Club", "G7", The Federal Reserve" etc. etc. is the problem, is it not?
There will be no stability in partial victories, I assure you.
If gold can be freed, who would stop there?
I want total freedom to run my own life. How about you?

Best Wishes
R Powell
Belgian
I'm sorry that I could not help. My viewpoint is a pragmatic one. I strive to gain utilitarian understanding and I try to understand how the markets operate, not how they will at some time in a different environment. In this respect I believe we do not view the markets on a similar basis, perhaps?

I must confess that I do not understand your opinion that oil has increased in dollar price (somehow correctly) while gold has not increased as much as you thought it should have (also somehow correctly) because the relationship of buying oil with dollars is somehow not the same as the relationship of buying gold with dollars. The dollars are just a means of exchange, no?

I had, as AgMountain suggested, thought that perhaps you were asking for answers in an attempt to question my rational that supports my answers through the process of questioning those assumptions from a most basic level. If this was your intention I will gladly play the role of pupil but patience will be required.

Perhaps someone else can offer some answers to your questions that you will find more value in? For what it's worth, I tried. I'm sorry that I've failed you. You have asked some tough questions, not easily answered as they encompass so many intertwined forces, much like answering the question of "What is an economy?" I do hope someone else joins in and with more success.

I will leave with one thought. The markets exist and function on their own basis, not for any ideal, value or goal. They are not bound by morals, religion or ethics, they exist for themselves, not for us, not for any grand scheme or future projection of anyone's wishes. The markets are totally impartial, unlike party politics or government. They are not immortal or unchangeable but they are perhaps mechanical and complex beyond any total understanding.
Good weekend!
rich
R Powell
Topaz
Your words..

"If it is the intention to trade Gold to make Money then the Gold futures (comex) pits are as good a place as any ... in fact, probably easier than most! But please don't confuse Currency Gold with Bullion Rich."

I know what gold is, what currency is and what bullion is but I don't know what "Currency Gold" is so I'm not at all sure what your point is....???
Ag Mountain
@Liberty Head, how it can be done
The current dollar-based system is built upon gold-supression from an organic evolution of the Bretton Woods and post-Bretton Woods designs. If this worldwide system is systematically abandoned by its unsatisfied international users, to be replaced by ANOTHER monetary system, there won't be any institutional motivating advantage for any further suppression of gold. At the very least you have to admit that under this scenario the American dominated boogey-man institutions you mentioned will have been shown ex post facto to no longer have powers of control worth trembling about like a little girl.

Whatever powers might be left to them, how can we be sure gold is kept free in Another follow-up system? It's been talked about here before by the giants that blazed the gold trail for all us to follow and it's an easy concept to grasp because if I can get it so can anyone. Structural rule of law is simply amended to recognize a de facto truth about gold which is that nations are sovereign agents and there is no reliable law that can ever truly obligate an international counterparty to make good on delivery into a gold receivable contract agreement. Lots of paper gold is played under the delusion that physical delivery remains an option for them just in case the paper starts to smoke and burn around them. With rule of law formalized to recognized the unforceable undeliverable inevitability among counterparties, the paper gold market loses it relevance, loses its volume of participation, and loses its power to obscure or dictate the price of the metal.

There's nothing wrong with writing a new "law" that simply codifies a universal truth in such a way for all the world to see.
Great Albino Bat
Dear BELGIAN:

What you say might have hidden within, deep truths. I do not in any way wish to discourage you or disparage your contributions.

The problem is that your style of exposition is convoluted. Lamentably, your native tongue is not English, and this contributes to obscurity in your posts.

I have asked you before, for a step-by-step logical analysis in your exposition. I still find it impossible to entirely understand you. You are on the side of the good guys, beyond doubt! Therefore, we must not discourage you. But, a simpler and clearer exposition of your thoughts would be very helpful.

I refuse to accept that I am "intellectually challenged", in other words, stupid, and so if I cannot follow your arguments, it must be because you are not presenting them clearly.

Do not be discouraged. The world's economy is a house of cards about to collapse. We shall all of us, face terrible conditions in the near (?) future. All our doubts about paper money, will be totally confirmed. Alas, it will be little satisfaction to tell others, "I told you so".

On this we can agree, n'est pas?

The GAB
YGM
Paper Money, Past, Present and Future
YGM
Robert Mundell Website............
http://www.columbia.edu/~ram15/index.htmlFather of the Euro and a true Gold believer.....
Well known to most all who grace these halls but IMHO a seer of the financial future of the world.....
YGM
From the minds of Mundell & Rockwell.......Long but worthy.......
Sunday, October 10, 2004


Mundell on Gold
Robert Mundell of Columbia University is the 1999 Nobel Laureate in Economics. Professor Mundell is not an Austrian (he is usually considered to be a Supply-Sider) but he is in print defending the classical gold standard; for current reform purposes, he favors only a watered-down version.
For an assessment of Mundell's strengths and weaknesses, see A Winning Choice.

The following is an excerpt from his 1997 paper, "The International Monetary System in the 21st Century: Could Gold Make a Comeback?" --------------------

...What will be the character of the international monetary system in the next century and how will gold intersect with it? This subject may strike modern audiences as a strange topic, but I can assure you that, back in the 1960s, when people were deliberating about the future of the international monetary system, gold figured importantly in the discussions. Even today, the importance of gold in the international monetary system is reflected in the fact that it is today the only commodity held as reserve by the monetary authorities, and it constitutes the largest component after dollars in the total reserves of the international monetary system.

It is true that gold today suffers from persistent attacks on it in the press and it is fair to say that there is still a conspiracy of silence on it among international monetary officials. The competing asset, the SDR or Special Drawing Right, was a "facility" or "reserve asset" created by the members of the IMF in 1968 as a substitute for gold. It was initially given a gold guarantee by members of the Group of Ten, which would have made it extremely valuable today; however, its gold guarantee was stripped away in the early 1970s when the price of gold soared, and ever since the SDR has floundered as an important component in the international monetary system. Later in the 1970s, when the Second Amendment to the Articles of Agreement, which endorsed managed flexible exchange rates, was enacted, it was decided to emphasize the SDR as an asset and de-emphasize gold; to further this end both the IMF and the US Treasury sold part of their gold holdings.The other countries, however, held onto their gold and experienced as a result reaped huge (if unrealized) capital gains when the price of gold soared in the late 1970s. Since that time a few countries (notably Holland, Belgium and Canada) have sold gold to help finance large budget deficits, but by and large the total gold holdings of all central banks and international monetary authorities today is not very different--at about 1 billion ounces--from what it was before the international monetary system broke up in 1973. Despite attempts to demonetize it, gold has kept much of its allure to the public and monetary officials; despite attempts to promote it, the SDR has remained, like the Susan B. Anthony silver dollar, a wallflower in the monetary system.

Gold's Mystique

We certainly have to examine gold's link to the monetary system, but not in any sense of any mystique; some of that has now been shed from the yellow metal. There was much talk in the 1970s of banalizing gold, stripping it of its mystique and luster and regarding gold as a commodity like any other commodity. But it was not really successful. Even when the price of gold soared above $850 an ounce, central bankers held onto it as if their lives or careers depended on it.

It is useful to reflect on the mystique of gold. Historically, it has been far from a banal subject. From the beginning of civilization, gold was such an attractive metal that it was coveted as an object of beauty and quickly monopolized by the upper classes. It soon found its way into the palaces and temples that controlled the autocracies of the ancient world. Many of the early empires used gold as reserves for their banking systems with exchanges being effected by means of clay notes and seals convertible--at least nominally--into one or both of the precious metals.

The introduction of overvalued coinage provided a strong economic motive for the cultivation of a mystique. From its very beginning, probably in Lydia in the 7th century B.C., coinage was overvalued; one could say that was its very purpose. The earliest coins of the Lydian kings were made of electrum (from the Greek word meaning amber), an alloy of gold and silver.

We mustn't be misled by the textbook fiction that coins were first struck to guarantee the weight, and therefore the value, of the earliest coins. There is no point stamping the weight on a lump of electrum metal if the fineness of the alloy is neither known nor constant; in fact the electrum coins from the early hoards varied widely in fineness. The earliest coins were not the natural electrum found in the beds of the Patroclus River near Sardis, but artificial electrum made by a metallurgical technique that had been pioneered by the Egyptians over a thousand years earlier and which was well known to such monarchs of the Mernmad line like Gyges, Alyattes and Croesus. The conventional wisdom that these Oriental despots stamped the coins to confirm their weight and thus provide a convenience for their subjects, is sheer nonsense. The stamp meant that the coins passed ad talum--by their face value--equal to 1/3 of a stater (the word meant "standard").

The earliest function of coinage was therefore profit. Coinage not only helped to market the electrum found in the Patroclus but the markup on them generated a substantial profit, helping these kings to achieve their dynasty's ambition of extending the Lydian Empire throughout Asia Minor. Accepted at face value as if they had a high gold content, the Lydian staters started out with a high proportion of gold but got progressively smaller, increasing the markup and the revenue for the fiscal authorities.

Coins cannot of course remain overvalued in a free market. Gyges and his successors were no libertarians. Overvalued coinage implies artificial scarcity, a monopoly and government control. Without exception in the ancient world, the gold and silver mines were controlled by the government. This was the basis for all the doctrines that would later evolve around gold: the assertion of mines royal, regalian rights, treasure trove, suppression of private, episcopal and baronial mints, the trial of the pix, and the regulation of the standard. To sell their coins and create the mystique, a full panoply of devices was called upon. Religious symbols helped to reinforce the mystique. Whether the symbol was called Marduk, Baal, Osiris, Zeus, Athena or Apollo, or Jupiter or Juno, or St. John the Baptist, its purpose was the same; the latter symbol made the florin the most famous coin of the Middle Ages. The gods changed but the principles stayed the same! Just look at the Masonic hocus-pocus that still remains on our dollar bills! "In God We Trust" introduced on our dollar bills in 1862 when their gold backing was dropped.

**********************************************************

A Winning Choice
by Llewellyn H. Rockwell, Jr.

World central banks had long planned to sell what remained of their gold stock. Just the prospect pushed the price down to $250 an ounce last month. But then they changed their minds, and the price rocketed to $315. Why do central banks own gold anyway? And why would they have any worries about selling off what they have left? To understand why requires a history lesson, one that intersects nicely with the career of Columbia University's Robert Mundell, the 1999 Nobel Laureate in economics.

Mundell's specialty is monetary economics, particularly as it affects international trade. In the 1960s, when nearly everyone else was clinging tightly to Keynesian orthodoxies about inflation and unemployment, he began to examine the relationship between government policy and money's value on international exchange.

He observed that the Bretton Woods system (which Keynes helped create) was breaking down due to the U.S.'s relentless expansion of the money supply. In a regime of floating exchange rates, the inflated currency would depreciate relative to the sound currency. But with fixed exchange rates under inflation, he said, the result would be gold outflows and an eventual forced devaluation.

As remarkable as it seems, economists in those days weren't thinking much about money. They viewed inflation as something that reduced unemployment and otherwise caused no distortions in production and trade. Mundell's contribution highlighted the dangers of monetary manipulation.

But these dangers were not only internal. He recognized that policies made on the national level generate international effects. That is as true of tax policy as it is of monetary policy. His warnings went largely unheeded until the early 1970s when a loose Fed policy did indeed bring about massive gold outflows and a final breakdown of Bretton Woods.

Instead of restoring the classical gold standard, President Nixon took us in exactly the wrong direction: eliminating gold altogether as a foundation of the monetary system. At that point, all bets were off because the Fed was free to inflate without limit. The result was a phenomenon in the mid-1970s that no Keynesian could explain: prices soared as production stagnated.

Mundell now found himself able to apply the theoretical work he had done in the 1960s. He was nearly alone in explaining the workings of a floating exchange rate system, particularly one where monies have no underlying tie to the markets they serve. Money had to be made sound, he said, else the dollar would continually lose its value on international exchange and disrupt trade flows.

He further argued that floating exchange rates had made government spending useless as an economic tool. No longer could the government push and pull levers on the budget machinery and expect the economy to respond. Markets had become super sensitive to government attempts to manipulate the growth rate and the real value of currency. Entrepreneurs responded to inflation, not by simply paying their workers more, but by increasing their investments in real capital even as cash holdings declined in value.

Mundell, at his best, was advancing claims made by the Austrian School since Ludwig von Mises' earliest warnings (1912) about the dangers of inflation. He worked to advance the anti- inflationist argument at a time when most economists thought such concerns were silly.

Moreover, in the late 1970s, Mundell played the leading role in identifying the one policy that was likely to bring about renewed economic growth: tax cuts. Jude Wanniski has identified him as the real intellectual guru behind the Reagan tax cuts.

Not that Mundell bears responsibility for the failure of the Reagan administration to keep taxes low, curb government spending, or re-institute a gold standard. It is more useful to look at the big picture. His understanding of economics is far richer than the Keynesian view he went up against, and far richer than the Friedmanite/monetarist view that finds salvation in floating exchange rates in a sea of paper currency.

The Nobel Prize committee cited the Euro as a hook for recognizing Mundell. It's true that he prefers fixed to floating exchange rates. At the same time, the Euro is inherently flawed because it is a composite of paper currencies vulnerable to manipulation by the European Central Bank. It is precisely the fear of a monetary system without backing that led the world central banks to hold on to their gold rather than sell it, if only as a symbolic sign of stability.

The Nobel committee should have cited the monetary devaluations of this past decade to illustrate Mundell's theoretical relevance. His biggest flaw is that he hasn't been nearly adamant enough in insisting that the only long-term solution to international monetary crises is not fixed rates, currency boards, or new regional currencies, but a real gold standard that would put government out of the money-making business entirely.

The Nobel Prize for economics has been hit and miss recently. Last year it went to Amartya Sen, whose murky thoughts on poverty and development conclude in a hymn to governments that redistribute wealth every which way. The year before, the winners were honored for a pricing formula that ended up bankrupting Long-Term Capital Management, on whose board they sat.

Robert Mundell has not only been right when others were wrong. He is a theoretician who works in the old-fashioned way: not through econometric pyrotechnics, but with clear language and good sense. It would be a shame if a decline and fall of the Euro came to be seen as proof that this economist had nothing to teach the world.

* * * * *

Llewellyn H. Rockwell Jr., is president of the Ludwig von Mises Institute in Auburn, Alabama.

*********

Read Muindell's entire paper on the gold standard, written two years ago.

Visit Professor Mundell's personal website.

Read the Nobel Prize Committee's evaluation of his work.

Belgian
@ GAB - Rich
GAB, I understand your request and promiss to do my best.

We, non American habitants of planet earth, have come to a point where we increasingly "question" the dollar and its diaspora. Intilligentia did this dollar-questioning already 3 decades ago. I am trying to rush through these experts minds and their 3 decades of thinking about the dollar-International-monetary-system. Not an easy job to wurm oneself under their skin.

I could have decided to follow Rich's line and follow "the markets", as I did before A/FOA & Co woke me up.
Up until then, a US$ was nothing else than...a US$ and an ecu (now euro) was something exotic...and Gold was goldmines, with a very brief physical interruption in the eighties.

Dearest GAB, USAGOLD/CPM/MK + all posters overhere, opened the most fascinating world that laid behind my simple understandings. I still enjoy this ongoing discovery, every day.

I am still learning, GAB...and that's why my ramblings might certainly be confusing.

But I'm certainly NOT re-inventing the hot water and there must be a lot of more advanced students out there, busy with questioning the $-IMS...and the relationships with Gold...and oil, of course.

A/FOA/MK & Co, have been providing us with their conclusions of more than 30 years intense observations and experience. There is so much involved in these IMS-affairs, that the subject is complex and inexhaustable.

Example : Waverider's posted article on oil-independance :
Could write a 10 page long of reflexions about it...but don't have the time to do this. Therefore I have to post extremely briefly with the confusing results.
One reflexion though : All writings about oil are done from the standpoint of the oil-consumers (us) and we even have the arrogance to speak for the oil-owners !!! An old habit that is to change.
But there are silent people who have been and are exchanging ideas (theories) (negociations) on an horizontal basis with
these other partys of growing importance. All these evolving exchanges are happening with the growing questioning of the $-IMS in the background .

How do we connect facts and exchange of ideas with the evolving political will to build a new currency system that wishes to build on a world market price for Gold and a euro that doesn't want to replace Gold but wishes to evolve into a Gold transactional currency !? Hey, Gab, not an easy cake !
What if, many of the non American dollar holders and users are exchanging the dollar numeraire for Physical Gold in Possession and in the mean time co-operate with the Gold shorting markets !? What is the whole debate about oil-indepency worth, against such a changing background !?
Were the Belgian early goldsales part of the building of the new �-IMS !?

Are the dollar > Gold exchangers going off the old dollar standard or are they simply hedging with papertrades resulting in a zero net sum game and ending up with more or less of the same $-paper in a $-IMS that is increasingly questioned !?

As an Eurolander, I can afford to challenge/criticize/investigate the $-IMS from another angle. I see the Gold affairs from a euro perspective. GATA (and others) must see it through dollar glasses with the bygoing $ biasses. I'm constantly questioning the viability of a probable new �-IMS. I do realise that this stands or falls with GOLD. A very difficult exercise, GAB.

In the above context, Turkey close to the EU, with approval/encouragement of the US...is Another oil affair of geostrategical importance where $-� remain competitors...with both having the old and new IMS in the back of their head ! Same goes for the coming trans mediterranian pipeline from Libya to Euroland.
Whilst $ and � are co-operating...they are increasingly competing with each other. The price is the IMS (International Monetary System) and GOLD is the crow bar over the head of the planet's remaining oil reserves.

It is a disaster for the dollar, when the dollar shift into Gold would escalate ! That's WHY this dollar>Gold shift has to happen "discretely". Leaving the dollar standard and go for euro Free Priced Gold with an oil-barter intention...is $-IMS destructive and a looking out for the new �-IMS. Remember what Mundell said when hugging the Giant Gold coin. Leaving National currency for an International one. A new one...A Gold transactional one...with a world market price for Gold...where appropiate MTM can be done.

How much of all the "swapped" Gold has been Physically moved !? And WHY is this question appropiate ? The answer is wrapped into the above Big maneuverings.
Belgian
YGM - Rockwell
>>> It is precisely the fear of a monetary system (IMS) without backing ... that led the world CBs to hold on to their gold ...rather than sell it... if only as a symbolic sign of stability >>>

- The notion of "Backing" is already demod�.
- Holding gold as a "symbolic" sign of stability...Whilst Euroland's National Banks are constructing exactly the opposite perception ...UN-stability...by the much fanfared CB-goldsales !!!??? Then comes WAGI-II, ADDING TO THE CONFUSION.
All politicians that are fingerpointed as un-responsible for having sold goldreserves, know very well that Euroland's basis is the "stability" of EMU (euro) !!!
It is much too easy to brand these so called goldsales as opportunistic, vulgar money-making stories for shortsighted purposes (deficits) !!! Complete nonsense.

WHY would anyone take away (sell) Gold and destroy that symbolic sign of stability !? This does NOT make sense at all. Who is going to destabilise the growth and stability pact, right from the start ? Rather idiotic, no ?

That's WHY these EU gold-commitments, labelled as ordinarry goldsales, are part of a much bigger construction.
The euro as the new transactional currency for world physical free-priced goldtrade ! NOT A EURO BACKED BY GOLD !!!

The main differences with the present $-paper-goldmarket, ly in "physical" and "free priced".

Buying physical gold with dollar-reserves that permanently lose credibility is taking away the regulating force out of the $-papergold market, dominating gold's price !!!
Accumulating physical gold in possession is protesting against the regulators/controllers of your/anyones's wealth.
We are NOT alone with this protest. We are not alone in the building of a new IMS reality. No force can confiscate the all the universalising gold and ship it to da moon.
YGM
Looking Thru The Smoke & Mirrors of The Past......
Considering that we now see the world flooded with Fiat, talk of devaluations, near collapse of various Countries Fiat in recent months and years, personal and Corporate debt at all time highs, Central Banks obvious war on gold, inflation rampant, (altho the Powers that be say no inflation) talk of the IMF and one World Currency, default in Paper instruments being a new topic among a few knowledgable souls (remember A & FOA) the biggest U.S. Banks and Hedge Funds being virtually kaput if the Derivatives market blows up, etc, etc ......
To myself the question is what part of history is being repeated and what part will yet repeat itself......I am a believer in the theory that when the Gnomes of Zurich have milked "THEIR" System for all it's worth, they'll default, collapse, destroy the old system to make way for the new one....(shades of 1929 magnified many times over)...YGM

Below is a short synopsis of the some of the tactics of the "Past"....
***************************
The Great Gold Robbery

James Bovard

Some of the programs and policies of that era have been terminated, the moral heritage of the New Deal continues to permeate American government and political thinking.

In 1936 Franklin Roosevelt declared, "I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. . . . I should like to have it said of my second Administration that in it these forces met their master." 1No American president has rivaled Roosevelt in his denunciation of what he called "economic royalists." He sought to "master" the "forces of selfishness" by making government master of every person's private financial destiny. Like today, the citizen who wanted to retain control over his own life was selfish, while the bureaucrat who wanted to seize power over the citizen was automatically presumed benevolent.

One of the most controversial New Deal policies was the seizure of citizens' gold.2 During the Great Depression, several foreign nations repudiated their promises to redeem their currencies for gold. In 1933, when Roosevelt became president, the United States had the largest gold reserves of any nation in the world. He announced on March 8, 1933, a few days after taking office, that the gold standard was safe. But three days later, he issued an executive order forbidding gold payments by banks; Treasury Secretary Henry Morgenthau, Jr., announced on March 11 that "the provision is aimed at those who continue to retain quantities of gold and thereby hinder the Government's plans for a restoration of public confidence." 3 Thus, according to Morgenthau, any limit on government power was bad for public confidence. And whatever confidence people might seek to achieve must be left in abject dependence on politicians' latest salvation scheme.

The ban on bank gold payments created widespread doubts about the Roosevelt administration's intentions. Ogden Mills, who had served as President Herbert Hoover's treasury secretary, observed that "it was not the maintenance of the gold standard that caused the banking panic of 1933 and the outflow of gold. . . . [I]t was the definite and growing fear that the new administration meant to do what they ultimately did-that is, abandon the gold standard." 4 People naturally sought to get rid of their paper currency and to put their savings into something with more secure value-gold.

Gold as Contraband
Fear of devaluation spurred a panic, which Roosevelt invoked to justify seizing people's gold. On April 5, 1933, Roosevelt commanded all citizens to surrender their gold to the government. No citizen was permitted to own more than $100 in gold coins, except for rare coins with special value for collectors. Morgenthau announced on the same day that "gold held in private hoards serves no useful purpose under present circumstances." 5 Gold was thus turned into the same type of contraband as Prohibition-banned rum. Roosevelt announced, "Many persons throughout the US. have hastened to turn in gold in their possession as an expression of their faith in the Government and as a result of their desire to be helpful in the emergency.

There are others, however, who have waited for the Government to issue a formal order for the return of gold in their possession." 6 To speak of the "return of gold" implied that government was the rightful owner of all the gold in the nation, and thus that no citizen had a right to possess the most respected store of value in history. Roosevelt assured the country: "The order is limited to the period of the emergency." But the order stayed on the books until 1974.

Roosevelt labeled anyone who did not surrender his gold a "hoarder." His executive order defined "hoarding" as "the withdrawal and withholding of gold coin, gold bullion or gold certificates from the recognized and customary channels of trade." 7 Actually, Roosevelt was not concerned with the gold being in the "customary channels of trade"; instead, he wanted government to possess all the gold. And the notion that people were "withholding" their gold merely because they did not rush to the nearest Federal Reserve bank to surrender it was political logic at its best.

Roosevelt, in a later note to his Public Papers, justified the order because it "served to prevent the accumulation of private gold hoards in the US." 8 Roosevelt used the same "hoarding" rhetoric against anyone who owned gold that Stalin used against Ukrainian peasants who sought to retain part of their wheat harvest to feed their families. But while Stalin sent execution squads to kill peasants who had a few bushels of grain hidden in their hovels, Roosevelt was kinder and gentler, seeking only ten-year prison sentences and $250,000 fines for any citizen who defied his edict and possessed more than five Double Eagle gold coins.

Roosevelt was hailed as a visionary and a savior for his repudiation of the government's gold commitment. Citizens who distrusted the government's currency management or integrity were branded as social enemies, and their gold was seized. And for what? So that the government could betray its promises and capture all the profit itself from the devaluation it planned. Shortly after Roosevelt banned private ownership of gold, he announced a devaluation of 59 percent in the gold value of the dollar. In other words, after Roosevelt seized the citizenry's gold, he proclaimed that the gold would henceforth be of much greater value in dollar terms.

Citizens who had desired to hold gold as a hedge against government inflation policies were completely vindicated. FDR's administration subsequently did everything possible to inflate prices, foolishly confident that a mere change in numerical prices would produce prosperity. Citizens had accepted a paper currency based on the government's pledge to redeem it in gold at $20 per ounce; then, when Roosevelt decided to default on that pledge, he also felt obliged to turn all citizens holding gold into criminals. Roosevelt stated that the ban on private ownership "was the first step also to that complete control of all monetary gold in the United States, which was essential in order to give the Government that element of freedom of action which was necessary as the very basis of its monetary goal and objective." 9 But the primary "freedom" government acquired was the freedom to default on its promises and to manipulate the lives of everyone depending on US. dollars in their daily transactions.

Curiously, FDR retained his denigrating tone toward so-called gold-hoarders even after he defaulted on the federal government's gold redemption promise. Even though people who distrusted politicians' promises were vindicated, they were still evil people because they had not obeyed FDR's demand to surrender their gold. In the moral world of the New Deal, justice consisted solely of blind obedience to political commands. FDR had absolutely no sense of embarrassment or shame after he defaulted on the federal government's gold promises-it was simply political business as usual.

Senator Carter Glass of Virginia, chairman of the Senate Finance Committee, denounced the gold seizure: "It's dishonor. This great government, strong in gold, is breaking its promises to pay gold to widows and orphans to whom it has sold government bonds. . . ." 10

Free to Inflate
The refusal to convert paper dollars into gold meant that the government was "free" to flood the country with paper money and sabotage the currency's value. The stability of the value of currency is one of the clearest measures of a government's trustworthiness. Before Roosevelt took office, Americans clearly recognized the moral implications of inflation. Vice President Calvin Coolidge had bluntly declared in 1922: "Inflation is repudiation." Inflation is a tax whereby government prints extra money to finance its deficit spending. The value of money is largely determined by the ratio of money to goods; if the quantity of money increases faster than the increase in the amount of goods, the result is an increase in the ratio of money to goods and an increase in prices. Thus, the government's printing presses devalue people's paychecks and effectively allow government to default on the value of its debt.

The threat of inflation was invoked in the early 1940s to justify imposing payroll tax withholding 11 (protecting people from their own paychecks) and in the 1970s to impose price controls over the entire economy. Apparently, politicians who decide to flood the money supply automatically become entitled to increase their coercion of their victims who hold increasingly worthless currency.

Since Roosevelt banned citizens from owning gold in 1933 and forced people to rely on the unbacked promises of politicians for the value of their currency, the dollar has lost about 93 percent of its purchasing power. 12 The collapse in the dollar's purchasing power severely disrupted the ability of scores of millions of Americans to plan their own lives and save for retirement. If someone proposed a law to give government the right to explicitly default by 2 to 3 percent a year on all its debts, the proposal would be widely denounced. Yet, this is what the government has been doing for decades. Though inflation has slowed since 1980, the purchasing power of the dollar has fallen by over 50 percent in subsequent years according to the government's own numbers (which slightly exaggerate the damage to the dollar), making a mockery of people's attempts to calculate and save for the future. A 1997 study by Congress's Joint Committee on Taxation found that because of how capital gains taxes are calculated, many citizens are forced to pay taxes on investment "gains" when in reality they have suffered losses due to the deterioration of purchasing power. 13

Roosevelt's gold seizure was based on the doctrine that in order for government to save the people, it must be permitted to breach all the promises it made to the people,. According to modem conventional wisdom, government has no obligation to do justice or treat any specific individual citizen fairly-instead, government's only duty is to achieve "social justice" or some other abstraction perfectly suited for evasion.


James Bovard is the author of Freedom in Chains: The Rise of the State and the Demise of the Citizen (St. Martin's Press, 1999).



YGM
Excerpt from R. Russell's D. T. L. Oct 11/04... "China & Gold"
"The US is now living on credit. The US is paying for its massive imports with credits and paper. And that is unsustainable. The big picture today is how long the dollar can hold up under these conditions. The game will go on as long as the rest of the world continue to accept dollars.

Today there are two viable alternatives to dollars. One is another form of central bank paper -- the euro. The other is the only time-honored form of wealth -- gold. Both the euro and gold are now moving higher.

The central banks believe they can control the world's monetary system. They print the money, and most of the world accepts it. But there's a small segment of the world that has learned the lessons of history. This is the segment that is now accumulating gold."


Knallgold
Liberty Head
You bring up a good point, to "divide power down". We know this here as "F�deralismus" which is a bit a misleading term,others say "Subsidiarity".Its about to keep power on the lowest possible level,being it individual,community counsel,canton...
We made very good experience with it,people HAD to act in a very responsible way.But there was always a federal government!Its power was limited though as we could vote directly and say no,which was a final no then.So this has a democratic dimension too (some belittle democracy here-again,if most act responsible,this allows more freedom and welfare).

But this is a constant fight as there are always powers to centralise things or (currently) forces of degradation.You never reach your final goal this way-so then how?Interestingly,you write "why not keep dividing power?" WHO and HOW does it?

I have read the Greenspan citation.There is some irony in that.Is not the currenty situation of the USA the result of this freetrade/no governement mantra?Greenspan is in power,for how long now?You say,but this is not what we understand under freetrade-just where did I hear this before?

Crucial to freedom is the common will!Everything else is secondary.Frankly,Switzerland is a bad example as there were many cartels,economically and politically,and yet,we enjoyed very good and free times because none abused its power.


Waverider
Energy transition and final energy crisis
http://www.vheadline.com/readnews.asp?id=23067"The current �oil price crisis� in reality reflects an emerging and permanent supply crisis for oil and gas (which currently provide about 65% of world commercial energy). For oil, the myth of OPEC always being the �supplier of last resort� has in 2004 already been discredited if not finally destroyed. Soon after the present and short-term �price crisis� ... which can only intensify in the 2005-2008 period ... and within at most 10 years, both oil supply and natural gas supply will enter into constant and terminal decline, due to physical depletion.

In fact only two factors can bring down oil and gas prices: increasing supply or falling demand. For the first, increasing supply, the outlook is bleak. Worldwide oil depletion is now running at about 1.25-1.5 million barrels/day (Mbd) of capacity lost each year, and net additions to world oil production capacity are small, slow, high cost, and irregular. On the demand side, because of strong industrial growth in China, India, and also in East Europe, West Asia and Latin America, oil and gas demand is growing at its fastest percentage rate since 1975-80. In many non-OECD countries experiencing fast industrial and economic growth, typical annual growth rates of demand are 5%-9% for oil, and 8%-12% for gas...

The strengthening likelihood is that oil prices will easily exceed US$75/barrel in the absence of any war, sabotage or hostile action, solely because of �structural undersupply� and almost certainly by 2008. This itself will powerfully draw attention to study and action for firstly slowing the growth of oil and gas demand, then reducing demand for these fossil fuels. Only at genuinely �extreme� oil prices, well above US$100-per-barrel, will there be a rapid and uncontrolled fall in fossil energy demand, firstly in the OECD countries, triggered by economic crisis. This will come too late to offer any chances of organized and efficient economic and energy restructuring, especially in the OECD economies and societies, which are the most oil-dependent due to their high or extreme average per capita rates of oil demand. Laisser-faire scenarios will necessarily include a new �Great Depression� to a backdrop of already serious tension and low-level but increasing international conflict and warfare focused on the Middle East (�war against terror� and �war for oil�). De-globalization, or increased self-reliance will necessarily feature in longer-term restructuring of the world's energy and economic systems."

Waverider: There are a number of interesting articles of late with POO now >$53.00 and the longer-term economic, geopolitical, etc. consequences. Dear Belgian - I must agree with GAB that I strive but sometimes have difficulty deciphering the content of some (not all) of your posts. I will continue to read and reread them, but don't have a clear enough understanding at the moment to articulate your ideas in my own words. Thanks for your efforts and your patience.
YGM
Belgian......
I also as Waverider thank you for your constant thoughts. I would be foolish to even try to enter into open discussions as my knowledge is so limited. If the brain were compared to a sponge, mine would be barely damp, but I remain ever absorbant in the quest for understanding.....This forum remains a great place for stimulation and discourse....Thx...YGM
Bizarro-Greenspan
IMF gold games,we've seen this movie before
ORO (12/22/99; 5:38:23MDT - Msg ID:21493)
TownCrier - IMF debt trick - is it truly the greatest money pump ever?
7. TownCrier (12/21/99; 14:09:14MDT - Msg ID:21457)
6. TownCrier (12/21/99; 12:59:41MDT - Msg ID:21452)
5. ORO (12/20/99; 19:44:14MDT - Msg ID:21420)
4. TownCrier (12/20/99; 15:15:36MDT - Msg ID:21415)
3. ORO (12/18/99; 2:35:37MDT - Msg ID:21249)
2. TownCrier (12/17/99; 16:36:43MDT - Msg ID:21217)
1. rsjacksr (12/17/99; 13:20:11MDT - Msg ID:21214)

IMF program

-------TC, in your #6, you wrote :
The key statement above as I see it is "The IMF retained about SDR 250 million on its own account as required by the Articles of Agreement." This value corresponds to SDR 35 for the 7 million ounces, and would offer some great degree of credibility to the my statement offered yesterday:
"Could the answer to my two-fold difficulty be that the IMF then writes their gold back down to SDR35 in value ($48), therewith canceling out the corresponding principle value from the Brazil loan repayment, and also thereby eliminating the double increase in value on both the BIS and IMF balance sheets? At the end of this operation, the ledger issues on the Brazil loan would be properly squared away, and the newly created dollars would be held free-and-clear within the BIS account."
--------

As they indicate that gold is subsequently repriced back to the levels in the Articles of Incorporation as revised (1976), that is 35 SDR per ounce, this leaves the gold available for subsequent cycling - repricing each ounce more than once. Your last post on the subject indicates, with quotes from their PRs (6), that this accounting scheme is correct, bringing us back to #3 with your modifications of #6. This removes debt from the books, keeps most of the cash $ alive, and as a resource for the IMF. Since the repricing back to 35 SDR leaves the IMF with the gold priced as before, they can do this over and over. We have here a new money pump. They can do more damage than the FED would ever dare to do. Could Summers have been so chagrined about the IMF's continued role because of this scheme? This money pump reduces future demand for debt repayment by 2 $B while keeping 1.67 $B alive in the Eurodollar arena through an account at the BIS.

