http://www.turkishpress.com/news.asp?ID=34538DONETSK, Ukraine, Nov 30 (AFP) - Angry pensioners in eastern Ukraine jostled for a place in line to a bank Tuesday as a crisis over a bitterly disputed presidential election spilled into the financial sector.

...The run on bank deposits was sparked by a crisis that followed a November 21 runoff presidential vote, including mass opposition demonstrations and threats of separatism by southeastern regions.

"This is an artificially created problem, it's the political instability that is making people do this," said Irina Panaseyko, chief accountant of the Ukrainsky Biznes Bank in Donetsk.

The rush to buy up dollars and euros prompted the central bank Tuesday to impose limits on purchases of foreign currency...

Meanwhile currency exchange booths throughout the city of Donetsk had stopped selling foreign currency and many of the city's bank machines had "out of order" signs taped to their windows.

"The situation is such today that the economy is hostage to the political situation," said Andriy Blinov, head of International Centre for Policy Studies, also warning of a spurt in inflation.

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

This article was forwarded by a friend of the firm who has a keen appreciation for the art of striking the right balance between use of a political currency for convenience on one hand and use of physical gold for secure savings on the other hand.

A political crisis can erupt from any number of reasons. However, had the population not put overmuch reliance and use of its currency in the improper role of savings, the political crisis need not escalate in scope to an economic one, too.

That is to say, had the people kept most of their savings safely at home in the form of gold coins such that the banks had only been holding a marginal amount of the population's money in checking-style or immediate-use transaction accounts, there would be no reasons for potentially disruptive bank-runs to add further to the local misery.

Live and learn, folks. Live and learn. The school of hard knocks takes its classroom on a world tour. Don't wait for it to visit your neighborhood. Learn easily from this correspondence course and get your diploma ahead of time. Use gold to strike the right balance.

R.

Nothing cryptic about my msg#: 126848,I even admitted to being virtual.Whats wrong I thought will be self-evident when thinking about it,you can bet the CB's won't hord the Golden ETF.Buying up Goldmines,Gold in the ground,deep storage,all that has been proposed,for one reason:to get his hands on bullion.The ETF is as necessary as a pimple on your bu**.Its not as good as gold.

http://www.quamnet.com/fcgi-bin/index.fplThere are two places in the world that is full of hot air -- hot gossips of celebrities and speculations in the stock market, and this is particularly the case when the jobs have just become more secure, and people have more leisure time to gossip and more spare money to gamble (and to lose). Since this is a financial column, and we would not like to step into the profession of the paparazzi, and therefore we will only focus on the hot air that is ballooning in the stock market. This time I will not bore you with the Macau concept again, which we have discussed several times on other occasions, but a more relevant issue -- the speculation of a potential revaluation of the Reminbi.

RMB Appreciation More Than Hot Air

Last Friday, the rumors have it that China might decide to revalue its currency in the coming few days, and Beijing could reach a decision at an annual high-level economic meeting over the weekend. When readers read this column, they might have realized that if these rumors is true or not. But my impression is that Beijing might have actually made up its mind to revaluate the RMB, and the hot air will likely precipitate into rock solid ice, the only matter is only the timing and the extent of the revaluation.

Why?

That is probably in the best interest of China and at the same time it can fulfill the needs of the rest of the world.

China being the world's most populated country is rich in population but short in natural resources. Since mid-2001, the US dollar has depreciated against the Euro by almost 38%, or in other words the Euro has appreciated over 58% against the greenback, and as a result of both a weakening US dollar and the persistent high growth in the PRC economy, China has imported much more natural resources, which dramatically reversed China's trade surplus from a positive ~US$6 billion in December 2003 to a trade deficit of ~US$6 billion at the beginning of this year. Due to rising prices of import raw materials, goods and services, inflation soared to a dangerous level of over 5% in the middle of this year, forcing Beijing to cool off the economy by both fiscal (austerity measures at the end of the first quarter) and monetary policies (raising interest rates for the first time in more than nine years).

If China continues to let the RMB stay pegged with the extremely weak USD, then China is risking an uncontrollable inflation and also a resurgence of trade deficits, which could be detrimental to the PRC economy in general and in particular to the banking system. For a country whose banking system has non-performing loans as a percentage of its annual GDP of over 48%, it needs to maintain a strong current account balance (both trade and net capital inflows through foreign direct investments) in order to defend against any potential attacks in the banking system. Inflation could also create social problems, as the salaries of the lower income class are unable to catch up with ever-rising prices.

Kill Two Birds with One Stone

Although raising interest rates can perform the same task, it is unable to solve the problem of rising import raw material costs. The only way to kill two birds with one stone, i.e. cool off domestic inflation and at the same time reduce potential trade deficits, is to let the RMB appreciate.

Depreciation of USD: A Conspiracy Theory

The European Central Bank (ECB) originally claimed that it might intervene in the currency market, but after the G20 meeting over the weekend it suddenly had a 180-degree change in attitude. We don't know what had been discussed during the meeting among the US Federal Reserve, Bank of Japan, and the ECB, but what we know was that they have since become silent on the currency market movements, which the market has interpreted as a agreement to let the greenback to continue to weaken. We suspect that this was probably a tactical measure to force China to appreciate the RMB.

Long before that, John Snow of the United States had said that the United States would like to adopt a strong USD policy, which we all knew that he was bull shitting, but at the same time he has neither said the Euro nor the Yen was undervalued except the apparent under-valuation of the RMB, which indirectly sent out a message that the free-falling of the USD was actually targeting at forcing the PRC government to appreciate the RMB.

China, in the meantime, has already sent out messages indicating that she is actually willing to appreciate the RMB as long as the revaluation will not invite future attacks on further appreciation, and even if that is the case the People's Bank of China (PBoC) will be able to defend. So you may say that there has already been a consensus among the international powers. The last question is only that whether the PBoC is confident of itself to defend against any potential attacks on further depreciations, and if China gets the nod of potential help from the US, ECB and BOJ, or at least paying lip service to China by saying that they are contented with the extent of the pace of appreciation.

RMB Appreciation and HK's Asset Reflation

If China does appreciate its currency, and the most likely rate of appreciation will be similar to the exchange rate of the Hong Kong dollar, which has an official rate of US$1 per HK$7.8, or an appreciation of approximately 6%.

We disagree with Mr. Joseph Yam, the Chief Executive of HK's de facto central bank, that the purpose of hot money staying in HK is use HKD as a substitute for the RMB. Mr. Yam has underestimated the IQ of the speculators. Their target is not an appreciation of the HKD but the expectation of asset inflation in Hong Kong. One argument for HK's wages failing to increase is that we have cheaper alternatives just a few steps northwards in Shenzhen. With an appreciation of the RMB, the pressure on HK's wages and property prices will at least be eased, even though some doomsayers are saying that a 6% appreciation in the RMB is far from enough for Hong Kong to regain its competitiveness. Investors who hold this view have again grossly underestimated the productivity of HK's employees.

I know that even in Quam Research Team, there are still an overwhelming number of HK bears. As always, I always tend to be the more optimistic one. With the fastest growing economy as our hinterland there is just no need to be too bearish about the future of our economy.

One last remark, since the main purpose of the free-falling of the USD is not targeted at the Euro and the Yen, when China announces the appreciation of the RMB, speculators may find them to have been made use of, and soon betrayed by the ECB and BoJ.

- written by Vincent Lam, Director of Research & Advisory of Quam (IA) Ltd., and Fund Manager at Quam Asset Management Ltd.

Just a quick question please regarding this new ETF thingy, "GLD". I see the share price at $45.12. Is this 'share price' supposed to mock 1/10th oz. gold?

TIA.

"Is this 'share price' supposed to mock 1/10th oz. gold?"

Yes. Your choice of the word "mock" may be apt and prophetic. :-)

http://english.aljazeera.net/NR/exeres/14CC5C59-8FE8-42C7-A7EF-16D1DA0ACD45.htmChinese oil firm loses $550m on derivatives


Wednesday 01 December 2004, 15:02 Makka Time, 12:02 GMT


The company attributes losses to speculative oil trading

A Singapore-listed Chinese company that sources jet fuel for China is in deep trouble after losing $550 million in speculative oil trades, triggering concern over other China-linked stocks there.


China Aviation Oil (Singapore) Corp's losses, announced by the company late on Tuesday, equal its market capitalisation of $549 million and raise serious questions about its future.

It is the largest amount a company in Singapore has lost by betting on derivatives, since rogue British trader Nick Leeson bankrupted Barings Investment Bank when he blew more than $1 billion in the 1990s after getting the bond market wrong.
Cont'd.....

http://www.foxnews.com/story/0,2933,140076,00.htmlGOP Discusses National Sales Tax
Wednesday, December 01, 2004


WASHINGTON � While Republican leaders of the House and Senate are huddling for the next two days in Norfolk, Va., to chart the agenda for the upcoming Congress, White House officials meeting with them on tax reform are likely to debate the idea of a national sales tax (search).

President Bush and House Speaker Dennis Hastert (search) have both said the idea of a national sales tax deserves a serious look. For many, the idea of a world without the Internal Revenue Service is very seductive.

"We spend about $400 billion a year complying with the tax code. We spend $200 billion a year just filling out IRS paperwork," said Rep. John Linder (search) , R-Ga., who has proposed a bill that would create a national sales tax.

Proponents have spent millions on research and have concluded that a national sales tax can replace the income tax, payroll tax, estate tax and corporate tax. Advocates say the new tax would lower the cost of manufacturing and job creation and attract foreign investments, among other things.

"If we were to get rid of the sales or the income tax and the payroll tax and all compliance costs, we would be so ferociously competitive in a world economy that corporate America would not be competed with unless foreign corporations started building their plants in America," Linder said

...Cont'd

Much of the commentary on the weakening US dollar has focused on the competitive edge it will bring to US exporters -- and thus the benefit it will bring to the US current account balance -- and on the difficulties it will bring to exporters in the Eurozone. Surely there's a downside to devaluation: price inflation.

In my lifetime, the UK has gone through several times of significant devaluation and each has been followed by equally significant price inflation. Everything which is imported suddenly costs more and other things -- made domestically from imported raw materials or transported using imported oil -- rise in price to join them.

At the time of the 1960s devaluation of the pound sterling from $2.80 to $2.40, the prime minister, Harold Wilson, famously said that it did not mean that "the pound in your pocket, or in your purse," had been devalued ... a phrase that haunted him for the rest of his political life since it seemed to ordinary people that their pounds HAD been devalued by the subsequent price inflation.

In economics there ain't no such thing as a free lunch; and devaluation, which may well have been unavoidable and which was good for those who needed to borrow money, was terrible for those who had saved and disastrous for those on fixed incomes.

Why is there so little analysis of this sort of impact on the people of the US?

Is it because the US is immune from this downside: because of the size of the country (there are fewer things that cannot be sourced domestically), the size of the economy (some seven times as large as the UK's), or the widespread use of the dollar as a reserve currency?

Or could it be a conjuror's misdirection, and that price inflation is indeed waiting in the wings?

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10You may not be seeing the FOREST because of that BUSHY thing blocking your view !
The POG is still going UP, while all the "EXPERTS" are looking for a top (does NOT include Mr. S !)
The fun and games are only about to BEGIN !!!
Look at the US$ fall (LINK) and think what that means.
Hang on for the RIDE ---
TO THE MOON, Alice !
<;-)

From ample experience with these things:

Devaluations can have a TEMPORARY effect of diminishing imports and favoring exports, if the devaluation is significant. Say, 40%.

But, the effect is passing and temporary, because if credit expansion (as in deficit spending and more credit for the consumer) continues, the creation of additional funds goes on relentlessly, and soon the TEMPORARY effect of the devaluation "wears off". A further devaluation is necessary. And so on.

The country cannot achieve economic stability and balance in its relations with the rest of the world, until the creation of money is halted, and that requires halting further expansion of credit.

That's what Volcker did back in 1979 and interest rates went skyward, a very bitter pill for the U.S. Today, halting expansion of credit would bring on a MAJOR DISASTER for the U.S. economy.

Basically, today, it's China and Japan that are enabling the present credit expansion in the U.S., by buying enormous amounts of government bonds.

The relentless fall in the dollar is the predlude to China and Japan ultimately ceasing to buy more bonds. It will have to happen. When that happens, the U.S. dollar will cease to be the reserve currency of the world, and the dollar price of gold will rise, probably to levels we can hardly suspect.

Nothing new here, no doubt.

The GAB

http://www.usagold.com/gold/special/DenBoard.htmlWe are very excited to announce our December Buyers' Group. For the first time in company history, we have compiled complete date sets of the Denmark 20 Kroner Frederick VIII and Christian X gold coins. This collection has a representation for each year these coins were minted, beginning in 1908 and ending in 1917. The coins have been placed in a display case to preserve the state of the collection, making for an excellent presentation.

Quantity on this offer is a mere 37 sets, so we recommend quick action of you want to be sure to secure this unique piece of history. If this offer has you thinking "Christmas gift," you'll be pleased to know that placing your order by December 10th will allow us to ensure delivery prior to the holiday.

To view a picture of the collection, as well as additional details for this offer, please visit the URL above.

Orders can be place via the above website, or by calling the trading desk at 1-800-869-5115.

If government spending is not contained, it makes little difference how we structure our taxes and debt burden.
Government spending is the source of our downfall.
Tax discussions are but a distraction from this truth.

The sooner one realizes this truth, the better chance one has of getting a seat on the gold express ahead of the trend.

All aboard

With the market in fed funds trading slightly higher than FOMC target, through its NY trading desk the Federal Reserve boosted liquidity this morning with an overnight injection of $3 billion through open market operations -- repurchase agreements agreements conducted largely sub-target at 1.932 percent.

More significantly, the trading desk also used its forray into the open market to buy U.S. Treasury Securities outright through coupon pass targeting maturities in the range Jan 31st 2006 to Nov 15th 2006. The size of the purchase was $1.307 bilion, using dollars newly created in this event as a 'permanent' addition to the nation's money supply. At once these funds swell the cash reserves of our banking system, thus providing the base fuel for the mulitplier effect on money supply via the fractional reserve nature of the system.

Politically, money supply growth is the primary balm in a quack's medical bag for an ailing economy. As that easy growth gives rise to monetary depreciation, thoughts of gold for security grows in the minds of all who have savings and wealth to protect.

Give USAGOLD-Centennial a toll free call today for gold coins and bullion at prices that will make you smile.

R.

Greetings Gandalf and I completely concur with you ....
I think the bias is to the upside............

Sometimes when I'm in traffic and I am unable to speed as has become my habit on the open road ....and I come to someone who is in front of me ........in hibiting my desired speed ...... I am only thankful for the protection that they afford me when they appear........

I am thankful even now ........
I would not say anything to injur or harm ..
others or myself .

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.

Wednesday market excerpts

The price of gold rose above $455 an ounce on Wednesday as investors piled into the hard asset amid widespread worries about the dropping U.S. dollar.

Bullion touched $455.20 an ounce to mark its loftiest level since June 1988, before slipping off its peak by midafternoon.

Broad concerns about the declining U.S. dollar drove investors toward gold, which is viewed as a classic store of value when the greenback is under pressure.

"It is this continuation of the theme of dollar concerns and probably new funds coming into the market," said a head gold trader at a large bank in New York.

"Gold is sensitive to the dollar's devaluation," said John Person, president of National Futures Advisory Services. And "it doesn't appear that there is much available to defend or cure the dollar's trouble immediately."

The dollar extended its descent versus major currencies worldwide Wednesday on concern about burgeoning U.S. deficits.

The greenback hit an all-time low versus the euro at $1.3335 early Wednesday. The dollar has lost almost a tenth of its value versus a basket of currencies in four months on concerns about the U.S. current account deficit and speculation that Washington is happy to see a weaker dollar.

Money newly available to fund-type accounts at the start of the month mainly fueled buying in gold, dealers said. In futures, COMEX February gold moved as high at $457.70 before settling at $455.90, up $2.70 on the day.

----(see url for 24-hr international news, prices)---

HEADLINES

South Africa: Trade Deficit Worsens As Strong Rand Hits Exports -- AllAfrica.com

Dollar continues slide -- The Register-Guard, Oregon - Business

U.S. consumer spending and incomes rose in October, good economic signs -- CBC Canada

Bond yields, spreads fail to support ailing dollar -- Reuters - Markets

Dollar at 12-Year Low Vs. British Pound -- iWon

Euro hits record high vs dollar again -- Reuters

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

http://www.jsmineset.com/home.aspWednesday, December 01, 2004, 1:33:00 AM EST

Jim's Mail Box



Dear Friends:

Lars Lindgren sent me a fax today asking about the potential for a large amount of gold being taken for delivery in the December future month settlement.



The 7,638 Comex gold contracts (see Delivery Notices) represents 736,800 ounces of gold whose present value at $450 represents a monetary value of $331,560,000 which is a significant take down on delivery.