Imagine the IMF using this trick over and over with their gold cycling through this. The rewards are smaller on this first go, but they get to do it over and over. Each time they kill only debt, without extinguishing the cash. In my wildest dreams I never imagined that they would be allowed to get away with anything even close to this. This would make them more powerful than the FED.

Is there a limit to the number of times the cycling can go on? I have not found one yet.

A money pump is a mechanism whereby a loop action reinforces itself while draining or filling a reservoir.

The reservoir being drained is Emerging Market debt - the source of dollar strength and low US price inflation. The pool being filled is the cash base of Eurodollars. Obviously, the pool is not limited, the reservoir is. It still has 2.6 $T in it. If they eradicate this debt, the results for the dollar could be catastrophic. There must be a limit somewhere."

Bizarro-Greenspan
Dr.Benjamin Anderson
"Senator Glass said, as he talked in his office on the day that this amendment was first announced: "It's dishonor, sir. This great government, strong in gold, is breaking its promises to pay gold to widows and orphans to whom it has sold government bonds with a pledge to pay gold coin of the present standard of value. It is breaking its promise to redeem its paper money in gold coin of the present standard of value. It's dishonor, sir." To the grand old senator, morality was something written in the heavens, eternal and unchangeable." (pp. 315) Some of Democrats in the Senate also protested. "President Roosevelt did not escape sharp rebuke from distinguished men in his own party who opposed this bad faith. As part and parcel of his policy of debasing the gold dollar, he had introduced into Congress a joint resolution (signed by the President on June 5, 1933) abrogating the gold clause in existing governmental and private obligations. The resolution not only forbade private debtors to keep their gold obligations, but also freed the government itself from its solemn promise. Before the introduction of this resolution, the President conferred with a group of senators regarding it. Among them was Senator Thomas P. Gore, the great blind senator from Oklahoma. When the President asked Senator Gore for his opinion regarding the matter, the senator replied, "Why, that's just plain stealing,isn't it, Mr. President?" " (pp. 317)


American Expression
New Deal Document Library
http://newdeal.feri.org/"It is dangerous to be right in matters on which the established authorities are wrong." - Voltaire

"For a long time I felt that FDR had developed many thoughts and ideas that were his own to benefit this country, the USA. But he didn't. Most of his thoughts, his political 'ammunition,' as it were, was carefully manufactured for him in advance by the CFR-One World Money Group." --Curtis Dall, Franklin D. Roosevelt's son-in-law, from his book, "My Exploited Father-in-Law"

"The depression was the calculated 'shearing' of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market...The One World Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank." --Curtis Dall, Franklin D. Roosevelt's son-in-law, from his book, "My Exploited Father-in-Law"

"Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the Federal Reserve Banks are not Federal instrumentalities...but are independent and privately owned and controlled corporations...Federal Reserve Banks are listed neither as 'wholly owned' government corporations [under 31 U.S.C. Section 846] nor as 'mixed ownership' corporations [under 31 U.S.C. Section 856]...It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the Federal government direction over the daily operation of the Reserve Banks...The fact that the Federal Reserve Board regulates the Reserve Banks does not make them Federal agencies under the Act...Unlike typical Federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees traveling on Bank business are not subject to Federal travel regulations and do not receive government employee discounts on lodging and services..."Lewis vs. U.S., case #80-5905, 9th Circuit, June 24, 1982

"...the lord and master of the money markets of the world, and of course virtually lord and master of everything else. He literally held the revenues of southern Italy in pawn, and monarchs and ministers of all countries courted his advice and were guided by his suggestions." Benjamin Disraeli, Prime Minister of Britain, describing Baron Nathan Rothschild in his novel, "Coningsby: Or The New Generation"

"When the conflict with France ended (at the battle of Waterloo) the House of Rothschild was in control of British finance and was the official banker of the British Government. This odd financial octopus was acknowledged to be in some respects the greatest power on the earth and was acknowledged by some writers as the 'Sixth Great Power of Europe'."E.C. Knuth, in his book "The Empire of The City"
USAGOLD / Centennial Precious Metals, Inc.
... In Order to Form a More Perfect Union... (between You and Your Savings)
Belgian
OIL
Through various press agencies, the same message is coming through : OPEC wishes to calm oilmarkets and Saudi Arabia is working hard (?) to get a 2 million bpd increase in output on top of the 30 mbpd that OPEC is already supplying.

A POO>$60 will certainly cause a form of general panic and provoke (more) action. A high to very high oilprice (+ pump-price) might affect Bush re-election chances ? Is that the aim of the price rises ?

Keep an eye on Sudan. It are the chinese who have a big finger in the oil-pudding overthere. The wars in Sudan were already started 20 years ago. Today, the matters get world attention (UN), because of these oilreserves. China threathens with a veto at UN if there comes an oil-embargo on Sudan, that puts the Chinese dry. More pressure on oil supply.

The Bigley atrocity is having a big impact in the UK. What if Tony steps down and troops would be withdrawn from Iraq ?

If oilprices keep rising and remain on a high level, I think that big trouble is on its way. Will it result in reckless military action or monetary action from wich oilconsumer's corner !?
Are the oil-supplyers challenging the oil consumers ? We cannot go on inventing fake reasons that justify a continued rise in oilprices, can't we ?
One day the mobilization of Iraqi oil must come on the table as to stabilize this country (region). And can Japan cope with much higher oilprices ? How can Japan possibly compete with China if the POO keeps rising ?

Or is the dollar stealthly happy with a high oilprice for a determined period (Rove strategies)?

Let's wait, see and be prepared (informed).

Lady Waverider, please feel free to question if I'm putting thoughts unclear. Forces me to do better. Thanks.
USAGOLD / Centennial Precious Metals, Inc.
Odds of winning are 1:147 or better; your odds of great prices are 100 percent!!
YGM
Belgian,,,,
IMHO...US Election has naught to do with oil skyrocketing & Peak Oil has everything to do with it.....

From Aljazeera a few days ago......YGM

The man who foresaw skyrocketing oil prices
By Adam Porter

Thursday 30 September 2004, 18:50 Makka Time, 15:50 GMT


Ali Bakhtiari: By end of the year, we will see oil at $50 a barrel



In a world dominated by self-censorship, only the brave speak out. But in a world running on cheap energy, with all the consequences that it brings, only those who value their integrity above their wallet are worth listening to.



Back in April one man, Iranian oil and energy analyst and expert Ali Bakhtiari did just that. He stood up and made a prediction that could have seen him ridiculed.

"By the end of the year we will see oil at $50 a barrel," he told an audience at the annual gathering of the Association for the Study of Peak Oil (ASPO) in Berlin.

To make a prediction that takes in record high prices is one thing. To name the price is another altogether. But now, while OPEC, the major industrial nations and Saudi Arabia chant their mantra that there is "no problem", Bakhtiari seems more vindicated than ever.

"That is what I said in April, that we would get to fifty dollars by the end of the year. And we have arrived three months early," he says with a chuckle. "I think that was really quite a good prediction you know."

Out of control

Trouble is, the rise of oil's price range is an undoubted economic threat. Not to the super rich, the top 1% of global earners, or the super poor, the 50% of the world's people who live on less than $2 a day, but to everyone else. Around three billion of us.


Oil's real value was rather low
until the recent pricing collapse

"I am afraid I think the price will go higher," says Bakhtiari worryingly. "I had hoped it would stay in the $40 range. I think, at that level, economies could start to cope, but now the price of oil is out of anyone's control."

The argument goes that instead of planning a structure for using oil, it has been left to the market fundamentalists to determine the future of these valuable biological assets.

The collapse of oil pricing in the 1990s, as well as the weakness of the dollar, had meant that the real value of oil was incredibly low.

As a result no oil majors or producer nations were interested in spending billions of dollars in new investment, because there was no short-term profit.

Growing appetite

No one was interested in spending billions on fuel efficiency because there was no short-term profit. Why no one was interested in spending billions in solar, wind or hydrogen energy is anybody's guess.

"The big economies are just starting to get used to the idea of $40 a barrel. We have passed that financial and psychological barrier, but if we moved straight into the $50 range, then that is not good at all"

Ali Bakhtiari, Iranian oil and energy expert


The same train of thought says that as well as these factors, oil has been physically guzzled up like there is no tomorrow.

Ironically, it is that very appetite, growing at an exponential rate due to demand in the USA, China and India, that could exacerbate the problem.

Bakhtiari says, "I hope that we don't move into a fifty-dollar range. The big economies, and by that I mean the US, the EU, China, India and Japan, are just starting to get used to the idea of $40 a barrel. We have passed that financial and psychological barrier, but if we moved straight into the $50 range, then that is not good at all."

However, he does not see the forty-, or fifty-dollar, range as something that will last forever. Indeed not even for very long at all. Instead, he says the price is being driven by something far more fundamental.

Peak oil syndrome?

"No one can restrain the price any more. For example, everyone thought that it would be OPEC who could manage demand. But that is now in the past.

Now it is really peak oil that is behind the wheel of the car. Peak oil is driving the rise in price and demand is not the real question. We are entering a new era, but we are only at the very beginning of it."


Repeated attacks on refineries in
Iraq have added to market woes

The idea behind "peak oil" is this. That, as the planet reaches the halfway point of consuming all its available oil, then a combination of bullish demand, slowing fields and insurmountable supply bottlenecks will create brutal price shocks. Almost certainly slicing the head clean off the world economy in the process.

This peak in oil supply will act as an economic guillotine. Yet the thread suspending the blade above our heads will be released without warning.

Politicians, producer countries, major oil companies and consumer states are not about to announce their own demise. It would not be good for business, or re-election, or both.

Unstoppable


Peak production by OPEC nations
has failed to calm the markets

"If there was nothing to be worried about, then there would be no price increases," explains Bakhtiari.

"If there is no reason to worry, because there is plenty of oil and OPEC or Yukos or whoever can simply pump some more, then there would be no problems and no rises in price. The market would not be worried at all."

Whilst Bakhtiari admits predictions are fraught with danger, his own research, so far extremely accurate, says peak oil has yet to arrive. Like Hurricane Ivan blowing in from the ocean, we may only be experiencing the first stormy gusts.

"I think the peak will arrive around 2006, 2007. But, this is only 15 months away. That is all. At that point, no one can say what is going to happen. Except the price is going to go up. And no one will be able to stop it."


Aljazeera


YGM
Aljazeera (Porter) Todays article....
Producers cash in on record-high oil prices
By Adam Porter

Sunday 10 October 2004, 17:59 Makka Time, 14:59 GMT


The oil market has been volatile and confused for weeks.
As oil price posts a new record of $53.40 a barrel, the worry is that any new surge could take oil to $60 or higher.



Until recently, technical analysts - those who plot charts and graphs of commodity movements - saw $51.20 as a fundamental breaking point for oil prices.

The $51.20 barrier has been breached, yet by all accounts the market is as confused and volatile as before. And it will remain so for the foreseeable future.

Despite pronouncements from those trying to calm the markets with words, market fundamentals are unavoidable.

Raging demand

"The market wants light sweet crude at the moment," said Frederic Lasserre of Societe Generale in Paris. "And we have two problems with this, both are strikes.


Demand increase has stretched
global oil supply lines to the limit

"One coming up, probably a short one in Nigeria but also another one in Norway. This is adding to the problems that we have because these two countries produce light sweet crude and this it the oil the market wants at the moment."

Raging demand increases over the last three years have stretched supply lines to the limit.

The nature of the market drives the desire for short-term gains from oil companies, shareholders, executives (who stand to earn performance bonuses) and producer countries hungry for extra cash. Those desires have meant a vested interest in high prices and low investment in supply capacity.

Markets have also been worried by a litany of problems that just will not stop coming. Reports of falling company production; strikes in Norway and Nigeria; conflicting OPEC promises; fall in US heating fuel stocks; and hikes in gas prices all are to blame for the unprecedented nervousness in the market.

Market baffled

This week two large American oil companies, Conoco Phillips and Marathon, both reported drops in production. Conoco, which has created a partnership with Russia's Lukoil in recent days, said it produced around 7% less oil in the third fiscal quarter. It blamed "scheduled maintenance" and a seasonal drop in demand.


OPEC's promised extra supplies
of crude have yet to materialise

Marathon Oil, the fourth biggest US oil company, reported a 9.8% drop in production. It said this was due to the effects of Hurricane Ivan, problems with supply in Equatorial Guinea and "unplanned downtime". Neither event was what traders wanted to hear.

OPEC meanwhile continued to baffle the markets. The chairman of the 12-nation producer group, Chairman Purnomo Yusgiantoro, lead the way in making seemingly conflicting statements.

First Yusgiantoro said that, "If prices continue to go up there will be a danger to the global economy. I warn that high oil prices will result in the start of a recession."

Just a few days later, he said that OPEC did not just have their oft-quoted 1.5 million barrels of spare capacity, that in fact there was surplus global capacity "of 2.5 million barrels a day".

"No one is listening to OPEC at the moment. They are only communicating, they are unable to take action. OPEC cannot do anything about the current situation," Societe Generale's Lasserre said.

They may have spare capacity in Saudi Arabia but it is oil the market does not want. Heavy sour crude is not the sort of oil that is needed to bring down prices. As a result the market is not paying much attention to OPEC."

Hurricane Ivan's effects on the
market were greatly overstated

Weekly US inventory figures - the stocks held in commercial hands - have grown slightly. But this was following eight out of nine straight falls.

Crude oil stocks rebounded by 1.1 million barrels but perhaps more surprisingly heating oil supplies actually fell 2.1mb. This is the time of year when the US normally sees an increase in heating oil stocks, used to fire oil-powered central-heating and air-conditioning systems.

The market is still blaming the effects of Hurricane Ivan. But US oil stocks fell right across the country, not just in the Gulf of Mexico. Also, self-evidently, not all US refineries are on the Gulf coast.

This has led analysts to further dismiss the claims of OPEC that it can maintain supply. The promised extra supplies are simply not arriving.

Will supplies arrive?

"We have really lost those two weeks when Hurricane Ivan arrived," Lasserre said. "The market has not been able to recoup the time lost and as a result we are entering the American winter with low stocks.

"Again,Oil the market wants oil that it can make into the heating oil or kerosene that the Americans want, but it is not there. This is driving the price up as well."

"[OPEC] are only communicating, they
are unable to take action. OPEC cannot do anything about the current situation"


At the same time, producer countries are raking in the dollars. Perhaps the best indicator of this is that Coutts Bank of London is to double its Middle Eastern arm staff in order to benefit "from oil cash".

Ordinary people in the US, however, will be part of that operation, but not beneficiaries like the banks or oil producers. They will be the ones who pay up this winter.

So says the US government's Energy Information Administration in its report Winter Fuels Outlook.

It foresees gas and oil heating prices as set to rise by anywhere from 11.2% to 28.8%. A household in the American north-east will pay nearly double the heating costs it paid in the winter of 2001/02.

If they are right it is boom time for the oil barons and banks, but bad times ahead for the consumer.


Aljazeera
YGM
How the Arabs Upset Zurich and Basel applecart ....OR...."Sharia"
strange has nobody noticed......I said this was coming years ago....YGM

Islamic banking makes British debut


Thursday 23 September 2004, 2:28 Makka Time, 23:28 GMT

The first bank in Britain to operate on Islamic principles, including interest-free loans, has opened.



The Islamic Bank of Britain (IBB) saw a steady stream of customers on Wednesday as it opened its doors in Edgware Road, the heart of London's Arab quarter.

Islam's Sharia law imposes a series of restrictions on banks, including a ban on charging interest for loans and prohibiting clients' money from being invested in activities linked to alcohol, tobacco and pornography.

To deal with the no-interest rule, the IBB will itself buy the assets sought by clients and then sell them back at a fixed price, via monthly payments.

"We charge a profit for the services which we provide, we do not charge interest," said the bank's director of operations, Michael Hanlon.

'No money for money'

"We do not trade money for money. We are actually involved in the physical supply of goods and services to customers," he said.

"We charge a profit for the services which we provide, we do not charge interest"




Currently, savings accounts are the only service on offer at the bank.

Mortgages are due to be available soon, and online banking will be offered from next year, according to the bank, which has posted Arabic-language details of its products in the windows to attract potential customers.

Opening hours are identical to a conventional bank, with the exception of Fridays, when the bank closes between 1pm and 3pm to allow its employees to attend prayers at the mosque.

"The biggest issue obviously is the interest rate," said one Moroccan customer.

"We've always been waiting for these opportunities to have an account in a bank where you can get profits which are allowed in our religion," he said.

First of its kind

The IBB was granted formal approval to operate by the Financial Services Authority last month, and is the first bank in Europe to specifically address the needs of Muslims, of whom there are 1.8 million in Britain alone.


Other institutions have begun
to offer Islamic services


It is starting out with a capital of �14 million ($25.2 million) and plans to raise another �40 million via a stock market float.

"The capital that we have and the capital that we'll be raising is more than sufficient to establish the bank," said Hanlon.

The IBB is being supported by a group of investors based both in the Middle East and Britain, including some major financial institutions.

Its president is Abd Al-Rahman Abd Al-Malik, formerly head of the Abu Dhabi Islamic Bank, while other top managers come from institutions including Jordan International Bank and British-based Barclays.

About 150 Islamic financial institutions operate in 40 countries, but are still far and few between in western countries.


AFP
R Powell
Belgian
Concerning OPEC oil production increases, I've read opinions that OPEC can increase production but not production of light sweet crude. To increase they would have to pump an inferior grade which will not produce as much gas and/or heating oil and which will not meet the environmental standards of some industrialized nations. I don't know how reliable (true) this information is.

You just mentioned .....

"A POO>$60 will certainly cause a form of general panic and provoke (more) action. A high to very high oilprice (+ pump-price) might affect Bush re-election chances ? Is that the aim of the price rises ?"

At what price level will the markets react? The talking heads and stock brokers along with Fed. statements are trying to convince us that these higher prices can be tolerated without excessive damage to a supposedly recovering economy. They say higher oil prices will not cause undue price inflation. I disagree as I wonder how the cost can be absorbed without eventually being passed along to the consumer.

As to searching for an ulterior motive behind higher oil prices...."Is that the aim of the price rises?".... why do you seek such when the simple answer is that demand is growing faster than supply. Also, there is unrest in oil producing regions around the world. The market does not like instability and reacts with a higher price. Ockham's razor supports this most obvious explanation. Why look for some other "aim" when the invisible hand theory of market prices fits so well? If the POO dropped to $30./barrel in short order without some valid market justifications, then I'd start wondering.

Many would opine that behind the scenes politics has only limited, short term power over the POO and that any long term intentions might take drastic measures...like perhaps a direct military presence in oil producing countries. (g) I know you have already rejected such but the POG might also be mostly....mostly... reflecting the simpler market forces that determine prices rather than elaborate unseen conspiracies involving replacing the dollar as the world's dominent currency or some other unknown intent. Not entirely, perhaps, as there are indeed so many factors involved, but mostly.

Please continue as you have more knowledge of the more complex issues than most of us but, why ignore the obvious? I doubt that the markets are reflecting the unseen at the expense of perceived supply and demand factors and the obvious threats to a stable oil supply. As always, just one man's opinion.
rich

Chris Powell
Bank for International Settlements acknowledges that banks are the big gold shorts
http://groups.yahoo.com/group/gata/message/2451Latest GATA dispatch.


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

gata-subscribe@yahoogroups.com

YGM
Rich P.......Sweet vs Heavy Crude.....
http://www.middle-east-online.com/english/?id=11417This article I think can shed some light on your comment to Belgian....Not trying to butt into your ongoing discussion just trying to help w/ info...Regards...YGM.

TownCrier
News on the currency front...
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh08358_2004-10-10_20-59-47_n10319546_newsmlHEADLINE: Chavez may sue Venezuela cenbank over forex profits

CARACAS, Venezuela , Oct 10 (Reuters) - Venezuelan President Hugo Chavez on Sunday accused the country's central bank of withholding foreign-exchange profits from the government, and he threatened to go to the Supreme Court to make the bank hand over the funds.

"Venezuela's Central Bank is autonomous but it's not so autonomous that it can flout the law," Chavez said in his weekly "Hello President" television and radio broadcast.

Earlier this year, the former paratrooper who was first elected in 1998, threatened to take over the central bank and fire its directors unless they released hard currency reserves for government farm projects....

Such threats from the leader of the world's No. 5 oil exporter alarm some foreign investors, although most have become accustomed to Chavez's revolutionary rhetoric and his frequent tirades against free-market capitalism.

Chavez said Venezuela's official banking watchdog had discovered the Central Bank had failed to deliver "billions of bolivars" (millions of dollars) to the national treasury because it was using an incorrect formula to calculate the forex profits it should hand over periodically by law.

"Put your house in order, gentlemen of the central bank, and you can be sure I will be fighting to obtain every last cent to give to the people what belongs to them," he added.

Venezuela's international reserves stand at more than $21 billion, swelled by record world oil prices above $50 a barrel and insulated by tight currency controls installed early last year to protect the bolivar currency and stem capital flight.

Critics accuse Chavez, who won a referendum on his rule in August, of using the increased oil revenue to go on a public spending spree to fund health, education and other social programs that are the centerpiece of his self-styled "revolution".

Opponents say his statist economic policies are trying to turn Venezuela into a replica of Communist Cuba.

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

Politics aside (if possible), no doubt the IMF-styled critics would prefer to see Venezuela's windfall oil revenue rolled more "critic-servingly" into additional international reserves in the form of U.S. Treasuries instead of brick and mortar or other tangibles.

How do you consolidate your own profits at the end of each billing cycle?

R.
Goldendome
Nigerian workers strike looming

National Public Radio (the BBC world broadcast), tonight, is reporting that a 4 day national strike in Nigeria (including oil workers) will commence tomorrow-Monday, unless the Government rolls back a 25% refined fuel price hike implemented recently. Oil markets remain unaffected at this time.
Goldendome
An Oil Tax increase in Venezuela
Also from "The world tonight on the BBC", a National Public Radio broadcast: Venezuela is announcing that they are going to increase a tax on oil shipments, (at least that is how I interpret it) from 1% to 17% ! Not sure what the percentage is based upon, but whatever it is-- sounds like something is being increased a lot on the big crude oil shippers.
Belgian
@ YGM -Chris >>> OIL
I firmly disagree with all those who keep viewing the present oil-matters, purely from "the market" standpoint !

OIL IS A POLITICAL COMMODITY !!!

All those who keep on digging into the big bag of "market" arguments, are producing contradictions.
The oil-owners are NOT stupid and have been "managing" their oil-reserves with consistant policies for decades.
The major oil-owners and producers have, most of the time, managed the oil flows with a "long term" vision. Long term means beyond peak-cheap-oil...up until the last drop.

If oil was not a political commodity, the real marketforces would have played over all the past decades and the global picture would have been completely different. But oil is NOT an ordinarry commodity and IS (geo)political.

Any market goes where one can make money. But oil in the ground falls under National Interests and is therefore heavely politically loaded, because of oil's "strategic" importance. Normal market laws count very little in this case. There are other examples, temporary and permanent, of this phenomenon. For instance, strategic resources during exceptional times (wars etc). And not in the least...the (political) goldmarket.

Currencies, taxes, IRs...are political phenomenons/forces, dominating "markets" !!! A global, debt driven political economy.
It is NOT "the markets' forces" that drive ...but markets are driven by "REGULATING" political forces.

...more later...



Belgian
Interesting times....
Rich : Oil is a "supply" driven affair ! The same goes for helicopter money that is not demanded by a real market-economy. Look around you and see how things economical do have tremendous loads of political dimensions !

It is the financial industry, that for obvious reasons, keeps on hammering that we live in a genuine market-economy. Nothing is farther from the truth than this myth.

It are all those political dimensions that do cause the permanent erosion of the dollar. Jim Rogers confirmed this, today at CNBC.

If oil-states deliberately discourage oil-investment...than there is a political loaded reason for this. Of course they know what a declining oil-supply means for the present and future oil-consumption. Peak or no peak, it is the supply of finite oil that rules.

Ali Bakhtiari's selfmade crystal ball can predict oilprices. Yes, he knows how to have sufficiant hands in concert on the oil taps !
Think about... the power/control/supply... of "water" in an agricultural economy.

Isn't it strange that since we don't hear about goldsales anymore, that the goldprice is edging up !? Remember...cheap gold for cheap oil !? Wich gold has been guided to oil...Euroland gold or AA gold !? Soon the Swiss, one tonne a day keeps oil gay, will be over.

There is NOT enough "TRADABLE" Gold to match the mega inflated paper hysteria ! I am NOT going to supply my Gold in possession to a goldmarket that ridicules the value of Gold. I put this goldmarket in a shortage of physical tradable gold situation. I force you to increase your papergold market and have paperfun up until physical Gold can be traded again in a real market.
Cheap oil supply has maneuvered this globe's economy into a "dependance" position. Papergold markets have been inflated for the same reasons. Oil has and will exploit its pricing power as the holders of physical Gold will experience, once papergold loses its capacity to hedge the eroding dollar !

Euro banks have no fear from writing short goldpaper ! The entire euro money profile is in the background for them.
Euroland does not need (want) dollar-reserves anymore and wishes to hold euro reserves underscored with huge non-monetary gold assets ! This is the perfect hedge for the coming dollar failure and its impact on the world $-system.

It speaks for itself that the ongoing evolutions with oil and gold would not be possible if this planet would swim in masses of easy available oil and new (PHYSICAL) gold. The market economists jump on the relative scarceness of oil and gold, to explain what is happening. Wrong angle !

A real market driven economy, immediately fills the supply-demand gaps. The political dimension of the economies (markets) can keep these gaps open or closed.

Yes, this confetti/digits operating global political economy is heading towards a huge financial/currency crack up where GOLD will be pushed out of the money game.

A real market driven economy, that only exists in our perceptions, does not need helicopter money. A debt driven political economy is based on helicopter money...AND THAT WILL NEVER CHANGE...because it functions. But we urgently need the GOLD arbiter again as a reference.
And there are many other reasons why it is Euroland that will bring back this GOLD arbiter. More on this later.
Topaz
@Rich re: Currency Gold.
http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=LOW&b=LINE&st=Sorry for the delay in reply Rich ..Currency Gold, in the context I offered it refers to Gold as it is traded in todays markets. To best quantify CG we need to revisit the Gold Standard of yore and identify the several failed attempts at "officially" pricing Gold .. as Gold receipts were issued over and above the official "backing" (fractional reserve, yes?). Now there is no official restraint on this practice, it is considered this CG has been issued in much greater quantities on an ever decreasing support Bullion Base.
The little black line on Kitco is Currency Gold, marked to the Currency Markets and as Good as Gold, until it isn't!
Cometose
Duisenberg commentary on the Dollar
From dutch TV this am .........
Duisenberg made three statements about the outcome of the dollar

1 spend less
2 borrow more
3 allow the dollar to slide

THe first two scenarios are out of the question he says
US cannot spend less
The borrowers have left the building ........

Hence #3 ...........is only outcome ....

Some have viewed this has the last warning to European Holders of Us Denominated assets.........

....this came from a posters' recap at K .........

YGM
Promise of the Past
http://www.frbsf.org/currency/world/nocirc/m2.htmlShould have traded them for the backing before the default.
YGM
Promise of the Future.......
http://home.hkstar.com/~alanchan/papers/smartCardSecurity/#physicalWhat do you mean it's like a two fold tracking device? Me & my spending????????
USAGOLD / Centennial Precious Metals, Inc.
Serving a world of satisfied gold owners. Join us.
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Client Testimonials: A Couple True Stories about Gold...
http://www.usagold.com/cpm/aboutcpm.html______$1 million invested becomes $1.5 million______

I recently did an appraisal for a USAGOLD client who was looking to borrow for a real estate transaction. He invested $1 million about four years ago in a mixture of bullion coins and pre-1933 European -- weighted in favor of pre-1933. That purchase is now worth just short of $1.5 million.

We asked his permission to use this story at the USAGOLD website, and here is his e-mail response:

"No problem at all. I have viewed it as a hedge, but also as an alternative to money market funds. Now I can leverage it for investment purposes -- private equity and real estate mostly. The holding has averaged 7%-10% of my total assets. And I do hope to buy substantially more, when appropriate. Thanks again."

Note: He's not selling but hypothecating. Knowing this client he means what he says. I have no doubt he will purchase more gold, as he says, when his personal financial situation deems it appropriate. This is important information because needless to say, he is an astute investor. His returns tell a story worth thinking about in this age of 2% money and wavering to collapsing stock portfolios.

______Gold trumps bank cd's______

"I read the article in the newsletter about one of [USAGOLD's] clients' buying1 million of gold 4 years ago and it now being worth 1.5 million. I have a similar true story if you would like to use it. About 4 years ago I talked my father into converting about a third of his cash into gold, mostly pre-33 Sovereigns. I bought for him from CPM approximately $80,000 when spot gold was about $290. He had the rest of his money in 1-2% CD's in the bank. My father passed away recently and I am executor. He willed my brother $250,000 which was essentially all of his gold and cash. I gave my brother the gold along with the bank CD's. While the CD's had earned barely a pittance in those 4 years the gold had become 41% more valuable.

"So instead of receiving $250,000 my brother really received about $282,800 ($80,000 x 141% = $112,800 or + $32,800). Had my father converted all his paper money to gold my brother would have received $352,500. Ironically my father was very conservative and didn't like to gamble. In this case his biggest gamble was watching those CD's smolder and not acquiring real money -- gold."

(Client names witheld by request.)

Visit the url and see what USAGOLD-Centennial can do for you.
Waverider
Chavez Frias says the party's over; Venezuela's legal right to increase royalties
http://www.vheadline.com/readnews.asp?id=23084"Venezuela has moved to secure sovereign control over its massive petroleum resources by insisting on compliance with a law which requires foreign oil firms to pay a 16.6% royalty on their production instead of the previous 1% which President Hugo Chavez Frias describes as "negligible." The move comes after a 3-year 'grace period' for compliance."

Waverider: Goldendome - more on the royalties instituted by Chavez over the weekend - as Belgian said earlier today, "...oil is NOT an ordinary commodity and IS (geo)political. Any market goes where one can make money. But oil in the ground falls under National Interests and is therefore heavely politically loaded, because of oil's "strategic" importance. Normal market laws count very little in this case."
USAGOLD / Centennial Precious Metals, Inc.
Odds of winning are 1:147 or better; your odds of great prices are 100 percent!!
R Powell
Topaz
Your definition of currency gold assumes a connection between money and gold beyond the mere fact that gold is priced in dollars. You said...

"To best quantify CG we need to revisit the Gold Standard of yore and identify the several failed attempts at "officially" pricing Gold .. as Gold receipts were issued over and above the official "backing" (fractional reserve, yes?)."

Long ago our monetary supply and its value were defined and restrained by the amount of gold held to back it. This is no longer the case (at least with the US dollar) as money is simply printed into existence backed by the issuance of debt certificates. We already know all this. I guess I'm questioning whether or not currency gold exists any more. Recently I've also begun to question how much of a relationship exists between gold and oil. I do so as I've watched the POO rise from the low $20s/barrel to well over $50/barrel with hardly a move in the POG. All theories aside, a much higher POO is simply NOT raising the POG. What happened to cheap oil for cheap gold? I'm also surprised that the high POO has not yet turned market sentiment towards the fear of price inflation but I believe this will occur in time.

I thank you for the response. I guess the continued lack of market confirmation has me questioning the validity of some old theories. My long term outlook for the POG is still pointing up...very much up...but its no longer based on an oil for gold connection.
rich

Great Albino Bat
Another true GOLD STORY:

My dad and I used to comment monetary matters regularly. It was the late 60's and it was absolutely clear to me, what had to happen: the US would either have to devalue the dollar against gold - then trembling around $40/oz - or, it would have to go renege on delivery of gold according to Bretton Woods Agreement. (This last alternative did not seem at all likely; in the event, of course, that is what happened).

So, I convinced Dad to invest his life cash savings, $500,000 dollars, in gold. He purchased some 12,000 oz. at about $40 US/oz.

In the early 80's, he cashed out and into T-Bills yielding 15%, at around $615 US/ oz., after the peak at $850.

A fifteen-bagger.

The situation now, is much worse of course. The entire world is bloated with debt, and the US is totally out of control - the US, the provider of the RESERVE CURRENCY OF THE WORLD.

Have not doubt, this thing is going to blow spectacularly. Every day, we get closer to the meltdown. It will come suddenly.

Stock up on gold. Another fifteen-bagger is worth the wait.

The GAB
Aristotle
Strategic national assets
http://news.bbc.co.uk/2/hi/americas/3732224.stmCripes, I can remember we've kicked this notion around for years that a day may come when the economic and political climate is right (or wrong), or shall I say *aligned* so that recognition of Gold in the ground (or oil in the ground) as strategic national assets would lead to the effective nationalization of those assets through something as easy and breezy to implement as TAXATION.

As a shareholder, where will your company profits be found in a higher-priced asset environment if the government, on behalf of the voting masses, elects to tax away the windfall? Sure, the company is left with enough to survive -- because that's the basis for the government's revenue -- but the company sure ain't gonna thrive! Add government regulated conservation production quotas on top of taxation (to smooth out the government revenue stream) and the poor company is now effectively an privately owned agency working on behalf of the government for break-even existence.

If you want a piece of the windfall, you've got to be holding the strategic asset directly -- in a portable form not so easily held hostage as an oil well or a mine. I can almost hear Smeagol's thoughts on this:

"What's its shares worth now, eh precious? Nassty people's government says the miners were greedy, yeeeesss, and so they took the exsspected dividend profitses and capital gainses from poor, poor Smeagol! Don't want nassty stockses no more in this hard, cruel world. Only wants the Precious!!!"

Rebuttal: "This is an act of justice and sovereignty" ---President Hugo Chavez

How many times might we see this sorta thing repeated where a minority private interest loses out to the populist national one? I'll leave you with a case in point from the BBC news today.