If this is the beginning of a trend in delivery take down, then the price of gold is headed much much higher.

http://www.sitedynamo.com/cwsv3/trial530369/MiscFiles/delivery2.pdfThe takedown trend has possibly begun...We shall see soon enough if it's going to take a life of it's own & give Spot a shot of Adrenalin...YGM

http://www.fromthewilderness.com/free/ww3/120104_world_burns_summary.shtmlSNIP
-- But when the run on the dollar begins, OPEC will inevitably at some point switch its pricing to the Euro, which the entire world is wrangling - much to Europe's chagrin - into not only a safe-haven currency, but a profitable one. The next house is being built before the old one is abandoned. When the run on the dollar begins, it will be as if the rest of the world declared war on the United States of America by launching a missile, dropping a bomb, or landing an army at Bethany Beach, Delaware. That this will lead ultimately to widespread global warfare seems certain. This is exactly the way the administration is setting it up to appear to the American people. Think of 9/11 times fifty.

Just had to share this -

Yesterday the message in my wife's fortune cookie said: "You will have gold pieces by the bushel". More likely it will greenbacks that are soon measured by the bushel!

BTW, unless something alters the trend, seems we will soon witness a test of the DX=80.00 support level. "Interesting" times!

A golden cheer to all
- Survivor

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Check out the US$ Chart at the LINK !
there it goes through 81.40 !
DIVE, DIVE, DIVE !
GET MORE Yellow.
<;-)

http://stockcharts.com/def/servlet/SC.pnf?chart=$SILVER,PWPADANRBO[PA][D][F1!3!1.0!!2!20]⪯f=GThe latest Silver P&F Chart.
HIGH HO SILVER, AWAY !!
Headed for $10.+ ?
<;-)

Good post. Re: "That this will lead to widespread global war."
What would it take to do that? A breakdown in communications on an impossible scale would bring WWIII. I doubt you're saying that.
But where are extra US troops going, announced today, December 1st? To beef up Iraq, but we need them home and we need them with their families. Why? I'm certain that the style of little conflicts, Korea, Vietnam, Grenada, Afghanistan, etc., will someday soon be concentrated and centralized to "urban wars" like Basra or Fallujah just as WWI and WWII were scaled down to the Korean War, Vietnam etc.
The trend is also towards more multinational or an "international" coalition. Any economic crisis now has potential to trigger social unrest, tribal, racial or class warfare, regional resource conflicts and more. Is this what you mean by "widespread global war"?

I concur w/ end results of all this could lead to disaster...Currency Wars, Trade Wars, AND maybe the worst kind.....Miss your insights from long days past.....If you've time please keep the thoughts coming.....YGM

http://news.xinhuanet.com/english/2004-12/02/content_2284793.htmSnip:

"...
BEIJING, Dec. 2 (Xinhuanet) -- The gold rush is reaching a feverish pitch in major cities across China, China Daily reported Thursday.
..."

Sundeck: Worth a read...watch out for "Gold Treasure"...sounds a bit like GLD...

;-)

Spoke with Michael Kosares of USA Gold today. He totally debunks what Gavin Maguire reported yesterday for Dow Jones. He says his gold business is booming. What is most impressive is the size of the orders, according to Mike. At times some of his staff are even having trouble keeping up with what has to be done it is so busy. Mike can't figure out what Maguire is talking about. Concern over the dollar fall is spurring demand in a major league way according to this Colorado gold pro.

The better interpretation hinges on seeing the word "by" with its meaning "beside" or "next to" instead of "within." You were quite right in saying greenbacks could likely be measured with bushels. But we also know that that bushels are a more standard measuring tool for foodstuffs.

So the best interpretation of your wife's fortune is that she'll remain wealthy and well fed. She'll have gold pieces, and because of it, no lack of food besides.

That's a keeper. Put it under a magnet on the refridgerator door.

In my haste to reply to the subject of your post, I overlooked the source of the "wider war" comment. Thanks, and I look forward to YOUR views as always.

http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=3372331
Snippit:

NEW YORK, Dec 1 (Reuters) - The price of gold rose to a 16-year high above $455 an ounce on Wednesday as investors piled into the hard asset amid widespread worries about the dropping U.S. dollar. Broad concerns about the declining U.S. dollar drove investors toward gold, which is viewed as a classic store of value when the greenback is under pressure. A lower dollar also helps lift the yellow metal because it is dollar-denominated and becomes less costly for non-U.S. buyers as the currency's falls.
"It is this continuation of the theme of dollar concerns
and probably new funds coming into the market," said a head gold trader at a large bank in New York.

The dollar has lost almost a tenth of its value versus a basket of currencies in four months on concerns about the U.S. current account deficit and speculation that Washington is happy to see a weaker dollar. Money newly available to fund-type accounts at the start of the month mainly fueled buying in gold, dealers said, while a jump in the price of silver above $8.00 an ounce on Wednesday,
an eight-month peak, also gave gold support. "It is the first day in the month, so there is new money being allocated to the funds, and it set off a bunch of technical buying," said another trader at a bank.


Black Blade: Some are just catching on. ;-)

http://www.nasdaq.com/asp/quotes_news.asp?cpath=20041130\ACQDJON200411301407DOWJONESDJONLINE000722.htm&selected=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.nasdaq.com/asp/gmWorldNews.asp&
Snippit:

NEW YORK -- The New York Mercantile Exchange's metals division, Comex, this week will extend after-hours trading of gold futures to include Fridays, a spokeswoman said, a decision that comes amid a surge in gold prices.

As gold extends its rally, Comex faces competition from gold-based products at other exchanges, including futures at the Chicago Board of Trade. Unlike many financial exchanges, Nymex and Comex in recent years have maintained their traditional floors as the only venues to execute trades in their benchmark products during regular hours, with online trading reserved for after hours.

Until now, after-hours gold trading at Comex would open online Thursday afternoon and then continue until shortly before the floor's open Friday. After Friday's floor close, there was no trading at all until the opening of an overnight online session Sunday.


Black Blade: Interesting that the Comex admits to growing interest in Gold. Soon - a 24/7 Gold market.

By somebody named Buttler. What do you think?

Let's say we gave the following lesson to a group of children. There are two metals of the same category (precious). The only outward physical difference is color; one is white and one yellow. They felt and weighed the same. They had each been used for the same purposes for thousands of years, but in the last hundred years or so, the white one was discovered to have many unique properties, better than any other material, that made possible many of the modern devices and inventions that made life better. Because of all the necessary uses on this white metal, all the accumulated amount produced over 5000 years was almost completely depleted because we couldn't produce it as fast as we consumed it. The yellow metal was basically used as it always had been and all of it was still around in a form that could be retrieved. Because the white one was used up so much, there was a lot less of it left in the world than the yellow one. And even though the world produced more of the white one than the yellow one, it used up even more. So, even though there is less of the white metal in the world, meaning it's rarer than the yellow one, there is less of the white one every day, while there is more of the yellow metal every day. Additionally, the governments of many countries in the world own a lot of the yellow metal, which they keep selling, while very little of the white metal is still owned by governments, meaning not much can be sold. If the yellow one disappeared completely from the face of the earth overnight, it would have little or no impact on the life of the average world inhabitant. But if the white metal disappeared, modern life as we know it would be disrupted beyond belief.

Now, the children are told that one metal cost 60 times as much as the other, and are asked to guess which metal is the most expensive. How do you think they would answer? It's that answer that permits me to be a gold agnostic.

I did not mention that most newly mined silver comes as a byproduct to the mining of other metals, so I did not discuss the differences of cost of production between the yellow and white. Nor did I point out that the white metal had a much larger short position than the yellow one. And I did not raise the issue that if all investors in silver switched and put their entire proceeds in gold, it would hardly cause a ripple in the price of gold. While if 1% of the amount invested in gold were to migrate to silver, the silver price would immediately explode by many times the current price.

Snip:

"...
Even with the dollar falling, and US gaining a currency premium, it still will have a very difficult time competing in the international market. Yes, short term, this strategy should cut the current account gap somewhat, but at what cost? Depending on what product we are talking about, the cost difference is in some cases up to 80% less. A currency premium isn't going to overcome those cost differences.

The other problem with allowing the dollar to fall is that it will hasten the exodus of other countries to use Euros and invest elsewhere as the confidence in the US economy continues to wane. As more countries use Euros as the de facto reserve, the US dollar becomes less attractive, and therefore, more costly to attract foreign investments, thereby forcing Greenspan to increase long term interest rates, which makes financing the debt more and more costly in the long run.

..."

Sundeck: Cost differences of 80% are going to take a lot of devaluation to correct...

Just as China is determinedly diversifying the sources of its manufacturing inputs (raw commodities and energy), it is simultaneously diversifying the sink for its manufacturing outputs - away from the US, so as to incrementally lessen the importance of the US as the consumer of last resort. This has to happen smoothly in order to avoid large transients in the global flow of goods producing unwanted "inductive" effects throughout the financial system. It will be remarkable if it all corrects without major mishap...

Just one man's view...

On a completely different tack...I notice large companies in Japan are using profits to buy Japanese real estate rather than returning the profits to investors as dividends...risky?...or do these guys see the end to the 13-year-old land-asset deflation in Japan??

;-)

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

For all you gold and silver bulls that happen to be out of the market, I hope we get the brief pullback to get you some good entry points and for me to re-load the heavy leverage positions. It won't be easy to trade the metals because it's not simply straight-forward fundamentals and technicals, but rather mixed with politics and international posturing of foreign currencies. Political haggling over currency rates will make the unpredictable more probable�linear thinking in a non-linear world will not work moving forward. Time to think out of the box�Expect a discontinuity in the financial markets and prepare as best you are able!! We are in uncharted waters with the entire globe operating on fiat funny-money. Next year should be a wild ride!!!

Black Blade: Interesting article tonight. I had mentioned the possibility of $650/oz. by year-end. Maybe not but a realistic inflation adjusted price suggests a much higher Gold price (maybe more if "real inflation" non-BLS data are used).

http://www.chinadaily.com.cn/english/doc/2004-12/02/content_396667.htm...for my last post

Please tell us if you "BROUGHT IN" that MCF/day Gas well ?
<;-)

Looks like another 2 to 5 days before the next NatGas well comes in. I have another 11 permits to drill yet (not to mention some additional geology/lithology/hydrology work for the enviro side of the biz). Probably another couple of months or so of work on this project. Gotta head back out early in the morning and maybe be into formation. ;-)

- Black Blade

It's that kind of haphazard application of facts and logic that permits me to be a Butler agnostic.

I used to be a mezmerized follower until I was brought back to better judgement by more objective presentations from guys who could explain why things are as they are instead of incessant whining about the size of a short position and a bunch of improbable "what ifs" for a big payoff.

No thanks.

But could you please explain to me why the things he is saying don't make sense. Just trying to learn. I have been considering trading in some gold for silver. You really didn't say anything about why he is wrong.

What is your take on today's oil market action. Are we going to see more price softness, or is this just a head fake.

The way the Fed is pushing the coupon passes, I would expect oil demand to remain strong, and prices to return to an upward trend, exacerbated by the falling dollar. Your thoughts?

The EIA stated that oil inventories rose 0.8 million bbl and gasoline about 3 million bbl. Actually this is a "drop in the bucket" but some simply want a reason to take profits as we go into the last month of the year. Refinery utilization rates rose above 94% for the first time in several months. Also, OPEC and Saudi officials said that they would raise production - where and how many times have we heard that before? What I would like to know is what the API inventory data was. Anyway, the oil price remains well above the $40/bbl "sweet spot". Tomorrow we get US NatGas storage data.

- Black Blade

Butler has written a paper mountain of silver rants and raves and it would become a full-time job to set it all in order. I'm just saying there's better guidance to be had and giving a quick warning to climb Butler's mountain with a lot of grains of salt.

Just to cut to the chase ask yourself honestly one question. If Butler's facts and logic in your previous message is completely square with reality, why is the market price for the boring piles of yellow so very very much higher than for Butler's amazing shortage-suffering silver wondermetal? When the market says $450 gold versus $8 silver despite everything Butler says against gold and for silver it's not too hard to see his perception is fundamentally skewed.

It's one thing to recognize a paper mania that will lift hard assets in general when the fad collapses, but it's crazy to pit a cheap silver metal against the commanding yellow metal with a meaningly assortment of trivia and conclude like Butler does that the market is getting it wrong here, too.

I can believe in temporary paper fads that can undermine metals in general, but I can't believe in some kind of additional coincidentally raging anti-silver fad which is needed to make Butler's perceptions square with the market reality.

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=216891
Snippit:

HOUSTON, Dec. 1 -- Although crude prices have fallen considerably from record highs in mid-October, the retreat doesn't necessarily signal the start of an extended price slide into 2005, said analysts at the Centre for Global Energy Studies in London.

"The path of oil prices in 2005 will depend on the extent of the slowdown in economic growth and the severity of winter weather," said CGES analysts in their Nov. 22 monthly report. "US heating oil stocks are as low as they have ever been for the time of year over the last decade and well below the levels seen at this point in each of the last 2 years. While they are probably sufficient to meet demand if the winter is mild, they will not do so if it is severe," they said.


Black Blade: Ditto that.

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http://www.gold-eagle.com/editorials_04/hommel080104.htmlTed lost me years ago, but...some points to ponder with regards to Silver...
-It is hard money.
-It has thru history (pre-manipulation) traded at approx 1 oz AU to 15 oz AG.
-There is 7 x more Gold above ground stocks than Silver.
-@ 15 to 1 ratio Ag should be +\- $30.00 p/oz

Jason Hommel makes a VERY good case for Silver as does Ted Butler only he keeps it simple....I for one, from MANY other analysts critiques as well, fully believe Silver will give awesome returns some day...Ted Butler as well as folks like Bill Murphy deserve MUCH credit for awakening people to the underbelly shams of both Gold & Silver....FWIW....YGM

Yes ... for some things; a lotta things, in fact...and it may turn out to be a better way to make a profit in the short, medium or long terms. Who can say for sure?

Ted Butler has written much on silver over the years, and many people have probably benefited from his knowledge. Silver has already shown remarkably good gains in the last year or two, with probably further good gains to be made. After all, I cannot imagine that the likes of Warren Buffett (and others) have invested in silver just because they like the way it shines under the full moon.

However, to address Ted's reasoning with respect to silver, I would suggest that there are many "illogical" imponderables in the investment world that are not easily reconcilable on the basis of commodity supply-and-demand, or "functional utility" reasoning.

To offer some examples:

1. A house with an ocean view may sell at a vast premium over one without.

2. A chipped fine porcelain plate, or dinner set, may be "monetarily" worthless while an intact one may cost many thousands of dollars...even though they are both functionally equivalent and of comparable availability.

3. An artwork by an artist who "has made it" may sell for a ridiculous price when compared with another artwork of an unknown artist involving far greater skill and of much wider "common" public appeal (get the school-kids to do the test).

4. Certain wines sell for vast premiums over their neighbours with comparable or superior "drinking qualities".

5. People may pay 20-times more for a car that is functionally equivalent to another - in fact, the cheaper car may be far more functionally diverse.

6. Some people are prepared to die for beliefs that are patently absurd to others, and which can be demonstrated to be in error by the vast weight of scientifically determined knowledge and reasoning.

To cut a long story short, gold has acquired a place in the collective human psyche that is remarkably persistent. Sure, there will be ebb and flow in relative "values" over time, but gold serves its purpose(s) just as silver serves its...and Picasso's serve theirs...

Cheers

;-)

You picked a bad day to pick on silver.
It went up 37 cents, a hefty increase,
practically 5 times the gold increase.
For the last few years it has beaten
gold consistently. In Butler's mountain
of rant, as you put it, one will find
treasure, reserved for keen minds.

He uses exactly the same logic that has
been used by gold advocates which has
uncovered desparate tactics by govern-
mental entities to forstall the inevit-
able.
The big problem with silver is its hugh
markup. I have some silver for the last
5 years and only now break even, whereas
the gold shown remarkable gain.

So, please, restrain your antipathy for
silver. A little bit on the side makes
sense for the biggest gilt bugs and even
MK won't agree with you: After all, he
sells them silver dollars also.Cheers.OvS

Since I've seen the light I've totally given up Butler and his adherents as a lost cause, the blind following the kooky. Like I said to Gold Fella, I can't imagine anyone with the time and patience to whittle away Butler's propaganda mountain, least of all me. But seeing that a good ol prospector like yourself has taken the time to show interest in a few of the outcrops on that mountain, I'll tap them with my hammer and see if they're punky or solid.

----Silver is hard money.

Hardly. Silver is a white metal. It has a long history of various employment one of which was use in coinage. Coinage and money are technically distinct from one another. Coinage is representational for money, and circulates with equally representational paper notes. The notes and coins are properly called currency, not money. Strictly speaking you can't put your hands on money, it's an intangible system as a whole. To reuse an analogy that I've been told, if we consider the currency of coins and notes to be analogous to the individual words of nouns, and if loans and contracts for currency are considered as a parallel to the verbs that connect nouns into strings of ideas, then the term money is seen in the analogy as parallel to the term language which applies to the whole intangible system.