-----------Venezuela has announced that it is increasing the royalties paid by foreign oil companies from 1% to 16.6%.

President Hugo Chavez said it marked the second and true phase of the nationalisation of the country's oil.

The surprise measure will affect all foreign companies offering joint ventures in Venezuela's Orinoco heavy crude belt.

During his address on Sunday, Mr Chavez said: "We are no longer going to give our oil away for reasons that no longer exist, if they ever did."

Venezuelan Energy Minister Rafael Ramirez told the BBC that no warning had been given to the oil companies concerned - which include Exxon Mobil, Total Fina Elf and Conoco Phillips. But he insisted that the increase was entirely legal.

The 1% level of royalties was granted by the previous Venezuelan government in the mid-1990s as a special measure to attract foreign investment.

But the minister insists that now international prices have risen and productivity in these oil fields is three times higher than expected, the Venezuelan government has every right to return royalties to their earlier levels.----------

Oil knows no road that Gold has not also strode. For all you sleepy-heads still out there, time to get a clue and get physical.

Gold. Get you some. --- Aristotle
Waverider
Gold/Oil Ratio Extremes: Adam Hamilton
http://www.zealllc.com/2004/goldoil4.htm"Based on this chart, oil doesn't even start to get interesting until it breaks $50. And I would probably not consider oil prices to be on the high end of things personally unless it gets above $60. The next time some Wall Street commentator moans about today's "all-time high oil prices", realize he is either na�ve and has not studied market history, or he is trying to mislead you by intentionally ignoring inflation, or he is outright lying to deflect your attention away from the real issues plaguing today's stock markets like excessive valuations.

The long-term chart above is also very valuable to help visualize just how closely gold and oil prices tend to correlate over strategic time frames. If you look at major secular trends measured in years, gold and oil pretty much move in lockstep. Yes, they deviate tactically over shorter periods of time as their respective supply-and-demand influences dictate, but over the long run they travel the same path. Their prices tend to oscillate around each other and periodically cross on this chart. Over the entire four-decade span of time charted on this graph, these monthly gold and oil prices have a correlation coefficient of 0.835 and an R-Square value of 69.7%. These are very impressive numbers over such a long period of time and really drive home just how closely gold and oil are intertwined."

Waverider: Belgian and Rich - is it possible for you to explain to me why this historical correlation should change? The way I see it, a correlation coefficient of 0.835 over 40 years is pretty impressive - if POO stays high (which I think it will), then why would the ratio fail to revert to the historical mean? Rich, I think that the higher POO has not *yet* raised the POG. I believe TPTB are experiencing *supressed* panic and denial with hopes that OPEC has the production capacity to magically bring POO down into the $30.00/$40.00 range. The question is whether OPEC *can* do this, but also (and I'd say more importantly) whether OPEC really *wants* to do this - Chavez stated publically that he doesn't think $50.00 oil is excessively high nor does it put the economic stability of the world at risk. Does OPEC really want cheaper oil when it looks like the dollar's going to depreciate another 20%? Are there other geopolitical reasons why they don't want cheap oil? I think that once we have POO > $50.00/$60.00 for an extended period of time, *that's* when the panic will cease to be contained, and fear of price inflation will catapult POG back to the historical mean POG:POO ratio. Thoughts?
Belgian
Wim Duisenberg speaks.....
>>> The ECB can "MOVE" to limit the impact of high oilprices !!!
Price-Infla is a monetary phenomenon,...right Alan !?
Brent oil up 1% >>> $50 : ECB must act to counter the external oil shock and guard price-stability in Euroland !

Wim : Euroland's governments must and shall take courageous deciscions, now ! Don't postpone the enivitable any longer !

Andrew Smith-Mitsui : All commodities will crash in price, soon !
The dollar is,...remains,... strong ! The China demand factor is strongly exaggerated.
Gandalf the White
BUT!!!!!!, YGM. --- Did you take a GOOD HARD LOOK at that Piece of Paper ?
http://www.frbsf.org/currency/world/nocirc/m2.htmlYGM (10/11/04; 08:22:50MT - usagold.com msg#: 125375)
Promise of the Past
The "Piece of Paper" shows that is was of the "SERIES of 1934" !!!!!!!!! Was that not AFTER the Proculamation and enactment of the LAW ? THEREFORE, THIS "Piece of Paper" NEVER had a chance of being circulated and being presented for being "PAYABLE TO THE BEARER UPON DEMAND" !
Tis in my mind only a REMINDER !
Mr. Wilson DOES look nice though with the "Rosie Red" background showing through from the REVERSE SIDE of the GOLD CERTIFICATE !
<;-)
Gandalf the White
Sorry, The WIZ did not read the "FINE PRINT" !
http://www.frbsf.org/currency/world/show.htmlBank Transfer Note, $100,000, 1934
Featuring a portrait of Woodrow Wilson, this note was the largest note printed by the Bureau of Engraving and Printing. Bank Transfer notes were used only for transactions among Federal Reserve Banks and not for public circulation.
===
OK, --- It was ONLY used by the Fed BANKS, BUT even they could not convert it !
<;-)
MK
Response to Sovereign
Thanks for your question, Sovereign.

I gather from your post that your main goal is to get me to say that I see Gold as Money, though I am unclear as to where that might lead us. I am assuming that you are in favor of a gold standard and that your question is essentially political in nature, i.e., Do I favor a gold standard? But then again, your question could be a philosophical one, i.e., Do I view gold as money? Historically, gold has served as money (as we all know) and gold can serve as money even today by two willing parties making an exchange. So, yes, gold is money philosophically . . . .to those who wish to utilize it as such. They do not need my permission to do it, nor do they need the permission of the State. So it doesn't matter whether or not I see gold as money. Clearly though, gold today is not money sanctioned by the State.

On the question of a gold standard, I would need to know more about what type of gold standard you advocate and how you would go about implementing it (and please don't refer me to some dreary treatise that you would like me to read). You see there are gold standards and then there are gold standards. Tell me in your words what the gold standard would look like under the Sovereign regime. Most importantly, I would want to know how you are going to value gold and whether or not that value is going to be fixed against some currency, all currencies or float against perhaps a basket of goods (as some have suggested) or the various currencies, or one currency. If you would like it to be fixed, I would want to know the price you envision putting on an ounce of gold and the currency in which you would like to denominate it. Last I would want to know if this going to be an international treaty (agreement), or will the United States embark on this endeavor alone?

I might circumvent a great deal of discussion by telling you that I believe a balanced budget amendment, real free floating exchange rates (not the fictional variety we have today) and real international free trade (not the fictional free trade we have now) are practical political goals worth achieving. And perhaps time spent with one of the political parties attempting to make those goals a reality would be time well-spent. I disagree with Professor Mundell on fixed rates (if that is what he truly believes) in that I believe that they are unenforceable without a direct common tie to a natural commodity like gold. Someone will always cheat, or the "stability pact" breaks down, or the politicians get together and decide to scrap all these controls and placate the masses. The real problem is the socialist tendencies in all nations, not the monetary regime. In order for gold to rise, socialism - even the Western-style welfare state - must be scrapped. And I don't see that happening any time soon.

So you see, Sovereign, there is much to consider here. It is easy to say "Yes, Gold is Money" but it is more complex than simply uttering the words. Though it might make us feel good, it doesn't put beans and bread on the table, so to speak, though it does make for interesting conversation over a bottle of wine.

Obviously, all the angst about gold as money is directed toward the questionable job the government and Federal Reserve have done in managing the dollar. Better put, it reflects the questionable job all the nations of the world have done in creating and managing the current monetary system. Many see a gold standard as some sort of manna from heaven - a relief from mismanagment and a talisman against governments which cannot live within their means. It is not. It is simply another currency regime that the individual will be forced to assess as being in his or her best interest. The question will still remain whether or not gold makes sense in the individual portfolio. In 1933, for example, we were on the gold standard. Banks collapsed. Businesses were wiped out. People stood in soup lines. Socialism was on the march worldwide. So the gold standard isn't a panacea. Though you may view it as a preferrable approach, it is still an imperfect system created and managed by imperfect human beings - as such upon creation any system will be destined to become an imperfect human institution. (Call it monetary original sin.) There was good reason to own gold in 1933 even in view of a potential confiscation simply because when the bank went under and refused to honor its deposits, the gold stored in a drawer was unaffected. (At the very least one could look foward to a check from the government upon turning it in.)

I have watched with interest since the gold internet took root here and other places the development of two schools of thought on gold. One is the political school which advocates a return to the gold standard and sees the internet as a means to bringing about social change through a gold standard. The other says, "Humanity (and its politics) is what it is. That will never change. I will become a gold owner in response." The former sees gold as a political instrument and stumps for it interested in recruits.(I am often targeted.) The latter sees gold as a financial instrument, accepts the world for what it is, and acts as an individual to compensate for it.

Which in your view is more correct than the other? Which in your view is the more effective response?

So it goes, Sovereign. . . . . . I look forward to your response, or the responses of anyone else interested in the subject.

As I said at the top, I appreciate the question and the chance to post these views. Hopefully, Sovereign, I have framed the discussion for you, and made you think about digging a little deeper within your own understandings. Voltaire once wrote a treatise (Candide) as a public response to a school of thought prevalent at the time that this was 'the best of all possible worlds.' He pointed to earthquakes, famines and the like, refuted the proposition and advised that we should 'tend our gardens.' Now many believe that this is the worst of all possible worlds. I refute that notion as well. It is what it is and not much different from the way it was when Voltaire was writing. I adhere to the notion that we must 'tend our gardens.' And in the context of this website, financially tending that garden translates to a solid gold diversification.
R Powell
Waverider
Adam Hamilton is very good at charting price relationships. You said....

"Rich, I think that the higher POO has not *yet* raised the POG"

And yes, often very long term relationships do fluxuate during shorter periods of time. I do hope that both you and Adam are right!! Perhaps after participating in some of last year's silver and grains moves, I need to remind myself of the necessity of patience. Thanks
rich
Belgian
@ waverider
The 35 yrs old, Gold-oil (and dollar) relationships, are in the process of being broken up.
We cannot go on exchanging oil, becoming more precious in time, for dollars that increasingly are associated with debt...and not enough physical gold-flows to (Arabian) oil can be organised.
The CB's silence on goldsales + rising oilprices, are not a coincidence.

If Arabian oil would be pleased with rising goldprices...the immediate effect is a declining dollar and rising euro !!!
That's why the goldprice can only rise if oil is priced and invoiced in euro !

Duisenberg >>> ECB can MOVE...to limit the impact of high oilprices...
Move = dollar down ...euro + gold up >>> $-POO up...EURO-POO down.
Do you understand now what that MTM-thing of the ECB means !? Higher goldprice is stronger euro and weaker dollar. As simple as that, lady.
Cometose
Belgian
based on my earlier reading from Dutch TV and your post
re Euroland protecting itself and its' economy from higher oil prices ..........

looks like Euroland is going to dump the Dollar .....so on an exchange rate basis and paying in the DOLLAR reserve currency of the world .............

their cost of ENERGY RELATED expenditures will be held in check or reduced........as the dollar goes down and the Euro goes up ..........

Shapur
@belgian
your post snip earlier today:

*Belgian (10/11/04; 10:39:58MT - usagold.com msg#: 125385)
Wim Duisenberg speaks.....
>>> The ECB can "MOVE" to limit the impact of high oilprices !!!
Price-Infla is a monetary phenomenon,...right Alan !?
Brent oil up 1% >>> $50 : ECB must act to counter the external oil shock and guard price-stability in Euroland !*

My take: High Oil price in dollars is the economic and political lever that the euro nations can use to pry up the value of the euro currency in relation to oil and gold. The ecb countries are losing billions now by having to buy oil in dollars---why not price oil in a basket of currencies, for now? One step closer to free gold.

TownCrier
Word from Jonathan is that half of this allotment is already sold through
http://www.usagold.com/gold/special/group.htmlDue to popular demand the primary feature of this month's special was a return to the exceptional pricing of our standard fare rather than emphasis on rare or unusual gold coins. Our investors are responding in kind, and at this rate it is hard to imagine that this monthly special -- to which we've allotted 3,000 coins -- will last the week, let alone the month.

R.
USAGOLD Daily Market Report
Page Update!
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 ----

COMEX gold futures ended easier Monday as players cashed in on gains from Friday's six-month peak, but record high oil prices and anemic U.S. jobs data limited losses, dealers said.

Trade was thin amid little new economic data and small moves in the dollar due to market holidays in Canada and Japan, and Columbus Day in the United States. [Call USAGOLD-Centennial, we're open for business!]

"It is a light volume day," said one dealer at a large bank. "We just made new highs last week, so maybe it's some form of consolidation today."

December gold settled down $1.10 at $423.40 an ounce after trading from $424.90 to $422.50.

Price could still target $430 in the short term, dealers said, as oil showed no sign of falling back. But if the yellow metal was to retreat further toward $420, stiff support was pegged at the $415 area.

Crude oil shot to an all-time high of $53.80 a barrel on Monday.

------(see url for access to full news, 24-hr newswire)----
TownCrier
News for our budding laureates at the table
http://www.omaha.com/index.php?u_np=0&u_pg=46&u_sid=1227599HEADLINE: American, Norwegian share Nobel for study of economic policy

STOCKHOLM, Sweden (AP) - A Norwegian and an American won the 2004 Nobel prize in economics Monday for their work in determining the consistency of economic policy and the driving force behind business cycles worldwide, work that has shown how the money supply can affect international trade.

...The academy said Kydland and Prescott were able to show "how such effects of expectations about future economic policy can give rise to a time consistency problem. If economic policy-makers lack the ability to commit in advance to a specific decision rule, they will often not implement the most desirable policy later on."

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

Congrats to both Finn and Ed. Now, please demonstrate to the world that you've truly got a good economic head on your shoulders by investing your prize money in gold. The friendly and knowledgeable staff at USAGOLD-Centennial stand ready to complete all the arrangements for secure delivery to your door.
1-800-869-5115 Ext. 100

R.
Belgian
Re
Cometose : You >>>...dump the dollar...
The dollar cannot be dumped. There are already too much dollars outside the US in proprtion to what the US has to offer on aggregates. Outside the US, the planet is doomed to exchange a not legal tender dollar unit, amongst themselves. We are all stuck with the dollar as reserve and trade settlement unit. That's WHY Gold is being accumulated as to compensate the dollar's reserve status loss, right in time. The relative small amounts of dispersed Gold will have to rise enormously in price to compensate for such gigantic amounts of dollar units.

Shapur : you >>>...price oil in a basket of currencies...
All currencies are a dollar derivative. What difference is a basket of dollar-derivatives going to make ? More of the same ?
I realise how difficult the notion of FreeGold still remains. Gold traded in a goldmarket free from paper coercion (money system).
Today, paper says what Gold is worth. Tomorrow, Gold will say how worthless paper is. We will keep on using currency/digits to settle a trade but with both eyes on FreeGold, saying what the currency is worth. And the currency that fosters that FreeGold will be associated with Gold and used as Gold's preferred "transactional" unit.

If one cow = 5 pigs, than the currency is 5. One unit of Gold equals 5.
If one cow = 10 pigs, than the currency is 10. One same unit of Gold equals 10, now. That's FreeGold ! Gold has been marked to the market...first 5 than 10...

I keep on trying...
Federal_Reserves
I agree about politics and oil
but then I would also say, increasing, all the markets are political machines, including stocks, bonds, and especially currency. Overall we have a new political global economy
run by oligarchists using front organizations like NAFTA, G7, WTO, FED, World Bank, UN,etc to control the world's economy and they also serve as the mind police feeding the
citizens the necessary pablums.

The new political economy is a blend of communism, capitalism, socialism, and facism wrapped in globalism. Its all about making the world safe for the new World Order, with oligarchists on the thrones of power. Borders and cultures, nationalism, and indepedence are the enemies of the oligarchy. So many of us live with our eyes wide shut.

Welcome to George Orwells 1984, had he lived he would be 100 years old this year!
mikal
"Commodities" turn heads, demand attention
http://www.economist.com/agenda/displayStory.cfm?story_id=3283741Economist.com | The commodities boom
October 11, 2004
Elwood
Aristotle (10/11/04; 10:18:21MT - usagold.com msg#: 125383)
"President Hugo Chavez said it marked the second and true phase of the nationalisation of the country's oil."

Would anyone care to guess when the FIRST phase of Venezuelan nationalization occurred? As I recall it was late July 1971. Food for thought, yes?

Elwood
Ned
POG/POO ratio
http://www.lifeaftertheoilcrash.net/downloads.htmlI understand that the historical ratio has been in the 15-17 range for a long time. I think the simplest fundamental reason why this will change is the 'peaking' of oil. Something rather drastic has happened in the last couple months and I believe its the discovery that the oil producing countries cannot open the spigots any wider.

I read today at the attached link that it will take a couple years to confirm that the peaking of production a couple years back. I believe what is happening now is the speculation that peak oil might be here NOW. Possibly as early as next year we may confirm the issue one way or the other. Another article that I happened upon lately is the POO, priced in the mid-20's/bbl pre-911, has added 7 or 8 bucks for dollar depreciation, 8-10 bucks for terror premium and now another 10 for 'peak' speculation. Old price of 25 + 8 + 10 +10 = 53. Now add in a second 20% USD devaluation (53 + 11 = 64 ) and possible confirmation of 'peak oil' and we got $70...$80....$90....$100 oil !!

We know at some point the economy will collapse before these kind of prices so $100 will not be seen, at least not in this wave. I personally believe we will get the 'deval', then $60-65 oil and then a economic crash and a crash of oil back to $40-45 give or take.

What happens to gold and the POG/POO ratio? When the US 'devals' in round 2 and we get a global slump BIG FLOAT begins to move and we get into serious trouble. This is going to take place within a year IMHO. The ratio will initially fall off to 7 or 8 as oil accelerates to $60 and gold starts its climbs to $500. The ratio will begin to rise when gold stabilizes in the upper $400's and oil falls to 45-50. Then all hell breaks loose when BIG FLOAT comes home. Gold begins to fly (towards $1,000 and oil stagnates at 40) brings the ratio to 20-25. When the USD really begins to crumble the ratio might remain in the 20 range (2,000/100) or might even get much, much higher with (3000/100), (4000/100). Who knows but one thing is certain; the traditional 40 year 16/17 ratio peg is HISTORY! Forget about it.

All things are about to change....radically. All things aside, remember Belgian's perfect & exact phrase, "Yellow gold must replace black gold". When the oil's gone (maybe sooner than later) what 'wealth' replaces the 'wealth' in the ground. What asset, what 'currency' will replace the oil?

Yeah you got it right...GOLD! In your hands!



Waverider
Ned...
...my apologies for a silly question...but what do you mean by BIG FLOAT...exactly? TIA!
YGM
Ned...Peak Oil
I totally agree w/ your statement.....""I think the simplest fundamental reason why this will change is the 'peaking' of oil. Something rather drastic has happened in the last couple months and I believe its the discovery that the oil producing countries cannot open the spigots any wider."".........How True

One of the unmentioned problems with defining a timeline for 'Peak Oil' is the fact that the OPEC nations have all
"LIED" about their in ground reserves, as their sales quotas
are based on those same stated reserves...The more you said you have, the more you could pump. Plus the areas that produce the much sought after 'Sweet Crude' are fewer than the Heavy Sour Crude ie; Saudi Oil........YGM

PS: as one who derives a living in the oilpatch I have seen over the last months a noteworthy event unfolding..To wit this area in Alberta is where the first oil wells were ever drilled in Canada, and this area was long ago abandoned by Major Oil Co's with respect to new exploration......
Now it has again become boom times...Over 600 new wells to be drilled here in near future. I'm told it's not just oil prices but lack of new discoveries elsewhere, and so now the smaller deposits are being produced. As the junior Cos' drill & put many wells online they become fair game for buyout by majors....FWIW....YGM
YGM
Peoples Daily News.......(China)
China to build four major oil reserve bases



China will formally launch its strategic petroleum reserve program next year, as learned from related departments. An oil reserve base in Zhenhai, Zhejiang Province is now under construction, which will be able to hold more than 5 million cubic meters oil when its first-stage project is completed next year.

The state's first batch of reserve bases approved by the National Development and Reform Commission are located in Zhenhai (Zhejiang Province), Daishan (Zhejiang Province), Huangdao (Shandong Province) and Dalian (Liaoning Province). Of them Zhenhai is regarded the largest one in scale and the one of the fastest construction speed.

Construction for the other three bases is also stepped up. The first-stage project of the national petroleum program is now in full swing, officials from the Commission said. China's three oil giants-- China Petroleum& Chemical Corporation (Sinopec), China National Petroleum Corporation (CNPC) and China National Offshore Oil. Corp. (CNOOC)--are entrusted by the state to be responsible for the overall construction of the four bases, which are hopefully to be basically completed between 2006 and 2008.

Upon completion, the four bases will altogether form a government strategic reserve capability equivalent to the amount of crude oil imports in 10 days. Accounting the 21 days commercial oil reserve within the oil system nationwide, China's overall oil reserve capacity will exceed 30 days of imports.

It is learned that the oil reserve in the United States, Japan and Germany have reached 158 days, 161 days and 127 days of net imports respectively. The standard reserve capacity suggested by the International Energy Agency to its member states is 90 days imports. This is also the long-term goal of China, which is expected to be realized by 2015.

By People's Daily Online


YGM
Further 'Non-Political' aspects of Oil Price hikes....
October 11, 2004

Saudi Arabia bitter over global taste for sweet and not sour oil
By Carl Mortished, International Business Editor



SAUDI ARABIA's oil minister said his country was ready to pump more oil but it could not find buyers as the Kingdom's high-sulphur crude was being rejected by Western refineries.
In a bid to quell the surging price of crude, Ali al-Naimi said Saudi Arabia was ready to pump more crude but gave warning to consuming nations that they needed to invest in new refineries to process Saudi Arabia's "sour" crude.



"We have 500,000 barrels a day extra capacity and we are ready to produce now but there are no buyers. Consumer nations need to build sufficiently sophisticated refineries to be able to handle sour crude," said Mr Al-Naimi, speaking at an oil conference yesterday in the Gulf.

The Saudi minister's comments highlight emerging problem of high-sulphur oil reserves. "There's a difference between sour and sweet crude and what's on offer now is the light sour crude," Mr Al-Naimi said.

Tightening emission controls over motor vehicles have increased demand from refiners for low-sulphur ("sweet") crudes, such as North Sea Brent or Nigeria's Bonny Light, which are easily refined into high-quality petrol or ultra-low sulphur diesel fuel.

However, supplies from Nigeria are likely to be under threat today from a general strike in the troubled West African state where the main labour union is protesting high petrol prices.

A shortage of sweet crudes, such as Brent and America's West Texas Intermediate, has driven their prices to extraordinary levels. On Friday, Brent set a new record closing just shy of $50 a barrel.

A chasm is growing between the premium price of sweet crudes and the discounted price at which the bulk of the world's oil is sold. The surplus of sour crude is hitting the price of Arab Light, a higher-sulphur crude that accounts for most of the Saudi exports, and the Kingdom has been forced to double the discount at which it is priced against Brent.

Russian oil, too, is being shunned for its sulphur content. Urals, the main blend of Russian export crude is now trading at more than $7 below the price of US Light crude, compared with just $2 a year ago.

According to oil industry experts, about 40 per cent of the world's current crude output is "sweet", but rough estimates of the proven reserves in the ground show more than 75 per cent is higher-sulphur "sour" crude. A shortage of refineries capable of converting sour crude into low-emission fuels suggests continuing price pressure on sweet blends and high prices for consumers.

"The world is going sour," said Rafiq Latta of Petroleum Argus, a publication that monitors crude prices. "The only regions where there is room for expanding sweet production is West Africa and Algeria."

North Sea and Texas oilfields have been the largest, easily accessible sources of low-sulphur crude but these are now in accelerating decline. For future oil supply, the world will increasingly look to the sour crudes of the Gulf and Russia.

A lack of refineries equipped to process sour crudes is the problem, according to Julian Lee of the Centre for Global Energy Studies. "America hasn't built a new refinery since 1976," he said.

Ever-tightening environmental legislation is adding to the pressure on refiners to buy premium crudes, Mr Lee said. Even refiners equipped to convert sour crudes are now finding it necessary to buy lighter, sweeter products to produce the new ultra-clean fuels.



Sovereign
Mr. Kosares, the ideal monetary system under the Sovereign regime
Thank you for taking the level of the discussion to a higher level.

Initially, I had only intended to point out the counterproductive and ultimately self-defeating position of those who advocate the parallel existence of currencies and gold as money. The power to print currencies results in the suppression of the price of gold by those who have retained such dubious privilege, in order to consolidate their power. To bet on gold and to say that fiat is OK amounts to bribing the dealer to give you a losing hand at the Blackjack table. Gold as money is what prevents the fiat purveyors from misleading the users of their currency about the inflation that they are inflicting upon it. So when I defend gold as money, I am thinking of the rule of law as in all men being equal before it. Gold as money prevents theft and extortion and provides for a level monetary field where all rules are the same for all players. When I asked you, are you for gold as money, I literally meant, Are you for the rule of law or the law of the jungle?

As per your request, here's the ideal monetary system according to me:

1.Only silver and gold (specie) are lawful money.

2.All derivatives of silver and gold are illegal.

3.Specie-backed AND specie-convertible Debt Notes can be used as a medium of exchange.

4.Debt Notes are not derivatives of silver and gold. They represent the kind of debt that can only be redeemed in in lawful money, i.e., silver and gold.

5.ONLY SILVER AND GOLD (and mutually-agreeable barter defined in terms of specie) CAN EXTINGUISH DEBT.

6.Specie units are defined in terms of amounts of silver and gold of a standard fineness. A given weight and fineness of silver and gold is numeraire.

7.GOLD/SILVER RATIOS BY FIAT ARE ILLEGAL. Market participants voluntarily determine, refuse or accept, how much silver specie is worth in terms of gold specie and vice versa.

8.Debt Notes can be issued by public or private entities if and only if verifiable 100% specie backing is proved to exist.

9. The amount of debt redeemable in lawful money that each Debt Note represents is to be LOWERED in direct proportion to new supply in Debt Notes and INCREASED in direct proportion to amount of Debt Notes redeemed out of existence.


You are all welcome to comment, thank you.

S
Sovereign
Mr. Kosares, as to your final question
Is gold best used as an instrument of social change or should it be employed only as a means of generating or protecting wealth [a la cynical Mr. Aristotle; Mr. Belgian with his freegold; Ag Mountain]? asks Mr. Kosares; and invites me to take one or the other side of this debate as he frames it.

My answer is that these are not mutually-exclusive propositions and ideally both goals must, and can be, pursued togther. Planting a vegetable garden is not tantamount to denying the existence of the Amazonian jungle that may be providing the oxygen necessary for the subsistence of the gardener.

Still, what really counts cannot be expressed.

S



Cytek
WOW, am i seeing the future or is Silver trading at $719.00 an oz
http://www.netdania.com/QuoteList.aspJust Check out Netdania.com and get their realtime quotes on Silver. An unreal glitch, if it's not than i'm Filthy RICH.

Cytek
YGM
Sorry.........
http://business.timesonline.co.uk/article/0,,9072-1303849,00.htmlI should have provided a link/credit for the news story, on Oil..message# 125404
Humble Pie
# 125407
That $719.00 for silver is 719 cents or $7.19 per oz
Ned
Waverider/YGM
Speaking from the 'nations capital' I say hello to B.C & Alberta!

Ms. Waverider,

You haven't heard of BIG FLOAT? Well, well....are you in for a treat! In the archives of this esteemed table round lies the story of BIG FLOAT, a monster waiting to come home. When this evil monster arrives disaster will follow for he is BIG & UGLY & EVIL. You know of him, I am sure. It's just the name that you have never heard. BIG FLOAT has (2) little brothers, one in B.C. and one in Ontario. I think the one in Ontario is called Bob Rae. (hee..hee, just kidding). I digress.

I will try to find the reference in the archives and I hope TC or MK or Gandy will intercept this message and direct us in a heartbeat to that note.

YGM dear Sir,

I remember your name only so vaguely....young..gold..or golden ...please remind me.

I was in a bathroom stall the other day...well I'm in a bathroom stall every day but what made this visit unique was the editorial I was reading about Ralph Klein or is it Kline. I think Klein. You Albertans are filthy stinkin' rich...whoops, did I say that? I mean very fortunate. There was another article in the Globe and Mail about Klein's 'pieing', too funny...to be in the leagues of Jean Chretian. And the article about Ralph telling Martin to get his sticky fingers out of the Alberta coffers. Oh those federal leaches eh!

And what about the Noranda deal? Doesn't that stick in your craw? The goverment sells Petro-Canada, the only entity that it has ever had that made a buck and then 'allows' the sale of Noranda to China. I tell ya, the government shouldn't be in the business of business, but you gotta know a good deal from a bad one and selling your 'hard assets' early in a bull market isn't too bright. Just ask that George fruit-loop over at B.O.E. Well...was talking about black gold and got sidetracked into politics (which TC will get me back on track in a hurry) so I better run. Good talking to ya and remember,

"yellow gold replaces black gold" , starting now!

Ned

YGM
Ned....
You may remember a Yukon Gold Miner....Went broke Gold mining from $450/oz to $265. Fuel tripled in price, so I became a GATA Advocate to fight back years ago...Now I work in the Oilpatch to buy Gold...Funny how things work out!
Regards...YGM
YGM
Mundell...Speaks @ International Congress of Financial Directors.."GOLD"
http://www.agi.it/english/news.pl?doc=200410111505-1132-RT1-CRO-0-NF11&page=0&id=agionline-eng.oggitaliaMUNDELL: A WORLD CURRENCY IN THE LONG RUN
(AGI) - Florence, Italy, Oct.11 - Nobel prize winner Robert Mundell reckons that the "long-term goal is world currency", and proposed to call it "Intoro". That's what he said at the international congress of financial directors in Florence. Intoro stands for "oro internazionale, international gold", because the new currency "should be based on the only international metal system, which is gold. The mechanism is similar to the one of the Breton Woods agreement, and is to involve the IMF, perhaps with an initial agreement between the 3 main currencies, euro, US dollar and yen. The following step would be a temporary currency named 'dey' (dollar, euro, yen), and it could then include the pound sterling and the yuan. Such a monetary reform would then lead to the brand new international currency, Intoro". (AGI) -
Great Albino Bat
Mundell proposes a new, GOLD, international currency...

We know that the world is addicted to paper money, because Democracy DEMANDS it - the masses of the world want to live with a standard of living which they do not earn. They vote politicians in, according to their promises to deliver that standard of living. Governments can only spend what they take from the people, so - they print the money. Easier that way. Expand credit, without limit. Just keep on shifting the problems into the future - let some other sucker deal with them.

Given this fundamental situation, based on a political philosophy of "Democracy", how can the world tolerate a currency tied to gold in any way? The answer is, IT CANNOT.

Mundell's system might be quite workable, but the people will not stand for it.

Of course, a combine of dictators all over the world, if they were benevolent - a BIG if - might slap the people into some sense. ON second thought, it would take more than a slap, more like a whip and a rifle.

So, I think Mr. Mundell will have to wait until the present political illusions of the world melt away, and we come back to our senses. Or until the Dictators enforce reality. I think Mr. Mundell will be long gone, before that ever happens.

Installing a world monetary system tied to gold, means the instant collapse of the world's economic structure. Either the "gold link" is abandoned, or the system crashes. Which do you think would happen?

Better to go with the idea: gold at market prices, for savings. Paper money, for doing what the world wants, today. And let Nature take its course.

The GAB
Druid
Iraq and the hidden euro-dollar wars
http://www.gasandoil.com/goc/news/ntm42655.htmDespite the apparent swift US military success in Iraq, the US dollar has yet to benefit as a safe haven currency. This is an unexpected development, as many currency traders had expected the dollar to strengthen on the news of a US victory.
Capital is flowing out of the dollar, largely into the EUR. Many are beginning to ask whether the objective situation of the US economy is far worse than the stock market would suggest. The future of the dollar is far from a minor issue of interest only to banks or currency traders. It stands at the heart of Pax Americana, or as it is called, The American Century, the system of arrangements on which America's role in the world rests.

Yet, even as the dollar is steadily dropping against the EUR after the end of fighting in Iraq, Washington appears to be deliberately worsening the dollar's fall in public comments. What is taking place is a power game of the highest geopolitical significance, the most fateful perhaps, since the emergence of the United States in 1945 as the World's leading economic power.
The coalition of interests that converged on war against Iraq as a strategic necessity for the United States included not only the vocal and highly visible neo-conservative hawks around the Defence Secretary, Rumsfeld, and his deputy, Paul Wolfowitz. It also included powerful permanent interests, on whose global role American economic influence depends, such as the influential energy sector comprising Halliburton, ExxonMobil, ChevronTexaco and other giant multinationals. It also included the huge American defence industry interests, comprising Boeing, Lockheed-Martin, Raytheon, Northrup-Grumman and others.

The issue for these giant defence and energy conglomerates is not a few fat contracts from the Pentagon to rebuild Iraqi oil facilities and line the pockets of Dick Cheney or others. It is a game for the very continuance of American power in the coming decades of the new Century. That is not to deny that profits are made inthe process, but it is purely a by product of the global strategic issue.
In this power game, least understood is the role of preserving the dollar as the world reserve currency, as a major driving factor contributing to Washington's power calculus over Iraq in the past months. American domination in the World ultimately rests on two pillars -- its overwhelming military superiority, especially on the seas; and its control of World economic flows through the role of the dollar as the World's reserve currency. More and more, it becomes clear that the Iraq war was more about preserving the second pillar -- the dollar role -- than the first. In the dollar role, oil is a strategic factor.

American century: the three phases
If we look back over the period since the end of World War II, we can identify several distinct phases of evolution of the American role in the World.

The first phase, which began in the immediate post-war period 1945-1948 and the onset of Cold War, could be called the Bretton Woods Gold Exchange system, which was relatively tranquil. The United States had emerged from the War clearly as the sole superpower, with a strong industrial base and the largest gold reserves of any nation.
The initial task was to rebuild Western Europe and to create a NATO Atlantic alliance against the Soviet Union. The role of the dollar was directly tied to that of gold. So long as America enjoyed the largest gold reserves, and the US economy was by far the most productive and efficient producer, and the entire Bretton Woods currency structure from the French Franc to the British Pound Sterling and the German Mark was stable.

Dollar credits were extended along with Marshall Plan assistance and credits to finance the rebuilding of war-torn Europe. American companies, among them, the oil multinationals, gained nicely from dominating the trade in the 1950's. Washington even encouraged the creation of the Treaty of Rome in 1958 in order to boost European economic stability and create larger USexport markets into the bargain. For the most part, this initial phase of what Time Magazine's publisher, Henry Luce, called "The American Century", was relatively "benign" for both the US and Europe in terms of economic gains. The United States still had the economic flexibility to move.
This was the era of American liberal foreign policy. The United States was the hegemonic power in the Western community of nations. As it commanded overwhelming gold and economic resources compared with Western Europe or Japan and South Korea, the United States could well afford to be open in its trade relations to European and Japanese exports. The trade-off was European and Japanese support for the role of the United Sates during the Cold War. American leadership was based during the 1950's and early 1960's less on direct coercion and more on arriving at consensus, whether in GATT trade rounds or other issues. Organisations of elite groups, such as the Bilderberg meetings, were created to share the evolving consensus between Europe and the United States.


Druid: This is somewhat of a dated read yet very informative for those individuals who have not had an opportunity to peruse the castle archives and walk the trail. Enjoy the read and let your imaginations run wild as it pertains to the price of oil.
Topaz
@Rich.
"Your definition of currency gold assumes a connection between money and gold beyond the mere fact that gold is priced in dollars".
What I intended to convey is pretty close to the above Rich in that during the last three years, Gold has been in lockstep with it's alt currency counterparts as the altDX/Gold chart shows.
If "IF" Gold traded independent of this currency shackle, either Dollar OR Basket, for more than (say) a Month we could conclude that Gold may be setting itself "free". So we establish a path ...Standard Gold >> Commodity Gold >> Currency Gold >> FreeGold. Commodity Gold (see Chart) bit the dust "99, What/When for FreeGold?

Gold/Oil? Dunno! Whilst I and the "others" (Bel, Ari etal) are on the same page with FreeGold, my "trail" runs in a completely different direction as I see a Dollar spike in the near future that will make the horniest $Bulls eyes water.
Knallgold
POG
Interesting is the time of the POG smash,HK going into London.What will happen in NY???
Copperfield
@Druid, msg#: 125414
http://fergusonreport.myonlinepublication.com/article.asp?pop_id=161&article_id=69You posted the following link:

http://www.gasandoil.com/goc/news/ntm42655.htm

The above article is written by F. William Engdahl. Now, compare this with:

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

Written by former Maryland Senator Tim Ferguson?!

Can anyone tell me who the real author is?

Thanks
Aristotle
Great Albino Bat -- msg#: 125413
Worth a slow motion instant replay:

----------"We know that the world is addicted to paper money, because Democracy DEMANDS it - the masses of the world want to live with a standard of living which they do not earn. They vote politicians in, according to their promises to deliver that standard of living. Governments can only spend what they take from the people, so - they print the money. Easier that way. Expand credit, without limit. Just keep on shifting the problems into the future - let some other sucker deal with them. Given this fundamental situation, based on a political philosophy of 'Democracy', how can the world tolerate a currency tied to gold in any way? The answer is, IT CANNOT. [...] Better to go with the idea: gold at market prices, for savings. Paper money, for doing what the world wants, today. And let Nature take its course."-----------


Congratulations, Sir! You have arrived!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Gold. Get you some for this right understanding. --- Ari
Aristotle
"no secrets" -- Nov 4th to discuss problems of the market
http://www.neftegaz.ru/english/lenta/show.php?id=51384This is probably good enough to share.


---------Oct 8. The head of GOKHRAN Of Russia (a state-run body of state precious metals forming) Vladimir Rybkin announced that the organization has no more secrets and is quite transparent for the participants of precious metals and gemstones market. In this connection Russia's entry to WTO is regarded as a real event.

On November 4th, 2004 GOKHRAN will hold a meeting on the problems of the market.

According to Rybkin, Russian diamond, gold, silver, platinum and jewellery market has been liberalized to some extent and this process will continue. In the nearest future it is highly likely that the law "On precious metals and gemstones" will be cancelled as it has become unnecessary.------------


Don't forget that China's also in the works. It seems that everywhere you go, Gold is taking on its full weight as Property, and only a few red herrings are leading down the dead-end "as money" road. The future for gold and civilization is looking brighter every day.

Gold. Get you some. --- Aristotle
Knallgold
CB's out of the Goldmarket
Now the bullion banks will protect the"r market without scrutinity and sell it to the bottom?
Boilermaker
Boilermaker Debt Notes
I think Sovereign's gold and silver backed Debt Note is a wonderful idea. In fact I think I will issue Boilermaker Debt Notes (BDN's) against my personal stash. But what shall I ask/get from the guy who buys my notes? And what happens if some rascal steals my stash? Or what if I lose it in a card game?

Clearly I am too cynical and unreliable to be entrusted with this scheme but I'm sure that our government and banks would never experience these problems or temptations.

Clink!
@ Sovereign
I hate to upstage our generous host, but you did invite other comments.
My problem with your ideal comes somewhere between your points two and three. You say that no derivatives are legal, yet straight after talk about specie-backed and specie-convertible debt notes. If those aren't bits of paper derivative of specie, I don't know what is.
As the GAB pointed out (and Aristotle excerpted the nub of the argument below), there needs to be a clear distinction in people's mind between wealth and money. Wealth is a repository of a person's excess productivity, while money is merely a unit of exchange to avoid barter. The huge advantage of using a money that has no inherent value is that its quantity (and other secondary parameters such as interest and margin rates) can be modulated at will to compensate for its (highly variable) velocity. You can't do this with specie, and the only reason that specie was used in the past as money was that it was difficult to counterfeit.
JMHO
C!
Rimh
GAB's #125413
I concur with Ari....well spoken Sir GAB!
Knallgold
Aristotle
Doesn't it worry you a bit that GAB's delusional state brings him to same conclusions as you are preaching?Is there no hope?
"no (fiat) dope,no hope"?

Or,asked differently,what are our leaders doing against this excessive credit creation?Somehow I can't live with the answer "Oh,the lemmings want that credit!"-lemmings don't have a will.Imperfections,yes,but path of least resistance,no.Maybe,I know what FOA meant once with "FreeGold" being a "bridge".

"Let nature takes its course"-if that means writing this nasty bill now,well,then I'm with you.Those few who tried always their best to act responsible will certainly have a Golden Stahlhelm now.The days of reckoning have arrived.
Boilermaker
Wealth and Money, like Church and State, Separate and Unequal
I have adopted this philosophy; I believe it was Ari who said that the ***only*** way to prevent the manipulation of gold was to eliminate ***all*** paper claims on gold. I took that to mean that one could use his paper currency to bid for gold in a competitive market but there could be no fixed exchange rate. Of course anyone could sell his gold to the highest bidder to obtain currency for making purchases of other goods and services.
Survivor
@ Knallgold msg#: 125420

Knallgold - I probably missed something. What did you mean by:

"CB's out of the Goldmarket.
Now the bullion banks will protect the"r market without scrutinity and sell it to the bottom?"

Thanks
- Survivor

Camel
CAFE Standards
After reading some of the articles on oil posted here recently one can better appreciate the absolute insanity of Reagan dismantling the Carter CAFE Standards and alternative energy policies. Some of the articles speak of a 10 or 15 year time lead in makings some of these transitions. Well we have already had 15 years. All of this was crystal clear 25-30 years ago, but Reagan got in and turned everything over to the big corporations. This year ,as with every year, they have spent huge sums to defeat the CAFE standards.Then all the free enterprise types worship them as they throw the world into chaos What drivel .Better to use the mind to anticipate and solve problems before they develop.
USAGOLD / Centennial Precious Metals, Inc.
When in the Course of Human Events it becomes Necessary to Protect your Savings from a Dissolving Currency...
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Knallgold
Survivor
I interpreted the CB's intention to not sell any new Gold as per WAG2 plus the long stated cap on Goldderivatives as a sign that they won't support the paperGoldmarket anymore.It was a theory of FOA back then that the remaining parties (mostly bullion banks) will have to protect their huge shorts and sell it down until failure-->(fiat)settlement and still run away with ($) profits.That there is not even an attempt to hide the blatant manipulation anymore is a sure sign of commercial banks arrogance and desperation.

Another theory (pun intended) is that a Goldsale is actually a bullish sign for the POG (support the credibility of paperGold)-I remember many times rallying into an announcement of a physical sale.That we can't rally since Gold hit the abyss line at 425 smells very fishy for me.CB's no-sale intention only confirmed this.
TownCrier
New money
Fed funds trading in market in line with FOMC target, via overnight repurchase agreements the Federal Reserve chooses to add $6 billion in fresh money to bolster the coffers of the nation's banking system, provided in a range from 1.735 percent for Treasury collateral and 1.797 percent for mortgaged-backed collateral.

The point to be made -- when money is this easy, choose hard assets.

R.
ge
Free Gold and Brussels Gold Pool
Hypothetically, assume that Euro becomes the world reserve currency and gold is revaluated big time, and people begin chanting free gold songs, hand in hand, dancing in a circle (like a Milan Kundera scene).

What is next?

Euro debt would increase. That is why you try make your currency a world reserve currency. Otherwise, you would stick to the gold standard. Actually A/FOA predict it, by saying that every currency has its time line (including Euro). Current account would then go to the negative and devaluation pressures would mount.

[� a pause for reflection� If I were designing the Euro system, I would make sure that gold becomes overvalued, as Dollar is discarded as a reserve. This would postpone the Euro devaluation to a far away day in the future].

Anyway, tomorrow or later, devaluation pressures would be felt. If there are no foreign powers bidding for reserve currency status, devaluation would be easy. Now assume that Asians are trying to make their own paper the reserve currency.

At that point, a Brussels Gold Pool would be formed to pressure the Euro-Gold prices down, with off-market deals to by-pass big buyers from the so called free gold market. Free gold market becomes "Prometheus Chained".
TownCrier
On chocolate shakes and dirty floats... dollar let to fall
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh31397_2004-10-12_08-01-08_l12643544_newsmlHEADLINE: Rouble trades at new c.bank dlr support level

MOSCOW, Oct 12 (Reuters) - Russia's central bank intervened on the rouble market with a lower dollar bid on Tuesday...

The central bank, which runs a heavily-managed "dirty" float of the rouble, was sighted with a dollar bid at 29.1150 roubles after on Monday withdrawing an earlier support level of 29.2150 it had held since August.

"The central bank appears to be buying at 29.1150," said Sergei Kornev, a dealer at International Moscow Bank. "Banks will periodically test the central bank's grip on this level."

...The dealer forecast market players may sell up to a billion dollars to the central bank in this session, betting that the rouble will resume its advance....

Analysts say Russia's bulging trade surplus is testing the central bank's resolve to cap the rouble and maintain economic competitiveness, as its intervention is fuelling potentially inflationary growth in the money supply.

That, say economists, will make it hard for the central bank to meet its twin targets of limiting inflation to 10 percent this year and real effective rouble appreciation at 7 percent.

-----(from article at url)------
TownCrier
Gravy
http://www.usagold.com/gold/special/group.htmlGreat prices made temporarily better thanks to this morning's general shudder in all things paper, COMEX gold included.

Get your share of this allotment while it lasts, and at the same time give yourself a chance to play the odds (1:147 or better) of winning an uncirculated $20 St. Gaudens from USAGOLD.

R.
TownCrier
Special offer, more info
http://www.usagold.com/gold/special/group.htmlBy the way, Jonathan has just now informed me that the over two-thirds of the allotment has been bought, leaving only 300 each in this monthly special of French gold angels, Belgian gold francs, and Dutch gold guilders. It's a monthly special in name only because when they're gone, they're gone -- even though only a week will have passed since this offer was launched.

R.
USAGOLD / Centennial Precious Metals, Inc.
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MK
Pimco's Bill Gross: Federal Inflation Conspiracy!
http://www.10news.com/money/3802963/detail.htmlHis Title:

Haute Con Job
_______________________

Are you a regular visitor to our Daily Market Report page (linked above)?

If not you should be.

Articles like this one on the Inflation Conspiracy posted all the time via our London news feed.

LIVE gold price chart on the day. Click on that chart and go to one week, one month, one year, five year and 20 year charts.

Afternoon market reports.

All right there for you in one place.
MK
Whoops!
http://www.usagold.com/DailyQuotes.htmlLinked the Business Week article, not our Daily Market Report page. (Not as good at this as the sitemaster.)

DMR linked above.
Druid
The Real Reasons for the Upcoming War With Iraq:
http://zambezitimes.com/metals/petro-dollar.htmlA Macroeconomic and Geostrategic Analysis of the Unspoken Truth
by W. Clark, January 2003 - Although completely suppressed by the U.S. media and government, the answer to the Iraq enigma is simple yet shocking -- it is an oil currency war. The real reason for this upcoming war is this administration's goal of preventing further Organization of the Petroleum Exporting Countries (OPEC) momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves. This essay will discuss the macroeconomics of the `petro-dollar' and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The author advocates reform of the global monetary system including a dollar/euro currency `trading band' with reserve status parity, and a dual OPEC oil transaction standard. These reforms could potentially reduce future oil currency warfare.


"If a nation expects to be ignorant and free, it expects what never was and never will be . . . The People cannot be safe without information. When the press is free, and every man is able to read, all is safe."


Those words by Thomas Jefferson embody the unfortunate state of affairs that have beset our nation. As our government prepares to go to war with Iraq, our country seems unable to answer even the most basic questions about this upcoming conflict. First, why is there almost no international support to topple Saddam? If Iraq's weapons of mass destruction (WMD) program truly possessed the threat level that President Bush has repeatedly purported, why are our historic allies not joining a coalition to militarily disarm Saddam? Secondly, despite over 350 unfettered U.N inspections, there has been no evidence reported that Iraq has reconstituted its WMD program. Indeed, the Bush administration's claims about Iraq's WMD capability appear demonstrably false. Third, and despite President Bush's rhetoric, the CIA has not found any links between Saddam Hussein and Al Qaeda. To the contrary, some intelligence analysts believe it is far more likely Al Qaeda might acquire an unsecured former Soviet Union Weapon(s) of Mass Destruction, or potentially from sympathizers within a destabilized Pakistan.

Moreover, immediately following Congress's vote on the Iraq Resolution, we suddenly became aware of North Korea's nuclear program violations. Kim Jong Il is processing uranium in order to produce nuclear weapons this year. President Bush has not provided a rationale answer as to why Saddam's seemingly dormant WMD program possesses a more imminent threat that North Korea's active nuclear weapons program. Strangely, Donald Rumsfeld suggested that if Saddam were `exiled' we could avoid an Iraq war. Confused yet? Well, I'm going to give their game away -- the core driver for toppling Saddam is actually the euro currency, the �.

Although completely suppressed in the U.S. media, the answer to the Iraq enigma is simple yet shocking. The upcoming war in Iraq is mostly about how the ruling class at Langley and the Bush/Cheney administration view hydrocarbons at the geo-strategic level, and the overarching macroeconomic threats to the U.S. dollar from the euro. The Real Reason for this upcoming war is this administration's goal of preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, in order to pre-empt OPEC, they need to gain geo-strategic control of Iraq along with its 2nd largest proven oil reserves.

This essay will discuss the macroeconomics of the `petro-dollar' and the unpublicized but real threat to U.S. economic hegemony from the euro as an alternative oil transaction currency. The following is how an astute and anonymous former-government employee/macroeconomist alluded to the unspoken truth about this upcoming war with Iraq:

"The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.)

"The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)."

Furthermore, despite Saudi Arabia being our `client state,' the Saudi regime appears increasingly weak/threatened from massive civil unrest. Some analysts believe a `Saudi Revolution' might be plausible in the aftermath of an unpopular U.S. invasion and occupation of Iraq (ie. Iran circa 1979). Undoubtedly, the Bush administration is acutely aware of these risks. Hence, the neo-conservative framework entails a large and permanent military presence in the Persian Gulf region in a post-Saddam era, just in case we need to surround and control Saudi's Ghawar oil fields in the event of a coup by an anti-western group. But first back to Iraq.

"Saddam sealed his fate when he decided to switch to the euro in late 2000 (and later converted his $10 billion reserve fund at the U.N. to euros) -- at that point, another manufactured Gulf War become inevitable under Bush II. Only the most extreme circumstances could possibly stop that now and I strongly doubt anything can -- short of Saddam getting replaced with a pliant regime.

"Big Picture Perspective: Everything else aside from the reserve currency and the Saudi/Iran oil issues (i.e. domestic political issues and international criticism) is peripheral and of marginal consequence to this administration. Further, the dollar-euro threat is powerful enough that they will rather risk much of the economic backlash in the short-term to stave off the long-term dollar crash of an OPEC transaction standard change from dollars to euros. All of this fits into the broader Great Game that encompasses Russia, India, China."

This information about Iraq's oil currency is being censored by the U.S. media and the Bush administration as the truth could potentially curtail both investor and consumer confidence, reduce consumer borrowing/spending, create political pressure to form a new energy policy that slowly weans us off Middle-Eastern oil, and of course stop our march towards a war with Iraq. This quasi `state secret' can be found on a Radio Free Europe article discussing Saddam's switch for his oil sales from dollars to the euros effective November 6, 2000:

"Baghdad's switch from the dollar to the euro for oil trading is intended to rebuke Washington's hard-line on sanctions and encourage Europeans to challenge it. But the political message will cost Iraq millions in lost revenue. RFE/RL correspondent Charles Recknagel looks at what Baghdad will gain and lose, and the impact of the decision to go with the European currency."

At the time of the switch many analysts were surprised that Saddam was willing to give up millions in oil revenue for what appeared to be a political statement. However, contrary to one of the main points of this November 2000 article, the steady depreciation of the dollar versus the euro since late 2001 means that Iraq has profited handsomely from the switch in their reserve and transaction currencies. Indeed, The Observer surprisingly divulged these facts in a recent article entitled: `Iraq nets handsome profit by dumping dollar for euro,' (February 16, 2003):

"A bizarre political statement by Saddam Hussein has earned Iraq a windfall of hundreds of millions of euros. In October 2000 Iraq insisted upon dumping the US Dollar -- `the currency of the enemy' -- for the more multilateral euro.

Although Iraq's oil currency switch is astoundingly censored by the U.S. media conglomerates, this Observer article illustrates that the euro has gained almost 25% against the dollar since late 2001. This also applies to the $10 billion in Iraq's U.N. `oil for food' reserve fund that was previously held in dollars -- it has also gained that same percent value since the switch. According to the abovementioned former government macroeconomist, the following scenario would occur if OPEC made a sudden (collective) switch to euros, as opposed to a gradual transition.

"Otherwise, the effect of an OPEC switch to the euro would be that oil-consuming nations would have to flush dollars out of their (central bank) reserve funds and replace these with euros. The dollar would crash anywhere from 20-40% in value and the consequences would be those one could expect from any currency collapse and massive inflation (think Argentina currency crisis, for example). You'd have foreign funds stream out of the U.S. stock markets and dollar denominated assets, there'd surely be a run on the banks much like the 1930s, the current account deficit would become unserviceable, the budget deficit would go into default, and so on. Your basic 3rd world economic crisis scenario.

"The United States economy is intimately tied to the dollar's role as reserve currency. This doesn't mean that the U.S. couldn't function otherwise, but that the transition would have to be gradual to avoid such dislocations (and the ultimate result of this would probably be the U.S. and the E.U. switching roles in the global economy)."


Druid: This is another dated article but certainly fills in a lot of the gaps (at least for me) that I have often come across in trying to piecemeal the reactive nature of our foreign policies as of late. For those of you that haven't come across this read, I think you will find it most informative. Enjoy. Also, peruse the site for some interesting articles and perspectives.
Topaz
Bond/Oil/Dollar.
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=LOWOur Oil Standard components are poised to begin the pre-election Oil price plunge with both Bonds and Cash exhibiting strength today. The dilemma is: Yields have to drop to unsustainable levels if DX remains here (88ish) or alternately Cash has to go +92 at current Bond levels to turn this Oil monster. Failing either, Oil WILL remain at or near this level. There is NO cure-all panacea imo!
USAGOLD Daily Market Report
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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 logged a loss of almost $7 an ounce Tuesday to close at their lowest level in a week, pressured by renewed strength in the U.S. dollar. At last check, the U.S. dollar was broadly higher against its major counterparts, helped by dollar-supportive U.S. investment legislation and the sting of high oil prices on the yen.

Negative economic data from Europe are also providing a lift to the dollar, "which is causing an excuse for traders to lock in some profits," said Amaury Conti, equity trader at Austin Calvert-Flavin, an investment adviser in San Antonio, Texas.

Against this backdrop, gold for December delivery fell $6.80 to close at $416.60 an ounce on the New York Mercantile Exchange, its lowest ending level since Oct. 4.

But the fundamentals for gold are still positive, said Conti.

"Inflation expectations continue to prevail as oil ... continues to climb higher, which is a positive for the gold price, and ... expectations that the U.S. economy will slow down more than people expect has high energy prices eroding consumer sentiment and spending ... which will cause the dollar to continue to underperform," he said.

The market will likely see support near the $412 to $414 level, "with that as a last chance to buy before gold resumes its trend up," said John Person, head analyst at Infinity Brokerage Services. Then prices will likely move "back up to a yearly high of $475 by the end of this year," he said.

------(see url for access to full news, gold price charts, 24-hr newswire)-----
TownCrier
From the USAGOLD Newswire...
http://www.thestreet.com/pf/options/futuresshocktsc/10187342.htmlWatch the Dollar for Gold's Cues
By Howard Simons
(thestreet.com) 10/12/2004 -- Market analysis requires a combination of detective work, an understanding of numerous economic and financial rules and relationships, and perhaps most importantly, the ability to throw everything aside when all of your past training and experience fail.

For example, take the relationship between bonds and crude oil prices over the past three months: On many days, both markets rose together on the notion that higher oil prices would slow the economy sufficiently to keep a lid on interest rates.

Even for one who has argued for more than two decades that this was the proper relationship, the irony of seeing the old shibboleth turned on its head was a little disconcerting. Even when I believed the market had the relationship wrong, I chose to go with the stampede in the interests of self-preservation. Besides, who would hear all my tut-tutting over the hoofbeats?

The gold market is another situation where the wrong relationships are emphasized.

Over the years, gold has entered and left analysis a schizophrenic. On one hand, it should be one of the simplest and most rational markets going: Its currency-adjusted price should be the product of the difference between expected inflation and the expected short-term interest rate cost of carry and nothing more.

On the other hand, it is a market imbued with mysticism. Keynes called it "a barbarous relic," yet it is a favorite of those who believe the creation of paper money has been the root of all evil. I recognize gold's various symbolic values and let it go at that.

...The actual supply/demand balance for gold is always difficult to ascertain. *****Suffice to say that many of the organizations that publish data are not disinterested.*****

One datum that is market-based is the gold lease rate, the difference between LIBOR and the gold swap rate. When demand to borrow the metal is high, price spikes frequently follow. The ratio of the lease rate to LIBOR has been declining steadily for almost three years, a situation that speaks to both little interest in shorting the metal and a low level of future demand to buy it back in a short-covering trade.

Some gold bugs suggest the low lease rate is evidence that central banks are dumping gold bullion into the swap market in an attempt to cap gold's price. I prefer the simpler explanation. On balance, the low and declining lease rate should be a damper on gold's price, but gold has rallied for three years in defiance thereof. Let's call this one neutral.

...When all is said and done, which won't be anytime soon, gold has been a proxy for the dollar, and vice-versa, for the past three years. The dollar's value is a function of relative inflationary expectations between the U.S. and the rest of the world. If the market senses that the Federal Reserve will back away from rate hikes, the dollar will weaken, and gold will rise in nominal dollar terms.

A final note to those who like to play commodities via commodity-linked equities. I pointed out in February how the Philadelphia Gold and Silver index had underperformed the increase in bullion prices. Several readers asked me to look at the Amex Gold Bugs index, which includes only those firms that have not sold their production forward past two and a half years. Fair enough; please find the comparison below.

[chart shows stock underperformance]

The story remains the same one we have seen time and again: If you want to play the commodity, play the commodity.

In any case, cast off the mind-set that growth causes inflation, which should support gold. The fashion in this market will be that weak economic news will stifle the Federal Reserve, which will weaken the dollar and support gold.

-----(from article at url)----

Half a dozen one way, six the other. At any rate, it's good to see the gold commentary increasing at various media outlets, and especially relevant in this piece is the comment "Suffice to say that many of the organizations that publish data are not disinterested", which certainly resonates well with Bill Gross's contention about the U.S. government's low-balled inflation numbers that MK pointed out previously.

Gold is the ultimate reality check. You can't fake the metal -- you either have it (and as its owner can thus enjoy full benefit of its use or trade), or you don't. That is the true essence of wealth.

R.
slingshot
Running with the Big Dogs.
I have been sitting in my easy chair of Lurkerdom ,trying to absorb all the information being presented by scholarly and astute students of gold. There is,in my opinion, no other forum that introduces commentary that fully encompasses the role of Gold in the world today.
If you are a first time reader of this forum, I assume you are interested in the preservation of your wealth. You have found the right website on gold. May I suggest M. Kosares book,"ABC's of Gold Investing" to give you the basics of gold investing. There is no better time than now to invest in gold. My intention of this post is to bring the small time investor to the table so he too, can run with the Big Dogs.

I have read M. Kosares's book and have been a poster at USAGOLD for about 3 years.
Slingshot--------------<>
Great Albino Bat
"The Answer my friend, is blowin' in the wind..."

Top of first page of the FT for today features on the left, a bag with the dollar sign on it. On the right - three one-kilo gold bars - very pretty!

Headline: "Starting today: managing your personal wealth" and below that, "A new weekly feature offers expert guidance on strategies for the SMART US INVESTOR." (My emphasis).

Hmmm...so what's with the gold bars, are they coming back into fashion, maybe? Gold is for "smart" investors? I haven't heard that one from the FT for some time, it seems to me....usually gold is for goldbugs and old fuddyduddies.

The GAB
misetich
Global: Danger Zone - S. Roach
http://www.morganstanley.com/GEFdata/digests/latest-digest.htmlSnip:

As the odds of a full-blown oil shock rise, we have little choice other than to cut our global growth forecast. Our first revision is a relatively small one: We are reducing our 3.9% estimate of world GDP growth for 2005 by 0.3 percentage point to 3.6%. Yet there is more to this revision than meets the eye.
.................
That leaves us with a consensus forecast for the US (3.5%),
.................
The impact of the current surge in oil prices is expected to be felt most acutely in early 2005. In the first quarter of the year, our revised forecasts now call for annualized real GDP growth of just 2.5% in the United States, 1.0% in Euroland, and an outright contraction of -0.7% in Japan. That puts the combined growth of these three regions -- which collectively account for fully 79% of the output in the advanced countries of the world -- at just 1.5% in 1Q05.
...............
With those sources of extraordinary support now likely to wane, the over-extended American consumer could be hit especially hard by an energy shock.
.................
*************
Misetich

With all due respect to S. Roach, the 2005 GDP forecast for the US at 3.5% is overly optimistic

The MS team though recognizing the impact of oil prices are making a very poor assumption that oil prices have peaked - far from it

The 2004 Oil Shock And Awe is continuing - most are in DENIAL - expecting lower prices any day now -

The driving forces behind higher oil prices expressed in US $ - is made up of many variables -

- China/India increased demand
- Supply constraints (producing countries have turned to being importers)
- Iraq oil supply lower than anticipated - and hostilities WILL INCREASE NOT DECREASE in the months ahead as the "promised elections" will not materialize, as they will be "post-poned"
- Saudi Arabia - the once US ally is NO MORE
- Palestine/Israel issue is at the "center" of higher political oil prices

Those that expect lower oil prices are in dreamland...

All Aboard The Goldbull Express - Part ll
goldquest
@GAB
Gold "Smart" Investor! Just when I was getting used to the standard goldbug labels, such as "fringe lunatic," "gold conspiracy wacko," metal mental maverick," I have to get used to a new label? Fine with me!
DryWasher
A PLEASANT SURPRISE TODAY -- THANK YOU USA GOLD

This afternoon a Fed Ex truck pulled up outside my door and I was handed an envelope containing a bright new Canadian SILVER Maple Leaf, one of the three second prizes which our generous host provided in the recent Gold price guessing contest.

I shall treasure it, and each time I look at it, I will be reminded of the many pleasant hours I have spent reading and learning from this great forum. A bit of Silver among the Gold, so to speak.

If you are contemplating the acquisition of some "heavy metal" then give our host a try. You can do it all right from your keyboard, except for getting up to answer the door in a few days, and the Fed Ex driver won't even know why you are smiling so broadly. Safe, easy, and you are supporting this forum.

DryWasher.
TomJIl
@Druid: The real reason for the war...
I read Mr. Clark's writings shortly after they were written. His ideas struck me as having the most explainatory power for the events leading up to the war and I still feel that they do going on two years afterwards.

For what it's worth, it was shortly after reading this article that I became interested in gold. Instinctually I wanted to reduce my exposure to dollars since I didn't (and don't) believe that our military actions have the potential to be successfull over the long run, and indeed, increase the potential for a catastrophic collapse (due to increased hostility from our partners/competitors.) I first thought about diversifying into euros, but it wasn't trivial to do. Then more or less out of the blue the idea of gold hit me. It was easy to march down to the jewellery store with a wad of cash and walk out with KR's, so that's what I did. (Wasn't aware of USAGOLD/CPM at the time, and a dealer was just down the street.)

I just thought I'd throw this out for the benefit of those who may wonder how various gold-bugs hatch.
R Powell
DryWasher
Whatever you do, don't...repeat DO NOT fix your eyes upon that silver coin in the light of the moon..!!!! Moonglow (without any other light source present) unlocks the power, long ago dreaded, but once understood, if only occasionally harnessed, by the ancient wizards of now long forgotten realms reportedly lying to the East.
Aside: have you ever noticed the anxious uneasiness of a wizard whenever silver is near? To this day some say any wizard worth his wand can feel her presence...
DryWasher
R Powell

Thanks for the warning Good Sir. (Waiting for Sir Gandy to weigh in.)
Chris Powell
Huge increase reported in banks' use of derivatives
http://groups.yahoo.com/group/gata/message/2457Surprise, surprise: Morgan Chase's exposure
is highest.



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

gata-subscribe@yahoogroups.com
MK
Slingshot and All. . . .
Thank you, Slingshot, for your very kind words. As an avid reader of your adventures, I am honored to read your plaudits.

I would like to make a general announcement:

All who post on a regular basis here should receive a copy of the new edition:"The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold". Since it is difficult to go through these pages and sort out the list, I will ask that all regular posters contact Jill Snyder at the following e-mail address:

jill@usagold.com

We will forward a copy of the book no matter where in the world you live at our cost. It is the least we can do for you who give so much in support of this website and this firm.

And Slingshot, o noble knight, you are first on the list.

Many thanks.

MK
Additional Note:
Those requesting the book: Please head your e-mail

"MK's Book"

Yes, it will be signed.

Jill. . . Pls take note.
MK
One more thing. . .
Pls make sure you include your mailing address in that e-mail. Internationals: Give it to us line by line.

Thanks, MK
CoBra(too)
Derivative Risk Exposure of US banks ...
And they may be not the only ones in that league - Thanks to Chris Powell:

"Those banks retain large credit exposures thanks to their
derivatives holdings, the OCC said.

Credit risk exposure as a percent of risk-based capital for
J.P. Morgan Chase remains the highest of any lender at
768 percent, the OCC said. That's down from 890 percent
in the first quarter of 2004.

Risk exposure for HSBC, Citigroup, and Bank of America
stands above 200 percent of their risk-based capital, the
OCC added."

Isn't great? Now we have a new barometer of relativity - derivative risk exposure to overall credit risk of a bank.

None, whatever relation to the entity's capital base, liquidity, working capital or reserves are even mentioned. No, it's a function of relative standards. Can you stress relativity forever ... probably, as long as all the players go on betting on the same assumptions.

So in the final recce nothing changes? Or does it?

How would we know? When everything is relative - at least price wise - in relation to competing entities - of confetti, declared legal tender, or a pegged currency to the hegemon of the day?

OK, since Albert E., we all know thzat everything is relative. In terms of financial health we've had to learn the lesson the hard way. At least since 1971, when all semblances of weights and measures in the financial world have been abandoned. Though a metre is still metre and a pound is still pound.

A square metre in the haydays of Silicon Valley was measured by acres of Nevada's bleak stretches of sage brush country - and a pound of copper was almost worthless.

Well the right area of Nevada has since become the bonanza of gold and copper has hit a 25 year high.

On a relative basis, that is. The revelation that most of the world's riches in form of resources, which are becoming more and more scarce or more and more expensive is slowly dawning on all of us. Crude Oil may be the latest, though loudest message.


A recent article from the original Club of Rome editors stated that the world would not be able to sustain half of today's population without oil. Now - oil production is peaking and the globe still pays Dollars for its oil/energy survival.

That in itself seems to be relatively absurd as the relativity of financial assets is on decline - again, relative to real and hard assets.

OK - Sorry to have bothered you for so long - have a relatively great week and use the relative buying power of your respectie confetti to load up the reality of wealth preserving real assets - gold and silver.


Goldendome
Waiting for another Long term Capital Management.

WHEN GENIUS FAILED -- The Rise And Fall of Long-Term Capital Management
By Roger Lowenstein, Cr. 2000.

Keeping with the recent theme (tonight) of the derivatives market, above is listed a fascinating book;
chronicling the rapid rise and meteoric crash of what was probably the first of the swashbuckling, mathematically driven hedge funds.

Some highlights:
The fund began life by raising $1.25 billion from large investors around the world in 1994. They began trading bond spread divergences in recently issued treasuries; noticing historically larger spreads in recently issued treasuries and placing huge bets that the spreads would close. This is a pattern that was followed through the early years of the fund; using mathematical formulas to guage price fluctuation distortions, based upon volatility inputs (the Black-Scholes model developed in the 1970's).