----Silver has in history traded at 15 to 1 with gold.

In history sabre-toothed tigers used to roam the fields but I can't eat a mammoth burger today if I wanted to. History is not always a reliable indicator of the present because some changes are permanent just as certainly as some others are cyclical. Wisdom is being able to figure out which is which.

----There is seven time more gold above ground than silver.

Wrong. Atoms are destroyed only in nuclear reactions, and the world has as much silver today as it had when it was created. Same goes for gold. And every year more silver is mined up to the surface than gold is.

What this punky (spongey) outcrop is probably really trying to look like on the surface is that most of the surface silver has been put into use whereas the surface gold is just laying around in heaps of unused stockpiles. That's wrong too and my rock hammer sinks right through the shallow crust like this. Just because lots of the gold has been kept in a refined state and put to use as reserves doesn't mean that a usage shift is imaginable which could make its availablity to the market exceed that of the silver that has been employed and alloyed into other more or less pedestrian uses. Only a kook like Butler would attempt to claim otherwise and talk like this about big "stockpiles" of gold and little ones for silver.

Silver has some merits of its own, but they almost all boil down just to being based on its relative cheap affordability for industrial applications as compared with higher costs for the various alternative precious metals. All the other talk of silver being poised with a better investment potential than gold is just plain blind to the reality and potential of gold as it evolves out of history leaving the mammoth burgers far behind.

So what? Big deal. Haven't you heard? Every dog has his day.

I wasn't wasting my time talking about a day or week timeframe. I'm not a day trader and I don't talk to day traders. I'm talking about things that are meaningful social phenomena, not things that make you go "woooHOOO!" once in awhile if you happen to catch it on your trading screen and lock in the trade. And don't waste my time talking about longer timeframes and performance. For every timeframe you cite that silver bested gold, I can quote another where gold bested silver. But if you insist, then lets be fair and look at where they started (YGM says 15 to 1) and look at where they are now. Looks like gold is winning at over 50 to 1.

You're flat wrong on your other point. Butler's logic is NOT the same as the logic used by the special gold guys that I was talking about earlier. Apparently you missed the part where I bothered to talk about the occurance of paper manias as something distinct from Butler's fanciful anti-silver mania.

There IS a paper mania, and when it breaks all anthropological signs point to gold as the beneficiary. But like I also tried to say, there is NOT also an anti-silver mania, so there is nothing more to be counted on to give silver the extra boost that Butler tries to claim. He doesn't understand markets, he doesn't understand gold, and he doesn't understand money. I'm sure he's an expert in silver, but so what? I'm an expert in water and I have a friend who's an expert in wastewater and another in aluminum but that doesn't mean we should expect the markets to send their prices to the moon. Why should Butler be any different? Kooky stubborn ego.

No, you don't want a flat tax. With a flat tax everything will be taxed. And surely you don't think that gold will escape that tax, do you? Presently, Title 26, the US tax code, is written so cleverly that people believe that voluntary tax payments are mandatory. Under the flat tax system, all payments will be legally mandtory. Every transaction will be taxed: food, water, shelter, metals, etc.

Some may proffer the argument that gold should not be taxed on the basis that an exchange of money is not taxed. If you take a $10.00 bill to a bank and ask for two $5.00 bills, there is no tax applied to that transaction. But gold is not considered curency. So it's taxed.

So here's my abstract thinking. Let's say that the face value on a gold coin set by TPTB is $50.00. You exchange that gold for a house say at a value of $500.00/coin. Therefore you are liable for paying tax on the $450 per each coin profit. Then you still get to pay your yearly tax on the house. Sound convoluted? Perhaps, but don't think that will stop them.

Just my thoughts.

Although I detect a bitter undertone to
your writing, I really like the way you
talk and think and find it very enter-
taining. You lighten up my end-of-day.

But, nothing personally, don't you think
you should change your name from Ag Moun-
tain to: Au Mountain ? Good Night. OvS

Where to start and what to say??

The question at hand seems to be: "Will silver beat gold on a percentage basis?"

In any given investment decision, one can construct a ledger with pro arguments on one side and con arguments on the other. The next step is to examine the collective inputs to see which arguments and consequently which side of the ledger "holds the most water". I have done my own examination of the exact question that you have raised and noted the following.... so far.

1. Those that believe that silver will vastly outperform gold on a percentage basis, point to a vast body of FACTS and use CLEAR, UNDERSTANDABLE LOGIC.

2. Those that believe that gold will outperform silver support their belief with OPINIONS and something I would most politely describe as NOISE.

3. I have yet to hear the first, concrete FACT from the gold camp.



Gold Fella ...I have been reading Butler for several years and studying the silver market for the past 20 years. I believe that the Butler excerpt that you posted here earlier today, is the SINGLE BEST ENCAPSULATION that has ever been written to answer the silver question. His little story should be written in stone so that those that WANT TO SEE will have a convenient place to remind themselves of why silver was chosen over gold.

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

Just returned from the annual San Francisco Gold Show ... As a one-sentence, summary statement, most of the world-class experts like gold ... but they love silver ... in particular, Jim Dines and Doug Casey. I could give a lot of details as I have done in the past, but they would just boil down to the above statement ... save this one final comment. One of the experts said that the primary goal of investing is not to make money but to keep what you have. Going forward, gold will certainly do that job ... its just that silver will do it so much better!

For the sake of discussion, I will assume your 3 points are all true.

One thing I have learned is that "FACTS and CLEAR, UNDERSTANDABLE LOGIC" do not always carry the day.
Generally, folks who make fact based decisions are in the minority.

I do not have any knowledge that gold or silver will outperform the other.
I do see that silver premiums are much higher.
Dollar equivalents of silver take up much more storage space and shipping costs.
In my experience, silver gets pumped and hyped more by boilerroom types that set off my BS detector.
These points will probably steer more newcomers to gold.
In a crash, the newcomers will likely be the ones driving the market.

For me, Silver conjures up images of grandmas walking around Las Vegas and Reno, wearing too much perfume and smoking too many cigarettes.
Gold conjures up images of ancient civilizations and Kings.


Best Wishes

I'm going to intrude just long enough to throw my own two-bits into this fun conversation.

You want facts, so here they are. Silver is a metallic hard asset. Gold is a metallic hard asset. Silver is grey like a dozen other metals. Gold is yellow like none other.

Paper money weakens over time, eventually being replaced by another -- call it the next in line. Metal is forever.

Any amount of money invested in silver is 60 times more difficult to carry around and store than the same-sized investment in Gold.

At its barest level, if we accept the premise that the market is always right, the only thing we metal investors can count on is that the price/value of silver tomorrow will be pretty similar to the price/value of silver today, and the price/value of Gold tomorrow will be pretty similar to the price/value of Gold today. That is to say, the perfect market is not very easily surprised. At its barest level, in addition to that premise, over time we can also expect the price/value of these two metallic hard assets to rise -- owing to the inevitable depreciation of the monetary numeraire.

Now, all things being equal under the above-stated premises, as averaged out over all the participants in the *perfect* market, the one fact we can agree on among Gold and silver investors is that investors in silver are the more speculative of the two groups.

How do we know this for sure? Because, again, all things being equal, all unbiased investors who are simply looking for safe diversification into a metallic hard asset will choose the portable efficiency of Gold over the bulky 60X hassle of silver.

Put another way, for an investor to willfully choose the bulky hassle of silver over Gold as an alternative to cash it effectively means that that investor is bucking the perfect market, effectively saying that the market has gotten its relative pricing/value wrong, effectively saying that the market is *wrong enough* to justify the added 60X hassle of all that silvery bulk. In other words, they are *speculating* on that account and that's what's got them all so damned insecure all the time.

That's why they fixate on the stats and *facts* as you call it (i.e., *trivia* as Ag Mountain rightly called it) and worry about lining it all up in a vast body of justification as a means to give them a measure of peace of mind for the duration of their financial speculation.

Gold advocates/investors are far more secure because we're not speculating. With our Gold acquisitions we're simply performing a natural act -- respecting at the barest level the premise of the general day-to-day perfection of the market, the inevitable depreciation of paper, and the efficiency of moving $1,000,000 in a briefcase on wheels instead of requiring a team of 60 movers or a forklift to move and store the same price/value.

So there you have it. Silver investors are speculative and anal about their grasp of statistical trivia to a fault. Meanwhile, Gold investors are (except for a few cracked eggs) generally calm, worldly and philosophical because at the barest level of interpretation we Gold investors are effectively engaged in a natural financial act of self-preservation -- that is, a natural capacity that almost all of God's creatures are born with.

The philosophical orientation comes from being so closely in touch with life on a natural basis. We are more concerned with understanding these matters and universal patterns of the human heart and soul, call them *opinions* if you insist, than we are with your false idol of statistical speculative justifications.

It's these matters of human social politics and behavior that's what's driving us forward, but you silver clowns with your tables of stats are all merely looking in a rearview mirror! Stats only show you where we've already been. Gold investors/advocates generally have interesting conversations that transcend usefully into many facets of the art of living a productive life. The conversations you silver guys generally have in support of your investments serve no other useful purpose. Numbers shouted into the wind.

Go with the flow, in the footsteps of giants. This is one natural act that will pay off like none other -- thanks to the happy coincidence that your birthdate put you into this phase-period of socio-economic evolution.

Gold. Get you some. --- Aristotle

Thank you for your insights.
A simple question : Why do you think W. Buffet chose to buy a lot of silver instead of gold some time ago ? Did he want to avoid causing a chain reaction (a financial panic) by buying publicly a lot of gold ?

See? That's basically what I'm talking about.

Silver investors like to obsess over Buffett's silver play almost like it single-handedly justifies their own speculation. They're trying to set up their own giant and settle into one of the toeprints as if it means something. But in all fairness they really need put the size of that silver deal into its proper context relative to Berkshire Hathaway's many larger corporate and financial holdings. And until the day arrives that they consider using those decisions by Buffett as their personal guiding light, I'll maintain my claim that they're cherry-picking their stats/trivia to suit their peace of mind regarding their own silver speculations.

They really don't care about Warren Buffett or Berkshire Hathaway's wholistic investment schematic except for the personal pacifier that more has gone right than wrong in total, and therefore somehow that justifies their own emulation of any one of the parts.

Again, until the silver guys citing Buffett are ready to see the relative size of these parts in proper perspective and sing accordingly the praises of Buffett/Berk's holdings of Acme Brick, Benjamin Moore, BH Finance, Fruit of the Loom, GEICO, General Re, Intl Dairy Queen, Justin, NFM, Pampered Chef, etc., then I don't see a rational basis for dwelling on the silver out of context. Just imagine how much more office paper they've bought to feed the insurance and re computers, and how much more cotton and elastic they've bought to feed FotL machines! The silver guys don't care because they're informational cherry pickers, ignoring the larger context that matters most of all.

Gold. Get you some. --- Aristotle

968 is not 'obsessed' as you imply. He asked a simply question, "Why do you think Buffett bought the silver?"

I ask a simple question, because silver is 1/60 the price of gold (per oz.) does this and this alone cause silver to be a 'lousy' investment as you imply?

Perhaps rhodium that was recently $3,000 /oz. is a superior investment to gold given this weight-to-value thesis of yours?

Not suggesting anything, simply asking.

I like gold. I like silver. Both are presently caught in the gears of the great fiat machine. The machine is over-heating and about to blow up. The only thing worth salvaging from the wreckage will be gold and silver.

Recently, I made some posts about the nature of gold. Somehow, people here thought that I thought that the price of gold in fiat will be going down. Nothing could be further from the truth.

I do believe that eventually, all will be valued in terms of gold. My brothers keep telling me that gold is a bubble. They ask me when I am going to cash out. I try to explain that the idea is to eventually move all assets into gold, to the extent that is possible.

Now I have a fair amount of silver holdings. I do think that as the "bull market" in PM (in quotes because I think it is really a bear market in fiat), silver will rise faster than gold. Part of the reason for that is the size of the leveraged bet that has been made against gold. Its rise will be stubbornly resisted. But the resistence will prove useless. Silver, one the other hand is a side-show. When it starts to rise, its rise will be annoying to the powers that be, but it is not as devestating as a rise in gold. I think that soon silver will rise like a rocket, while gold struggles forward. I think that foolish investors, seeing the rocket rise of silver will eagerly trade their gold for my silver. But all of this will unfold with the passing of time.

Yes, silver is mined in massive quantities compared with gold. Yes, silver is consumed as fast as it is produced. For those wishing the perfect standard of value, this industrialization is a big downer. Think of silver as a means to buy a lot more gold.

Myself, I bought one third silver, two thirds gold when I bought my PM's. Is there anyone else thinking the same way I am?

Man what a hornets nest in here over what has and always been wealth...Gold & Silver.....One buys a horse the other buys boots...AG has every bit as much history and modern ownership as AU...Advocates don't need to bash one to justify owning the other...Diversification is wisdom and openmindedness is a Golden Rule...Never say never!!!...Now I gotta go earn some paper nothings to pay for living...
Have a good day all......YGM

It's Gold and Silver!

Both metals are precious. And yes there has been a historical relation as both have been used as money. The average historical ratio has been around 15 and is now around 60. Some years back the Gold/Silver ratio has reached an extreme high of 105 and has steadily come down since. Why shouldn't the ratio fall further in line with its
historical average?

While I'm not a fan of Gold ETF's, I feel that Silver ETF's will also become available in due course. James Turk is contemplating to start "Silvermoney", analogue to his "Goldmoney" sometime during next year.

And why is speculation so bad, anyway? After all the word's origin means to plan forward and expect certain outcomes on ones actions. Something every businessman and Investor should be doing diligently, anyway.

I've been adding to my Gold stash for more than 30 years now and will keep on doing so, I also very much enjoy my Tiffany and other Silver trinkets every day. And I even "speculate" in some Gold and Silver miners and are making some great profits in l.t. Silver Options trading in �'s.

I probably still don't get it, but I feel kind'a happy to have been able to profit from my strategy over the years and therefor have been able to grow my physical holdings by a wide margin.

Thanks for reading - cb2 - back from a few weeks in your coutry and Canada.

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http://www.ecb.int/press/pressconf/2004/html/is041202.en.htmlJean-Claude Trichet, President of the ECB: Introductory statement to the press conference

2 December 2004

Ladies and gentlemen, the Vice-President and I will now report on the outcome of today's meeting of the Governing Council of the ECB.

All in all, the short-term outlook for inflation remains worrisome, but our assessment of price developments over the medium term is unchanged. At the current juncture oil price developments are having a sizeable impact on consumer prices in the euro area, while there is no significant evidence that stronger underlying domestic inflationary pressures are building up.

Accordingly, we have left the key ECB interest rates unchanged at their historically low levels.

At the same time, we recognise the existence of upside risks to price stability over the medium term. Continued vigilance is of the essence with regard to those risks.

...Concerns relate in particular to future oil price developments and, more generally, to the potential risk of second-round effects in wage and price-setting throughout the economy.

...Over the course of 2004, monetary dynamics have been driven by two opposing forces. On the one hand, the historically very low level of interest rates in the euro area has stimulated M3 dynamics, in particular demand for the most liquid components of M3 contained in the narrow aggregate M1. On the other hand, portfolio allocation behaviour has tended to normalise over the past year following the exceptionally strong preference for liquidity observed during the period of heightened economic and financial uncertainty between 2001 and mid-2003. However, investors� preference for liquid assets seems to have remained greater than would typically be expected at the current stage of the economic cycle, possibly due to the fact that the economic and financial uncertainties in recent years have been relatively strong and protracted.

The very low level of interest rates is also fuelling private sector demand for credit. In particular, the demand for loans for house purchase has continued to be robust, supported also by strong house price dynamics in several euro area countries. Growth in loans to non-financial corporations has picked up further in recent months.

As a result of the persistently high growth in M3 over the past few years, there remains substantially more liquidity in the euro area than is needed to finance non-inflationary economic growth. This could pose risks to price stability over the medium term.

----(from speech at url)---

Monitor this one later in the day for the Q & A update.

If the relatively strong euro (at historically low 2%) is frankly cause for such inflationary vigilance as seen in Euroland, it begs the question, how much more troubling is the internationally weakening U.S. dollar (also at the same 2%) with respect to our own inflationary prospects here in the USA?

On either side of the Atlantic, choose gold.

R.

Despite the market in overnight fed funds trading in line with the FOMC 2% policy target, the trading desk for the Federal Reserve this morning launched $8 billion in new cash via 14-day repurchase agreements, plus $6.25 billion via overnight repos.

Easy money is easy come, easy go. Choose gold.

R.

There remain a lot of questions to ask on the silvermarket :
- Is the silvermarket being cornered in a more or less similar way like the goldmarket ?
- Are we evolving to a "Freesilver" spot market ?
- Who is benefiting of it and who orchastrates this (cfr. Fed-IMF for gold) ?
- What about CB silverholdings, CB silver sales/purchases ?
- Does anyone has figures on the US (and other countries) strategic silver stockpile.

Your thoughts, please.