The fund began to experience significant losses in 1998, as the the Asian Crisis lingered and importantly, the Russian economy weakened and eventually the Russian Government defaulted on it's debt. In all cases, Long Term in whatever market they were in 'round the world, had bet on already historically wide bond spreads to narrow, etc. (spreads between corporates and govenments) long term and short term. Everyone wanted extreme liquidity though in the markets at this time and rushed into the short term higher rated securities. The spreads inexorably continued to widen throughout August and Sept. 1998. Long term was losing tens of millions to hundreds of millions a day!

The Federal Reserve was made aware of the problem. Their concern: not that markets were falling, but that with a collapse of a huge hedge fund, that the markets would not trade at all!

The funds equity position collapsed from roughly $4.0 billion in May of 1998 to $1.0 billion in Sept; the fund was often losing $100 million a day or more at this point, so time was running out! By this time, the fund had $100. billion in leveraged assets on $1 billion in equity (100 to 1 leverage), so a 1% move down would wipe out all equity.

The Fed. provided the forum for the major bankers of New York to work out a deal to shore up the equity in Long Term Management, until the markets could finally be turned ( they all stood to loose heavily also, in the event of a market meltdown as LTCM had borrowed large somes of money from all of them).

Approximately 11 of the largest money center banks from New York and round the world, and a few smaller players, antied-up about $300 million each [the largest banks' shares] for a total of $3.65 billion to accomplish a bailout. Some of this equity was lost early on also, until the markets calmed and spreads finally began to contract in early 1999! (The fed. also began easing interest rates the day after the deal between the banks was struck on Monday, Sept. 28. 1998.)

The banks and brokerages were hit hard; Merril Lynch stock price, for example, plunged 2/3rds in value.

A dollar invested with LTCM in 1994, had quadrupled to $4.11 in early 1998 and had collapsed to 33 cents only five months later.

Some reflections: The fund thought they were diversified. However, in nearly every trade they had taken the riskiest side, the same side, of every transaction. They had also taken such large positions in their trades that they couldnot exit, without moving the market significantly against themselves. Once other firms learned of their positions, they came in like sharks to a bleeding whale.

Also: The mathmatical models did not figure well enough on moves to the extreme ends of the "Bell Curve" distributions. They learned that their once in one hundred year event, came in year four. And, that waiting for the markets to turn (as you Know they should) can be an expensive wait. As a famous economist once observed: Markets can remain irrational longer than you can remain solvent...
---------------------------------------

This is a book that I found while browsing the Extremely limited choices in the business and economics section of my local library. I highly recommend it. The book gives some wonderful insights into the banking personalities involved (one is now a U.S. Senator from N.J.) and the principals of LTCM (who collectively lost $1.9 Billion of their own money) included 2, Nobel Prize winners in economics, a former Federal Reserve banker, and some mathematical wizards from M.I.T.

Did the banks and brokerages learn anything from the near financial meltdown?...probably, but a lot of it has apparently been forgotten by now in the ultra-competitive world of banking and brokerages; after all, that was six years ago--so long ago, who can remember?
Gandalf the White
Sir DryWasher and Sir Rich !!! <;-) TRUE TRUE !!
DryWasher (10/12/04; 18:09:57MT - usagold.com msg#: 125449)
R Powell
---
Thanks for the warning Good Sir. (Waiting for Sir Gandy to weigh in.)
---
R Powell (10/12/04; 17:48:17MT - usagold.com msg#: 125448)
DryWasher
Whatever you do, don't...repeat DO NOT fix your eyes upon that silver coin in the light of the moon..!!!!
===
YES !!! Sir Rich, the magic with a NEWLY minted Canadian Silver Maple Leaf is nearly overwhelming, --- BUT, "real" GOLDFEVER can be gotten if one looks upon a NEWLY minted GOLD Canadian Maple Leaf in the light of a FULL MOON.
<;-)

I did that once, many years ago and had opened an exploration Company listed on the Vancouver (B.C.) Stock Exchange with the name of Goldfever Resources Ltd., ---
AND, ALSO -- like the Yukon Gold Miner (YGM) -- one never loses the GOLDFEVER !

Belgian
Iran ...direct oil (special status)deals with China.
We are evolving to a new situation where specific oilreserve owners are increasingly privileging specific oil-consumers ! Less oil in/through the world "market"...market !?
Oil picks its favoured clients ...and that's one step closer to,...oil picks the currency and the price in wich to sell, what kind of oil (sour-sweet), to who.

9/11-Iraq-WOT-$/� POO-gold-pipelines-derivatives-politics-currencies..."The Web"...the spider(s) and the flie(s).
One big integrated complex !
Belgian
Reactions on Duisenberg speak...
Wages in Euroland are to be (remain) frozen for the next two years. If rising oilprices are not forcing higher wage demands...there is no immediate price-infla danger. And...in the mean time budget deficits can be cured with the windfall oil-tax income.
There is more than enough liquidity in Euroland markets in proportion to the economic activity.
Conclusion : no imminent drastic moves on �-$ exchange rates are to be expected under the present conditions.
White Rose
The Onion nails the reality behind this election
http://www.theonion.com/news/index.php?issue=4041Once again, satire is more true and honest than reality
Maverick1
(No Subject)
I heard about the reduction of the foreign earnings tax several months ago. I understood the effect it would have on the strength of the US dollar and the resultant effect on gold. What I don't understand, is why this forum doesn't seem to have any political "insiders" that could have told us what was brewing in Washington. We dropped the ball on this one.
Goldendome
(No Subject)
Sir Maverick: Perhaps you dropped the ball on this one! And, could have reported on it at any time, if you felt it important. You seem to know more about it than anyone else. Where's Your responsibility? However, be comforted: This, like all things with the dollar will pass. Strengthening the dollar will not improve the trade imbalances nor the current account deficit.
968
The European Union and the Russian Federation: Challenges of market building
http://www.ecb.int/press/key/date/2004/html/sp040928_1.en.htmlSpeech by Tommaso Padoa-Schioppa, Member of the Governing Council and of the Executive Board of the European Central Bank, delivered at "Russia in Global Affairs", Moscow, 28 September 2004
SNIP :
"The euro is a floating currency. This is well founded given that the euro area is a rather closed economy. Moreover, euro area trade is diversified, with the United States, the euro area's most important trading partner, accounting for less than 15 per cent of total trade of goods. Finally, there are no conditions indicating a need for an exchange rate oriented monetary policy. Foreign debt of euro area residents is mainly euro-denominated, and euro area residents hold virtually no foreign currency cash or foreign currency deposits at euro area banks.
In the case of Russia, the analysis leads to a different result. Indeed, for most of the post-Soviet period Russia has pursued an exchange rate policy in which the anchor currency was the EU dollar. There have been good reasons for this. The most important is of course the fact that natural resources � traded in global markets, where prices are quoted and payments invoiced in US dollar � are Russia's main export item. Moreover, Russia's financial links with the global economy are mainly US dollar-based. Most of Russian international debt is denominated in US dollars, foreign banknotes and foreign exchange deposits are mainly held in US dollar.
Between Russia's trade and financial links, however, there is a clear currency mismatch. As the geographical structure of trade has a European, i.e. euro, bias, the competitiveness of the Russian economy is to a certain extent influenced by movements in the euro-US dollar exchange rate. Assuming that linkages between the EU and Russia will strengthen in the near and medium-term, this currency mismatch may further increase.
To account for this, the Bank of Russia has adjusted its exchange rate policies over the last two years. It is now placing more emphasis on the ruble's real effective exchange rate which also reflects changes in the euro-US dollar exchange rate. Moreover, there has been a gradual increase of euro-denominated assets in Russia's foreign exchange reserves.
As you know, there have been repeated calls for a further diversification of invoicing and settlement currencies in EU-Russian trade in favour of the euro. This includes energy trade, as it represents Russia's major export item to the EU. Against this background, it is no surprise that the possibility for energy exports from Russia to Europe to be invoiced in euro has been featuring prominently in the debate on monetary and financial aspects of EU-Russian relations.
I am well aware that invoicing of energy in euro would raise challenging questions. The functioning of standardised global markets, like the one for energy, is crucially related to choice of currency. Indeed, economic analysis suggests that due to network externalities of using only one currency, a partial switch could make markets less transparent, less liquid and less efficient. On the other hand, with more than 50% of total Russian trade being conducted with the EU it may be become increasingly suboptimal to expose Russia's relative competitiveness vis-�-vis its major trading partner to fluctuations in the euro-US dollar exchange rate. This is all the more relevant given the dominant role of natural resources in Russia's export structure and the authorities� aims to diversify export and production structures. In any case, the choice of invoicing and settlement currency is an issue dealt with in private contracts. Authorities can and should not interfere in this.
------------------------------------------------------------------------------------------------------------------------
"...it is no surprise that the possibility for energy exports from Russia to Europe to be invoiced in euro has been featuring prominently in the debate on monetary and financial aspects of EU-Russian relations. "
It is very clear that the EU is working hard to get Russian oil (energy) invoiced in euros !!!!
Maverick1
Goldendome
I agree, it will not help our trade imbalance. I'm not angry at anyone. I'm just surprised something so big could make it through congress so quickly. But then again the hogs can empty the proverbial feeding trough in a flash!! Pure election year pork. DEMOPUBLICANS!! God help us all!!
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Bizarro-Greenspan
Ominous,The US deficit and the dollar
Rimh
to YGM:
I've spent some time in the Yukon in the past and was curious roughly which area you were mining in? Do you have to deal with the black muck?
Rimh
Gandalf: goldfever
I too contracted the fever many moons ago, early in my working career. There is nothing quite like the feeling when you find the real stuff in the wild, see it's color, feel it's weight.... It is worth labouring for!
TownCrier
Rising gold similar to Monopoly's Get Out of "Jail" (i.e., a jam) Free card
In yesterday's article posted to the forum, the central bank of Russia was seen lowering the recognized value of the U.S. dollar in its managed float against the rouble, thus letting the rouble demonstrate appreciation from an earlier level of .03423 dollars/rouble to .03435 dollars/rouble.

In another article from yesterday's news, U.S. Treasury Secretary John Snow 'said that China has been receptive to U.S. calls for more flexibility in its currency, and said the United States would continue to press the Chinese on floating the yuan'.

In a more rigid case than Russia's managed float, China pegs its currency at around 8.28 to the dollar. However, despite Snow's comments, China's state agency on foreign exchange issued the following statement yesterday to cool market speculation that it would revalue the yuan in the near future:

"These rumors (of a yuan appreciation soon) are groundless and are a misunderstanding of our country's current exchange rate policy."

The statement went on to assure that reform of the yuan would be gradual and that China's policy was to keep the currency stable.

Sharing a problem with Russia and all others who experience an influx of dollars as a result of trade surpluses, the central bank practice of absorbing this excess foreign dollars in exchange for fixed or semi-fixed amounts of domestic currency, (that is, without letting a free forex market do the exchange to establish a more balanced clearing price for the exchange), becomes potentially a recipe for fueling inflationary trends from the resulting outsized growth of its domestic money supply.

Another common problem faced by developing countries in this mold is a disrupting inflow of "hot money" as speculators poise their funds to benefit from the expected currency revaluation (appreciation) following the inevitable abandonment of the CB's currency-management policy in an attempt to curb the growth of inflation -- and, I might add, these pressures of inflation are often further exacerbated by this inflow of hot money.

The "get out of jail free card" that I am referring to in my subject line is an opportunity for the various central banks of 'developing'-type countries who find themselves in such an unenviable situation -- choking down dollars at an unnaturally high rate while watching the fires of domestic inflation being fueled on two fronts (i.e., the CB policy and the hot money inflows).

The opportunity to get out of this jam "free" is to initially ignore the IMF-dogma of purely market-driven floating of the domestic currency. Instead, the CB should maintain a degree of its exchange-rate management (the so-called "dirty float") -- AND HERE'S THE KEY -- they should moderate the speed of their domestic currency's transition in such a way that its appreciation is always less than (never greater than) the pace of the rising value of gold.

That will accomplish two things.

1) the allowance of domestic currency appreciation will help curb the inflationary fuel coming directly from the CB's own exchange rate policy.

2) the disruptive pressures and inflationary fuel of hot money will more naturally be diverted into the direction of NON-NATIONAL gold -- owing to the CBs carefully measured pace of its own currency appreciation, the the gold avenue will thus always be seen by the hot-money-speculators as the greater opportunity for faster-paced gains. And as more hot money speeds the appreciation of gold, the CBs will in turn have greater latitude (if necessary) to hasten appreciation of their own currency versus the crumbling dollar -- eventually arriving at the admirable end goal of a more freely floating currency.

Within months you'll likely hear this particular angle bandied about again elsewhere.

Remember, you saw it here first... at USAGOLD!

R.S.
Rimh
Re: Get out of "Jail"
Great post, Randy! It seems so logical when you put it that way. Russia and China do seem to be positioning themselves in that manner, but they will need a good breakout in gold (probably post US election now, based on the last two days action) to get the speculators off their backs in the short term.
Belgian
What is going on today...
After Mitsui (A.Smith) yesterday announced that base metals were going to crash...because the dollar remains strong...we have some very strong intra-day moves.
In the morning oilprice + euro + gold, went down and the trio is now recouping almost all their intraday loses !?
W're looking at 1%-2% moves !
Since 20 hours, the CNBC's goldprice (spot) ticker has been removed !?
Some controversial political statements on Iraq have been made in Germany. Troops...no troops ? Some kind of allo, allo, for Kerry ?

Iraqi officials (humhum) announce that they will raise Iraqi oil output !?

I increasingly hear the word "wealth" on CNBC ! They want you to associate paper with wealth. Paper as good as gold...whoehaha. GM's debt is 8x (times) its market cap. Wowww, what a market !

Alan speaks on friday : oil !?

@ 986 : Capital shall flow through the eurozone !!! Just be patient.

US oil inventory figures out tomorrow, thursday instead of today. Holy markets !?
Survivor
@ Belgian

At my U.S. location - which I think is GMT + 8 hours - we get CNBC Europe for an hour or two starting at 1:00 AM. Today at 1:00 AM, I did notice the gold price was missing from the CNBC Europe ticker. When I awoke again at 6:00 AM, our U.S CNBC show, "Squakbox", had the gold price ticker running.

When the NY stock market opens at 6:30 AM (my time), the gold price ticker goes away for the rest of the day. It always amuses me that the gold ticker dissapears when the market opens - as if the gold price is suddenly unimportant because stocks are now trading :)

It is sort of a moot point, because the U.S. CNBC gold price ticker is wrong about as often as it is correct.

Cheers
- Survivor

Waverider
TownCrier
"...However, despite Snow's comments, China's state agency on foreign exchange issued the following statement yesterday to cool market speculation that it would revalue the yuan in the *near future*...The statement went on to assure that reform of the yuan would be *gradual* and that China's policy was to keep the currency stable.

Waverider: The state agency on foreign exchange is (obviously) talking western terms in this article...just to give a different perspective, in another article I read this past week re: the US pressure on China to revalue the yuan in the *near future* - China's state agency replied that for China - a country with a 5,000 year history...the near future is the next 10 years. :) BRILLIANT post Randy!! Thank you.
USAGOLD Daily Market Report
Page Update!
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 claws back after early dip

Gold futures on the Comex endured a choppy session Wednesday and plumbed 12-day lows of $410.50 per ounce early on a flurry on fund sales before clawing back above the $414 mark by the close as the early pressure dissipated.

The most active December contract settled $2 lower at $414.60 per ounce.

The overnight stretch higher in the U.S. dollar versus its rivals combined with the downdraft seen in the base metals and oil markets proved to be the main catalyst behind the fund and bullion bank selling evident overnight, and that downward pressure continued through the European session and into the New York morning.

Thereafter the U.S. dollar's inability to extend its recent recovery bounce against the euro and other currencies offered support to gold before a rise in bargain hunter interest lifted bullion prices off their early lows by the close of play.

Dealers agreed that the tone and direction of the U.S. dollar will remain gold's primary driver over the near term and that any renewed weakness in the greenback will likely steer investors back towards the yellow metal.

-----(see url for access to full news, 24-hr newswire, price charts)----
Belgian
@Survivor
CNBC-Europ : Spot gold from 9 am in the morning till 21 pm in the evening, uninterrupted and reliable. Yesterday evening the ticker broke down and sticked at $100/Oz during POG's $8 decline.
This is most probably an ordinary technical problem... !?

W'll survive this...:-)(-:

Actually,...I would welcome any descission to take that goldprice off the screens. That would mean that gold's "paper-price" days are numbered !

Ned
To Waverider
I had a quick look in the archives fro article(s) on BIG FLOAT but did not see them.

Did you get assistance?
Sovereign
@ Mr. Clink!
My apologies for the delay. I will address your concerns before the end of this week.

Thank you for responding.

S
Cometose
Oil. Gold, Currencies....
I can't help but( by watching things in these markets )thinking that the tail is wagging the dog.........
Actually this really reminds me of fishing ........

When I was a kid , I grew up in a large family with 3 brothers and two sisters.....My father thought that we should go to church a lot........every Sunday , every Thanksgiving , Ash Wednesday , all the big High Holy days in the church plus July 4th............ He also thought that we should go fishing a lot........

I'm really thankful for my father's vision ......
because he was balanced in his approach to spiritual matters and the practical approach to applying spiritual principles.

Fishing is a great practice in believing, patience and anticipating what you cannot see happening .......on a line.....and in my case a line on the end of a cane pole with a bobber and a hook.......We had to use two boats most of the time because there were so many of us .....
They were 14 ft aluminum boats with 10 or 15 hsepwer motors on the back .....

There's a reason I am telling this story.......I started fishing in this type of scenario in a beautiful east Texas setting near Athens........when I was big enough to walk and without a diaper.

There wasn't anything out there to distract ....there wasn't anywhere we needed to be ........We took snacks , I guess sometimes........: we did this as a family two or three times a year to get out of Dallas.........

If we weren't out on the lake or were waiting our turn , we used to go down to the spillway and fish off a spill way dock or there was another covered dock off of another area near the club house or we'd go straight line fishing off a boat dock that had several slips and meandered through several turns.....it seemed.

I fished for years and accompanied my brothers and sisters for years in all these specific areas in addition to fishing off the boat in the main lake......and have many wonderful memories as a result......

Years of weekends spent .......waiting for the magic of the anciticpated BASS mostly coming and making our bobbers disappear....We used minnows, pretty much exclusively...
They were the best bait to get the Bass to bite......
There were brim and there were perch.........and there were white bass but we mostly caught Bass.......\\\\\
We caught some catfish too .........and that was pretty exciting because of the variation of the way the Catfish hit the line and then fight ........sometimes there were turtles too....

that stole your bait and played with you for a long time.....
they were like mystery fish ....you knew they were in there but you couldn't see and you never knew what was stealing your bait ........we all assumed it was a big CATFISH HUNTER FISH that had been around forever and never got caught because it was the wise fish......

Ok , so after years of experiencing and seeing these fish and catching this assortment of fish and understanding because of prior experiences with these different type stiking fish .......something really strange happened ....
I was sitting on a Fishing Pier/Dock near the clubhouse with minnows and a fish struck my line ........and did something with it in a different way which was far more agressive than the most aggressive Catfish .......
Drag your line down hard and put so much stress on the line , it broke the line off ........
hook and all ........or the attacker would take your line in its mouth and wade you around in a like manner , plunge your bobber deep and hard and just when you were about to set the hook, the sob would let you go ........and it would be as if nothing ever happened.........

The first time that happened .......I never caught the fish .........I just had an afternoon of fun with my newfound adversary and a completely new world in the fishing world opened up to me ..........I don't remember who I was with ....probably my little brother ......but when we got back to the group later in the day , I recounted to my older brothers and adults in the group ....what had happened ......and all the particulars to hear if they had any insight as to what we had run into ..............

I can tell you , that up until that day , I had never seen anything like it in my life....

( I still love to fish ,,,,,,,I'd rather fish than work; maybe i'll get to do a lot more fishing than I have recently in the years ahead.......My kids love to fish too; Tried to learn how to catch Salmon a couple of weeks ago , with my son, Jonathan , in Gunnison ....we got skunked but we learned a lot .....about how much technique there is in catching specific...types of fish .......I guess I call them finicky fish .......and would settle for Bass ; we were right next to guys on the bank of the river who were catching them nonstop ....there were hundreds of them in a pool right in front of us and if our lives had depended on it , we probably couldn't have bought a bite).

What's the point?

What's your hurry .......?

Ummmm.........

One of my older brothers ( I forget which ) aaked me about the MYSTERY FISH that I had never seen before and that was such a collassal intrigue for one whole afternoon .....

He asked me if .....it made currents at the surface of the water without showing itself ......
HE asked me if the fish seemed elusive .
He asked me if the fish ever jumped out of the water.
He asked me if I ever saw the fish while trying to land him out of the water.....
He asked me if the fish kept breaking the line or taking the hook off the line.


He said the fish made the currents in the surface of the water like swirls with its tail and that the reason the fish seemed impossilble to catch and seemed so strong...
is because the fish had a snout on him and he kept breaking our hooks off and our line because he had teeth ...and the name of that fish is the " alligator gar ".

He said a friend of his used to shoot them off the spillway with his 22 .....because they weren't any good to eat and because they had a nasty habit of killing and eating the other fish in the lakes......(reminds me of sharks).

I had had a new experience with something I was not familiar with ;;;;something I had never seen before and my brother gave me a name to put on it to help me log it into my fishing memory banks with a reference name .......

YOU CAN CALL IT TONI THE TIGER
YOU CAN CALL IT A TIGER IN YOUR TANK
YOU CAN CALL IT AN ALLIGATOR GAR................

and it may be something that we haven't ever seen before.....

but it looks like the TAIL is WAGGING THE DOG.........
and SOMETHING HAS GOT HOLD OF THAT TAIL and it is not visible to see what it is but it is powerful...........

The way all the markets are responding to the price of Oil , specifically the currencies and the Gold and silver markets.......makes these markets look like they are responding to the dynamics of the OIL MARKET..........and is giving evidence ,,,,,,,that this market is out of the box of the control of the Central Bankers.......and that it is free...........in an Heightened Demand driven , Shrinking supply driven market....

These relationships today show themselves for what they are ..........and it appears in these times of Frivolous FIAT that real money now manifests its real nature unveiled...........GOLD IS OIL'S CURRENCY.......Isn't that one of ANOTHER'S premises

It isn't incidental ..........
It isn't the tail wagging the DOG........or the coincidence of appearing so ........
It isn't coincidence that this activity ( the currency markets and GOld markets responding to the price of oil )
reminded me , today , of my first experience with an alligator gar.

It is the UNVEILING OF THE WAY THINGS ARE......
IN YOUR FACE.......


My brother's summary statements regarding the alligator gar:

1 Don't try to catch an alligator gar.......it's a waist of time ........an exercise in futility.......

I would give the same advice to the bankers regarding attempting to captivate gold ........

2. Alligator Gars are of no use to us because we can't eat them ......

My brother, at tht time, didn't admit that they performed some activity to our ecological benefit in the scheme of nature ...
probably didn't know what that was.....the study of the ecology barely existed in the time I speak of .

Something about removing the weaker and sick fish ....like sharks.......have a job to do ....

Occasionally ,,,Gold acts like An alligator gar as Real MONEY in its relationship to REAL THINGS......to eat the debris caused by PAPER PUSHING GOV'T SHILLS AND BANKERS.........gets rid of the sickly element in our economic environment to reestablish a healthier economic environment .......a healthier economic Ecology.

It's (GOLD'S ) PREEMINENCE......becomes apparent in relation to all things ........when the paper world gets upside down.......

NOTICE THE WORD EMINENCE INSIDE THE WORLD PREEMINENCE...

EMINENCE : POSITION OF PROMINENCE
or SUPERIORITY....

Hence ..............his EMINENCE..........
GOLD THE CURRENCY OF KINGS........

as Aristotle says:

GET YOU SOME
TownCrier
Quarterly gold revaluation
Posted from the "better late than never" file.

The short version of this saga is that the Eurosystem central banks are leading the "best practice" charge of reserve management by allowing their various reserve assets, including gold, to be quarterly revalued -- marked to market values according to the prevailing numbers on the final day of each quarter. The latest of these being September 30th.

With consolidated financial statements trailing by a week, I could have posted the latest official numbers as early as last Wednesday, but other projects had me behind my game. Forgive me, here they now are.

Compared from the previous quarter (ended July 31st), the value of all paper assest fell by EUR 3.1 billion, which was neatly compensated in turn by a net rise in gold assets by a value of EUR 3.3 billion.

The quarterly revaluation breakdown is as follows.

The euro value per each yen of Japanese assets held fell from .00755 EUR/yen to .00729 EUR/yen.

The euro value per each dollar of U.S. assets held fell from .8227 EUR/dollar to .8059 EUR/dollar.

The euro value of IMF Special Drawing Rights assets held fell from 1.206 EUR/SDR to 1.1874 EUR/SDR.

Coupled with a net dishoarding of EUR 400 million in holdings from the net position in foreign currency, the aggregate paper loss during the week of mark-to-market operations was the previously mentioned figure of EUR 3.1 billion.

Against that paper washout, the euro value of each ounce of gold assets held rose from 323.94 EUR/ounce to 332.30 EUR/ounce.

On the week, there was also a one-tonne dishoarding/reallocation of gold resulting in an 11 million EUR decline, but overall this adjustment was overwhelmed by the EUR 3.3 billion upward revaluation of the value of the gold and gold receivables held in reserve by the Eurosystem.

Thus, at week's end, the overall net position in foreign currency had slipped to EUR 168.2 billion, while the overall value of gold reserves rose to EUR 130.657 billion.

In the subsequent week (since this is being posted so late) I can also tell you that additional gold operations involving 1.5 tonnes has resulted in a slight EUR 16 million decline to gold reserves, whereas additional portfolio adjustments and dishoarding of the paper postion has trimmed a further EUR 200 million from the net position in foreign currency.

And there you have it -- gold for savings. Follow in the footsteps of giants.

R.
Great Albino Bat
Thanks Comatose! For that excellent anecdote and its meaning...

I'm a book man, though I have gone fishng a couple of times, and I watch fishing programs on the T.V. I love the idea of fishing on a stream, in a flat bottomed boat.

Unfortunately, these things are learnt and passed on from father to son, and my dad never went fishing, and that was because HIS dad never took him fishing or hunting. Busy making money.

You are Isaac Walton all over again - "The Compleat Angler". It's an activity related to the spirit, that's why fishing is so satisfying and why Walton's book is eternal in value.

That big Fish in the water, Gold, is so big it's going to upset everything, in its own good time.

Get some, by all means!

The GAB
misetich
Reality Check: U.S. Cargo Executives: August Imports Level Off Oct 13 / 10:14 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1097676840000&sn=3&banner=mainwireSnip:

NEW YORK (MktNews) - August imports were artificially dampened by tremendous bottlenecks in Southern California -- but a mighty surge was witnessed in September and October that suggests more monthly trade deficit records are likely to be broken, say cargo executives.
.................
Exports were range-bound, even somewhat down, in August -- and the removal of export subsidies this week is likely to reverse the little forward progress seen on outbound this year, they say.

The nation's two largest ports, Los Angeles and Long Beach, are clogged -- with close to 90 cargo ships "sitting beyond the breakwater" waiting for dock space, a picture somewhat reminiscent of the port lockout two years ago, which had graver economic repercussions.
..................
Port officials say the congestion got worse in September and early October with the nation's largest retailers waiting to the final moment to bring in holiday goods in an effort to cut inventory costs, overwhelming the ports, rails and trucks that handle the cargo.

With Southern California ports so strapped, cargoes have been re-routed to other ports.

"August was strong, strong, strong -- imports are heavy," said Clement Chin, business development manager at the Port of Oakland. "A lot of cargo is being diverted out of southern California due to congestion in that corridor."
....................
he U.S. Commerce Department is scheduled to release international trade data for August on Thursday, Oct. 14 at 8:30 a.m. EDT.
*************
Misetich

The calm before the storm. Trade deficit for August is expected to range between $46-$55 billions - that is the calm - THE STORM is the Septemeber trade deficit which is likely to establish a new record toward the $60 billion ++
as oil prices have risen substantially in September

With bond yields faltering and the stock market returns dwindling it is difficult to invision foreigners pouring into US investments - specially when the US $ is losing ground daily

Trade deficit + Budget Deficit + Current Account + a slowing economy + slowing corporate earnings + higher derivatives risks + housing bubble + reduced consumer spending + higher oil prices + debt bubble

= the gold bull of a lifetime

All Aboard The Gold Bull Express - Part ll
misetich
Con Job Redux - Bill Gross - Investors Conned by the government
http://www.pimco.com/LeftNav/HomePageAnnouncements/IO+Con+job+redux+04.htmSnip:

Bloomberg's John Berry and the Fed's William Poole are well intentioned I'm sure but they have an agenda like we all do................Their agenda is to support the Federal Reserve, its strategies, and by osmosis the thinking of its chairman, Alan Greenspan. I was not surprised, therefore to read their criticism of my October Investment Outlook Haute Con Job, which called into question the validity of our government's inflation numbers. Berry and Poole read what they wanted to read and, as Paul Simon once suggested, disregarded the rest.
................
My point, however, was as follows. The CPI inaccurately calculates Americans� cost of living. Since Social Security and pension benefits, as well as the level of wage hikes are predicated upon the specific number and/or the perception of annual increases, Americans are being in effect conned by their government and falling behind the inflationary eight ball year after year.
.....................
I do disagree with those adjustments being reflected in a CPI that is used to calculate the benefits of wage earners and retirees. The U.S. government has over 40 different CPI indices � there is not one sacred calculation. There is a CPI for medical care for instance, and a CPI for services, as well as a CPI for transportation. Take your pick. But in using for retirement benefits an hedonically adjusted CPI that lowers annual price increases by as much as 1%, they take money unjustly out of Americans� pockets.
................
I would take that assertion one step further by using the following example that strikes to the heart of the hedonic debate. Say the only product that Americans purchase and consume are bags of gumdrops � 100 to a bag that cost $1.00 per bag, with each citizen limited to 1 bag. Through the miracle of productivity, a way is found to fill each bag with 110 gumdrops that is now priced at $1.10. The government's hedonic adjustments would now calculate that the bag really only costs $1.00 and that the CPI has not gone up. After all, each gumdrop in the bag still only costs a penny does it not? It does. But here's the catch and the con. The price of a gumdrop hasn't gone up, but the cost of a bag of gumdrops has. Because Americans must buy 1 bag as opposed to individual candies, their cost of living has increased by 10%. They must fork out an extra dime even though they're getting more for their money. Now turn the gumdrops into computers, cell phones, refrigerators, etc. and you see my point. We can't buy individual pieces of memory in a computer � we have to buy the entire package. And the package costs more whether it's improved or not. The government's hedonic adjustments may accurately reflect productivity increases, but they should not be part of a CPI, which is intended to depict America's cost to live. In effect, that allows the benefits of productivity to accrue to businesses (which don't provide adequate raises) and government (which under-compensates Social Security recipients). Holders of TIPS who are hoping to keep up with the cost of living via their "inflation protection" are disadvantaged as well. It's a con � pure and very, very simple.
*************
Misetich

Bill Gross on a rampage - on Feds manipulation of price inflation - Part Deux

The Feds have their hands full with the bond boys/girls.

Gross ought to reallocate some of his managed funds in excess of $600 billions to GOLD

All Aboard The Gold Bull Express - Part ll
Goldendome
Responses

Maverick: Reading yours and the opinions of others here (and I agree with you on party assessment); it will be interesting to see the level of 3rd party participation this year.

Ned: It's been a few days back, but when I read your post, I interpreted "Big Float" to mean the increasingly large number of dollars held overseas, that with a tide shift, could all come floating back to us.
Waverider
Ned, Goldendome
http://www.usagold.com/gildedopinion/bigfloat.htmlThanks kindly - that was my thought too Goldendome but I hadn't heard the term before (at least I don't remember it) - I just Googled "Big Float" and sure enough found in the archives what you were probably looking for Ned (see link for the complete commentary). Cheers!

"Big Float Calls Home"

...You see, for the time being at least, and for those living their economic lives in "dollars," there seems to be an exception to Friedman's observation, a loophole in Friedman's Rule. Well, sort-of.

We know that the Federal Reserve has been expanding credit (expanding the money supply) at a rapid rate for quite awhile -- especially since the early 1990s -- and we already know where a lot of that money has been going. Overseas.

Now remember Case Sprenkel's quote? "Insofar as the money remains abroad and is not used to purchase goods or services from the country that printed it, it serves as an interest-free loan ..." But suppose the money doesn't remain abroad.

What would happen if these "foreigners" showed up in the US and started buying things with their dollars? Suppose Big Float calls home. This has happened more than once. On August 15, 1971 U.S. President Richard Nixon "closed the gold window." As a result, foreigners perceived dollars losing value because they were no longer redeemable for gold. Chiefly because of this, a wave of foreign-held dollars came home in the late 1970's and early 1980's.

Overseas dollars started showing up here in the uS in the late 1980s as well. It was during this period when the Japanese bought-up such American icons as Pebble Beach, MGM, etc. with some of these formerly expatriated dollars. Americans at the time didn't like this much -- but, well, afterall, the "foreigners" were just trading "dollars" back to us "for stuff they wanted later."

Those unpopular acquisitions by foreigners were only the most visible symptom. In both periods, all those foreign dollars returning home increased the money supply. So tell me. What happened as a result? - - - If you said "inflation," you get a gold star! If you said, "the value of the money dropped," you get five gold stars.

In fact in the late 1970's, "inflation" here in the uS reached an official rate of about 18% per year, while more accurate estimates put it as high as 21%. This was perilously close to "hyper-inflation." People who retired just before this period lost as much as a third of the value of their retirement checks in a few years because "dollars" lost about a third of their buying power during this period. Those retirees, including my mother, are called the "notchers." Many "notchers" ate dog food because they could no longer afford anything better, and, for a long time, they were disproportionately represented in the ranks of "bag ladies" and the other homeless Americans..."
Cometose
OIL and GAS
as the candidates (NOW ) speak ................