@ Aristotle :
Thanks for your answer, but :
1. I'm not obsessed with silver, but I prefer gold over silver, and I prefer silver over paper. It's a matter of not putting all your eggs in the same basket.
2. I'm not buying anything because W. Buffet, B. Gross, Naqvi,... or William Howard Taft say or have said something. I just asked your opinion on this fact.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh77603_2004-12-02_14-47-28_n02436896_newsmlNEW YORK, Dec 2 (Reuters) - U.S. inflation risks are on the rise, a growing number of Federal Reserve officials believe, ... the Wall Street Journal reported on Thursday.

The newspaper, which cited "officials," said the concern was based on slowing productivity growth, the falling dollar, higher oil and commodity prices, recent inflation data and anecdotal evidence of businesses raising prices.

...more business contacts are telling Fed officials they are able to pass on higher costs of oil, commodities and health care to customers.

..."a few officials" believe the Fed can limit the odds of a disorderly plunge in the dollar by erring on the side of higher rates.

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

Hmmm. "...disorderly plunge..." and "erring" with higher rates...

There is nothing in that last statement that builds confidence in the fate of the dollar, or, for that matter, in the concurrent fate of U.S. economy.

Choose gold. Rest easy.

R.

There remain a lot of questions to ask on the silvermarket :
- Is the silvermarket being cornered in a more or less similar way like the goldmarket ?

Doubt it, and the goldmarket is not being cornered as much as the methods to keep the price suppressed are being overrun.

- Are we evolving to a "Freesilver" spot market ?

Probably, within 2 to 18 months.

- Who is benefiting of it and who orchastrates this (cfr. Fed-IMF for gold) ?

Physical holders benefit.....sheeple pay.

- What about CB silverholdings, CB silver sales/purchases ?

CB's don't have silver holdings.

- Does anyone has figures on the US (and other countries) strategic silver stockpile

China is assumed to have a stockpile of silver (whether it is available anymore is doubtful), India has some as well..but is not believed to be for sale.

US stockpile........6 billion ounces!! wait...I meant ZERO! as in they sold the last of it in 2003.

http://news.goldseek.com/Dani/1101922782.php.

Although this down draft could be from something altogether different, the most logical source for the change in direction is probably the front page story in Financial Times this morning about a possible joint intervention by the ECB and BOJ to buoy the dollar.

Keep in mind that we warned about intervention some weeks ago and suggested when it comes they should be viewed as buying opportunities. I stick with that. The positive (?) effects of currency intervention seldom extend beyond the short term. The dollar drop is based on some fairly serious fundamentals having to do with the twin deficits and the tremendous international dollar overhang.

The report is based on an interview of "a senior Japanese finance ministry official" who attempts to put some teeth in the standard Japanese position by dragging Europe into the fray. The official states that dollar should not be weakening given the superior U.S. growth performance - which is a load. He also states Japan and Europe have a right to defend themselves. What about all the years the United States shouldered the burdens of a strong currenccy -- a polich which provided a huge LONG-TERM export advantage to the likes of China, Japan and to a lesser extent Europe?

A couple points of interest:

1. There has been no concurrence from Europe as yet.

2. The discomfiture is coming out of the political sector in Japan, not the BOJ (as might be expected).

3. The "official" condemns Alan Greenspan's comments on the twin deficits, dollar etc. as essentially throwing fuel on the dollar fire.

4. He discounts implicitly the United States' ability to push its weak currency agenda.


More and more this is taking on the appearances of a high-stakes economic war with the battle lines being clearly drawn.

I should add a fifth and a sixth point of interest:

5. Any siginificant move downward in the gold price is likely to be met with short-covering as the long-term bear market in the dollar and bull market in gold are likely to remain intact. Private physical owners worldwide will not be the only ones looking to buy the dips.

6. Major league market players (commodity funds, hedge funds, etc.) are unlikely to take the threat of intervention - joint or otherwise - seriously under the current circumstances.

http://news.ft.com/cms/s/712b751a-43d8-11d9-af06-00000e2511c8.html
"when a country with a key currency has a deficit in its balance of payment � that is to say, the United States, for example � it pays the creditor country dollars, which end up with its central bank. But the dollars are of no use in Bonn, or in Tokyo, or in Paris. The very same day, they are all re-lent to the New York money market, so that they return to their place of origin . . . if I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan, I would have no objection at all to ordering more suits from him." --Jacques Rueff, President de Gaulle's economic adviser, interview to the American financial writer Fred Hirsch (1965)

Yes, I too am accumulating approx. 1/3 ($ value) in silver and 2/3 in gold. I occasionally count (oz.'s) and the ratio is about 20:1

...and man! Do I hate that storage problem!

;)

A first salvo in the economic and currency war. The irredeemable debt berg of the US reserve currency has amassed over the years and is set to inflate away by unilateral devaluation. After borrowing 80% of the globe's savings for years this won't succeed.

This maneuvering in a free floating currency regime always effects all participants. Eventually it will become "beggar thy neighbour" policy as the final step will be competitive devaluations.

A recipe for financial Armageddon leading to hyper-inflation and potential economic depression.

Got Gold -and some Silver ;>( ...cb2


PS: BTW - Let's watch Bode and the Austrians Super Gee'ing
the Birds of Prey in Beaver Creek together ...

Accumulating gold is accumulating gold. In terms of silver the 2 factors that have me intrigued are:

a) above ground stockpiles are slight
b) the AU/AG ratio, now near 60 is out of whack.

This puppy may outrun gold, at least in the early phrases.

Perhaps the answer to your question (126913) needs to come from your own analysis, research and common sense. As you may have intuitively figuered out by now, there are many here who do like silver. These include Aristotle and Ag Mountain. There are also those of us who believe that the price of silver will, one day, soar. I have never been able to understand the silver haters "either/or" attitute of investing in either gold or silver. Why not both? I'm invested in both gold and silver and, though I've asked, I've never received a satisfactory answer why one can not favor both metals. I usually get a rant based on the weight difference or some other equally innane personal preference or bias which makes no sense to my way of thinking. Even if you hold gold for purely political reasons, is this cause to NOT hold silver?

Many have studied Butlers' work. Another good silver analyst is Morgan and also Mr. Ski who posted earlier today. Fwiw, I agree with Butler's facts (which I've checked!!) and his basic opinions on the silver supply/demand situation now and in the past. He has published an impressive amount of research (and opinion). I do NOT agree at any with Butler's complaints that the price of silver is manipulated by the paper market or with his opinion that more of any commodity being sold short than exists in storage is (or should be) somehow illegal. For every contract sold, one was bought. Think about this simple fact......If short selling were not available, and you wanted to buy...you wouldn't be able to because there could be no sellers unless someone who had already bought decided to sell. Open interest could never increase! No growth! Yet Butler complains about market manipulation??? This is basically the Exchange rule change which was enacted (liquidation only order) which broke the price of silver in 1980.

My own opinion is that there has never been a shortage of silver or even the perception of short physical supply. This has been so basically forever. But, 5000 years of accumulated silver (truely huge amounts!) has been depleted (used up) over the last fifty years and this yearly supply/demand shortfall continues while the price of silver has been driven so low (during the time 5000 years worth has been consumered) that many primary silver suppliers have gone out of business.

What remains is a market that runs up on speculative inflows and then down again in relatively short term mini buying sprees and mini panics. It trades on a mostly technical basis. I would love to know what percentage of the market's longs are there based on a belief that a real time silver physical shortage will soon occur (soon meaning sometime in the future...from a long term perspective). These would be the small speculative class in the COT reports. It is simply a matter of supply and demand (physical supply and demand). When (if) this occurs the inelastic uses of silver will drive the price high enough to cause a tremendous buying frenzy (imho).

One last note, when thinking of available silver, remember that like any other metal, that silver must be in an acceptable delivery form. An industrial user doesn't want and will not accept silverware, jewelry or grandma's tea set to fill an order for X number of ounces. In deliverable form, there is very little silver remaining and in deliverable form silver stores ARE a very small percentage of that of gold.

I'd suggest that you might like to study Butler's work, buy the annual Silver Survey, learn what you can about how the futures markets work as these determine the metals' prices. You won't get much help on how the futures markets work on this forum but there are volumes of information elsewhere. Fwiw, I'm obviously a silver advocate and hold physical (beautiful coins and bars) and paper investments. Finally decide for YOURSELF if silver is something you care to invest in or not. Only you can decide and only you will have to bear the consequences, whether beneficial or not.

I often wonder why soybean investors don't get all upset when someone else suggests investmenting in corn?

Precious metals ..get you some
rich

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10ECF, -- That is a "MARVELOUS PAINT JOB" on the US$ Chart today !
LOOK at that CHART (at the LINK).
Too bad that you can't do it EVERYDAY !
<;-)

http://news.goldseek.com/Dani/1101922782.phpge (12/2/04; 09:26:23MT - usagold.com msg#: 126942)
Graphic Analysis of the Price of Gold in Euro
http://news.goldseek.com/Dani/1101922782.php
--
YOU did not say a word about this GREAT Euro discussion with FANTASTIC charts and TA work !
EVERYONE should be sure to study that LINK !
Take another bow, Sir GE, and give all us your thoughts too.
<;-)

Yes, Gandalf, what a piece of work it was....so obvious to all the players. Notice how they didn't buy it (the dollar, that is). Every attempt to prop ol' USD is met with more and more scepticism. And the bashing of gold is met by new and stronger buying, limiting the downside.

The gold shares have taken more than their share of beatings this round, I suppose to shake out as many small players as possible before the melt-up. All small holders of gold shares listen up - don't be fooled by the fear tactics put forward by the media and "financial gurus". The melt up is coming soon so don't give in to the pressure to sell!

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.

Thursday market excerpts

COMEX February gold ended down $3.60 at $452.30 after trading between $448.70 and $458.70, which was the highest for futures since July 1988.

"As soon as the dollar started to gain strength, the metals collapsed," said Scott Meyers, an analyst at Pioneer Futures. "Gold can't hold up without the euro being strong, and the same goes for silver. This is an international monetary issue that has nothing to do with supply and demand."

Futures prices for industrial metals silver and copper suffered steeper declines than gold Thursday.

Near-term price direction in gold remains dependent upon the dollar, said Meyers, who said markets would be focused on Friday's U.S. monthly employment report.

The dollar rallied across the board as dealers pocketed profits in other currencies, which have climbed to highs in recent days.

Additionally, traders often look to gold when crude oil is volatile. Oil fell to $44 a barrel Thursday, a day after suffering its biggest one-day loss in more than three years.

Analysts have expected a correction lower in gold, which has benefited from concerns about the falling dollar.

"While the longer-term bullish mood still remains, the recent sharp increase in long positions and continued speculation of a dollar correction leaves gold and the other precious metals open to profit-taking," James Moore of TheBullionDesk.com said in a daily note.

At the moment, "virtually everyone" in these markets expects a significant correction after gold's impressive run, said Brien Lundin, editor of Gold Newsletter.

But "a salient feature of this bull market has been gold's habit of rising precisely when the bulls expect a fall," he warned, adding that gold's advance over the past few weeks is another example of this.

"So while a correction would not be surprising to me, neither would a continued rally," he said.

----(see url for full 24-hr international news, market prices)---

http://www.cbc.gov.tw/EngHome/Elegal/General/CBCAct.aspI believe some other Asian, Islamic and South American CB's do own Reserves of Silver....I'll try to do some research later on this...YGM

CHECK THIS OUT...."LAWS AND REGULATIONS OF CENTRAL BANK OF CHINA'"

TheCentral Bank of China Act
Promulgated on May 23, 1935
As amended on November 8, 1979
Text of Articles 23 and 44 amended on May 21,1997
Article 23 amendment effected on July 7, 1999
Text of Articles 18-1, 18-2 and18-3 added, 32 and 35 amended on June 5, 2002.


*ARTICLE 16:

For the amount of the currency issued by the Bank and its delegated banks, one hundred per cent reserve shall be kept, in equivalent, in gold and silver bullion, foreign exchange, and eligible bills and securities.

The coins shall be exempt from reserve.



*LINK SUPPLIED FOR COMPLETE ARTICLES OF BANK LAWS....

Today's silver is 60 times as heavy as gold but, like my brother "he ain't heavy". When gold rises to its proper valuation most of us "Po Folks" won't have enough fiat to buy a gold necklace let alone a small stash of bullion. That's when the PM marketers will promote silver as the Wal-Mart-Class PM. In other words the two classic PM's, gold and silver, will each have their own market, gold for the lions, tigers, and large dogs and silver for the small dogs, cats and mice. Of course at today's prices the small dogs, cats and mice are able to play the gold game and have a chance to become big dogs and better when the market finds its new valuation.
In the meantime the big dogs can use silver as ballast in their yachts. :->

http://www.platts.com/Oil/Resources/News%20Features/yukos/index.xmlsnip;
Russia's Yukos has all but run out of options to keep its business afloat, as gas giant Gazprom looks increasingly likely to try to snap up Yuganskneftegaz at next month's auction of the key Yukos subsidiary. Further twists to the already roller-coaster Yukos saga could yet be seen ahead of the Dec 19 auction, observers say. But the chances of anything turning in Yukos� favor seem nonexistent.

Yukos at the end of last week stripped back the agenda for its Dec 20 shareholders meeting, leaving only two options for shareholders to consider: bankruptcy or liquidation. The company originally also had intended to put forward a crisis-management plan, but its problems have now deepened to such an extent that struggling on no longer seems an option. Quite apart from the $20-bil Yukos still owes in back-tax claims, Yuganskneftegaz is up to three months behind in paying current taxes. The firm's other subsidiaries are also on the point of falling behind with their ongoing payments. Neither of the shareholders� options looks especially palatable. And it is beginning to seem inconceivable Yukos� other assets will not follow the 76.8% of Yuganskneftegaz that is to go under the hammer.

comment;
This is probably a scenario that will eventually be played out with gold miners around the world. Take heed and take possession of your golden stash.

http://www.gold-eagle.com/editorials_04/morgan111404.htmlGuess that's why Gates (10% Pan Am plus physical) Soros and Buffet have Silver/Yachts....Keep the keel steady when the Hurricane blows out of China....CEF w/ what, 12 million oz Silver? (Largest CEF shareholders and Principals are Lawyers, Politicians & Bankers)....A betting man might take a wager that Central Banks are or have been buying Silver for some time (possibly years) As I've said before money goes where money is and it's always been follow the leader...But then the 3 aforementioned men aren't among the weathiest on the planet or smart or connected to information the rest of us would give an arm to know are they! As Another said Gold may go to $10, 20 or even $30K but if it does just try to spend it....If Gold outshines Silver in leverage, well fine but don't waste time telling folks that only
Little Dogs own Silver"....Personally as a Gold Advocate of 20 yrs, a Gold Miner and one of the most outspoken defenders of the "Free" trade of Gold (thru GATA primarily)I'm sick to death of those who have to bash one to justify the other...Many of the wisest PM consultants advise ownership of both PM's...Same goes for those who like to trade in the Paper PM pits...More power to them...To each his own...Think I'll buy a thousand OZ of SILVER for Xmas just to p-ss off the anti every thing but Gold crowd...YGM

PS; I'm sure CPM Inc. would be just as happy to sell me AG as AU....

Dear Ari: I just fear that your fighting the unwinable battle. That is, attempting to convince the forumers here, that Silver is no longer money! They just aren't buying it, despite your best efforts. As with Gold, you can take the silver out of the money, but--in the people's minds, you can't take the money out of the silver.

Heck-jeez, Lot's of us been savin' silver since we were little kids filling in the round empty holes in those blue Whitman coin books...and then; we found out how much more valuable it was, when they took it right out of George Washington's head in 1965! Last night, with Silver perched then at $8.02 per, I did the little calculation, one of those old pre-65's was worth nearly six times face. Not bad, but of course, hardly the increase in face value that one would concurrently have found in a $20 gold piece! (about 22 times face). We should remember though, that when Silver was relegated to small coinage after adoption of the gold standard, the silver coins were given a face value so high in relation to their marketable silver content (at that time), that no one ever envisioned that the silver value could ever outstrip the face value of the coins. [This was done to eliminate the decades old problem stemming from bimetalism, that of metal arbitrage: Selling one, to buy the other, as markets and conditions changed.] Well, by the "60's--surprise, surprise!

I agree with your arguments that silver is ponderous storage for the gargantuan fiat money amounts of today. And true, it lacks the durability qualities of Gold. Some of the conglomerate masses that used to be silver coins, salvaged from ships: Not a pretty sight! Particularly, when compared to the almost pristine re-emergence of gold.

As often stated previously, some of us just like having some silver with our gold. Many of us probably have more silver than we can carry and wish it *Were* gold; a few (like Boilermaker) may have the hull of his yacht full of Silver. But oh- Ari-- just imagine how pleased we will be, if say, gold should go to the fabled land of $1000 per, and silver should just attain it's old high of $50 per again! We will be happy Hobbits!! Then-- If we can just figure out how to reap or hold onto the appreciation in both metals...That, my friend, may be a great challenge to anticipate and question.