OIL NOW OVER $54..................again .............

headed for the rainbow......and the pot of gold
YGM
Rimh (10/13/04; 10:40:33MT - usagold.com msg#: 125467
Black muck...you bet...many feet thick & frozen (permafrost)
Runs like soup when it thaws out...Sometimes conceals Mastadon bones & Tusks as well as other ancient wildlife... I was west of Carmacks for a few years. Had five creeks staked up at one time...Too bad for me I started just when Bre-X scam unwound and the Cabal began the big Gold bash...
Thx for asking.....Best Regards.....YGM
Sovereign
@ Mr. Kosares, Mr. Clink and Usagold forum participants
Mr. Kosares,

You asked how I proposed fixing the price of gold. I do not advocate fixing the price of gold. Gold is the instantiation of the most convenient form of intrinsic value. Yet, like all forms of relative existence, it's worth is not permanently fixed nor does it remain the same under all circumstances. All the gold in the world is not worth a glass of water to a man dying of thirst. Please refer to my premise #4 in my post to follow for a detailed explanation of how I propose to value gold in relation to goods and services.

Mr. Clink,

I said no GOLD derivatives. The Debt Notes (DNs) that I propose are derivatives for DEBT that is denominated and payable in gold. The gold-denominated debt (for which the DN is only a receipt) does not have a fixed gold value. The gold backing/redemption value of this debt changes up or down in relation to the actual supply of DNs. The DNs cannot extinguish debt like gold. They are not money but can be used as a medium of exchange for those inclined to do so. Furthermore, I would never suggest the use as money of things that don't have ANY association with intrinsic value, like you are doing.

A detailed explanation of the purpose of the Debt Notes and why they are of value is the content of my next message.

S
YGM
Mt St Helens Giving Off Erie Glow!!!!!!
http://apnews.myway.com/article/20041013/D85MP1M01.htmlGandolph are your Wizard bretheren brewing up a new batch the the Yellow stuff for Mother Nature???

No prospecting til the Lava cools down or you'll burn yer fingers....
Gandalf the White
Sir YGM ---- SHHHHHHHHHH !
Gandolph are your Wizard bretheren brewing up a new batch the the Yellow stuff for Mother Nature???
---
No prospecting til the Lava cools down or you'll burn yer fingers....
===
Naw, Pinkish Lava is No Problemo !!
To where do you think all those old ASBESTOS GLOVES when ?
--
BTW, Ma Nature is "doing well" all by herself, and the new "small dome" inside the crater looks GOLDEN color to my old eyes! The Hobbits are ready to go !
<;-)
Gandalf the White
oops !
THAT LAST WORD about the ASBESTOS GLOVES should have been ---- WENT !
<;-(
YGM
Gandolph wants one.................(Me TOO!)
I'd take an "Old One" I don't mind second hand clothes..........Mysterious gold cones 'hats of ancient wizards'
By Tony Paterson in Berlin
From the London Telegraph online....

WIZARDS really did wear tall pointed hats - but not the crumpled cloth kind donned by such fictional characters as Harry Potter, Gandalf and Merlin.

The wizards of early Europe wore hats of gold intricately embellished with astrological symbols that helped them to predict the movement of the sun and stars.


This is the conclusion of German archaeologists and historians who claim to have solved the mystery behind a series of strange yet beautiful golden cone-shaped objects discovered at Bronze Age sites across Europe.

Four of the elaborately decorated cones have been uncovered at sites in Switzerland, Germany and France over the past 167 years. Their original purpose has baffled archaeologists for decades.

Some concluded that they were parts of Bronze Age suits of armour; others assumed that they served as ceremonial vases.

A third theory, which had gained widespread acceptance until now, was that the cones functioned as decorative caps that were placed on top of wooden stakes that surrounded Bronze Age sites of worship.

Historians at Berlin's Museum for Pre- and Early History, however, claim to have established with near certainty that the mysterious cones were originally worn as ceremonial hats by Bronze Age oracles.

Such figures, referred to as "king-priests", were held to have supernatural powers because of their ability to predict accurately the correct time for sowing, planting and harvesting crops.

"They would have been regarded as Lords of Time who had access to a divine knowledge that enabled them to look into the future," said Wilfried Menghin, the director of the Berlin Museum which has been carrying out detailed research on a 3,000-year-old 30in high Bronze Age cone of beaten gold that was discovered in Switzerland in 1995 and purchased by the museum the following year.

Mr Menghin and his researchers discovered that the 1,739 sun and half-moon symbols decorating the Berlin cone's surface make up a scientific code which corresponds almost exactly to the "Metonic cycle" discovered by the Greek astronomer Meton in 432bc - about 500 years after the cone was made - which explains the relationship between moon and sun years.

"The symbols on the hat are a logarithmic table which enables the movements of the sun and the moon to be calculated in advance," Mr Menghin said. "They suggest that Bronze Age man would have been able to make long-term, empirical astrological observations," he added.

The findings radically alter the standard image of the European Bronze Age as an era in which a society of primitive farmers lived in smoke-filled wooden huts eking out an existence from the land with the most basic of tools.

"Our findings suggest that the Bronze Age was a far more sophisticated period in Europe than has hitherto been thought," Mr Menghin said.

Another cone, found near the German town of Schifferstadt in 1835, had a chin strap attached to it. The cone, which is also studded with sun and moon symbols, is the earliest example found and dates back to 1,300bc.

Other German archaeologists have suggested that the gold-hatted king-priests were to be found across much of prehistoric Europe. Prof Sabine Gerloff, a German archaeologist from Erlangen University, has found evidence that five similar golden cones were exhumed by peat diggers in Ireland during the 17th and 18th centuries.

These objects, described at the time as "vases", have disappeared. Prof Gerloff says, however, that her research suggests almost conclusively that they were hats worn by Bronze Age king-priests.

She is also convinced that a Bronze Age cape of beaten gold - the "Gold Cape of Mold" discovered in Wales in 1831 - was part of a king-priest's ceremonial dress.

Prof Gerloff has used computers to create an impression of a Bronze Age oracle wearing a golden hat and with an elaborately decorated golden cape wrapped tightly around the shoulders.

Sovereign
Mr. Kosares, Mr. Clink! and forum participants,
I devised the Debt Notes (DNs) in my theory of the ideal monetary system for the following reasons:

1.First and foremost, to give people the freedom of choice. They are free to choose to employ paper promises instead of money (gold) as a medium of exchange if they are so inclined for whatever reason.

2.To preclude the possibility of gold becoming an instrument of tyranny by virtue of unethical but powerful men cornering the market on gold. Even if tyrants control the gold supply, the use of other means of exchange (including the DNs) will deny them absolute power over society's monetary system and thence total subjugation of its citizens.

3.For the purposes of remonetizing gold. People will be forced to refer to gold in order to evaluate the actual redemption value (in gold) of the debt that DNs are a derivative of. In a real sense, this aspect of the DNs subverts the purpose of debt itself by enacting a de facto monetization of gold for it re-establishes gold (and silver, of course) as a monetary standard.

4.TO HELP FACILITATE THE REALIZATION OF PRICE DISCOVERY FOR ALL GOODS AND SERVICES IN TERMS OF GOLD AND SILVER. There is no fiat and/or fixed value relationship between gold, DNs, and goods and services. The ensuing responsibility to choose to settle transactions in either DNs or actual gold and silver will automatically force free economic agents to decide for themselves what are the relative values of goods and services to gold and DNs instead of taking this for granted, as is the case under our current system. When you can have only dollars in exchange for something, you only think about how many dollars you should get. When you can have something other than dollars instead, you think whether it'd be better to settle for the alternative to the dollar first, and only then how many units of your favored medium of exchange would be appropriate. Six billion free agents motivated by self-interest is an excellent price discovery mechanism, second only to God.

5. RECTIFICATION OF NAMES (CONFUCIUS). I want you to have your caca (paper promises, DNs) and eat it, too, if that's what you want. I just want to prevent you from calling caca 'cake' because it will result in somebody else eating it, too, even if they did not intend to do so in the first place.

Enjoy

S


Black Blade
Market Wrap Up - Hartman
http://www.financialsense.com/Market/wrapup.htm
Snippit:

Here is my last snippet on currencies with thanks to Ed Steer for finding this information out of Italy. This article follows one about a week ago where Robert Mundell introduced a huge gold coin called "Big Phil" and spoke to the merits of gold as a long standing asset for the preservation of wealth. Now we get this one on the prospects of a gold-backed global currency. Who knows if or when it will happen, but it looks like the N.W.O. gang are using Mr. Mundell as a mouthpiece to plant some seeds for future consideration. Mr. Mundell is no slouch when it comes to currencies since he is the one who laid out the framework to launch the euro. At the time of the euro launch he also indicated that the euro was a stepping stone to the bigger global currency�we shall see.

(AGI) - Florence, Italy, Oct.11 - Nobel Prize winner Robert Mundell reckons that the "long-term goal is world currency", and proposed to call it "Intoro". That's what he said at the international congress of financial directors in Florence. Intoro stands for "oro internazionale, international gold", because the new currency "should be based on the only international metal system, which is gold. The mechanism is similar to the one of the Breton Woods agreement, and is to involve the IMF, perhaps with an initial agreement between the 3 main currencies, euro, US dollar and yen. The following step would be a temporary currency named 'dey' (dollar, euro, yen), and it could then include the pound sterling and the yuan. Such a monetary reform would then lead to the brand new international currency, Intoro."


Black Blade: Interesting concept. However, PMs are the enemy of politicians because it limits overspending. Meanwhile, oil came off it's highs only to turn around to close near $54/bbl (WTI grade that is). NG storage looks to be refilled and yet the price for Henry Hub stays above $6 Mcf. The reason is partly trailing oil, but the real reason is the shortage of available storage space as NIMBY and lack of LNG off-loading facilities limits the availability of NG as we approach the Nov. 1st "Withdrawal Season". Remember, no new facilities have been built and the list of 40 proposed LNG sites are being culled by NIMBYism and permitting. Also, Greenpeace is at it again working to stop the construction of such facilities. Nevertheless, US storage is meant to cover only about 15% of winter heating needs and new storage facilities aren't being built. Canada also contributes about another 15% of US winter needs. We have been lucky with a mild summer but demand continues to grow and feul-switching to NG from oil where possible is starting up with higher WTI crude prices (the US uses cheaper heavy-sour crudes though more costly to refine). LNG tankers are heading from US waters to Japan and China because the "price premium" is better with NG at about $7 mcf vs. the US price. Even though a 67 cent transportation price to Asia is added in. However, with only 4 US facilities and tankers waiting offshore (costing a ton of cash) the Asians are the major market.

Meanwhile, Nigerians are starting a civil war targeting sweet crude (the US is the major buyer here) and Venezuelan heavy sludges are not being brought up to pre-strike levels. Funny thing is that US inventories are falling fast and heating oil demand in the NE US alone will add to at least another 82 million bbl draw (if we have another mild winter). Projections from the industry is that we will see a 4.5% increase in energy demand this winter. Get yourselves some extra blankets!

Still, we see growing budget, trade and current account deficits putting pressure on the USD (it's inevitable the US dollar with fall much further). Blame whoever you wish - tonights presidential debate (as with the other two) did not even address this all important issue as the two morons squared off. The end result is that the global economy is headed for trouble - big time. Be very picky with your paper investments and secure that with porfolio insurance of Gold and Silver. That is the first level of the "Wealth Pyramid" along with nonperisbale food and basic necesities. Get protected and get ready while you can. Call the Castle Guards here at USAGOLD to discuss your needs and probably look down the road with a bit of discussion by setting aside a portion of IRA holdings into physical (talk to George Cooper - aka "Marketalk"). For the resource limited among us - think regular small purchases to "smooth" out price volatility. A monthly or every other month a small purchase will add up. This is important to first built tangle wealth before getting more speculative (either for "long term growth" or simply "Diversification" purposes (online purchases or talk to Marie or jonathon - "Frontline Castle Treasury Guards"). Heck, even call Mike and "rattle his cage" for some good talk on the physical market. ;-)

I've been quite busy lately as clients keep changing plans as the year comes to a close. People in the energy biz are trying hard to beat deadlines and keep leases current - or lose them. There's a huge staff shortage in metals and energy exploration so my work load has nearly doubled-tripled. Nearly every drill rig is running and few experienced hands. I even have drillers working as deck hands because of the huge labor shortage. That means most of my time is spent out in the field (running from one rig to another) and in the office making maps and doing calculations. I do keep up and read your comments though even if I fall a couple days behind. It should slow down a bit after the year ends. Then Canada starts up working in the frozen tundra as the permafrost cover freezes.

Black Blade
Oil-shocked into recession?
http://money.cnn.com/2004/10/11/news/economy/oil_shock/index.htm
Snippit:

Economists say record oil is already taking a bite out of growth; some fear recession could follow.
October 12, 2004: 8:02 AM EDT

NEW YORK (CNN/Money) - Economists agree that oil prices have already spiked enough to take a bite out of the nation's economic growth. But what they can't agree on is whether this downswing could spiral into a full-blown recession.

Oil futures on Tuesday moved above $54 a barrel for U.S. light crude, up from the fifth straight record close it hit Monday.

On an inflation-adjusted basis, however, recent prices are still below the highest prices of the 1980 oil shock. The $38-a-barrel peak then would be the equivalent of about $79 a barrel today, said Fadel Gheit, Oppenheimer oil analyst. In 1990, when Iraq invaded Kuwait, oil approached $40 a barrel -- between $60 and $65 in 2004 dollars, he said.

Also,

"I think if you had $70 oil, and the Fed were to continue to raise interest rates to fight inflation, that could cause a problem," Silvia said. "I think there's a certain breaking point where that the price of energy alone is so high that it changes the psychology of both businesses and consumers. I think $80 would probably break the back."


Black Blade: Earlier (a few weeks ago) I said $60/bbl would be comparable to the 1979-1980 highs. I was wrong due to a slight miscalculation on the USD purchasing power price. It is closer to $90/bbl. Still, $60/bbl for WTI sweet crude is still likely by year-end as Asia fights for its "fair share" of this finite resource (at least the easy to find and produce WTI). Recession? The definition constantly changes (even for the NBER). Let's just say that it won't be pretty. Can't store oil or NatGas? Try Gold and Silver as a substitute for personal financial protection.

Black Blade
Eventual lunch bill may spell end to dollar's dominance
http://business.timesonline.co.uk/printFriendly/0,,2020-37-1303426-9068,00.html
Snippit:


IMAGINE a place where you could spend far more than you earned for years without consequence. Imagine a place where you could pay your way by writing cheques that nobody would bother to cash. Welcome to America, today.

Over the past decade or more, the United States has been living far beyond even the vast means commanded by the world's largest economy. America's households have spent far more than they earn, borrowing extravagantly against the rising value of their homes and other assets. The US Government has been no less profligate, dramatically increasing spending while making hefty cuts in taxes.

The consequences have been predictable. Over the past five years, America's national spending has outstripped its income by more than a fifth, leading to a rising tide of red ink. In little more than a decade, the US has become the world's biggest debtor. America now runs an annual current account deficit approaching 6 per cent of GDP, or more than $660 billion (�370 billion), while its Government's borrowing this financial year is heading for a record $422 billion.

All of this has been made possible by confidence in the continuing outperformance of the US economy and its financial assets, and the unprecedented willingness of foreigners to accept vast piles of American IOUs in the form of dollar holdings and US Treasury bonds -- effectively, cheques that go uncashed. And the keystone supporting the weight of this system has been the dollar's dominant status as the world's international reserve currency -- a status now seen as being under threat.

Over a decade, the proportion of US government debt held overseas has more than doubled from 20 per cent to about 45 per cent. Underpinning this massive expansion of overseas borrowing has been an inadvertent and undeclared currency pact between America and Asian economies.

(Continued)

It is a tantalising prospect, although one that will depend on China's ability to preserve political stability as its prosperity grows. However, it is not impossible that, in our lifetimes, markets will hang, not on the words of Alan Greenspan or his successor, but on those of the chairman of China's central bank.

The implications of such a shift would be truly seismic.


Black Blade: I've brought this up often enough. However, read the article for a good run down on what's happening to the world's currencies and the consequences of a crashing US dollar if Asian holders of US debt bail out. We already know what will happen and the process will leave those of us prepared much better off. I still think stagflation will be most likely at first and probably lead to hyper-inflation leaving the Asian bankers "holding the bag" so to speak.
Goldendome
This is off subject, but is short and I just have to ask:

When pounding a podium, isn't proper technique to remove one's shoe, to use to hammer home your points?
Black Blade
Is Gold a Safe Haven of Investment?
http://www.arabnews.com/?page=6§ion=0&article=52709&d=11&m=10&y=2004
Snippit:

BOMBAY, 11 October 2004 -- An Indian can live anywhere in the world but the fascination for the yellow metal, gold, which has been passed on to him from various generations before him, continues to live on. Infact, this fascination seems to be growing.

Indians need just a small pretext to buy gold. Be it a birthday, engagement, wedding, birth or even death, gold forms an integral ingredient of all rituals. And now is the season when gold sales peak.

The season of festivals heralds the season of more buying. Demand for jewelry in India picked up in August ahead of the Hindu festival season, which peaks with Diwali, the festival of lights, in November.

Moreover, the US economic slowdown and consequent weakening of the dollar, high crude oil prices, ongoing terrorist concerns and run up to the US presidential election, all these facts have made gold a more safe haven of investment. Demand for gold bars and coins has increased because of its value of providing stability and security to the overall investments.

Demand for gold is outstripping supply. The total world supply of gold, after adding old scrap and central bank sales, was down almost 10 percent in the first half of 2004 compared with the same period last year. In contrast, total demand was up 10 percent in the same period in 2004, with demand for bars and coins higher by a huge 40 percent over last year.

Demand for jewelry in India shot up by 21 percent to 119 tons during the first quarter of the current year over previous year's Q1 demand of 98 tons. Total demand for gold jewelry including net retail investment rallied by 25 percent to 149 tons from the previous year's figure of 119 percent, the World Gold Council report stated. Investment in gold in the form of bars and coins also shot up by a whopping 47 percent to 25 tons during the first quarter of the current fiscal as against 17 tons the previous year.


Black Blade: A fairly good harvest season and festival season is in full swing as Diwali approaches followed by western holiday demand.

Meanwhile I will continue to drop in and read comments from our "community" at USAGOLD. Good Nite all.
USAGOLD / Centennial Precious Metals, Inc.
A reminder of MK's Tuesday offer...
http://www.abcs-of-gold-investing.com/

MK
(10/12/04; 19:09:06MT - usagold.com msg#: 125451)

A special offer to our regular posters . . .

I would like to make a general announcement:

All who post on a regular basis here should receive a copy of the new edition:"The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold". Since it is difficult to go through these pages and sort out the list, I will ask that all regular posters contact Jill Snyder at the following e-mail address:

jill@usagold.com

Please include your complete mailing address, and head your e-mail "MK's Book"

Yes, it will be signed.

We will forward a copy of the book no matter where in the world you live at our cost. It is the least we can do for you who give so much in support of this website and this firm.

Many thanks.



Ned
BB....nice to hear from you
I read on another forum about the replacement of some 20-30% of the oil tankers by next spring. What are those puppies called again....VLCC or ULCC's? Apparently the oiltanker flight around the world is getting super-stretched, lease rates are building, impacting the POO or course and news that 20-30% are being shelved will cause more wrinkles.

Please keep us in the loop on this development.

Have a golden day Sir.
Jing Zu
$$Dollars$$
http://www.washingtonpost.com/wp-dyn/articles/A10321-2004Sep9.htmlSnippit:

The International Monetary Fund said it plans to begin lending money to Iraq in the fourth quarter. To qualify for new loans, Iraq must repay $76 million it has owed to the IMF since 1990. In January, the head of the IMF's Iraq team said the country could receive as much as $4.25 billion over three years.

^^^^^^^^^^^
It appears? that the IMF has an "Iraq Team"..... I wonder how many "Teams" they have?

Just a thought about the World Economy and where these "moneys" are being spent. I also thought that Iraq had tonns of GOLD. I wonder why they did not pay their loan off yet.

Just thoughts.......

Jing Zu
goldenpeace
Our Noble Host's Offer Haiku
Our host most generous
Sharing history's oldest truth
To benefit all who will hear.

Blessings
Bowing
goldenpeace
TownCrier
Alright guys, you can surely do better
Apparently Jill is being overwhelmed by incomplete mailing addresses.

In addition to identifying yourself by forum handle, to assist Jill in making her shipping labels to mail the book Jill needs a thorough address, unless, of course, your regional mailman has magical powers.

Here's an example.
________________________
SUBJECT: MK's book.
________________________
Hi Jill, I'm a regular poster -- you might know me better as YOUR HANDLE. (e.g., TownCrier)

I would love to take MK up on his very generous offer!

Please send it to me at the following:

YOUR NAME
YOUR STREET ADDRESS
YOURCITY, STATE ZIPCODE
________________________

Jill has nice hair. Please don't make her pull all of it out.

R.
Druid
TownCrier (10/14/04; 10:54:57MT - usagold.com msg#: 125502)

Druid: Thanks TC for the template. Isn't it wonderful when true leadership emerges at difficult times like these?
USAGOLD / Centennial Precious Metals, Inc.
A risk-free request, helping you enter the gold market with grace and confidence.
USAGOLD / Centennial Precious Metals, Inc.
What you need to know before you buy your first ounce of gold...
http://www.usagold.com/cpm/goldhelp.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 handy e-mail newsletter available to prospective clients. 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.

USAGOLD / Centennial Precious Metals, Inc.
Odds of winning are 1:147 or better; your odds of great prices are 100 percent!
TownCrier
August U.S. trade deficit higher than expected at $54 billion
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh76315_2004-10-14_12-40-37_nat001024_newsmlNEW YORK, Oct 14 (Reuters) - The dollar slumped on Thursday, as the U.S. trade deficit increased to $54.04 billion in August, surpassing expectations for a gap of $51.5 billion. ...... compared with a revised $50.55 in July.

A separate report said first-time claims for unemployment benefits rose to 352,000 in the latest week, compared with 337,000 in the prior week.

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

As ever more developments bode ill for the dollar, choose gold as your rock-solid savings plan.

R.
TownCrier
HEADLINE: Fed's Geithner warns of cyber-attack risk to banks
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh83707_2004-10-14_18-52-59_n14188551_newsmlNEW YORK, Oct 14 (Reuters) - Financial institutions need to do more to reduce the threat of cyber-attacks or terrorist attacks on their networks, New York Federal Reserve President Timothy Geithner said on Thursday.

In a speech that did not touch on the economy or financial markets, Geithner also said the over-the-counter derivatives market has grown much faster than the infrastructure supporting it, raising potential risks in times of market stress.

"The increased risk of terrorist attacks and increased sophistication of cyber-attacks on electronic networks have added new dimensions to the traditional concerns of safety and soundness and operational resilience," he told a financial services conference in Atlanta.

"Beyond the direct financial losses from criminal activity, these threats pose a broader risk to confidence in the integrity of financial institutions, payments systems and, ultimately, the global payments network," he said.

On the derivatives market, the Fed official warned that rapid growth had produced a potential source of uncertainty in how markets and counterparties would respond in a crisis.

"The growth in the over-the-counter derivatives market has advanced much more rapidly than the speed of improvement of important parts of the infrastructure that support the market," Geithner said.

Derivatives are financial contracts based on the values of underlying assets, like stocks, bonds, interest rates and currencies. Over-the-counter instruments accounted for 88 percent of the notional amount of derivatives of $65.8 trillion late last year, according to a government report, compared with exchange-traded futures and options at 12 percent.

Geithner also raised concerns about the payments structure that underpins the global financial system, describing it as a "patchwork" of national and cross-border systems that required companies to operate under many different systems.

"The myriad of different systems that makes up the global network means that payments now cross a complicated mix of legal, technological and supervisory borders," Geithner said.

-------(from article at url)------

Short of mentioning gold outright, what better argument could possibly have been made for the ownership of gold?

Delay your prudent diversification no longer. Call USAGOLD today. The call is free and the staff are both knowledgeable and friendly.

R.
TownCrier
Fed intervenes, creates money, buys Treasuries outright. Adds $19.5 billion.
Massaging the mid-section of the yield curve, the Fed today intervened in the open market (creating 'permanent' money in the process), buying Treasury coupons outright with maturities ranging from August 2009 to August 2013 in an operation totalling $994 million.

The Fed also added temporary injections of fresh cash to the nation's banking system through additional open market operations, adding $9 billion through 14-day repurchase agreements, and another $9.5 billion through overnight RPs.

All that money made as easily as throwing a switch... and rendered useless just as easily as indicated by the Fed's own New York Federal Reserve President Timothy Geithner in the previous article.

Leverage yourself to the sky if you will, but at the very least, put a solid, core foundation of unassailable gold under your portfolio, people.

R.
TownCrier
Social reality -- what good is a "rule" that can be counted on being changed under stress?
http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=3279337By the same token, what good is a regulartory "ceiling" which is regularly raised?

HEADLINE: U.S. Treasury acts to avoid piercing debt limit

WASHINGTON, Oct 14 (Reuters) - The U.S. Treasury Department
invoked stop-gap accounting measures on Thursday to prevent its
debt topping the $7.384 trillion ceiling, three days after
Congress adjourned without raising the politically sensitive
borrowing limit.

Treasury Secretary John Snow said it was critical that
lawmakers increase the statutory debt limit when they return
from their election break on Nov. 16, as measures to stretch
the government's financing ability would expire soon
thereafter.

"Given current projections, it is imperative that the
Congress take action to increase the debt limit by
mid-November, at which time all of our previously used prudent
and legal actions to avoid breaching the statutory debt limit
will be exhausted," Snow said in a letter to Congress.

----(from article at url)----

The social reality is that paper obligations are not rock solid.

Choose a form of savings which is.

Choose gold.

R.
USAGOLD Daily Market Report
Page Update!
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 marked their first climb in four sessions Thursday, recouping around half of what they lost in the past three days as a wider than expected U.S. trade deficit sparked fresh declines in the dollar. "Another round of dollar selling will keep gold from moving lower," said Dale Doelling...

Gold for December delivery rose $4.90 to close at $419.50 an ounce...

The greenback retreated broadly after the U.S. trade deficit widened to its second-highest level ever, raising fears about the pace of economic growth. The U.S. trade deficit flared more than expected to $54.04 billion in August, fueled by record imports from China, the government said.

U.S. crude oil futures rose to a record $54.88 a barrel in late open-outcry trading to mark the loftiest level in their 21 years of trading on NYMEX.

Andy Montano, director at ScotiaMocatta said downward pressure on gold had been alleviated by a near 12,000-contract decline in open interest, which had been pumped up by fund-type investments accumulating long positions recently.

"If they get too long, it creates the potential for a sell-off," he said. ["Or performance default", Randy said.] "By the decline or retraction in the open interest level, maybe they are ready to buy again." ["Or leave the derivative pits", Randy said.] COMEX gold open interest fell 11,812 to 295,296 lots as of Wednesday's lower close in New York futures...

"The fact is the world is not even close to catching up with new mines and production to match the needs of China, India and the world," said Peter Grandich, editor of the Grandich Letter. "The mood is down with gold less then $20 from multidecade highs, [which] strongly suggests to me we have a lot further to go on the upside," he added. The highest gold price this year was near $440...

-----(see url for access to full news, 24-hr newswire, price charts)---
TownCrier
Gold fever to grow in Northern Ireland?
http://www.klrt.com/business/story.aspx?content_id=20954B07-D6A6-4011-BB7C-E4A1211F125D(United Press International) -- Possibly the largest deposit of gold ever found in Britain, worth an estimated $450 million, has been identified in rural Northern Ireland.

A Canadian company drilling for the past year said it expected to extract 1 million ounces... ...drilled 1,600 feet down and found high-grade gold mineralization ... 0.6 ounces per ton

...massive by British standards...

Archaeologists have long puzzled over the origin of the gold used for the crowns of the ancient High Kings of Ireland. It was thought to have been imported from abroad, but there is now evidence Bronze Age Ireland might have had its own gold mines.

---(from url)----

Crown yourself today and fill your treasury with gold at low prices -- while the dollar and supportive derivative markets are still on relatively firm legs.

R.
TomJIl
@TownCrier - msg#: 125508 - "cyber-attack"

Interesting article. Interesting to hear various warnings from various Fed and other officials. Kinda reminds me of the vauge GSE related ramblings a while ago. (FWIW, I was in India in the middle of 2003 and the media there was fairly strongly warning that the US GSE's were an oncomming train-wreck and folks should think about saving their asses.)

Now, as for a 'cyber-attack', I don't worry that much about outside 'enemy forces' and so on. OTOH, I would be very concerned about a computer system 'melt down' at an opertune time should an economic collapse start to occur. At least I would be if I had any exposure to the various markets. I sense that people think themselves secure because the have various 'stops' set and so forth. I had an electronic trading account once for the sole purpose of dealing with some stock options at my place of work. Seems to me that the fine print was saying that the trading institution absolved themselves of any responsibility due to computer glitches and such failures. I can only imagine the magnitude of the 'transfer of wealth' that would happen if somehow all the folks who rest compfortable on the thought that they are protected via carefull planning should be proven incorrect due to a series of 'computer glitches'. I bet that certain other people are similarly in awe, and are in a position to end up on the winning side with a bit of engineering.

BTW, I am a software engineer. The Y2K thing didn't cause me even a tiny bit of concern. Electronic voting and electronic trading, however, are a whole different story for me.

Thanks again, TownCrier, for the FOMC operations update. I downloaded all of their data the other day intending to do some data reduction and charting but didn't get around to it. I learned a lot more about the Fed and their means thanks to your pointers.
goldquest
Cyber-Attack
Are we being prepped for an attack that could wipe out all records for Fannie and Freddie? How convenient for them!
Toolie
Euro--Gold
Would anyone care to recommend any reading on the role that gold plays in the Euro currency regime.

It seems that I recall two conflicting notions about the Euro.

1) Currency inflation was to be held at 3% or less, per the growth and stability pact.

2) That the currency could inflate indefinitely as long as the CBs gold reserves were at least 15% of Euros issued.

Help?
TownCrier
Toolie, about the euro--gold relationship and your questions.
1)
No, the ECB price stability policy is to target levels of annual inflation over the medium-term below but close to 2 percent.

Your 3% figure is probably a result of a temporary confusion with the cap on each member country's max allowable annual budget deficit, and, if memory serves, with the national total to not exceed 60 percent of GDP.

2)
Initial reserve subscriptions to the ECB by member countries called for a 15% stake of each member's subscription to be in the form of gold. I have seen nothing that disallows the ECB to deviate from that initial figure.

Currently, the Eurosystem taken as a whole (ECB plus member national banks) has a reserve structure in which the gold component of total international reserves is nearly 44 percent.

This commentary from yesterday giving a summary of figures may help you see your way further.

R.
----------
TownCrier (10/13/04; 17:07:31MT - usagold.com msg#: 125479)
European quarterly gold revaluation
Posted from the "better late than never" file.

The short version of this saga is that the Eurosystem central banks are leading the "best practice" charge of reserve management by allowing their various reserve assets, including gold, to be quarterly revalued -- marked to market values according to the prevailing numbers on the final day of each quarter. The latest of these being September 30th.

With consolidated financial statements trailing by a week, I could have posted the latest official numbers as early as last Wednesday, but other projects had me behind my game. Forgive me, here they now are.

Compared from the previous quarter (ended July 31st), the value of all paper assest fell by EUR 3.1 billion, which was neatly compensated in turn by a net rise in gold assets by a value of EUR 3.3 billion.

The quarterly revaluation breakdown is as follows.

The euro value per each yen of Japanese assets held fell from .00755 EUR/yen to .00729 EUR/yen.

The euro value per each dollar of U.S. assets held fell from .8227 EUR/dollar to .8059 EUR/dollar.

The euro value of IMF Special Drawing Rights assets held fell from 1.206 EUR/SDR to 1.1874 EUR/SDR.

Coupled with a net dishoarding of EUR 400 million in holdings from the net position in foreign currency, the aggregate paper loss during the week of mark-to-market operations was the previously mentioned figure of EUR 3.1 billion.

Against that paper washout, the euro value of each ounce of gold assets held rose from 323.94 EUR/ounce to 332.30 EUR/ounce.

On the week, there was also a one-tonne dishoarding/reallocation of gold resulting in an 11 million EUR decline, but overall this adjustment was overwhelmed by the EUR 3.3 billion upward revaluation of the value of the gold and gold receivables held in reserve by the Eurosystem.

Thus, at week's end, the overall net position in foreign currency had slipped to EUR 168.2 billion, while the overall value of gold reserves rose to EUR 130.657 billion.

In the subsequent week (since this is being posted so late) I can also tell you that additional gold operations involving 1.5 tonnes has resulted in a slight EUR 16 million decline to gold reserves, whereas additional portfolio adjustments and dishoarding of the paper postion has trimmed a further EUR 200 million from the net position in foreign currency.

And there you have it -- gold for savings. Follow in the footsteps of giants.

R.
Liberty Head
Change Back From Your $7.384 Trillion ?
http://www.washingtonpost.com/ac2/wp-dyn/A32577-2004Oct14?language=printer
Not a chance.
The US Treasury just tapped $56 Billion from pension funds to keep us under the debt limit until the limit can be raised.
Ah ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha ha

Best Wishes

ah ha ha ha ha ha ah........
Goldendome
White Hills
Yes--WAR drives oil prices, causes financial collapses, causes uncertainty, and affects gold prices. Not meaning to disturb your orb, but we may not be closer to the end, than to the beginning of this stress on our financial system. That was my purpose with the post.
Knallgold
Debt
Debt ceiling is an oxymoron in a fiat system.
Toolie
Randy, Thanks for your response.
That does help.
Waverider
Ominous: The US deficit vs the dollar
http://www.atimes.com/atimes/Global_Economy/FJ14Dj01.html"US president Richard Nixon closed the gold window in 1971, severing the link between the dollar and gold once and for all. Robert Bartley, the now-deceased longtime editor of the Wall Street Journal and a brilliant man to boot, said when the dollar went off the gold standard crude oil went on the gold standard. He explained that the oil crisis in 1973 was in reality a foreign-exchange crisis (Money Bazaar, Andrew Krieger). In other words, the Organization of Petroleum Exporting Countries realized the dollars it was receiving for its crude oil was buying a lot less than it did before the gold link with the buck was severed. Thus it was time for a little price hike.

Okay, fast-forward. Oil is still priced in dollars and now at an all-time high, we all know that. But what is interesting is that the real cost of oil, if we consider gold to be the standard, is also close to an all-time high (calculated by the number of barrels of oil one ounce of gold will buy). This could have some implications for the greenback.

Let's say you are in control of the world's money supply. And you see that the cost of oil is threatening global economic growth. And let's also say that you keep an eye on gold prices because you once wrote a paper extolling the virtues of gold. And let us say your last name starts with the letter G. Okay, the stage is set. What do you do now?