So then some of you seem to be saying that gold is the better because it is more sophisticated. Don't be to offended, just a little sarcasm.
I like what somebody said about silver returning to $50. That would 6 times the amount now and if gold went back to $850 or approx. $1000 that would only be 2 times. Sorry don't mean to be so simple and dumb you guys obviously know these simple numbers, but anyway. I think I will go with the 1/3 silver 2/3 gold as mentioned by some. Seems reasonable. Leaves room for possiblities.

I used to have 50/50 gold and silver and then 1/3 in silver like yourself and others but now I'm down to 15% and planning to go lower.
I'm glad to see the high quality of comments here as always. There has been much more posted here(and elsewhere) on this topic including excellent work by Aristotle, Anduril, Galearis, Michael Kosares, Randy(Town Crier), George(Market Talk), miner49, Ag Mountain, Sundeck, Mr. G., Grateful for Gold, Gandalf, Black Blade, FOA, Aragorn, Chris Powell, Belgium, Socrates, Great Albino Bat, Ned, Slingshot, Goldenpeace, Boilermaker, Goldendome, Misetich, Goldilocks, Mr.Bill, Ski, YGM, Waverider, White Rose, and many, many others who I'm deeply indebted to.
Topics here are almost always fascinating and silver just one of many. They're surely essential reading here, especially from what are in some cases, brilliant minds, beyond genius.
While easy to take for granted, surfing the best gold sites such as this always has invaluable and often unexpected things. My only regret is not being retired and thus unable to learn and contribute at a faster pace. All the more reason for others to take advantage of the open dialogue, news feeds, archives, etc. Thank you.

http://www.thebullandbear.com/resource/pdf/RI-1004.pdfYou might like this reading....page 20 of this pdf report gives alot of Silver info ie; est. Silver holdings and more importantly, Silver shortages from 1971 to 2003 *A CPM Group Survey....'Millions' of Oz. Silver Shortages total from 1971 to 2003...1,494. M oz's
There have been many financial upsets from past Silver shortages and the next one combined with all else going on could be the grandaddy of all time...Regards...YGM

http://cbs.marketwatch.com/news/story.asp?guid=%7BB3C67B04%2D0A2C%2D461A%2D96F7%2DF32FC73391AD%7D&siteid=mktwChina economist: yuan shift, rate hikes ahead -report - CBSMarketwatch.com - December 2, 2004

http://msnbc.msn.com/id/6638996/MSNBC - Consumers could get caught under falling dollar
by Martin Wolk - December 2, 2004
What doesn't get said says it all; read between the lines and it's golden.

Judging from the number of silver related posts today, it looks like I did a fairly good job of stirring up the pot (#126926). It's actually nice to know that people have opinions and that they are so willing to share them .... oftentimes for the benefit of all!! Keep it up fellas!!

I have two primary reasons for stiring the pot:

ONE....I LIKE TO HELP PEOPLE
Most who gather here like silver and gold because of the security they offer. I have no issue with them whatsoever as both silver and gold will adequately accomplish that important job.

However, some who gather here hold PM's for investment purposes. This is the group that I am trying to help. When it comes to investing in silver or gold, I ask myself which commodity will perform better and will the margin of out-performance be meaningful enough to justify the due diligence. Rather than trying to rehash all of the reasons why I have concluded that silver will vastly out-perform gold, I will just let the facts speak for themselves. According to a recent issue of "The Rude Awakening", year to date gains in gold are 10.1%. Year to date gains in silver are 34.3% .... for a difference of 24.2%

Some here may be very happy with a gain of 10.1% ... and that's just fine with me. However, in my book, the 24.2% difference clearly qualifies as SIGNIFICANT OUT-PERFORMANCE. Lets go back yet another year. Jason Hommel reported that in 2003, the AVERAGE silver stock went up by some 310%. Again, that would seem to qualify as SIGNIFICANT OUT-PERFORMANCE on my ledger. Back another year? In 2002, silver again out-performed gold. I fully realize that it is fairly easy to predict the past ... but those interested in SILVER INVESTMENT CONSIDERATIONS should note that I started talking the superior merits of silver over gold since my very first post on this wonderful forum. My tune has never changed ... and I have been the one who has been correct every time. Just as an aside, I have published three major silver articles ... one of which was an interview for a major Indian financial organization. I mention this not to pull rank ... but to somewhat establishing my credibility.

TWO .... I NEVER STOP LOOKING FOR REASONS WHY I MIGHT BE WRONG AND SIGNALS THAT THE POWER OF SILVER IS ON THE WANE (which WILL HAPPEN at some point in the future).

There were a lot of good posts here today. I read them all with an very open mind ... always on the prowl for something that I may have overlooked in my own ongoing analysis. I found none today. But, I keep looking. In the mean time, I continue to load my boat with silver.

Looking forward, you can clearly measure the merits of silver by simply watching the silver-gold ratio. If silver continues to narrow the present 60-1 ratio .... silver is making more money for PM investors than gold indicating that silver is where you should have been ... yet again!

And one final footnote. I divide my PM holdings into two piles. One for security .... that will be held for a very long time. And one for investment purposes ... which will be sold at some point in the next ten years or so.

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BELGIAN,where are you ? we need your candid view.

my reason for owning silver is not (so much) for MAKING money but for PROTECTING my gold. You wouldn't buy a loaf of bread with a gold coin, would you?

Suppose you were in a position to capitalize on the flow of fiat and that you could see into the future just a little. You can see the writing on the wall and in fact know deep in your heart the truth that a severe fiat crisis is imminent. This seer of truth also knows that fiat of all types will be maintained as the currency of the people even in the face of the extreme crisis. This seer of truth can also see that as the crisis advances, something must rise to retain the value of all toil ever expended. A vehicle of great strength to hold and protect the cookie jar while the earthquake destroys not only the house about it but also the the town the county, the state and the nation...indeed the entire world as we know it.

As the crisis foments, extreme measures will be taken to protect the wealth accumulated by those that pull the puppet strings of apparent power. Those structures our attention has been focused upon and told from childhood are in control of our destiny.

So there you are on the trading floor. People are begging you to take their fiat in exchange for shares of little availability. You can see that this momentum will we sustained and calculate how to draw the maximum benefit from this trend. All that need be done is to take the fiat, tell the customer that they in fact now own the share they desperately sought and then sell short for yourself enough shares of that same issue at a slightly lower price than the customer thought he paid to keep the price depressed thereby averting a stampede for these shares that you cannot supply since no one is willing to sell them. At the same time you tell this customer that you do not believe that he has spent his fiat wisely yet he reiterates his request.

So now you have the fiat cash from the customer who believes he actually owns a share and the cash from the sale of the shares that you sold. You use one portion of that cash (usually the customers) to buy a share of something there is plenty of at a high premium so its price appears to move higher faster than the item of small availability. You hold the other portion of the cash (borrowed from the inexhaustable generosity of the market that allows you such privilege by virtue of you being a "member")to buy back the short position you established and then wait for the play you have written to be performed.

The customer calls and tells you to sell that share since it is not performing as a true investment should and asks you to buy the share of plentitude which by now is even higher a price than when you actually bought it for him. You shamelessly tell him he needs to pony up some more fiat to make the trade. You buy back the shares of small availability that you sold short but for a lower price and collect the cash from that transaction as profit. You give back some of the money you borrowed to buy back the short position at a lower price.

So now you have used the customers fiat to obtain a profit (in fiat of course) and some "borrowed" fiat to obtain a fiat profit from a transaction that degraded the value of the share of little availability. You have milked the customer and he has thanked you. Then you pocket the real profit and then send a bill to the customer for performing his requested transactions. This is the profit you must report to the governing authorities and pay taxes on. You take all this fiat and spend it on promotion of item of high availability so that there is very little left to be taxed on. The trade is so profitable that it is implemented on a widescale.

Disclaimer: This descriptive essay is pure fantasy by the author and is not intended to stir up any cognitive associations whatsoever with real current events or any individual or corporation or government activities

Economy produced , 112,000 jobs in latest period as compared to projected 200,000........

October Jobs report revised down .......

http://www.atimes.com/atimes/China/FL01Ad01.htmlStrongly suspecting that US-treasury gold is being delivered...shipped !? Most IRs will remain low, EU 's included.
Agreements (unofficial deals) have certainly been made in Vienna. But nothing of the evolving fundamentals have been changed.
Read Henry C K Liu's latest (link).

http://www.safehaven.com/showarticle.cfm?id=2270&pv=1If a Silver ETF has half the awakening effect the Gold ETF had on the perception of Gold as an investment in these Fiat crises then coupled with the massive shortages of Silver and China hoarding, Silver will shine like never before....
VERY soon the Siver ETF will be the talk of many...IMHO...Little is currently being said about this new paper tiger, but I believe it will dominate the news soon enough...Already the strength of Silvers' move upward is showing...Approx 34% gain this year so far and climbing....YGM

Good point. Here is another point: What many
posters agree upon--possible draconian
measures taken because of unusual econo-
mic situations--confiscation, for example.
This threat is a mainstay of business
for this website; many of us have invested in
pre 1933 goldcoins to reduce that risk. Yet,
the future might harbor even greater risk and
all gold investments could be made illegal. In
that case, silver will shine brighter than gold.
But, who is to say it will stay safe? The metal is a necessity to a modern society. It would take the stroke of a pen to restrict silver just the same.
I equate investing not to a game of chess which is
mostly logic, but to a game of backgammon where
you must roll the dice. You make superior
judgments and you play, say, 20 games, and the
dice won't matter. You will win against an
inferior player.
Ari?
OvS.

Good point to ponder is that by driving the trade of Pms underground due to Gov't controls the price would go ballistic....It would be one more example of Gov't control making criminals of honest people....I also think it (confiscation) unlikely as the vast holdings of PMs by few individuals and Financial Institutions will be seen as the salvation of renewal....Hidden Gold & Silver stores have often had great meaning thru historic times of crisis...YGM

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10WELL, take a look at the US$ Chart NOW !
<;-)

BUT, I shall bet that there are a number of BOOKIES on the COMEX that are starting to learn a costly lesson. AND, they do not have the REAL YELLOW !!!
Get all the YELLOW you can afford now, as my Crystal Ball shows lots of SPARKS coming soon !
AND, HI HO SILVER, AWAY !
<;-)

http://www.bis.org/review/r041105h.pdf....Could it be that they know the future?...The LBMA will soon be "TOAST" when Gold enters the final stages of it's "PLANNED" evolution??? You be your own judge.I believe this (my) speculation to be true...YGM


Plenderleith: Developments in the gold market

Speech by Mr Ian Plenderleith, Deputy Governor of the South African Reserve Bank, to the London
Bullion Market Association Biennial Dinner, London, 26 October 2004.



Snip.....
First, the news in April that NM Rothschild were withdrawing from gold trading marked a sad moment
in the long history of the London market. That they chaired the London Gold Fixing for 85 years,
continuously from its inception from 1919, may not, I suppose, be entirely in line with modern-day
precepts of corporate governance, but it represents a long-running commitment to promoting the
quality and international reach of the London market which has played an important part in maintaining
its pre-eminence. We all owe a great debt of gratitude to the House of Rothschild and I want tonight to
pay unreserved tribute to the contribution they have made over the years.

Not often seen on a Friday....Wonder what the weekend news will hold??? Ever suspicious...YGM

Thanks, Clink! Didn't realize there was an alternative type of solar energy converter. Sounds like it is the real deal! I'll be reading up more on the Stirling engine for sure.

Gandalf: Like I mentioned yesterday about the US dollar, they (the big players) didn't buy the paint job or the buck, but loaded up on cheaper gold courtesy of the Fed. Patience in these times is usually rewarded! Thanks all for the charts and encouragements!

Gold at $455.60.

Dollar penetrates to below 81, now at 80.99

Methinks we shall have another little "x" on the Stockcharts P&F chart, at $460 very soon.

Good weekend, all!

The GAB

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10US$ has NOW broken below 81.0 !!!!!
LOOK OUT BELOW !!!
Gather YELLOW while you may.
<;-)

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTBDANRBO[PA][D][F1!3!!!2!20]⪯f=GTHERE is the Little GREEN "C" for December atop the stack !
That makes the "A B C" stack and the end appears to be at about $476. !
HOLD on tight to the YELLOW as the ride is only starting !
TO THE MOON, Alice !
(and yes, I love "exclaimation points" !!)
<;-)

I think that everyone here is aware that you can never get something for nothing. The unravelling of the housing bubble and the devaluation of the dollar are perfect evidence of that. And we all know that our dear precious Gold cannot be created out of thin air, nor can it be manufactured through some mystic process of alchemy. Why, then, should we believe the "factoids" about the creation of energy from nothing? I recommend we stick to discussing what we are here for, which is, of course, the theory and values of the true currency.

J

[factoid
n 1: something resembling a fact; unverified (often invented) information that is given credibility because it appeared in print]

Belgian , thanks for pointing me in the right direction. After reading the link ,its becoming more clear by the minute.

You DO like to stir things up - don't you get me in trouble!

Ah, yes, the other big "C" is always on my dark and suspicious mind.

Thanks for that..Who says a picture is worth a thousand words!..You've painted a very clear picture w/ few words....YGM

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

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

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

Friday market excerpts

Comex gold futures hit fresh contract highs late Friday as the U.S. dollar plunged to fresh historic lows against the euro and the partially expected week-end bout of gold profit-taking failed to materialize.

Dealers noted that many short-term traders had expected a hefty spurt of profit taking to emerge in gold Friday and so had established light short positions in the market in the opening hours of trade.

As it became clear that no notable profit taking-led dip would emerge, those short-term players were forced to cover their short exposure to the market and add fuel to gold's late-session climb.

Futures closed near $458 to mark a 16-year high and a more than 1 percent gain for the week, fueled by the dollar's decline to a record low against the euro and by reports of explosions in Madrid in the last half hour of trading.

"Gold was struggling on either side of unchanged when news hit of the bombings in Spain," said Peter Grandich, editor of the Grandich Letter. Traders "who sold the market short right after the pop off the unemployment numbers scrambled to cover in the last hour of trading," he said. "A new high on the euro didn't hurt."

Against this backdrop, February gold futures closed at $457.80, up $5.50, after an earlier fall to a low of $450.

Meanwhile, key indexes for the metals mining sector closed on a mixed note Friday, but were lower for the week. "Gold stocks have failed to participate fully and adequately in the recent gold rally," said Value View Gold's Ned Schmidt.

The euro hit an all-time high at $1.3458.... Some traders said the euro was also spurred by a report in a German newspaper citing a high-ranking U.S. Treasury official as saying the United States would intervene to support the dollar only if the euro/dollar rate reached $1.45.

After the close, the exchange introduced its first Friday afternoon ACCESS electronic trading session, which it said was aimed at accommodating a growing marketplace for metals products. COMEX gold and silver firmed slightly.

----(see url for full access to 24-hr international newswire, market prices)----

http://www.nasdaq.com/asp/quotes_news.asp?cpath=20041203\ACQDJON200412031713DOWJONESDJONLINE001089.htm&selected=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.nasdaq.com/asp/gmWorldNews.asp&headlNEW YORK -(Dow Jones)- U.S. Treasury Secretary John Snow told Fox News Friday he agrees with the views raised by the head of the Council of Economic Advisers that the nation's Social Security System isn't financially sustainable and needs to be reformed.

Snow said there should be a better understanding in Congress, and the country as a whole, that the system has to be changed.

"There are still a lot of people out there who say that the system is fine...( thinking) a little fix here, a little fix there will do it," Snow said. "The fact of the matter is...the system is not sustainable."

As treasury secretary, Snow is the managing trustee of the Social Security system.

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

When you have a situation where a large number (baby-boom) of people and a so-called "trust fund" on their behalf all holding IOUs for some future day of mass collection on those IOUs, it is not hard to see that the present system, based on ever-rolling IOUs, is not designed to accommodate a bulge of concurrent cashing-out of those IOUs.

Choose gold. If you have it in your hand it already represents UNDEFAULTABLE payment-in-full, and therefor can always be counted upon for reliable use in drawing upon its value whenever your need arises.

Please re-read those two paragraphs, and then pass the message to a friend or loved-one.

R.

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=202&feed=bus§ion=news≠ws_id=bus-n0360570&date=20041203&alias=/alias/money/cm/nwWASHINGTON (Reuters) - None of the United States' major trading partners manipulated their currencies to gain economic advantage in the first half of 2004, the U.S. Treasury Department said in a report released on Friday.

...urged Asian countries with fixed exchange rates -- including China -- to institute more flexible, market-based exchange rates.

The Treasury said China's fixed-exchange rate regime has made macroeconomic policy-making more difficult. It said the country's accumulation of foreign exchange reserves had fueled both credit growth and inflation pressures.

The report also said for current global trade imbalances to be fixed, the United States needs to increase both public and private savings and other economies need to grow more quickly.

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

Amen to the comment about increasing public and private savings. As explained in my previous post, you will want to be sure to accomplish the meaningful part of your savings with the durable security of "gold-in-full" rather than with IOUs of any design. Simply put, IOUs do not hold up well under naturally occurring stresses of crowd behaviour.