Hmm, you're thinking: if I can somehow get the dollar price of gold to increase, it might take a lot of pressure off of the global economy by reducing the real cost of oil and clear the way for sustained economic growth. If you're thinking that, then you're thinking a weaker dollar."

Waverider: According to the author, the dollar needs to fall another 84% as the *only* option to solve the current-account problem, and hence he sees this as quite plausible. If we were (sorry, here I go again) to revert to the mean POG:POO ratio with oil at its current price, we need POG around $750.00 which is where a 80% devaluation would put it (approximately).
Boilermaker
Waverider
In your previous post regarding a dollar devaluation you have made a very common error of miscalculating percentage changes. In this case an 80% devaluation of the dollar would translate into a five bagger for gold, ie., 5 x 420= $2100 per ounce. Here's the math; an 80% devaluation of the dollar means that each dollar becomes worth 20 cents in relation to other things such as gold. For gold to hold its "original" value in terms of devalued dollars it must go up by a factor of five, (5 x .20) = 1.00, just to stay even with its original value.

Here's another hypothetical example, A 50% devaluation of the dollar would result in the doubling of prices for all things including gold just to compensate for the devaluation. The relationship of percentage devaluation of a currency to the resulting price levels is expressed by the formula 100 divided by (100 -%devaluation). You can see from this that as the devaluation of the dollar or any currency approaches 100% such as happened in Germany in the 20's, prices approach infinity, ie, wheelbarrow currency.

I always appreciate your posts and hope this little math exercise helps. ;)
Pizz
Gold and Coffee
Sir Gandy:

Trying to get my life back in order after two moves in just over a year, but there's a Starbucks on East Lake Sammamish in front of Freddy's where you might find a free cup of Java on Saturday mornings around 7:30???

Pizz
YGM
China perspective on US Dollar decline...
USAGOLD / Centennial Precious Metals, Inc.
Reach for the phone. The prices are always right and the call is FREE.


Krugerrands
YGM
Asian Perspective on US Dollar Hedgemony
http://www.atimes.com/global-econ/DD11Dj01.htmlIMHO....China and the rest of Asia will be the wild card w/ respect to the future price of Gold and decline of the dollar....Meantime they divest US $$ by buying things like Gold Mining Co's and other resource (Oil, Oil, Oil) based infrastructure...
Soros and others haven't invested heavily in China for fun....
YGM
Oil dominates Russia-China Talks
http://news.bbc.co.uk/2/hi/asia-pacific/3741118.stmChinese Prime Minister Wen Jiabao pledged to invest about $12bn (9.75bn euros) in the Russian energy sector during his Moscow talks in September.
Noble1
Price Guessing Contest Prize

I received my 1oz. Silver Maple Leaf via Priority Mail. Pretty! Many thanks to our host and his staff.

Remember: All that glitters is not gold. But gold stands out amongst all that glitters.

Noble1
968
@ YGM // China willing to promote energy cooperation with Russia
China is willing to cooperation with Russia in oil production and building nuclear power plants, said Chinese Premier Wen Jiabao prior to his visit to Russia. He said that it was in the interests of both China and Russia to boost oil and gas cooperation.
The leaders of both sides have reached consensus and have worked hard to develop a plan for the oil pipeline from Russia's Angarsk to China's Daqing. China believes the Russian government and businesses will regard China as a prior destination of the pipeline as China is the most long-standing and stable oil and gas market to Russia.
Before the pipeline is built, China is willing to strengthen energy cooperation with Russia in other ways, for instance, expanding Russian oil exports to China through railway transport.
Russia will be able to export a total of 15 mm tons of oil to China by 2006. Meanwhile, Chinese companies are willing to cooperate with Russian companies in prospecting, exploiting and developing oil, said Wen.
In addition, Wen noted that nuclear plant construction was another important field in Sino-Russian energy cooperation. China's present total installed generating capacity of nuclear power is only 6.7 mm kW. It is expected to reach 8.7 mm kW by 2005, which will be only 2 % of China's gross installed generating capacity.
China has decided to establish more nuclear power plants and buy advanced technology and equipment through public bidding, China and Russia have carried out effective cooperation in the construction of the Tianwan Nuclear Power Plant in Jiangsu Province. Wen said he hopes both sides will continue to cooperate to ensure the construction quality.
Source: Xinhua News Agency

When Chinese Premier Wen Jiabao visits Moscow, all eyes will be on whether he can persuade his Russian counterpart Mikhail Fradkov to stick to an original agreement to build a pipeline to transport $ 150 bn (S$ 254 bn) worth of oil from Siberia to China. That agreement was signed by Chinese President Hu Jintao and Russia President Vladimir Putin in May last year.
The last time a Russian prime minister came to Beijing, in September last year, the then premier Mikhail Kasyanov told Mr Wen that the pipeline project had been postponed so as to conduct environmental studies. Since then, Japan has reportedly swooped in under China's nose with $ 7 bn in financing to persuade Russia to build a link to the Pacific instead of the $ 2.8 bn route to China backed by Yukos Oil, Russia's top crude exporter.
Russia is expected to make a final decision by year-end. China's Assistant Foreign Minister Li Hui admitted that China had no inkling on which route its northern neighbour preferred.
"As far as we are concerned, no matter which route is preferred by the Russian side, we hope a line linking Russia with China will be constructed," said Mr Li.
China's rationale for wanting to build the oil pipeline ending in Daqing is simple: The world's seventh-largest economy needs more energy to fuel its torrid pace of economic growth. It already accounts for 30 % of the increase in oil demand growth this year and next year. Over the next three decades, China will account for 20 % of the world's incremental energy demand, and 16 % of the rise in oil demand alone, says the International Energy Agency.
Most of China's oil imports enter the country via railways. But the risk of rail transportation was highlighted when Yukos partly suspended its deliveries to China National Petroleum Corp (CNPC) this month because it could not pay its railway bills and export duties.
Yukos was forced to cut production and exports after bailiffs froze its bank accounts as part of efforts to recover more than $ 7 bn in back taxes for 2000-2001. However, Yukos is honouring its oil export commitment to another major Chinese oil company, Sinopec, to supply an expected 750,000 tons of oil by the end of the year.
"Russian exports for Sinopec are more critical than for the CNPC. Therefore, we think it would be correct to ensure uninterrupted supplies for Sinopec," a Yukos spokesman was quoted as saying.
CNPC vice-president Su Shulin said it expected crude supplies from Yukos to continue as normal this month.
"The supply has not been suspended. It's being continued at 380,000 tons for this month," he said at the sidelines of a petroleum and petrochemical summit. Oil traders said it would take weeks before rail imports ground to a halt as railcars in transit take time to arrive.
Source: Straits Times
------------------------------------------------------------------------------------------------------------------------
China is arranging its future energy supply.
Waverider
Sir Boilermaker
You are a true gentleman and thanks kindly for your post - I should be more careful when sleepless in Vancouver at 0300. ;o) What you say makes imminent more sense (cents) regarding the math and price projections for Gold in consideration of Gold/oil/euro, etc. It's interesting that in the beginning of the article the author implies that the impetus for devaluation is the account deficit (which is generally what we read in the news today), but then he speaks of Oil:Gold - I guess Mr. G could kill two flies with one clap (as Belgian would say) - yes the lightbulb is slowly illuminating... This is the first article that I've come across in the mainstream media that addresses the Gold-Oil angle. I wonder if Robert Bartley was one of our posters here prior to his passing in 2003 - TrailGuide, FOA maybe? Cheers and have a Golden Day!
TownCrier
COMEX gold rises with euro in choppy early trade
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh98434_2004-10-15_14-21-58_n15366006_newsmlNEW YORK, Oct 15 (Reuters) - Gold futures firmed but held off session highs in volatile dealings on Friday morning, as the dollar plummeted to an eight-month low against the euro after a mixed bag of U.S. economic data.

Traders said there was no clear direction in the precious metal, though the momentum was on the positive side, for now.

"Since the correction down to the low, the market's been coming back very strong, especially on the back of the stronger euro," said a U.S. dealer at a precious metals refiner.

A stronger euro against the dollar usually raises gold's allure as the metal's price gets cheaper for non-U.S. buyers.

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

Whenever the dollar happens to go the other way on any given day, in these reports there's never a hint that a U.S. investor might want to be a gold buyer at cheap prices. What does that tell you?

Think Wizard of OZ. "Ignore the man behind the curtain... but do what he says!"

Surreal.

R.
YGM
China in 2020: There's an 800 lb Gorilla in the room alright & It's 7 Billion Strong....
China to become No2 world economic entity
(peopledaily.com.cn)
Updated: 2004-10-15 13:39

The latest Global Competitiveness Report 2004 released by World Economic Forum estimates that China would become the global second largest economic entity by 2020 based on the current fast growing pace of China's economy.
The report foresees that China will become the global second economic entity by 2020. "The encouraging feature of China's economic growth is that China opens its huge market to the world and the number of poor people is on a dramatic decrease," said Augusto Lopez-Claros, chief economist of World Economic Forum.

The forum calls on China to carry out stable economic management to prevent from the happening of inflation and imbalance of budget. China should improve its welfare system, such as by increasing pension and unemployment benefit in view of the large flow of rural population into urban areas for job opportunities. " China should waste no time in offering more job vacancies, which means the Chinese government should develop various mechanisms of the economic system, for instance, the establishment of a security network," said Lopez-Claros.

Generally speaking, China's strong economy and balanced macro-economy demonstrate the stability of China's macro economic environment. The report indicates if China wants to improve its competitiveness, it must increase its entire competitiveness through opening up, strengthening commercial rules as well as setting a control on the blind flow of workforces into cities.
Gandalf the White
Sir PIzz ====> WOWSERS !!!
Sir Pizz said, "Gold and Coffee"
"Sir Gandy:
Trying to get my life back in order after two moves in just over a year, but there's a Starbucks on East Lake Sammamish in front of Freddy's where you might find a free cup of Java on Saturday mornings around 7:30???"
===
I shall be THERE !
BUT, let me see -- 7:30 AM ??? WOWSERS !
As a night owl, I shall have to not go to bed the night before !! OK !! That will work !
---
See you there, and I will be the one with the GOLDEN conical hat. <;-) --[reference to YGM (10/13/04; 21:46:50MT - usagold.com msg#: 125491)]
---
GW
TownCrier
...stocks down 20% or more...
http://www.thestreet.com/pf/funds/supermodels/10187617.htmlBuckle your seatbelts, says Mr. P. It's going to be a bumpy ride.

It's been a long time since I checked in with Mr. P, research director of a major East Coast hedge fund who has supplied readers of this column with uncanny market-timing advice in the past four years. As you read on, you may wish I hadn't asked him what he thinks...

Now Mr. P's way-out-of-consensus belief is that the U.S. and global economies will slide into a pronounced recession in 2005 -- an event that will take stocks down 20% or more, boost bonds, spike the dollar and juice commodity prices.

..."The fact that no one is even considering that this can happen will give us an order-of-magnitude change like you have never seen," he said....

Rising rates will draw cash from stocks. If the Federal Reserve continues on its path to raising short-term interest rates to the level it considers equilibrium, or 3.5% to 4%, bank certificates of deposits -- which are largely invested by financial institutions in short-term debt -- will draw a lot of money away from stocks.

A guaranteed 4%, Mr. P says, would look pretty great next to the lousy fixed-income returns of the past few years, not to mention next to stocks that have gone nowhere this year and might be declining next year.

Why would the Fed raise rates if the economy is stalling and stocks are declining? It may have to in order to encourage foreigners -- particularly China, Japan and the oil-producing states -- to keep financing the U.S. deficit and maintain price stability.

If China follows through with its plan to switch its currency peg from the U.S. dollar to a basket of world currencies, it will have much less incentive to repatriate all the money it receives from its U.S. exports back to the U.S. in the form of bond purchases.

Mr. P believes the Treasury will have to pay higher rates to attract investment. Indeed, he thinks that oil-producing and Asian countries have been major buyers of U.S. dollars in recent months in an attempt to prop up President Bush's election chances. And they might shift their currency purchases to euros after November.

Crude oil supplies really are tight. In the same vein, Mr. P foresees oil peaking around $60 in December and then tailing off for a while, dropping back as low as $45. He observes that oil is going through the process of price discovery. Because there is no transparency in oil reserves, especially in Saudi Arabia, speculators are jamming prices up to see the point at which more supply can come on the market.

If no additional supply comes on, they will attempt to prove through price that the Saudis have not been honest about their ability to provide the world with spare capacity. "The market is saying, 'We don't believe you -- prove it,'" said Mr. P, noting that he thinks neither Saudi Arabia nor Russia have the reserves they have claimed.

High-priced homes with big, high-rate mortgages are vulnerable. He fears that the rise in subprime real estate lending on high-priced homes in states like California will end very badly -- potentially with tens of thousands of defaults from people who obtained zero-down or interest-only mortgages.

"The potential for a crash in the housing market is not anticipated," he said. "Thousands of people who are not creditworthy have been allowed to buy homes for almost nothing, and, if they are pressured by job losses or other effects of a recession, they will just walk away -- putting even more pressure on the banking system and homebuilding sector, not to mention the government, which could be called upon for a bail-out."

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

All in all, I'm still scratching my head how he figures the dollar could or would spike against his own backdrop where internationals are seen scaling back their use of the dollar as a reserve asset, and against a domestic picture where a recession and distressed banking system are compelling symptoms for the government's standard balm which is a recourse to the printing press and an easy money policy to distribute the stresses socially in the form of inflation for everybody to shoulder a share of the burden.

Insulate your wealth and future purchasing power security. Choose gold.

R.
Gandalf the White
The US$ chart does not look toooooo "POWERFUL" today !
Belgian
The dollar reserve, central banker, A. Greenspan on "oil" !
Alan simply wants to calm the markets and take away the effects that high/higher oilprices cause to the public's behavior (sentiments).
Alan believes...want us to believe...that high oilprices will "wash out" ! And besides,...high oilprices relative to present GDP...are no cause for concern.

I think, Sir Alan made the existing negative sentiments, worse. He was talking like an oil-specialist (expert) as to impress the public opinion.

But not one single word on the dollar...the currency that pays for oil, heavy sour, light sweet or cruel.

But in his brief historical overview...Alan silently asked himself if the US($) lost control of oil (oilprices-pricing) . The Rockefella times are gone...
Alan counts on "the markets" to do something.

If oilprices go and stay higher than $60...price-inflation fears cannot be cooled anymore. Than IRs "must" go up with disastrous consequences.

Any other Alan-speak-interpreters out there ?
TownCrier
Per Belgian's invitation to try your own interpretation -- here is the text to Fed Chairman Greenspan's speech, "Oil"
http://www.federalreserve.gov/boarddocs/speeches/2004/200410152/default.htm"Owing to the current turmoil in oil markets, a number of analysts have raised the specter of the world soon running out of oil. This concern emerges periodically in large measure because of the inherent uncertainty of estimates of worldwide reserves. Such episodes of heightened anxiety about pending depletion date back a century and more. But, unlike past concerns, the current situation reflects an increasing fear that existing reserves and productive crude oil capacity have become subject to potential geopolitical adversity. These anxieties patently are not frivolous given the stark realities evident in many areas of the world...."

---(see url for full text)----

R.
Survivor
@ Gandalf, Pizz . . .
Sayyy . . .

Would you two be amenable to a third dropping by for a hello and a cup? Maybe there will even be a ROUND table.

- Survivor

Belgian
@ TC
Indeed Sir, up until now, I don't see "how" the dollar exchange rate could possibly spike !?
I never considered IRs as a tool to defend (strengthen) or increase the exchange rate of the underlying currency. Rising IRs only compensate for the loss in exchange rate that any currency is suffering and in avoiding massive flights out of the curency. But then again,...there are so much other factors that are influenced by changing IRs and wich have indirect effects on the currency's fundamentals.

How can one possibly predict what the majority of dollar-holders-users will do and why, at any given moment of the short term/long term future !?

And now we are all hooked on that magic $60 POO number ? What is so special about this number, except for the builded infla-perceptions.

Yes, markets move from one kind of paper to the other. Out of stocks in bonds or currency...back into stocks and other currency or bonds : The digit dancing festivals.

What does an IR of 4% means, when the exchange rate of the currency already lost 25% and keeps losing !?
Is an IR of 4% giving any more credibility to the rising debt...currency infla...rising POO...etc !?

Nobody questions the dollar and its status ! All heads in the sand.

Gandalf the White
Sir Survivor --- <;-)
Come on down ! Sir Survivor --- I am sure that there are many others that wish to meet the FAMOUS Sir Pizz too.
<;-)
USAGOLD Daily Market Report
Page Update!
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 ----

COMEX gold futures endured a choppy session Friday that saw prices veer to four-day highs early on U.S. dollar weakness before wilting later in the session as profit-taking emerged and fresh buying interest cooled.

The most active December contract settled 60 cents higher at $420.10 per ounce.

The early strength was fueled by dealer short covering and the dollar's sharp fall, but ran out of steam as speculative players remained hesitant to chase prices above $423. Spurts of bullion bank and fund selling above $422 also slowed gold's progress.

Dealers said a $418-$422 range is likely to take shape over the coming days on both the spot and futures fronts until the market gets a clearer grasp on where the dollar and oil prices are likely to head over the near to medium term.

Dollar weakness and continued strength in the oil market are expected to keep gold prices well bid and prone to spurts higher on any geopolitical flare-ups, while a recovery in the greenback and an oil price decline would drag gold lower, sources agreed.

-----(see url for access to full news, 24-hr newswire, price charts)---
Aristotle
Need
Have you ever *really* needed NEEDED someone? For a lift to or from the airport, or for another strong back to move a piano?

The digits on your cell phone are only any good if there's somebody both available and willing to field your call and respond. Essentially, "What is the nature of the *market* during your time of need?"

Think about thhis. The numbers on a bank teller's monitor -- the ones listed under your name and account -- are not much different than the numbers on your cell display. The difference, however, is that on the phone you can at least draw upon the unique power of your personality to help persuade more favorable *market* conditions; but when you try to put those bank numbers into use, Brother, you're as anonymous and non-persuasive as a single snowflake in a blizzard -- just another random caller trying to unload some garbage along with everyone else.

When failing paper has everyone straight-jacketed and tongue-tied, Gold on your behalf becomes a powerfully pursuasive and animated orator. Gold gets the job done when you are in your greatest need.

Gold. It gets the job done. Get you some. --- Aristotle
Belgian
Trichet....
...Prefers to see the EUR-$ exchange rate fluctuate horizontally in its present narrow trading band.
With today's euro-rise/dollar-decline, we risk getting out of the desired trading range and steam to 1,30.

The "markets" and the guiders of the markets !!!

During his visit to Libya, Schroeder negated Khadaffi's wish to have the US getting out of Iraq.
Euroland will at a certain moment join US forces in Iraq...but...on very important conditions. A personal guess (speculation) of mine ?

France and Russia compete (or collaborate) to provide China with nuclear energy.
Finite oil and its price (and pricing) are in the process of being anticipated with (old) alternatives. But always bear in mind that oil is not only an energy resource but an important base-chemical with no substitutes. We will always need oil !
yellowmetal
Gandalf, Pizz,Survivor
Although I have only been a lurker,I would love to meet some of the great minds of this forum. Would it be OK for me to join in?
Pizz
Gandalf & Survivor
Gandy, now I've figured out why you're not really a morning person. Originally when I suggested you pick out a good watering hole and you came back with Starbucks or Tully's, I didn't realize that you spent your evenings there. One or two good brews WILL keep you up all night!!!

Looking forward to meeting you and Survivor. I'll be wearing my sweat stained "country" hat and have a couple silver rounds sitting on the table if I don't see a golden dome someplace. . . .

And the last time I checked, defaltion was still not a viable option for the PTB, but I still have my doubts they can pull it off. . . .situation kind of reminds me of an animal caught in a trap. The smart coyote will chew his own leg off to survive, i.e. let a good solid recession clean out the excesses, but it appears our leaders aren't quite as smart as old "Wile" or his realatives. . . .

Pizz
Pizz
Yellowmetal
The more the merrier. . .more PM connoisseurs in the land of rain and volcanos than I thought (smile).

Pizz
Gonlyold
"IT'S ALL OVER"
I got into an uncomfortable discussion with the bank manager of the bank I deal with. I was trying to cash a check and was told that the bank will have to hold the check for a day and that I could only get a few hundred dollars at that instant. Then the manager commented that I should sign up for direct deposit ( a sales pitch). I replied that I didn't want to promote a cashless society. That ruffled her feathers.

After a few more fencing comments, the upset manager blurted out something about once it comes, "It's all over". I could tell that she opened a can of worms. I couldn't resist and asked, "When what comes? She replied "Check imaging".

Well, just received my bank statement today. Enclosed was notice of a a new check collection procedure, Check 21. Here are some excerpts from that notice.

"Q. What is Check 21?
A. Enacted by Congress last year, Check 21 is a new law [The Check Clearing for the 21st Century Act] that allows any financial institution to turn your paper checks into electronic transactions. In turn, the financial institution must provide you with a subsitute check, which displays an image of the front and back of your check.

Q. When will Check 21 go into effect?
A. ...Ocotber 28, 2004...

Q. What happens to my original check?
A. ...In most cases, the original will be destroyed.

Q. What if I need a cancelled check as proof of payment or for other purposes?
A. Under Check 21, a substitute check is the legal equivelant of the original check...

Q. Can I choose not to have my checks processed in this way?
A. No. Under this new law, any financial institution involved in the check clearing process may replace your paper check with a substitute check."

The first thing that comes to mind is involuntary conversion. Much to think about with this procedure.

I have often felt that gold will never be allowed to become a currency. Why, because Digital-Money-R-Them (TPTB). With this procedure, I believe a gold as a currency is forever struck from implementation. I do own gold and wish it was a curency, but TPTB will not let this happen.
ge
Dr. Copper Speaking?
http://stockcharts.com/def/servlet/SC.web?c=$COPPER,uu[h,a]daclyyay[dc][pb50!b200][vc60][i]⪯f=G"Copper is called "Dr." because it is the metal with a Ph.D. in economics. Why? Because modern industrial economies use copper in everything - motors, wiring, telephones and computers...everything."
http://news.goldseek.com/DailyReckoning/1097868298.php
USAGOLD / Centennial Precious Metals, Inc.
Hard assets, easy access!
Ned
"It's all Over" all right.....in spades.
Gonlyold,

Part of your quote, "I do own gold and wish it was a curency, but TPTB will not let this happen."

The cool thing, and this is what many miss, is TPTB don't have a choice. It's not a 'choice' thingy. It's like the can of worms that Kerry opened the other night about the 'choice' of being homosexual or not. As inappropriate as it was, perhaps, he is correct. TPTB, at the end of the day, won't have a choice in the matter of which currency will rule and how it will rule. Yes, oh yes, they are trying to make this tough, they are dragging it through the mud.

In the wake of 'end of cheap oil', spontaneous combustion (the bursting into flames) of derivatives, baby boomer retirement, escalating terrorism and monumental financial indebtedness only ONE (1) currency will survive the molten madness that is to engulf this dear old planet. You don't have a 'choice' dear Gonlyold, I don't have a 'choice' and (snicker, hee hee) the evil, arrogant PTB don't have a 'choice'. It's actually pleasing, somewhat amusing that these buffons, given the circumstances mentioned above think that they do.

In the interim, I will SERIOUSLY collect the default (a la defacto) currency. As Misetich refers to the "Gold Express Part II, any further delay into Part III will render one 'behind the curve' as this puppy accelerates and spins completely out-of-control.

Thanks for the post, without any doubt, "It's all over" !

Have a golden weekend.



Toolie
Ned
Thanks for the first chuckle of the day. :-)

"You don't have a 'choice' dear Gonlyold, I don't have a 'choice' and (snicker, hee hee) the evil, arrogant PTB don't have a 'choice'."
Druid
Gonlyold (10/15/04; 23:53:27MT - usagold.com msg#: 125555)


"IT'S All OVER"

Druid: The interest has to be paid much quicker because it is compunding totally out of control. They're trying to eliminate the float between acquisition, processing and clearing. This one could backfire.

There is a HUGE amount of the population that uses float to their advantage, especially in a society that lives from paycheck to paycheck. Since this new change isn't exactly being advertised in any huge way, there are a lot of people that are going to get burned, badly. This could be the final nail that kills off consumption as even a 10% reduction in slowing down an already imploding consumption pattern is a HUGE number.

A lot people will realize that they have lost their advantage and go directly to cash. This will stress the system even more.
Druid
IMF Needs `Structural Reform'�Not Argentina!
http://www.larouchepub.com/other/2004/3140arg_v_imf.html"by Cynthia R. Rush


The brutal warfare against the nation of Argentina has reached fever pitch. During the weekend of Oct. 1-2, at the annual meeting of the International Monetary Fund/World Bank, leaders of the IMF, the European Union, the Group of Seven industrialized nations, and the Institute of International Finance (IIF) bankers' cartel, issued shrill warnings to President N�stor Kirchner: Argentina must come to a debt-restructuring agreement right away with the speculative vulture funds that pose as "creditors"; it must increase its primary budget surplus in order to pay more debt to these financial predators; and it must impose "structural reform" to prove to the world financial community that it deserves their loans and investments.

These imperial dictates also included threats that Argentina would be destroyed financially should President Kirchner continue to resist these demands�as if it weren't already destroyed. In remarks made Oct. 1 in Washington, Charles Dallara of the IIF, representing 330 U.S. and international banks, reported that all the nations of Ibero-America were experiencing an economic upturn, "except Argentina."

Why not Argentina? It's failure to impose the necessary free-market reforms has resulted in "no investment, an insolvent banking sector, and an energy sector with serious problems." There can't be "sustained growth" unless policies are changed, he warned menacingly.

During the two-week period beginning Sept. 21, IMF Managing Director Rodrigo Rato made repeated public threats against Argentina, railing on Sept. 29 that the government's insistence on partially regulating the electricity sector, would have a "negative" impact on those foreign investors who had bought up privatized utility companies in the 1990s�for a song, he failed to add. Proposed legislation that calls for "just and reasonable" utility rates, and prohibits automatic rate hikes, reflects a mistaken economic model that can't possibly sustain continued economic growth, Rato raved.

A few days earlier, Rato had ordered Kirchner to increase the primary budget surplus, funds that are set aside to pay the debt, to at least 4% of Gross Domestic Product. Claiming that Argentina's debt crisis was a "self-inflicted punishment," he asserted that the current 3% figure set by Kirchner is "inadequate" to ensure a "sustainable" debt restructuring plan. How can the country ever expect to have a "normalized" relationship with the global financial community, Rato lectured, if it continues to resist policies that everyone else agrees are necessary?"

Druid: It would appear that some "Lessons Learned" are beginning to take hold in Argentina. The President and Central Banker over there are a couple of live wires.
Ned
Holy macaroni....are we sitting on the edge....
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12DX is right at critical juncture, just above 87. We break 87 and we test previous lows. Check the triple low at first week of April, mid-July and Friday (yesterday).

Sub-87 was last seen in Feb.

Crash helmets on!
Liberty Head
die Wei�e Rose

Nothing is so unworthy of a civilized nation as allowing itself to be governed without opposition by an irresponsible clique that has yielded to base instinct. It is certain that today every honest German is ashamed of his government. Who among us has any conception of the dimensions of shame that will befall us and our children when one day the veil has fallen from our eyes and the most horrible of crimes - crimes that infinitely outdistance every human measure - reach the light of day? If the German people are already so corrupted and spiritually crushed that they do not raise a hand, frivolously trusting in a questionable faith in lawful order of history; if they surrender man's highest principle, that which raises him above all other God's creatures, his free will; if they abandon the will to take decisive action and turn the wheel of history and thus subject it to their own rational decision; if they are so devoid of all individuality, have already gone so far along the road toward turning into a spiritless and cowardly mass - then, yes, they deserve their downfall.

-- Hans & Sophie Scholl, from the first leaflet of The White Rose [1942]
-------------------

I too feel deep shame for the actions of our government. My only solace is my hope that a more pure freedom can rise from the ashes to live another day.
Like the brutal process gold endures on it's journey from the ground to the beautiful coin in my hand.

Freedom! Gold!

Best Wishes
mikal
Investment flows where gold goes
http://timesofindia.indiatimes.com/articleshow/msid-884228,curpg-3.cmsIndia and China are challenging America's leadership as a destination of FDI(Foreign Direct Investment), according to a new study by a global consultancy firm:
India May Soon End US Supremacy - Times of India - October 13, 2004
Excerpt: "For a third year in a row, the US lagged China as the second most attractive investment destination in the world, and now India is not far behind," the consultancy said.

"India's rise to the third most attractive market in the world is an all-time high for this country," it said, noting that in the manufacturing index, India had displaced the US to become the second most attractive FDI location.

"Never before has the US been ranked so lowly among manufacturing investors."
YGM
Corp. Crisis & Bubble Capitalism
misetich
Global: Productivity Convergence? - S. Roach
http://www.morganstanley.com/GEFdata/digests/20041015-fri.html#anchor0Snip:

These possibilities point to a rather shocking possibility on the US productivity front. Since the mid-1990s, business productivity gains have averaged a little over 3% -- a dramatic improvement from the anemic pace of the preceding 25 years, which averaged closer to 1%. I am not arguing that America will revert to the productivity stagnation of yesteryear. But an increasingly saving-short US economy could well have an exceedingly difficult time funding the investment requirements of ongoing productivity vigor. And the two transitional factors -- capital deepening and slash-and-burn cost-cutting -- may well be about to fade. It is perfectly conceivable, in my view, that US productivity growth could slow to the midpoint between the 3% vigor of the past eight years and the anemic 1% pace of the preceding 25 years. That would find the US on the same 2% productivity growth trend that Eric Chaney believes is now emerging in Europe. In a nutshell, that is the case for what could be a rather remarkable productivity convergence.

If US and European productivity growth were, in fact, to converge over the next few years, this would have very important implications for financial markets. Global investors have become convinced that America is the world's best productivity story. This, together with outstanding earning performance, has had a profound impact on the perpetual overweight of US equities in global asset allocation portfolios. The US-centric productivity story has also been key to America's seemingly effortless ability to finance an ever-widening current account deficit. Most believe that there is a "natural" demand for dollar-denominated assets since they represent a claim on the world's greatest productivity story. The productivity convergence play could certainly challenge that presumption as well -- undermining dollar support and providing a boost to the euro at just the time when America's current account deficit is veering out of control.

Productivity growth is where the rubber meets the road for economic and financial market performance. One of the key assumptions embodied in the collective mindset of investors, businesspeople, and policy makers is that the United States has established permanent leadership in the global productivity sweepstakes. A corollary to that belief is that Europe will never get to the Promised Land of productivity revival. In the realm of economics, it's change at the margin that always matters most. For a congenital euro-skeptic like me, it is very hard to admit it -- the coming productivity convergence could force us to rethink the long-standing contrast between America and Europe.
**************
Misetich

Is the productivity miracle over? How will The Maestro and his successor to be continue to fool foreign investors pouring in funds toward US shores

Typically a new measuring methodology such as "Pro-Forma" statemenents is adopted to continue the masquerade - and various Ponzi schemes - unfortunately it is more difficult to hide reality as the economy deteriorates -

All Aboard The Gold Bull Express - Part ll
misetich
STAGLATION fears as oil prices top $50
http://www.washingtonpost.com/wp-dyn/articles/A36803-2004Oct15_2.htmlSnip:

Oil prices above $50 a barrel "highlight stagflationary risks to our current forecast," the Goldman Sachs economics team said a few weeks ago, warning of the possible combination of stagnating growth and rising inflation. Benchmark U.S. crude oil for November delivery closed yesterday at $54.93 a barrel on the New York Mercantile Exchange.
..................
Many companies have not yet felt the effects of higher oil prices because they locked in lower prices through futures contracts, analysts said. With U.S. corporate profit growth so strong over the past year, many companies also have been able to absorb higher energy costs without raising prices.

But economists worry that these same companies will feel the effects in months to come if oil prices stay high. Eventually, their lower-cost fuel contracts will expire, profits will shrink, and stock prices will sag. Some of the current corporate reluctance to add workers and expand production capacity may reflect these sorts of worries among executives.
................
The Fed chairman attributed much of the recent increase in oil prices to temporary factors, such as the disruptions to supplies from the Gulf of Mexico because of the hurricanes. But he agreed that worries about war, terrorism and other geopolitical events that could hurt oil supplies "are not frivolous given the stark realities evident in many areas of the world. . . . We, and the rest of the world, doubtless will have to live with the uncertainties of the oil markets for some time to come."
*************
Misetich

Notwithstanding the "headline news" The Maestro KNOWS higher energy prices are here to stay

RISING PRICE INFLATION

http://www.morganstanley.com/GEFdata/digests/20041015-fri.html#anchor0

Snip:

Commodity quotes pass-through

Pricing conditions rebounded in October - as we had expected - courtesy of higher energy and commodity prices. The index increased by three points to 63%, as half of respondents reported that companies have increased prices from a year ago and just 24% reported that companies have lowered them. Contrary to the pricing power seen in some other industries, grocers are having difficulty passing on sharp commodity-driven cost increases, according to analyst Roxana Fariborz.

Pricing improvement continued in all sectors except for financials, technology, and telecom services.

We asked analysts whether the recent step-up in oil prices, along the lines of our new price assumptions, would depress earnings at companies they cover and by how much. Not surprisingly, 76% of the respondents said that if realized, the higher trajectory of energy prices would depress profits. Of these, 77% said that the impact on earnings would be slight, 19% said it would be significant, and only 3% said it would be severe. Predictably, higher prices would boost earnings at oil services companies.
................
Consumer Discretionary:

Business conditions improved in October. Prices charged also continued to increase for the group, and advance bookings picked up.
................

Consumer Staples

Prices continued to increase for packaged food and beverage manufacturers as they continue to increase prices to recoup higher input costs.
................

Healthcare:

Business conditions were unchanged for two of the three healthcare groups in October. Conditions deteriorated for the managed care/health insurance group, while prices charged increased by 3% or more from a year ago.
...............
Industrials:

Conditions varied for the industrials groups in October. Prices charged increased for most groups with the exception of airlines and aerospace/defense.
..........

Information Technology:

.... Prices charged declined for most groups with the exceptions of Internet and PC applications software, security software, and EMS.
..................

Materials:

Business conditions improved somewhat for the commodity chemicals companies and were unchanged for the specialty chemicals companies, while prices charged increased for both groups.
....................

Utilities:

Business conditions continued to deteriorate for the electric utilities, while prices charged continued to increase by 3% or more from a year ago.

End of snips

Misetich

JOB CREATION

Snips:

Consumer Discretionary:...... Employment and hiring plans were unchanged for the group,
..................

Consumer Staples:..... Higher oil prices will significantly depress earnings for the household and personal care companies.
.................
Energy: ...... they also plan to increase hiring noticeably over the next 1-3 months
.................
Financials:...........Large-cap banks were still cutting payrolls over the past three months. Mortgage finance companies as well as mid-cap banks plan to increase hiring over the next 1-3 months.
..................
Healthcare:........Hiring and capex plans are flat for the group.
..............

Industrials: ............. Conditions varied for the industrials groups in October.......... But airline advance bookings declined.
...............
Materials:........... Hiring and capex plans are flat for the sector. Higher energy quotes will significantly depress both groups' earnings.
................
Telecommunications Services: ..... 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.
..............
Utilities: Business conditions continued to deteriorate for the electric utilities,.......... Utilities cut payrolls over the past three months, and have no plans to increase hiring over the next three

**************
End of hiring snips

Misetich

Summarizing our reality check

- budget deficits are here to stay for years to come
- trade deficits are forecasted to top $700 billion for this fiscal year end
- Current account deficit is skyrocketing accordingly
- Real price inflation is soaring as the pressure is building up in the "pipeline"
- Consumer confidence is declining as is spending
- The much heralded "sales growth" was obtained by "trading $" of auto sales - achieving no profits thereon
- Hirings are non-existend and as corporate earnings decline, more layoffs can be expected
- Corporate earnings are slowing - and going to single digits (Pro-Forma)

The 2004 Oil Shock And Awe is being underestimated by the markets - and a rude awakening is in store for those in denial

All Aboard The Gold Bull Express - Part ll
Cytek
The Perfect Real Estate Storm Awaits
http://realtytimes.com/rtapages/20040624_perfectstorm.htmThe Perfect Real Estate Storm
by Blanche Evans


Rising consumer debt, rising interest rates, inflation, low job and wage growth and many other factors are swirling together to form a housing slowdown. But there a few other factors that are adding to the winds that could create the perfect storm - the largest housing recession in modern history.

Take a look at the storm conditions.

Top economists from Alan Greenspan to the National Association of Realtors researchers are telling the public that housing will "flatten," either in sales or prices, respectively. Flat housing prices and sales means that buyers are more at risk in their housing investments because homes will cost more in a rising rate environment, and their liquidity is effected when they can't sell as quickly or for as high a profit.

To a buying market that is used to jumping in and out of properties like daytraders do stocks, this is unwelcome news and a good reason to sit on the sidelines and wait for better conditions. And that's exactly what's happening in many markets across the country, particularly in areas that overheated in the mid-90s like Atlanta, Seattle, Dallas, Austin, and other techno-centers. Which markets are vulnerable next? Las Vegas, San Diego and other multiple-offer capitals that have attracted jobs because of housing, not residents because of jobs.

According to The Harvard Joint Center For Housing Studies' "State of the Nation's Housing 2004 Report," housing has weathered such events as an international financial crisis in 1998, a recession in 2001, and the job depression of the new millennium. The economy and homebuyers benefitted from record low interest rates which helped offset rising prices. In 1989, when an average-priced home in the U.S. cost $211,900, the mortgage interest rate averaged 10.1 percent, notes the report, while in 2003, the average-priced home cost $243,400 and the interest rate averaged 5.7 percent.

But homebuyers in 2004 are facing a set of conditions that previous generations have never had before in the aggregate. National news, economic conditions, lending and borrowing conditions, and buyers' expectations, and much more are creating a perfect storm of conditions that separately and combined could flatten the existing housing market, and impact new homes as well.

Toolie
An end to the flood of fiat.
http://story.news.yahoo.com/news?tmpl=story&ncid=1756&e=1&u=/041015/480/nhjc10110151751A rainbow forms over the Mount Washington Hotel in Bretton Woods, N.H., Friday, Oct 15. 2005. (AP Photo/Jim Cole) [Link above]


"In 1944, The Mount Washington hosted the Bretton Woods International Monetary Conference. Delegates from 44 nations convened, establishing the World Bank and International Monetary Fund, setting the gold standard at $35.00 an ounce and designating the United States dollar as the backbone of international exchange. The signing of the formal documents took place in the Gold Room, located off the Hotel Lobby and now preserved as an historic site."
Snipped from: http://www.mtwashington.com/hotelinformation/index.cfm?edit_id=37


Gen. 9:11 � 9:13
I establish my covenant with you, that never again shall all flesh be cut off by the waters of a flood, and never again shall there be a flood to destroy the earth."
And God said, "This is the sign of the covenant which I make between me and you and every living creature that is with you, for all future generations:
I set my bow in the cloud, and it shall be a sign of the covenant between me and the earth.

Toolie: It's a nice thought anyway. Thought I'd share it.
mikal
Another oil price forecast to fall short?
http://quote.bloomberg.com/apps/news?pid=10000006&sid=atV3kHLaG.lA&refer=homeChicago Board of Trade's Dan says Oil may rise to $75 a barrel - Bloomberg - October 17, 2004
USAGOLD / Centennial Precious Metals, Inc.
Odds of winning are 1:147 or better; your odds of great prices are 100 percent!
Henri
Clink
30 clinks
Clink!
@ Henri
30 ? Heck, that's more than my entire family, including almost all the cousins ! (Although not those base Clanks! -we don't mention them in polite company)
C!
YGM
Recession Clouds.......Adam Porter....Al Jazeera
http://english.aljazeera.net/NR/exeres/D1E1CDFA-1FE5-4E9E-BFD7-D9A7E3699457.htmSnip....Stimuli needed

Meanwhile, super cheap lending rates, the purported stimuli to drag the US economy out of recession, have caused Americans to buy Asian goods at record levels and fuel an investment boom in Asia, especially China.


Instability in Iraq has added to
uncertainties in the oil market

Yet that record level of purchase by Americans is based around record household debt. If American consumers could buy the country out of recession, it would set inflationary pressure moving.

More wages would mean more money in circulation and higher interest rates to curb the money supply. But now all the talk is that we have "reached the peak of the current interest rate cycle." In other words more stimuli are needed to prop up a weakening economy.

Yet already the American economy is propped up by Asian central banks. In order to keep Americans spending their money on Asian goods, the central banks of Japan, China, Korea and others have purchased a stunning amount of dollar assets: $616 billion in 2003 alone, up from $351.9 billion the year before.

Two growth engines

The fear of these Asian governments' central banks is that if the American consumer stops purchasing, then the Asian economies investments will seem like the internet boom of the late 1990s. Much of it will go to the wall.

These fears are already percolating around the edges of economic thought. The US recently announced weaker than expected job growth for September, downgrading the previous month's figure. They have also just announced an additional 15,000 unemployed for September.


A global recession will sooner or
later start to hurt oil producers

The signs are not good. Morgan Stanley's chief economist in New York, Steve Roach, is also verging on the pessimistic about the world economy for 2005. The bank has cut its growth forecasts for 2005 and Roach thinks the world is entering the "danger zone".

While he is not saying recession will occur, he warns that "an energy shock could quickly take global growth near the lower end of that (forecast) range.

In large part, that's because the world economy currently is being supported by only two growth engines, the Chinese producer on the supply side and the American consumer on the demand side.

The real problem is that both of these engines are now at serious risk of sputtering". It is unlikely the world's central banks will be telling people this in the near future.


Aljazeera



Chris Powell
Harmony to bid for Gold Fields ...
http://groups.yahoo.com/group/gata/message/2463... likely screwing up Gold Fields'
merger with Iamgold. Will that prompt
Golden Star to renew its bid for
Iamgold? This is getting dizzy.


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

gata-subscribe@yahoogroups.com
Dollar Bill
.,.
Thank you MK.
YGM
Malaysia set to become key Islamic Banking hub..
http://economy.news.designerz.com/malaysia-sets-the-stage-to-become-key-islamic-banking-hub.htmlSnip...Economists said there has been a boom in Islamic banking in the aftermath of the September 11 terror attacks in the United States as investors pulled funds out of the West. The Islamic finance market worldwide is estimated to be worth 200 billion dollars and is growing at 15 percent a year, they said.

MK
DollarBill
Happened to stop by and see your post. Trying to think of what I've done to warrant your thanks. . . .Perhaps you have something on your mind?



milos
YGM
Nice to see you posting again, no doubt the Islamic/Malasian money flows are no small potatoes.
Waverider
Light sweet crude...
$55.25
milos
Diebold - W - and USD Gold carry
It would seem a Bush win would be a good USD carry for Gold. Short USD long AU.

http://www.bagnewsnotes.com/

Not long ago a game played by GS the other way around.

Gandalf the White
I have NOW let the DOGS out ! <;-)
Waverider
Hot off the SA Press: Potential Merger Between Harmony And Gold Fields
http://www.sharenet.co.za/v3/sens_display.php?tdate=20041018084503&seq=765"Announcement regarding a potential merger between Harmony and Gold Fields Limited.."
Ned
The best quote of the weekend.....
Hope everyone had a great weekend. As per most weekends I spent a little time going through some gold notes and with a twist I spend some time surfing through some oil stuff and some geopolitical stuff. I researched that Karl Schwarz email thingy, WOW! Led me to Sibel Edmonds and Bridas Corporation. Political and not pretty!

I must say that I'm a little nervous going into the last 2 weeks before the election. Sure, it's apparently a draw, 50-50. But the its the 50 percent that are against Bush that has me worried. Are they Pro-Kerry, or are they Anti-Bush? And if they are anti-Bush, how much? Then we get to the other end of the spectrum where we have the ultra-anti-Bush and mixed in with the anti-America. You know where I'm going with this. I hope things are fine and the election goes off without a hitch. As I tell the kids, no buses, no malls, no crowds. Vigilance please.

Anyway........

I can't for the life of me find the quote of the weekend but I'll paraphrase it. Maybe someone else caught it as well. I believe a trader from Wall Street nailed the present oil situation, as odd as that sounds. Oops I forgot to check Sinclairs site, maybe it's there as well. Anyway, the trader has a catchy last name, damn I forget but his last name is a common first name. His thoughts go like this. The Saudi's, and to a lessor extent other OPEC producers have been jawboning about bringing on extra production in light of extra demand from China & India and lower production out of Iraq etc., etc. We know the reasons for the lopsided supply/demand equation. So when oil was flirting with $40/bbl, perhaps around the time when it had broken mid and upper 30's resistance the Saudi's et al began the "bring on extra production" business. Wall Street said "hurray" and $40 did not come. After 2 or 3 wolf cries $40 was breached because the oil futures traders began to doubt the extra production capacity of the Saudi's. So the forgotten oil trader had this to say last week.

(Paraphrasing) " The futures traders are now pushing the POO further and further testing the extra production capacity and the boasting and bragging of the Saudi's. At some point, theoretically, they will have to bite and extra production will come on line. " So I read a couple things out of this. First, do the Saudi's (OPEC) see the coming USD deval (a la 20/30%), presumably before end of 2004/early 2005 and are jacking (holding out) the POO now? Second, and fearfully, are the traders testing the theories of 'peak oil'? If traders are waving 35, 40, 45, 50 and now $55 oil in their faces and they still can't push the 82.5 million bbl/day envelope are we, as Black Blade might say, in a state of 'checkmate'?

This is scarey stuff. Is this REALLY the PEAK OILY thing? My son, who is studying economics at school, brings this nugget to me on the weekend. Apparently Syncrude, of the Canadian tar sands fame, who up to this point was cranking out 200,000 bbl/day at a cost of approximately $25-28/bbl has recently discovered some miracle that brings the production of the oily goo down sub-$20. Apparently there is a mad scramble to ramp up production to 2 million bbl/day, Sounds too good to be true, can anyone confirm this? TIA.

So anyway, peak production is being tested by the traders. I'm afraid that like it or lump it, in a few months we confirm some of our greatest fears,perhaps peak oil is here.....now! On the other hand maybe this is the preamble to a dollar flogging over the winter and we get rewarded with the yellow.

It's going to be interesting, scarey and everything else over the next few months.

Crash helmets ON!

Waverider
Harmony to bid for Gold Fields, has Norilsk support
http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid=%7BD1B67FA5-9394-475F-A465-D214DFB685E2%7D&siteid=google&dist=googleFor those intersted in this, see Compound's post at GE @ 0507...

"IMO, this is just the beginning of this scorched-earth, two-tiered, front-end loaded, and boldly hostile attempt by HMY wholy assisted by Norilsk to stop GFI's "highly dilutive" deal with IAG; put all GFI senior management out to pasture, and apply the so-called "Harmony Way" to reviving GFI's S-A assets, while currying favor with the SARB, the S-A govt., and - delicately but incontrovertibly - with Putin too.
Usefully, Potanin can sleep more securely at night if this deal goes ahead..."
Waverider
Harmony makes $8.1bn bid for Gold Fields
http://news.ft.com/cms/s/5c410f94-2078-11d9-af19-00000e2511c8.htmlHere we go from the FT...

"South African gold producer Harmony, with the backing of Russian metals giant Norilsk Nickel, has made a surprise takeover bid for Gold Fields, the world's fourth biggest producer...If accepted by Gold Fields shareholders, the offer would create the world's biggest gold company, with combined market capitalisation of about $10bn and annual production of about 7.8m ounces"
Waverider
Dollar slips after Aug US asset flows data
http://asia.news.yahoo.com/041018/3/1q0qf.html"The dollar slipped on Monday, after net capital inflows to U.S. assets fell to $59.0 billion in August. Treasury Department data showed that August net inflows to U.S. assets fell to $59.0 billion in the month of August, from a revised $63.1 billion the prior month."

Waverider: Capital inflows down 6.5% in August from July - not good news for a country with an insatiable appetite for debt. The US buck is about to break below 87.
Waverider
US $
Zhisheng
Momentary Disconnect between Gold and the Dollar
I wondered about this too Lady Waverider. Seems the pressure in the cooker is ratcheting up. Reminds me of a 3 Stooges show I saw in my youth, where they were strapped to a steam boiler in the basement, and the pressure guage was spinning around in the "hotter" direction so fast the eye could hardly follow. Wish I could recall how it came out.
USAGOLD / Centennial Precious Metals, Inc.
Call us to discuss a diversification strategy that's right for you


Krugerrands
Gandalf the White
SOMETHING is really STRANGE today !!!
SO many strange things happening in the world news today !
I accidently turned on the CNBC financial idiots this morning and heard them talking themselves in CIRCLES !
Good thing that they are just reading that "material" and not really thinking about it -- OR they would really need to be "popping asprin" !
WHERE AM I ?
"This is not Kansas, Toto !"
<;-)
CoBra(too)
Harmony's Assault on Godfields
@ Waverider - This unfriendly proposal from Harmony, on a capitalzation basis is less than half the size of Goldfields, is getting somewhat complicated and complex.

While Goldfields is in the process to digest IAM Gold and building Goldfields International by injecting all GFI's property outside of SA, the recent acquisitor of 20% of Anglo's stake in GFI the Russian Giant Norilsk Nickel backs the deal.

Here is the statement as from GFI's web site: "Harmony has received a sound and irrevocable committment of support from Russia's Norilsk Nickel for Harmony's proposed merger with Goldfields."

Is there a game plan to muddy the waters going on here? Barrick taking out Homestake, now Harmony taking out Goldfields ... what's going to be left for the big funds to invest in?

Newmont, the unhedged major vs. Barrick, Placer Dome and Anglo the super hedgers. And what is Norilsk role in all of this? Or the Chinese takeover offer for Noranda ... very strange. cb2



Aristotle
Nothing new
When you buy mining stock you get a share of "ownership" of a company and all its unpredictable management quirks and wrangles, mergers, bankruptcies, and other evolutions.

When you buy Gold, you know exactly *exactly* what you have and can rest easy in the confidence that it will always *always* be exactly "as good as Gold" -- while nothing else comes close.

In the end assement, it's a form of tangible accounting that won't morph or deteriorate, can't be faked or hyperinflated, and it's in that aspect of supreme predictibility and integrity that Gold inherently secures its place as King of Wealth and as a must-have asset in every thinking person's portfolio of investments and savings.

Gold. Get you some. --- Aristotle
Gandalf the White
TA TA TAAAAAAAAAAAAA ----- WE have WINNERS !!!
http://www.usagold.com/gold/coins/NethKings.htmlFINALLY -- The results of the ESSAY CONTEST judging is completed !

The Chief Judge said: "I'm happy to say it looks like we have successfully narrowed the list and finally reached definitive results...."

The FIRST PRIZE WINNER of the gold Dutch 10 Guilder King Willem coin (see LINK) is ----- Sir Tevye!!!!!

The Judges felt that what was especially pleasing about Sir Tevye's post was that even though the topic of our essay question was political in nature, his list of pro-gold factors were uniquely non-political in their entirety and remained distinctly focused on the topic of gold throughout. Please see Sir Tevye's Entry below.

--------------
Tevye (9/30/04; 18:52:06MT - usagold.com msg#: 124915)
With respect to gold, the election doesn't matter
It does not matter to the price of Gold, whom is elected US president.

The US president is certainly powerful. He will continue to support perceptions of the economy, and the economy itself if that is possible. But I am reminded of Harry Truman's comment on Eisenhower's inauguration: 'I feel sorry for Ike. As a General, he is used to commanding something and it happens. Now he will command and nothing will happen'. That is not likely to change, especially on the world stage that Gold plays on.

The demand for Gold in China amongst the emerging business class will keep the price rising. Dr. Know and Hung Phat also have more to say in terms of Gold price supports from the orient the the Oval Office does.

The demand for Gold in India will not slacken. It hasn't for centuries; why should it change because of the US election.

The demand for Gold in Japan will continue since Yen gather no interest and the banks that store it are perilous.

The demand for Gold in the Moslem contries will only increase as the respect for the islamic gold dinar increases.

And Another reason: the demand for Gold amongst the oil producing nations will only increase as the oil supply diminishes.

The demand for gold will only increase in Argentina and other countries eager to rid themselves of disgruntled creditors and outside interference.

The demand for Gold in Europe will return, as the central banks mark to market with the desire to show Euro stability.

The demand for Gold in the US will awaken, as the inflationary effects of the money supply and the oil price increases are felt and perhaps awaken sooner if Kerry is elected.

Here in my little village of Anatevka, we are too few and to poor to have an effect on the price of Gold. But Gold has had its effect on us. Here, Gold is Tradition!

Tevye
------------

HOWEVER, in assessing our "Runners-up" for the awarding of our two one-ounce SILVER Canadian Maple Leaf prizes, a tie among the results has required an expansion of the prizes from TWO, to THREE. Therefore, the results of our Silver prize winners are: (Listed in alphabetical order)

Sir Remarx,
Sir Sundeck, and
TheJuniorMiner Sir.
<;-)

Will all FOUR WINNERS please advise Marie (by email at marie@usagold.com) of their Forum Handle, REAL NAME and snailmail address for the posting of the PRECIOUS prizes.

CONGRATULATIONS and thanks to ALL that entered the competition!
GW
TownCrier
Word just in from Jonathan... less than one-fifth of this allotment remains available
http://www.usagold.com/gold/special/group.htmlThe 3,000 total coins allotted to thes offer have been going fast, with less than 200 each remaining. Don't miss out on great volume-pricing, plus a chance to win gold in the $20 St. Gauden's raffle. Click the url for details.

R.
TownCrier
New Client Letter e-mailed today, plus a new back-issue online for your review
http://www.usagold.com/Privateclientletter.htmlRequest an info packet and put yourself into position to receive the timely info that you've been missing!

"...One fact we might want to keep in the back of our minds (in this era of the New Dollar Devaluation) is that the 1970s were also kicked off with a devaluation of the dollar. The devaluation led to higher oil prices, not the other way around. Though this devaluation differs in terms of the mechanisms used, it will will not differ in terms of effect. By way of historical comparison, we are closer to the beginning of that devaluation and inflation timeline than we are the end, and very few petroleum experts are saying that the price is going to return to $10 to $30 price range. Likewise, just as the managed gold price at $35 was the buy of the century in 1971 (from whence it increased nearly 25 fold), so $400 gold could look very good by the end of the decade we are in."

Follow the link to request your free info packet today.

R.
TownCrier
HEADLINE: Canadian government eludes collapse a second time
http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh35627_2004-10-18_17-09-03_n18382111_newsmlOTTAWA, Oct 18 (Reuters) - Canada's minority Liberal government dodged collapse for the second time in 11 days on Monday, less than four months after it was elected.

Conservative politicians say that Parliament should now be able to run fairly smoothly until the debates over next February's budget.

Martin says that if his government does collapse, this would trigger a new election.

...The final amendment called on Ottawa to consider further reducing the tax burden on low- and modest-income families --something Valeri said reflected existing Liberal policies.

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

Given political realities, in what world is any national currency the safest parking space for your savings? Choose gold.

R.
USAGOLD / Centennial Precious Metals, Inc.
Serving a world of satisfied gold owners. Join us.
Gandalf the White
test
<;-)
USAGOLD Daily Market Report
Page Update!
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 -----

COMEX gold futures backtracked from $420-an-ounce resistance to close lower on Monday, as the dollar climbed off its lows and oil prices retreated from a fresh record high, dealers said.

COMEX December gold fell $2.50 to $417.60....

A weaker dollar recently has raised gold's allure for non-U.S. investors while a surging oil price has boosted the metal as a hedge against inflation, but gold's gains were being capped by persistent profit-taking at higher prices.

Dealers also were digesting news that South Africa's Harmony Gold made an unsolicited all-share takeover bid for bigger domestic rival Gold Fields worth roughly $8 billion...

Key indexes for metals mining shares edged lower Monday, with steep losses in Harmony Gold Mining and Iamgold Corp. shares leading the decline.

Shares of Harmony were down $1.14, or 9.1 percent, at last check.

Iamgold's stock fell 86 cents, or 10.8 percent.

Gold Fields' stock traded down 84 cents, or 5.6 percent.

"The possible acquisition of Gold Fields Ltd. by Harmony Gold continues a strong trend of consolidation in the gold mining industry that has gone on for six years now," said Todd Hultman, president of Dailyfutures.com, a commodity information provider.

"Fewer, larger gold producers are bullish for gold prices," he said. "The weak U.S. dollar and strong South African rand have [also] hurt the profitability of South African gold mines with the result that production is still being restrained, despite higher gold prices."

The U.S. dollar slumped against the euro and held its own against the yen amid record oil prices and data that showed foreign investors curbed their consumption of U.S. assets in August, heightening concerns about the U.S. trade deficit.

----(see url for access to full news, 24-hr newswire, price charts)---
TownCrier
To be filed under "Foxes guarding henhouses"?
http://money.iwon.com/jsp/nw/nwdt_rt.jsp?cat=USMARKET&src=704&feed=dji§ion=news≠ws_id=dji-00018220041018&date=20041018&alias=/alias/money/cm/nwHEADLINE: Gold Fields Hires Goldman Sachs, JP Morgan On Harmony Bid

JOHANNESBURG -(Dow Jones)- Gold Fields Ltd. said Monday it has appointed Goldman Sachs International and JP Morgan as independent advisers on a 52.9 billion rand takeover offer from Harmony...

"The board of directors will consider such advice and form its own view and recommendation regarding the proposed offer and will make the substance of such advice known to shareholders in due course in a form and manner required by the Securities Regulation Panel," Gold Fields said in a statement.

The statement follows an announcement earlier Monday by Harmony that it is considering a formal all-share offer for Gold Fields on the basis of 1.275 Harmony shares and American Depository Receipts for every Gold Fields share and ADR.

In its statement, Gold Fields said Goldman Sachs and JP Morgan would advise "as to how the proposed offer affects all holders of Gold Fields securities, specifically minority holders of securities."

-----(from article at url)----

Confetti blizzard -- one firm trying to use its shares to buy shares of another firm, and the kings of derivatives perched upon their shoulders whispering sweet nothings in their ears.

When you're ready to get serious about your core position to manage your wealth, choose gold. The kind that hurts your toe when you drop it on your foot.

R.
YGM
Global Economic Collapse in 2005????
http://www.globalresearch.ca/articles/ENG407A.htmlExcerpt...(some may have read this previously)

-------What is clear now is that this unsustainable effort is likely to come to an end sometime in 2005, just after the elections, regardless of who is President. Given the scale of the money-printing by the Fed and the US Treasury since 2001, it is pre-programmed that the "correction" of the latest Greenspan credit binge will impact the entire global financial and economic system. Some economists fear a new Great Depression like the 1930's. The world today depends on cheap US dollar credit. When US interest rates are finally forced higher, dramatic shocks will hit Europe, Asia and the entire global economy, unlike any seen since the 1930's. Debts that now appear manageable will suddenly become un-payable. Defaults and bankruptcies will spread as they did in the wake of the 1931 Creditanstalt collapse.

Survivor
YGM msg#: 125604 - Impending Debt Disaster...

This is starting to look like a no-brainer: US social obligations have about the same likelyhood of getting paid in full as Enron 401K accounts.

Even the 78% tax increase mentioned in the article would not get the job done. Emerging world competition for energy and material resources along with the "worth less" US dollar begs the question: 78% of WHAT??

As those wise men before me have said: Get outa debt, keep provisions for yourself on hand, and buy/hold the yellow metal.

- Survivor

misetich
US BUDGET DEFICIT ALERT WARNING
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1098128340000&sn=1&banner=mainwireSnip:

U.S. Budget Group Says Both Bush & Kerry Offer Weak Fiscal Plans Oct 18 / 15:39 EDT

WASHINGTON (MktNews) - Neither President Bush nor his Democratic challenger, Sen. John Kerry, are offering fiscal plans that adequately address the nation's fiscal challenges, says the Concord Coalition, a budget watchdog group.

In a detailed study of the fiscal plans of Bush and Kerry, the budget group concludes that while the two candidates are offering sharply different fiscal plans, neither has a "credible" plan for dealing with the U.S.'s serious fiscal problems.

The Concord Coalition says that when plausible spending and revenue assumptions are used the projected 10-year budget deficit is close to $5 trillion.
................
It adds that while the short-term outlook is gloomy, the
longer-term outlook is just a touch short of terrifying.

The report quotes David Walker, the U.S.'s comptroller general, who has said the U.S. is on the verge of a "demographic tidal wave that is never expected to recede."
....................
*************
Misetich

With all due respect to The Concord Coalition for sounding the alarm bells - the projected "terrifying" long-term outlook of a budget deficit projection of $5 trillion -

$5 trillion?

On a CASH BASIS - on an accrual basis the budget deficit is OVER $100 TRILLION within the next decade!!

The social security system will be severely tested with the next 10 years -

All Aboard The Gold Bull Express - Part ll


Copperfield
Lissabon 2010
Dear members of USAgold.

I realy enjoy the good stuff on this forum! One year ago I knew close to nothing about the economy, or gold.. Now I think gold is one of the most important, but also one of the least understood subjects in our time.

In 2005 I have to present a paper about the 'Lissabon agreement'. Maybe one of you guys can help me answering the following questions:

Will Europe be the most dynamic and competitive economy of the world in 2010 (Lissabon agreement)?

If so, will it be because of good economic policy, or because the American economy will collapse?

Will gold play a major role (Mundell)?
Boilermaker
Lissabon Agreement
Copperfield,
I'm not familiar with this agreement. Tell me all about it. Then tell me what you have learned from the Forum and how that knowledge has formed your own opinions on the question you posed. Then tell us what the answers are. I am curious about this subject.

misetich
Job cuts jump in September SOAR
http://sanjose.bizjournals.com/sanjose/stories/2004/10/04/daily13.html?jst=b_ln_hlSnip:

Planned job cuts announced by employers hit an eight-month high of 107,863 in September, 41 percent more than a year ago, according to a monthly report released Tuesday by outplacement firm Challenger, Gray & Christmas, Inc. The surge in job cuts compared to the announcement of 16,166 new job openings in the same period.

September job cuts were 45 percent higher than the 74,150 in August and 41 percent higher than the 76,506 cuts announced in September, 2003. The 107,863 figure was the largest since last January, when employers announced 117,556.

"Historically, the period from September 1 through December 31 is when we see the heaviest downsizing and this year appears to be on track to repeat that trend," says John Challenger, chief executive officer of Challenger, Gray & Christmas, in a written statement. "The return to six-figure job-cut levels paints a grim picture for ongoing economic growth, as such activity is generally considered a measure of how companies view future business conditions. Weak hiring announcements last month are not a good indication of stronger job creation to come."
**************
Misetich

The grim labor situation is at the core of the Feds failure which puts the econony and hence the financial system in rising risk peril

The various battles being waged by the Feds to maintain confidence, both at home and abroad is doomed to fail as time goes by as the Feds have and are failing in re-igniting the economy and provide a solid foundation for the economy - by the LACK OF JOB CREATION

The 2004 Oil Shock And Awe and its direct and indirect collateral damage is being "undermined" by the Feds and the newsmedia

The WHOLE FINANCIAL SYSTEM globally is being maintained by artificially high prices in HOUSING not only in the US but throughout the major world economies

Of interest - most "experts" compare the present scenario with the past - which is totally absurd

Whilst some similarities may exist, from bubbles boom/bust cycles, the 70's oil shock etc. the present situation has no historical comparisons other than to failed empires.

The gargantulan DERIVATIVE MARKET growing daily is what sets this "era" vs others eras.

Most draw comfort from the resiliency shown by the big 3 global economies in virtue of market "corrections" and the survival of the financial system from the 9/11 shock.

However such comfort might be delusional - as the impact - is still being felt in the financial system and the world economies and from anectodal reports the perils are increasing - thus the "after-shocks" may prove more formidable than the initial "market correction"

The big bad bear for equities globally is still alive and ready to pounce - and WHEN that happens ......

Astute investors would be wise to ADD physical gold to their investment portfolio

All Aboard The Gold Bull Express - Part ll
Copperfield
@Boilermaker
I will respond tommorow morning, sleep now..
Remarx
Thank You!
Thanks much to our gracious hosts for the essay contests. They are like a free course you'll never see in college: Gold 101.

My wife is now thinking about putting some of her retirement into PMs. She has opened an alternative IRA account but is considering euros and/or oil and gas royalty trusts.

Does anyone have thoughts on why this is a good time to buy gold? I have a feeling its going to dip quite a few times more before "the big liftoff". It was a much easier decision when POG was 340!

-r
Waverider
Sir Tevye and...
Sir Remarx,
Sir Sundeck, and
TheJuniorMiner Sir

Congratulations to you all on your wins! Well done. Gandalf - will all the entries be available for reading in the archives?
YGM
Always Struggling For Answers......Or......Peering Thru The Fog..
Anyone remember our old friend here 'North 49'..remember his conversation w/ his Bank Manager neighbour..His comment "Is it happening already?".....

Remember the "Letter" from Mr Johnston to his sons regarding 'The Sting'.....

Well I do and w/ all the rest of the information I try to filter thru, not just GATA, Veneroso, Howe, Murphy, Sinclair, Davey Kidd, Global Collapse Reports et al, I always come back to one thing that bothers me the most.....Why has Canada's PM Martin for the last few years (first as Min of Finance now as PM) been so totally obsessed with paying down our Fed deficit. He does this even at the risk of his political future....I believe we've all read and learned enough to conclude that some kind of 'Great Reckoning' (Davidson & Reese Moog) is at hand and I'm beginning to conclude that our Canadian Gov't also knows that something drastic is coming down the pike, and it ain't good.....Even letters to the Canadian Opposition Party Minister of Finance Critic regarding CB Gold sales rec'd a reply of 'No Interest'. Now if I ever hear that Martin & Canada's CB is buying back the gold (790 T) that our cabalist PM Mulrooney sold most of from the Can Dollar backing, before becoming a Barrick Director, I'll definately take it as a sign the end is near.....Looking for answers maybe, but just maybe looking for vindication for years of studying and searching thru the fog......YGM

***The only answer in the interim to keep one safe is 'Gold Ownership'
Sundeck
Gandalf's "We have winners" Msg #125595
Deep appreciation Sir Gandalf to you, to the judges and to USAGold/Centennial Precious Metals for your/their generosity and great service...a fine surprise to start the day in the land of Oz!

Also, congratulations to Sirs Tevye, Remarx and TheJuniorMiner...

Thanks Lady Waverider...you always have a kind word to offer...

:-)



PRITCHO
Ominous: The US deficit vs the dollar - - -
http://www.atimes.com/atimes/Global_Economy/FJ14Dj01.htmlPublished at Asia Times this article links OIL to GOLD.Worth the visit to read.
Gandalf the White
YES, Lady Waverider ---
Sir Townie is rearranging the space in the "Halls of Records" as we Celebrate the WINNERS of the Essay Contest ! I hear him yelling for me now, to magically convert the lower dungeons into storage space for his use !
A WIZARD's work never ends.
<;-)
Sundeck
Gold jewellery exports cross $1 billion in five months (in India)
http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=57511Snip:

"...
India is looking at a 28 per cent growth, month-on-month in gems and jewellery exports, commerce and industry minister, Mr Kamal Nath, said today. Exports of gold jewellery had crossed $1 billion in the first five months (April-August) of the current fiscal to record a 141 per cent rise as against $416 million worth of exports in the corresponding period last fiscal, Mr Kamal Nath said inaugurating a week-long �Festival of Gold-2004�.
"India is the largest consumer of gold and jewellery producer. Yet, strangely, the prices are not dictated from here," the minister said, adding "this is an aberration."
India's total gold imports are poised to grow by 10 per cent to around 880 tonnes in the current financial year, while prices of the precious metal are likely to rule steady, Minerals and Metals Trading Corporation (MMTC) chairman and managing director, Mr SD Kapoor, told reporters.

With a 15 per cent increase in the first half of the current fiscal, gold imports by MMTC, the country's single largest gold importer, are expected to grow by about 20 per cent to 120-130 tonnes by the end of 2004-05, from 81 tonnes registered so far, Mr Kapoor said.
..."

Sundeck: Indian exports of gold jewellery up 140%, gold imports up 10%...not bad for a barbarous relic...maybe the world is descending into barbarism?

;-)
Sundeck
Capital flows in 2003
May be