R.

The guy is a liar.

First he tells everyone the policy is a strong dollar, over and over again, while it tanks to 20 year lows.

Then he say's no currency manipulation, while Japan/Korea do it all the time.

Now he say's the social security system is on the brink, and needs a vast overhaul, when clearly it is not. Wall Street just wants to force feed itself with deductions from workers paychecks, as if the 401k/IRA money isn't ALREADY enough.

What a piece of work!

http://chemistry.about.com/cs/generalchemistry/a/aa050601a.htm
Ref: killerjay_47 (msg#: 126986) Something for nothing

While I agree with the thrust of your post, one small correction on your statement, assuming the above link doesn't fall into the factoid category:

"And we all know that our dear precious Gold cannot be created out of thin air, nor can it be manufactured through some mystic process of alchemy."

Snip from above link:

"Transmutation of lead into gold isn't just theoretically possible - it has been achieved! There are reports that Glenn Seaborg, 1951 Nobel Laureate in Chemistry, succeeded in transmuting a minute quantity of lead (possibly en route from bismuth, in 1980) into gold."

DryWasher comment:

Their is just one SMALL DETAIL however that does support your contention that we don't get something for nothing.

Another Snip from above link:

"Changing the element requires changing the atomic (proton) number. The number of protons cannot be altered by any chemical means. However, physics may be used to add or remove protons and thereby change one element into another. Because lead is stable, forcing it to release three protons requires a vast input of energy, such that the cost of transmuting it greatly surpasses the value of the resulting gold."

DryWasher comment:

Gold, transmute you some, or do it the easy way and just order it from our host.

DryWasher.

Yesterday, we bantered around the Gold Vs. Silver argument. Should we hold only gold? Gold or silver? Gold and Silver, etc.

Many--and I was one--decided that we like holding both--in varying amounts.

With silver, we cited reasons that might make it possible for silver to continue appreciating at a higher rate than gold: Lower price, historical price ratio anomaly compared to gold, industrial uses, and covetness, of we more poor folk, when dollar-death occurs.

One thing, however, about the silver argument, that kept popping up, troubled me; that was the argument that above ground supplies of silver are small. And, while that may impact favorably it's industrial pricing, and the metals price as we silver buyers trade it back and forth as our ""poor man's monetary metal""; that scarcity, in fact, works against silver, as a true monetary metal !!! The fact that the worlds markets have not chosen silver's monetary value (utility) over it's industrial value, thereby eliminating the once huge silver overhang, demonstrates that the worlds markets have turned against silver as commodity money.

Compare silver's circumstance to gold...[With few exceptions] EVERY, EVERY, EVERY bit of gold ever mined over thousands of years still exists!!! WHY???
Because thousands of years ago, the markets decided that gold was THE monetary commodity--bar none--on a global basis. Valuing that utility accordingly high. And though silver is precious to many of us--over time, it has simply failed the market test. How is this so??? **Because it's gone!!!**

Look--the reason that the gold is still here, is that no other utility for gold could ever overtake it's use as a store of wealth. Centuries of toil and labor, blood and war, production of all kinds, went into the accumulation of the tons of this very rare metal that now exist today. It would be virtually impossible for markets to change now, regardless of government paper mandates and decrees. The markets have decided that Gold is Money!---That is what all the thousands of years production have been about!

Gold is the perfect monetary commodity. We know the characteristics that make it so; I won't delve into them here. One point sometimes ignored: Though rare, Gold is not so rare that it is virtually impossible to acquire and accumulate on a worldwide basis. In picking gold as the commodity money, the market made it's marginal utility cease to decline; that means, the value of every bit mined and accumulated over the centuries, is worth the same amount (fungibly speaking) as any quantity mined today. Therefore, we find that gold has the greatest above-the-ground supply in relation to it's yearly production, of any commodity in the World!!!! For the monetary metal--Gold, the stocks-to-flows ratio is far larger than for any other. Unfortunately, we have witnessed silver move in a totally opposite manner.

I've been enjoying your recent contributions. Keep 'em comin'.

Over the lastest couple of years, it has become increasingly obvious to me that the main body of information is understood by those willing and capable to give it a mull, and for those of us daring to venture to the extremities of this worthy patient of study, we find less "body" to work with and consequently spend our energies splitting hairs.

The combined effort of all of that sort of superficial grooming lends itself to a newcomer's initial impression of the nature of the beast underneath, and since we are, indeed, splitting hairs here, we'd darn well better try our best to get it exactly right for the final presentation.

That's all a long way around to say this: instead of calling Gold the true monetary metal, howzabout calling Gold the true reserve metal, or the true wealth-reserve metal?

The term "monetary" introduces all of the unfortunate associated baggage of promissory-based units of account serving in tandem as a media of exchange, and as we all know, the strong point of Gold is that it isn't a promissory sorta thing. You can see that Randy has now once again hammered that point home again like he always does.

Oh, sure, Gold can be used directly in transactions (we'd call it barter,) but lot's of the "transactional" volume that a guy might point to today is actually a form of dollar-system derivatives dressed up in the name of Gold, or rather more properly said, dressed up in the name of the PRICE of Gold.

Gold's apparent market valuation, weighted down like it is under the heavy cloak of these derivatives, is none the less higher than a primarily industrial usage would have it. Significant Gold usage is simply done in the form of standard refined bars and coins, mostly held and held and held, but occasionally traded at need. So, since the well-worn phraseology of "store of wealth" is the component of money that most closely fits the determining usage that imparts Gold with its preciously lofty market value (60 times higher than silver, for example,) then why don't we just cut out all of the extraneous elements and split this hair right? Let's call Gold exactly what it is based on how it is used. That is, a reserve asset, a wealth-reserve asset. More specifically, *the* wealth-reserve metal.

And it's a good thing, too. *Something* is needed to fill that role, and as you point out, the market has shown us clearly that Gold's the metal who's won the job through all the trials time and man has thrown at it.

Gold. Get you some. --- Aristotle

http://www.butlerresearch.com/archive_free.htmlYou have to ask why some posters here have taken the opportunity to come out of their mud huts to throw stones at a subject they OBVIOUSLY know little about.

One even took the opportunity to stick knives into the one person on the planet who is probably the most acknowledged & respected silver expert.At least by those in the know.I thought it was an undeserved & scurrulous attack & I question the motive.

I'm talking about Ted Butler. (Ted is very polite & you won't hear him bag experts in "Other Fields" like H2O!).His writings are available for all to read at NO COST. (See Link) I have had correspondence with Ted on occasion over 5 yrs & have spoken personally with him on the phone several times. He is a very knowledgeable & modest man & I HIGHLY VALUE his opinions on SILVER. I invite others at this forum to read some back issues at the link and see for yourselves how hard the road has been & how far we've come. You don't have to be an expert to see the truth & honesty -- just bring an OPEN mind. This will be very hard for a minority.

Over the past three years I have built up a very large position in silver (Also Gold). My silver is mainly in numbered 1000oz bars & I pay a small acceptable fee for the storage. Some is in unallocated form but backed by the real thing & FULLY able to be turned into bars on the payment of fabrication charges.( This gives me the flexibility to sell some easily when I want need something for the paper.)

Because of currency strength /manipulation in the OZ$ it is
ONLY my SILVER that is showing me a decent appreciation! Gold has hardy moved in OZ$ terms for the past 3 yrs --and has been substantially under water up until the past monthor so! I expect Silver to show excellent appreciation
over the coming years as will Gold.

Many respected expert elders also expect Silver to bloom!
Amongst them Richard Russell & Jim Puplava. I read & respect these gentlemen and put their opinions WAY ahead of
the non expert Nay sayers I've read here over the past day or two. - - - - - GO Silver GO Gold!

http://news.independent.co.uk/world/americas/story.jsp?story=589587Snip: The breakthrough came in October, when the main trading blocs, Mercosur (Argentina, Brazil, Paraguay and Uruguay) and the Andean community (Bolivia, Colombia, Ecuador, Peru and Venezuela), signed a free trade pact. Chile, whose economy is the region's biggest success story, is not a full member of either bloc but its President, Ricardo Lagos, sign the declaration.
Thursday's declaration will be only that, a two-page declaration of intent entitled Preamble to the Foundation Act of the South American Union, calling for a regional parliament, a common market and even a common currency. Ministers will meet in spring to work on the mechanics of setting up its bureaucracy. A constitution will be drafted next year, probably with the EU as the model (end snip)

The world is becoming a smaller place for the dollar. The US, ever in search of more bag-holders for dollar expansion, is in the process of getting the short end of a property line adjustment. The bold plans enshrined by FTAA are sure to meet a more unified resistance in South America.

"Some is in unallocated form but backed by the real thing & FULLY able to be turned into bars on the payment of fabrication charges."

AH HA HA AHHA AHAHHA HAHHAA AHHAHHA HAHHA HAH

Butler is a hack.

"unallocated...FULLY able to be turned into bars..."

Or, maybe what I really meant was, YOU are a poor student.

Or both.

Upon FULL consideration, yes, that is it.

There is a State Govt Guarantee. Until prices really explode I don't feel I have a problem. I think you do though. --- Care to share?

HA HA! Nuts to that! State schmait. Maybe you don't know because you weren't here but while we were operating under the terms of the Bretton Woods treaty there was an INTERNATIONAL agreement guarantying that the US would deliver and accept gold at a rate of one ounce for thirty-five dollars on account. International... that's big stuff, bigger than a state guarantee. August 15th 1971 was a real eye-opener for the naive and the blind on the true worth of sovereign guarantees. They usually mean nothing when you need to count on them the most. You've been hoodwinked by Butler and your state. You'll understand it better as you grow up and learn a little more, but for now you can be thankful that you're young enough to afford making some big mistakes in judgement.

You don't seem to have the message yet - - let me be clear. Your utterances have been totally inappropriate for a site such as this. Who do you think you are talking to -or about?

Every one has an opinion --even A$$es. I don't like the way you speak about Ted Butler. It is obvious that you don't know what you're talking about. Ted has MY full respect which is more than I can say about you.

I care NOT for any opinion YOU have. I certainly wouldn't be rude enough to force mine down your throat.For what it's worth my $ are invested with a lot of thought & in a place where I have full confidence. That's all that matters. Aiustralia is not the USA & no confiscation has ever occured here.As I said earlier in a previous post I am WELL AWARE of the benefit of having numbered metal. It is my business opinion & choice to keep some unallocated for the obvious reasons I stated. At 60 I feel I've been around long enough to make my own informed opinions.

BTW I do not wish to continue with this conversation.

http://autarchic.tripod.com/files/commercial.htmlHmmm .... someone has overdosed on the green cheese @ the green cheese factory ....

"Unemployment develops, that is to say, because people want the moon: men cannot be employed when the object of desire (i.e., money) is something which cannot be produced and the demand for which cannot readily be choked off. There is no remedy but to persuade the public that "GREEN CHEESE" is practically the same thing and to have a "GREEN CHEESE FACTORY" (i.e. a central bank) under public control�"--John M. Keynes [emphasis added]

"What is the charm to awaken the sleeping beauty, to scale the mountain of glass without sliding back? If every Treasury were to discover in its vaults a large cache of gold proportioned in size to the scale of its economic life, would that not work the charm? Why should not that cache be devised? We have long "PRINTED GOLD" nationally. Why should we not "PRINT IT INTERNATIONALLY?" No reason at all, unless our hands are palsied and our wits dull�"--John M. Keynes [emphasis added]

http://econ161.berkeley.edu/Economists/keynes.html

On an aside note:

Life, liberty and property do not exist because men made laws. On the contrary, it was the fact that life, liberty and property existed beforehand that caused men to make laws in the first place. --Frederick Bastiat

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

Constitutional Chaos : "What Happens When the Government Breaks Its Own Laws"

by Andrew P. Napolitano, Former Federal Judge

In this alarming book, Judge Napolitano makes the solid case that there is a pernicious and ever-expanding pattern of government abuse in America's criminal justice system, leading him to establish his general creed: "The government is not your friend." As an attorney, a law professor, a commentator, a judge, and now a successful television personality, Judge Napolitano has studied the system inside and out, and his unique voice has resonance and relevance. Whether in the big, headliner criminal cases or in the thousands of small-town trials no one ever hears about (but should), the police, the prosecutors, the politicians, the judges, and the machinery of government are inexorably grinding away at the individual liberties guaranteed to all Americans by the Constitution. But in this sensational new book, Napolitano sets the record straight, speaking frankly from his own experiences and careful, thorough investigation and revealing how government agencies will often arrest without warrant, spy without legal authority, imprison without charge, and kill without cause.

http://www.amazon.com/exec/obidos/tg/detail/-/0785260838/104-6545620-1131905?v=glance

"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

"But, unfortunately, law by no means confines itself to its proper functions. And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense." - Frederick Bastiat (1850)

http://www.economist.com/agenda/displayStory.cfm?story_id=3443604A Clouded Outlook - The Economist Global Edition
December 3, 2004

http://www.etherzone.com/2004/henr120304.shtmlBORROWHOLICS
SETTING RECORDS
By: Ed Henry
In seven working days, the Bush administration borrowed $103.4 billion from individual investors and foreign countries still willing to loan us money. That's a record.
This is all money that future taxpayers are going to be forced to pay back someday plus annual interest. It's the same as a tax increase put on your credit card.
What's more, during November the government drew down $8.1 billion from entitlements in their criminal form of double taxation. We will not know which entitlements, Medicare, Unemployment, Airways, the Federal Employees Retirement System, Military Retirement, or whatever, were drawn down until the U.S. Treasury comes out with its Monthly Statement for November, but it will all be there in black and white just like it is every month.
Since the debt limit was raised $800 billion on Friday, November 18th, there have been several articles about the falling value of the dollar and the very real possibility that foreign nations will eventually seek investment elsewhere. With countries like Japan , Mainland and Honk Kong China, holding a sizable portion of the U.S. national debt and other currencies like the Euro showing more value all the time, this could bring on a financial Armageddon for the US.
More than half of the national debt is in the form of negotiable Treasuries that can be sold or cashed-in at any time. The United States has sworn to honor these securities at any time the holder wishes to cash them in before maturity. All the holders would lose is the remaining annual interest and any profit they might have made if they bought them at discount.
Because the government has no revenue other than taxes, all of this repayment falls on the shoulders of the American taxpayer, and all citizens are not taxpayers. We may have an estimated population of 294 million or so, but less than half of these people pay personal income taxes. That's why Bush is willing to consider tax reform like a consumption tax that spreads the burden across more people.
For instance, to soften the blow many good hearts will try to pass off the national debt as something like $25,000 for every man, woman, and child in the country which would be true if they all paid taxes. The actual figure is more than $50,000 per taxpayer.
What makes U.S. Treasury securities "the safest investment in the world" has always been the fact that they are backed by every taxpayer in the country. And that applies to the entire $7.5 trillion debt.
The falling value of the dollar is one significant factor that may affect future borrowing, but what happens when the foreign countries that have been loaning us money figure out that it's all on the taxpayer's shoulders and most Americans are up to their eyeballs in debt themselves? Do you think they will still view treasuries as the "safest investment in the world?"

Take it one step further.
What do you think will happen when these gracious lenders find out that the U.S. Government has been cheating its own people with a systematic scam of double taxation plus interest and does so with phony trust funds under the false label "Intragovernmental Holdings?"
One of the things we have working in our favor is 725 military bases spread throughout 70 percent of the world selling "protection" just as the Mafia sold it to candy stores, dry cleaners, and other retailers when they started building their criminal empire � that plus major stockpiles of weapons of mass destruction spread all over the planet. Do you know where your nukes are? Maybe we can intimidate countries into loaning us more money.
And let's not forget that our arch enemy, Osama bin Laden, has sworn to "bankrupt the United States" by making us spend a million dollars for every dollar he spends snipping at our heels from ambush just as our forefathers made holding the colonies a crisis for the British Empire.

"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."

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'Tis the Season!
Give the Gift of
GOLD JEWELRY

http://www.usagold.com/gold/special/DenBoard.html

http://www.gold-eagle.com/gold_digest_98/markus011998.htmlHaving noticed a new poster by the handle of IncaTrail at ge over the last 3-4 days, I have been somewhat intrigued by his discussions and referals to Anothers words....Although I have read many times the words of the Red Baron and Oracle of Alberta whom he suggests have similar insights as Another and FOA had/have, I was not aware of this writing and find it intriguing & reinforcing to say the least......YGM

-also of interest was a comment he made on the fact the house of Rothschild was no longer involved in the London Bullion trade and that he thought at that time of that announcement that it signaled the demise of LBMA was in the works...This is something I discovered by accident and posted here recently...He believes that the ETF is a temporary fix to stave off high oil prices and the inevitable Gold boom because of dwindling Physical Gold for sale...This falls into the realm of Anothers thinking and predictions IHO...YGM

Personaly I believe the day we hear old Alan G is retiring. That will be the most blatant signal....Now I also wonder what we will see thu the interim....Will POG reach $500/$600 p/oz before that happens? I think not. I think the time of abandoning your post and paper defaults are very near!!.......YGM

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh06568_2004-12-03_23-40-53_n03724497_newsmlHEADLINE: US's Snow won't discuss his future, fx intervention

WASHINGTON, Dec 3 (Reuters) - U.S. Treasury Secretary John Snow on Friday said any discussion about whether he stays in his post or leaves was a matter between himself and President George W. Bush.

"Let me say first of all, it's been, it is, an honor to serve in this administration, to work with this president, and I'll always be grateful for that opportunity," Snow said when asked on CNBC television whether he was ready to resign or had been asked to do so.

"But any discussion of that nature has to be between the president and myself," he added.

During the past week, speculation has swirled that Snow might soon leave his post, especially after a story on Monday in the Washington Post quoted an unnamed source as saying Snow could stay as long as he wanted provided it was not long.

The Treasury chief sidestepped a question about whether he would like to stay on, saying: "Again, that's a matter for me to discuss with the president."


Snow also said during his appearance on CNBC that the United States continues to back a strong dollar...

----(from url)---

Given the nature of currencies and their dependance upon confidence and certainty, one does not naturally say they favor a strong dollar in one breath and in another breath unecessarily introduce uncertainty regarding the surety of one's tenure at the Treasury. A simple "yes" would have been in order, unless it patently were not true, and an ouster were in the works; or else it is the pretence of favoring a strong dollar that were patently not true, and thus the veil of uncertainty is introduced to further weaken it.

Either way, choose gold.

R.

The SNOW man is GONE, as that is the way (rumor and denial) that things are done inside the Beltway !
Too bad that someone named "Truth" or "Realism" are not around to be nominated for the Post.
<;-)

Good to see a fellow Aussie on these pages "young fella" ;-)
The issue Mr Ag raises goes to the difference between "metal-mindedness" and "money-mindedness" ... IF you are happy to accept the money-market price assessment of YOUR Gold and Silver, then by all means entrust it to depositories in A or un-A accounts.
Were you otoh highly suspicious (as Ag obviously is) of the $pricing mechanism and all that entails, you would give consideration to moving some/all "out of systemic reach"

Yes, the Mint or wherever guarantees your deposits ... NOT on a metal for metal basis tho, more precicely "money-for-metal" ...and thats the rub Sir!

http://groups.yahoo.com/group/gata/message/2566Latest GATA dispatch.


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

gata-subscribe@yahoogroups.com

http://groups.yahoo.com/group/gata/message/2633"Gold prices soaring but Indians keep on buying
The Hindu Madras"
Thanks Chris

"...The Hindu Madras" corrects to "...The Hindu, Madras"

The dollar is tanking and somehow the media now points the way with its illuminated reporting. Gold gets barely a mention. The gold/dollar market hounds are running the show for now and the controllers are patiently sitting back, waiting, biding their time. But for what reason do they let the buck free fall and bond markets bid upward giving credence to alternatives for the dollar.

Certainly some form of method in the madness. On the homefront, we have a most indebted populace speculating in housing, stocks and what not. As well, I'm sure the monthly debt statements are beginning to scratch at the back of many minds. There's one I haven't thought of, speculating in the number of credit cards one has.

So what is the average Joe and Jane to do. With the dollar on the skids and interest rates not covering ever increasing inflation, further desperation has to set in if it hasn't started already with all this negative dollar news. It's probably not a thinking process going on here in most minds, it's a gut feeling of the effects of inflation and either acting or being crushed and left in the dust.

Whatever capital and all leverage they can muster, Joe and Jane might make a final play at the Roulette wheel on that lucky number to make good on all the debt; to be even if not much better off in a rising stock market. Calling Mr. Leeeeeeson.

What rising stock market you ask?

Of course the investing public will have to be driven their by upward market manipulation and the media. Round she goes where she stops . . .

With a depreciating dollar, an increase in nominal values in the stock markets will look good on paper but will in fact only reflect sideways inflation adjusted return of nothing special. If the dollar were to bounce due to a stock market rally, all the more spin of a recovering economy. We will have inflation at all costs.

The Dow and Dog move upward before interest rates are forced back up and the debt junky is cut off. Then the sharks start doing what they do best. Wall Street and banks have a purpose. I saw a P&F chart of Richard Russell's showing a Dow price objective of 12,350. Waiting for confirmation, mind you.

A carrot, a stick and the fleecing continues where few are not affected by bad debt or an overburdened mortgage. The housing market is near saturation so where do the dollar masters send the Pied Pipers. Confidence must be maintained or the money making mayhem machine is powerless and I doubt that will happen. So a little more inflation to be directed at the stock markets and games on.

It's impossible to predict the future but knowing greed, fear and gambling habits, it's interesting to ponder what's next. I doubt the Japanese and Chinese want to see their dollar paper burn so maybe some distribution is in order but on a much larger international scale.

Or is this it for the dollar, the final act, game over. Don't want to think about that.

as lurker for many years in this and other gold forums I want come to light of this great forum, as I my Au/Ag-holdings are 90% physical, only 10 % paper. And I consider this forum as physical.

My admiration in ancient cultures has guided me two times for vacation to the famous ruins of Troy (Troja) in Turkey, where Schliemann found the "Treasure Of Priamos", jewelry of its finest, made more than 1300 years before christ, when gold and silver was valued as true wealth. From there comes my handle Trojagold.

As often heard here, gold has hold its value over the past 5000 years. Often ridiculed or suppressed by paper. In the end all paper failed and will fail, period. If you dont believe me, go out and ask the Argentinos, Turks, Russians, Dollar holders and Euro holders and so on and so on. They all saw their paper money falling in buying power over the last years

Or read in the history books about the Weimar people and other paper accidents in France, England, so on.

Yes, also the Euro is falling, ask the housewifes shopping on the market. Or go to a restaurant. The prices I used to pay in German Marks I often pay now in Euro, even if there was an official conversion rate of about 2:1.

The initial fall of the Euro after its launch has been stabilized in the last two or three years while the dollar came down in a hurry, and counting. Watch out for the next step down of the Euro, looking like a Dollar rally.

This is, why I read this forum. And sometimes I will post here.

Trojagold, precious during 5000 years.

http://groups.yahoo.com/group/gata/message/2636The GATA army discovers duplicate
serial numbers listed for the
fund's gold bars.


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

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Good to have you at the TABLEROUND !!
Please do speak often.
<;-)

I for one will be interested in your perspective on gold from a German point of view. There is much wealth in Germany that eventually may seek safe harbor even though the Euro now is strong.

http://groups.yahoo.com/group/gata/message/2633GATA dispatch.

Keeping the paper pushers in the real world. I suspect this will lead to greater revelations on this ETF fog.
The vigilent few out there need no wake up call, but still many believers in paper promises of any kind whether Gold or whatever surely do. Some folks need a slap in the face before they know there's a fight going on....Gold, Silver and those who hold it in the hand will walk away to fight "Another" day...YGM

http://observer.guardian.co.uk/print/0,3858,5078556-102271,00.htmlJapan threatens huge dollar sell-off

Heather Stewart in Tokyo
Sunday December 5, 2004

The Observer

Japan is warning the White House that there will be 'enormous capital flight' from the dollar if the Bush administration maintains its laissez-faire approach to the mounting currency crisis.
Tokyo fears that Japan's strongest economic recovery in a decade could be derailed by the sudden appreciation in the yen against the greenback.

The criticism of President Bush's inaction, by a senior member of the ruling Liberal Democratic Party, will be taken as a veiled threat that Japan could start to sell off its multi-billion-dollar holdings of US Treasuries. 'The Japanese government is going to ask for a strong dollar policy; if it continues to fall, there would be enormous capital flight from the dollar,' said Kaoru Yosano, chairman of the LDP's policy council, adding that Japan would be calling on its fellow G7 governments to demand the US deal with the massive fiscal deficit that has helped to prompt the dollar's decline.

Cont'd.....

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http://groups.yahoo.com/group/gata/message/2639... in 4-for-1 share exchange.

Latest GATA dispatch.


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http://news.goldseek.com/EricHommelberg/1102278000.phpExcerpt from report......The Gold/Oil ratio



The Gold/Oil ratio says Gold is a screaming Buy.



Over the last 30 years Gold has been trading at an average of 16-17 barrels of Oil per ounce of Gold. At the moment Gold is dirt cheap compared to Oil and trades for about 9 barrels of Oil for an ounce of Gold. Such extremes won't last for a long period of time so what gives, lower Oil prices down the road or Gold catching up ?



According to Matthew Simmons we shouldn't count on cheap Oil anymore coming decades. Let's repeat once more what he said when asked if there is a solution to the impending energy crisis he said :



"I don't think there is one. The solution is to pray. Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it's a certainty." END.



So with these kind of statements in mind, would you bet on lower Oil prices or higher Gold prices ? (see chart below)

Cont'd @ Link

http://biz.yahoo.com/bw/041115/145036_1.htmlAnd when you see the past wisdom of Goldcorp witholding physical from market you must surmise they have smart management....I think this takeover is a plan of Silver asset addition. (See link) If one can look far ahead and percieve Gov't control over Gold in the ground (it has been hinted in Aus) one could see the corelation to Buffet, Gates, Soros and even the CEF fund holding Silver in the mix....FWIW....Thanks for all you do!....YGM

Hi alles,

I need a solid reference for when and where Professor Robert Triffin is supposed to have stated his(?) now famous theorem, "Industry is destroyed at the source of "mone" creation." Help please. I last saw this on a posting by ORO back in about 2001.

Thanks

Silvercoin

Hi alles,

I need a solid reference for when and where Professor Robert Triffin is supposed to have stated his(?) now famous theorem, "Industry is destroyed at the source of "mone" creation." Help please. I last saw this on a posting by ORO back in about 2001.

Thanks

Silvercoin

Thanks for the "heads up" on the merger. Looks like a great combination of two true mining companies that believe in the value of physical gold. I like it. It will advance the cause of PG.

On Another note: Recent rumor of a silver ETF. The gold ETF was announced by it's principals well in advance of it's introduction. Anybody making noise about who the principals are for the possible silver ETF? I do like both metals. Gold as a long term wealth asset and silver, as possibly the same, but more, as a medium term speculation. Physical supplies of both are currently under accumulation by investors and speculators. I think the SWHTF (sorry Gandalph for my colorful metafors) with silver in the next couple of years (sooner if an ETF is introduced) and it will be time to liquidate. Convert your gains to PG and hold on. Silver fundamentals look great. 1/3-2/3 Ag/Au previously mentioned seems about right. Silver's abundance in the earth's crust is much greater than gold's. If/When it's price flies, increased production will follow and meet demand. Things will stabilize (price will come back down) relatively (2-3yrs.) quickly. If such a thing ever happened with gold there can be no, other than what is now anticipated, sudden increase in production. Only a transfer of what now exists. USD price will stabilize only at a much much higher level. Ooh, do your own due diligence and decide for yourself.

Remember:

Both gold and silver have been money, but, ask Sir Smeagol, and you will find that only one of them is "precious".

Noble1

http://www.usagold.com/hall/hallfame3.htmlHere you go, from USA Gold hall of Fame...

Thank you YGM. The article you mention is excellent, but I did not see wherein the quoted theorem was referenced. I am wondering if the statement, "Industry is destroyed at the source of "money" creation" is a paraphrase of Professor Triffin's "Dilemma." As near as I can see, Triffin published "Gold and the Dollar Crisis: The Future of Convertibility" circa 1960 but have not read this book/report to see if he stated his theorem in those exact words. I am beginning to think that perhaps the more eloquent and certainly more plain statement above was the product of someone elses thinking and to him we should give some respect for this fine gift.

Regards,

Jack Worthington

http://www.google.com/search?sourceid=navclient&ie=UTF-8&client=google&rls=GGLD,GGLD:2004-48,GGLD:en&q=Triffin%27s+dilemmaJack 27 connections here. One may help you out...Good luck w/ your research. Remember to share :>)

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A big bravo to GATA soldier Steven Marney for checking all 7000 Goldbars of the ETF.It brutally reveals the lies of the present Goldbanking system.We knew of paperGold with no backing,but physical bars with #'s invented?Lets hope they do not represent faked Gold and start a general suspicion about the genuiness of physical.

The ETF,just Another scam?I'm awating an answer of the WGC.But then,if there about 5 parties involved,the responsibility is squared and therefore nobody is responsible.

http://www.ecb.int/press/key/date/2004/html/sp041203.en.htmlSpeech by Gertrude Tumpel-Gugerell, Member of the Executive Board of the ECB
Federal Reserve Bank of Philadelphia
Philadelphia, 3 December 2004

Gertrude reveals, between the lines, her view on the declining dollar and the US account deficit :

SNIP : "Exchange rate changes are also seen by some as an important adjustment mechanism for correcting external imbalances, although the relationship between both variables is far from being straightforward."

"There appears to be some evidence that, over the past few decades, capital mobility has increased to levels unseen since the gold standard. New export markets have gathered importance and foreign direct investment flows are directed to emerging markets. The increased integration of financial markets, the opening of new export markets as well as the prospect of higher streams of income across countries generated by foreign direct investment may arguably affect the sustainability boundaries of current account deficits."

There seems to be a problem. The messages of yesterday 5 december and today 6 december appear on the same page.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh24340_2004-12-06_05-40-21_t159701_newsmlHEADLINE: Japan repeats no plan to divert from dollar assets

TOKYO, Dec 6 (Reuters) - A senior official from Japan's Ministry of Finance reiterated the ministry's stance on Monday that it has no plan to divert its massive foreign currency reserves out of dollars and into other currencies.

British newspaper The Observer suggested on Sunday that Japan was threatening a huge dollar sell-off ... enormous capital flight from the dollar if the U.S. currency continues its decline.

"We have no plan to divert from our dollar-denominated assets to assets denominated in other currencies," Masatsugu Asakawa, head of the ministry's foreign exchange markets division, told Reuters.

Japan had held reserves of the Indonesian rupiah bought in 1997 during the Asian financial crisis, but has sold them.

A senior MOF official had told Reuters in November that Japan would not diversify out of dollars into other currencies, such as euros, since it could precipitate a further decline in the dollar.

----(see article for full report)----

If, as a central banker, you can't spend down your dollar reserves on other currencies for fear of driving its exchange rate lower still and thus further aggravating the original problem, you are left with a natural alternative.

Choose gold. Go ahead. Tell the world, honestly, that you are not going to diversify out of dollars into other currencies. Gold is not a currency, it is premium property and makes for a fine reserve asset. As you use your unwanted dollars to bid for gold, you will drive up gold's exchange rate (its price) but you won't directly be driving cross-currency international exchange rates one way or another, and additionally Mother Nature is unique among your options -- she won't complain that you've affected her competitive trade position (she doesn't have one).

However, in pursuing this alternative you will likely precipitate a crisis among the various cross-currency derivatives and those derivatives that tie into gold's price as market arbitrage players try to make sense of dollar-based gold market pressures that begin to seem asymmetrically out of sync with the forex currency exchange rates.

In the end, it will become very apparent whether the asset you have is gold, or just the promise of a counterparty having a very bad day.

R.

Thanks, yes, I'm aware of the archiving hiccup. We'll have it ship-shape as soon as possible. It requires a reboot of a database that I don't have access to from this computer.

R.

http://www.nydailynews.com/business/story/259177p-222006c.htmlHEADLINE: Cage's 'Treasure' mines more gold
Nicolas Cage's "National Treasure" added to its own riches by finishing first at the box office for the third weekend in a row.

The action-adventure flick, in which Cage leads a ragged crew in pursuit of untold riches (gold) supposedly stashed away by the nation's Founding Fathers, earned an estimated $17.1 million, easily outdistancing second-place...

---(from url)---

Has anyone here seen it yet? What's the word, do you think it is positive for gold, serving as a giant advertisement for portfolio diversification in showing the enduring value of gold?

I have yet to see it, so if you offer a review don't give away anything that might spoil the show.

R.

A unilateral decline of the dollar's exchange rate is "also" making the global dollar-debtberg less heavy. This encourages many to make (produce) more of that same dollar-debt and shift economic activity + profits (and consequently reserves) into appreciating (more stable) euro-paper, that can be holded somewhat longer as a temporary store of wealth.

And indeed, Sir Randy...all paper (included currencies) will/shall have to "merit" its own "exchange rate" against the universal gold-wealth-metal...in its most free, naked form.
It is exactly this ongoing, great "change", that escapes most gold affectionados. Simply because this "change" (in gold-mind) comes from the initiatives (concept) of the dollar challenging, euro-currency. Makes it more difficult to see and accept that it is happening.

There is much more debt than there are reserves. Dollar-debt and reserves are both becoming less heavy, with the unilateral dollar exchange rate decline. This will result in changing trade and capital flows...further and further away from the dollar, because the dollar-system is getting stuck. That's WHY it is/must be Another currency (than the $) that will/shall/is bringing gold back into the center stage. Logical that the new gold-market will NOT be dollar-inspired and different than the existing (paper)gold-dollar-market.

The savage oilprice knock down on friday, saved the dollar exchange rate. Watch the POO rushing back to $50, within a matter of weeks. Isn't it extremely remarkable that the POG remained extremely constrained within such a context. I suggested a (the very probable) reason, WHY this is so.

The colluding AA-media was sending a remarkable message on that same friday : Saudi Arabia (the globe's oil CB) has suggested to the OPEC members that they can (should) decide on their own about their quotas !!!-???
And today we see an attack on the US consulate in Djeddah !?

Dollar...euro...oil...gold !

http://www.michaelmoore.com/email/form.php?sbj=newsTC..thanks for the heads up, had not heard of this film....
Maybe someone with expertise could email Michael Moore with an enticement (well written) to explore the corruption of Gold trade in a documentary of real worth and a trail he could follow without needing half truths...
He'd be busy for years w/ sequels..."Farenheit Gold"
... "The Great Deception"...Bre-X Scam and the House of JP Morgan connection would make a good opening scene for the war on Gold...YGM

**Above is fatties e-mail addy.

I'm flabbergasted that the Good Delivery Bars under the GLD can actually have DUPLICATE numbers in the record, totaling 2.2% of the supposed holdings. What a scandal! Really brings home to me the seeming degree of perfidy to which the PTB are willing to resort, to mask Golds true value and protect fiat (if this is not simply a grotesque 156 bar (!!!) error. Being a tyro, and maybe a day late and dollar short (but not completely short of gold! ;-))
I've just subscribed to the GATA dispatches this morning. Evidently, despite the heroic court actions undertaken by the anti-trust the Powers That Be continue their tricksssy games without shame, and I will watch with bright yellow fascination.

I admit, (again, being a tyro and a newbie, etc.) that talk of gold plated lead bars gave me a twinge. When I bought, suspicious little fellow I can be, I measured my 'doorstopper' with a millimeter ruler, and compared the mint stamp on the net, and weighed the bar. Given dimensions accurate to half millimeter, and accurate weight, (on a kilo bar) is there anyway, theoretically, that such a particular bar COULD be 'faked' with lead? I mean one would have to use Platinum, right - to get even close? (or, I suppose, 'a hollow core' lead bar, gold plated?)

OK, silly question, I know - consider it 'comic relief'...

I came across an interesting comparison of how severe the US current account is now. At around $600B/yr, this equates approximately to the entire GDP of India ! Wow !

C!

Hello Belgian,

In what camp is Saudi Arabia according to you ? The Saudi royal family seems to be very US/$/Bush-minded, but in the years prior to the euro-launch they are suddenly a BIS-member (�-minded ??).
Or is the US military presence holding them in the dollar-camp ?

Um, ya...that WOULD be a 'use' for M&M's 'talents', and I WOULD write him to suggest it...but I'd be afraid of catching cooties ;-) (he's such a slimeball!)

So many fun issues mentioned this morning! I have to jump in. I also have visited Troy, and have to recall selling many ancient golden treasures, still gleaming bright.

The problem with faking gold is that you cannot get the density right. If a coin were made with tungsten, it could not take the strike (you cannot get the image on the coin). Uranium is radioactive. Osmium, Platnium, etc. are much too expensive. So ... if the density is right, it is probably gold. Please note: some very rare gold coins are easily faked, but in genuine gold. These counterfeit coins are a local industry in the middle east (especially Lebanon). Do not buy a gold product that has a very significant premium over the gold price just because you can tell that the gold is genuine. Another clue: there are only 3 of these coins known to exist, and the dealer who is trying to sell one to you has 7.

OK -- the movie National Treasure was fun to watch, but I do not think that it will cause much interest in gold investing.

The premise is that the Knight's Templar found great treasure digging in Jerusalem, and this treasure made its way to America, and that our founding fathers left clues to its location on the back of the Declaration of Independance ...

I prefer Jim Marrs' version of history found in "Rule by Secrecy" (mainly because it is so entertaining). According to him, the Knight's Templar located important secrets in Jerusalem. They used that for blackmail and collected vast riches from the Catholic Church. The heyday of the Knight's Templar was between 1120 and 1307. In 1307, on a Friday the 13th, they were rounded up by the French King (who had the backing of the Pope). They were tortured and executed before revealing the location of their treasure. The best guess is that their hoard moved over the Alps and because the basis of the Swiss Banks (notice the similarity between the flags of the Swiss Cantons and the flags of the Knight's Templar). Their boats made it to Portugal and Scotland and because the basis of the original pirate fleets.

The Knight's Templar was a democratic organization. So are pirates. There is reason to believe that there was a fair amount of associations between pirates and Masons (some of the Mason's "secret oaths" declare are that they are friends of pirates). These ideas filtered from the Masons to our founding fathers. So ... the true treasure of the Knight's Templar was the concept of democracy. A treasure currently being defiled by the Bush gang under the pressure of looting the worlds weath before Peak Oil blows the whistle on them.

Opps. I forgot to mention that during the glory period of the Knight's Templar, they acted like an ancient American express. You would go to one K.T. castle and give up your gold and silver. You would be given a coded piece of paper saying what you gave. You could travel long distances without fear of robbers (who would ignore paper). At your destination, you could withdraw your gold, and they would alter you coded paper for the deduction and of course the processing fee. Pretty cool. Think of where we would be now in commerce if they were not all burned at the stake in 1307.

But the movie "National Treasure" just plays into the "get rich quick" concept. There is no concept in the movie that gold is worth paying money for. No, if you find the right map, and defeat that bad guys, you get a portion of the treasure which are quickly exchanged for real stuff .. mansions, fast cars, prestige ... So, go enjoy an action movie that touches briefly on history, but gives a message solidly in line with the fiat masters.

Have a good day.

WHY does Snow (like O'Neil) has to be replaced !? Has this something to do with more gold for lower oilprices ? Thoughts anyone ?

http://www.lbma.org.uk/publications/alch36_pboc.pdfSpeech at LBMA /04 conference by the Governor of China CB.
He looks forward to the Paper market in Gold it seems more than the physical one...IMO China could become the ultimate storehouse for 'Non-Existant Paper Gold'....Massive population of uneducated investors to swindle and keep Gold in realm of Mushrooms forever...YGM

Saudi is in the "oil-camp" ! And the scarcer oil gets...the more that oil searches to be exchanged for equal "value"...whoever that may offer-deliver, such value.
The whole question then comes down to : WHAT is equal value (total package) for valuable oil !?
The answer to that question is "evolving" now. You certainly realize that there are a lot of elements within this package of value for oil. That's WHY you will never" hear about oil and gold in a same context !!! Oil and gold are to be seen, by the general public, in the usual (monotonous) context of warm/cold weather or high/low tensions. Gold and oil remain taboo !

I think we will only really find out when we see who the replacement nominee is. However, as Snow has been conspicuous by his silence on important matters such as the deficits, and has spouted baloney about a strong dollar like a talking toy whose button has been pressed, one has to consider that he was given extremely strict orders on what message he was meant to convey (it is a strong characteristic of this administration that the message has always been very consistent, whatever the particular topic). As he has shown no inkling of rebellion, he has to be considered a rather weak pawn who is thus expendable during the President's "housekeeping" excercise. Or, to be a little more cynical, he has already compromised himself so much with what he has said that he now sounds ridiculous, and the administration can't afford, at this stage, to have anyone who sounds ridiculous in Treasury.

While the President might have gained "political capital" during the last election, he also needs to reward some of the faithful. I would wager on the replacement being a middleweight hack. Not too strong as to be embarassing, not too weak as to look underqualified, and as politically connected as heck !

Just my 2cents.
C!

Do you really think that it are... the "chinese"... who are a massive population of "uneducated" investors... !?
Maybe the LBMA (and WGC) can try to promote some opium-impregnated goldpaper...once again ?

If I read you right, I concur. I doubt somehow that paper gold is going to draw many canny Chinese domestic savers or investors...they'll wanna see and feel it, just like us sophisticates. (Oops! Was that over 100 tons gold in the ETF when it opened? ...never mind)

White Rose, thanks for comments on physical fraud with bullion...would seem to me rather elaborate to begin drilling out and plating lead to match weights, etc...I mean the kilobars have serial numbers too a phone call check away. REgards "Bush and his gang" though, now - in fairness - while I concur it is plausible, in any case, that they're "busy looting the world before Peak Oil blows" in...it's not like this wouldn't be the 'game' no matter which crew were in the Villa D'Albani.

Maybe there is substance in your theory. The friday oilprice tumble was an underpinning of the theorethically strong dollar. Maybe, Snow stood in the (Rubin's) way for having such strong action being executed ?
IMO, if not enough US-Treasury gold is made available, the oil-CB will get the oilprice back up to +$50.
Question is...who can keep US gold in Fort Knox and have a strong dollar at the same time !? How can this go on, when more and more gold is physqically being taken out of circulation !? Baring in mind that many oil-owners have deliberately neglected investments in new oil-flows as to create gradual shortages + stronger prices...meeting increasing demand. How is new oil-investment going to be encouraged, without something else than dollars in return !?

Not quite sure of your question. My meaning was that with 1.5 Billion people the Chinese have a capacity for bringing far more suckers to the table than the west has already done. I would never underestimate the astuteness of many Aisan investors for sure...I think we should watch very carefully their intentions with their so called 'New' markets for Gold. With the likes of JP Morgan now entering the Chinese banking/brokerage biz and guys like Soros pouring in Millions I am leery of what the future holds w/ respect to China & Gold...If I am reading the wrong message into the mix, time will tell....Over a Billion souls to sell ETFs and other Paper Gold intruments to, is very scary to me. I think the key to Gold freedom will lie in the dwindling supply of Physical to bring to market, coupled with the Oil for Gold scenario. If CB's and Miners stop selling and hedging respectively, and when those in the Oil/Gold trade refuse any more paper promises of Gold,(which I believe the ETF was specifically groomed for) the game is over .....YGM

A report in the Observer newspaper that high ranking Japanese officials had warned the White House of the risk of "enormous capital flight" if the dollar kept falling.
The Japanese Ministry of Finance later played down the report, saying there were no plans to sell U.S. assets and it stood ready to intervene in forex markets if necessary.


UPDATE 2-US Treasury report finds no forex manipulation
Fri Dec 3, 2004 06:57 PM ET
(Adds details, background, Snow comments, byline)
By Laura MacInnis
WASHINGTON, Dec 3 (Reuters) - None of the United States' major trading partners manipulated their currencies to gain economic advantage in the first half of 2004, the U.S. Treasury Department said in a report released on Friday.

On the This Week, Sunday program, George Will called for Alan Greenspan to take over at the Treasury, with Robert Rubin stepping in as Fed Chairman.

Similarly if Iraq goes down the tubes, Rummy is in waiting to get the axe.

I know, I know, but the Bush team is just so blantant about it all. I think what they are doing to Fallujah is just a test for what they have ready for urban America.

If you are concerned that doctors might issue a causualty list, kill the doctors. If you want to keep track of the population, issue ID cards tied to retina scans. If there is resistance, blow it away. If you use too much DU (depleted uranium) shells, get new troops in there every 9 months. All in all, it may be necessary to level the city to "get out the bad guys".

Say what you like about all politicians being alike. But I think the Bush team runs much closer to fascism than I think is appropriate for America. My personal "joke" is that they are building Auschwitz and Birkenau version 2.0 in Montana. When they start sending Democrats in trains to a "destination unknown", it may be too late to resist.

I've only seen one analogy alluding to the coincidences and time frames between the entrance and success of the Gold ETF and the sudden drop in POO. (it was at another board) Could it be that the lack of physical for Oil was the engineer of the ETF and as it was accepted grandly the (select few) who trade Oil for a portion of Gold with the Dollars paid, now must take this new paper when Physical is not to be had???....Thinking aloud and wondering..YGM

The reason(s) why papergold (derivatives) must remain promoted in China and elsewhere, is because it is the one and only way left to keep the "perception" of a strong dollar, alive. It is evident that a chinese CBanker receives the LBMA delegation as guests. The yuan is pegged to the dollar. Many do talk the talk whilst not playing the game. And look...we got a nice oilprice present for Christmas. Is everybody happy ? Sure ! Low oilprice...strong dollar...gold flows...stable euro...neutral IRs and stockmarkets. Order is in the house...or not !?

http://www.house.gov/paul/tst/tst2004/tst120604.htm

The following is a reproduction of the December 6, 2004 column taken from "Project FREEDOM, Website of US Representative Ron Paul." as allowed by by the rules listed on the website.


Gold Exposes the Dollar
December 6, 2004

The existence of gold in the economy is a constant reminder of the poor quality of the government paper, and it always poses a threat to replace the paper as the country's money.
Economist Murray Rothbard


One year ago I wrote about the precipitous decline in the value of the U.S. dollar against other world currencies, a decline that continues unabated today. A Euro note worth only 89 cents shortly after its introduction was worth about $1.16 at the end of 2003. Today it's worth $1.33. In fact, the dollar has fallen to an all-time low against the Euro, and a 12-year low against the British pound. Since 2000, the dollar has lost 30% of its value.

Gold, by contrast, has surged 70% in the same period. The New York Times last week acknowledged that gold "was now a more favored currency than the U.S. dollar." As analyst Harry Schultz points out, when gold prices are low the financial press calls gold a commodity. When prices are high, they call it a currency. Investors cannot afford to sit idly by while their dollar accounts lose another 30% in value, so the rise in demand for gold is hardly surprising.

The world financial markets are betting against the dollar. Our creditors, particularly Asian central banks, are losing their appetite for U.S. Treasuries. Our federal government's huge debt and voracious appetite for deficit spending make our economy dependent on the actions of foreign governments and central bankers. Yet few Americans realize the extent to which their own government has sold out American sovereignty by borrowing money overseas.

Washington seems oblivious to the problem. Our current account deficit is roughly 6% of GDP, and our total foreign indebtedness is over $3 trillion. We borrow $1.8 billion every day! Unfortunately, our politicians and the public will ignore the problem until the combination of dollar inflation, price inflation, and higher interest rates brings the borrowing frenzy to an end. Americans, like their government, seem to have lost the ability to live within their means. When their standard of living falls, however, they will look for someone to blame in Washington.

The consequences of a rapidly declining dollar are not yet obvious to the American public. A trip to Europe costs more than it did a few years ago, but most Americans still don't sense they are becoming poorer as the dollar falls. The long-term significance has not yet begun to sink in. However, our relative wealth as a nation is measured in dollars, and the steady erosion of the value of those dollars means we will all be poorer in the future. Federal Reserve chairman Alan Greenspan has relentlessly increased the money supply throughout his tenure, ostensibly to keep the economy expanding. But this artificial stimulation through cheap money comes with a price. When dollars are abundant, they are worth less. This is the reality facing Americans today, especially older Americans who rely on savings to finance their retirement years.

Papergold (mineshares-derivatives)...more papergold (ETF)...more promotion of papergold (China-India)...serve a, two in one-purpose :

1/ There is not enough physical gold to have a free physical goldmarket.

2/ The POG is dollar-related.

Together : There is not enough physical gold to have a free physical goldmarket functioning at dollar friendly prices !!!

When we see more efforts being done to expand the papergold market (China)...we should be happy, knowing that the amount of physical gold available at today's prices, is declining even further.

Now, the clue YGM : It is NOT the shortage of available physical gold...that is going to impact the POG !!!
Repeat : The POG is NOT function of offer-demand and never was !!!

Gold (and oil) is a POLITICAL metal and therefor its price...has been and will stay...political, for as long as there is agreement upon this.

Consequence = More papergold will and shall circulate for as long as there is no agreement on freegold.
The managed price of gold was and still is at the dollar's service, like the price of (political) oil was at the service of global economic expansion...emphasis on "was"...because there is less and less agreement on the political pricing of oil !

In the above context...I don't care about any evolvement of any kind of goldpaper, circulating anywhere.

Most people keep on ignoring the immense "political" content of gold in the existing goldmarket. Very understandable but a big mistake, nevertheless.

Point remains to understand WHY gold will be "de-politicized" and set free. The gold-fight is with paper there where the oil-fight is with weaponary. Both are political derivatives !

... from German point of view: Nowadays here is often a lack of interest in gold when chatting at job or with friends comes to investment strategies. People prefer housing and saving at 3% as save harbour for their hard earned money. Many got burned from save stocks like Deutsche Telekom.

Some hold few gold coins maybe from their parents, who bougth them in the eighties. I remember well, how my father bought Krugs as Christmas gift for my mother, paying more then 1300 Marks or 650 Euros near the top. Got all from her to keep them save. More important, I got the goldbug genes from her.

I found no efficient retail system for gold or silver bullion outside the banks in Germany. They drive the spread for an ounce of gold up to 7%, more for smaller coins. And forget about silver eagles, the spread is huge and 16% sales tax on top. The banks dont promote investment in bullion and prefer to sell their paper products to customers.

But times start changing. With every new long year top of gold in dollar, people see the rising chart of gold on TV in our main stream investment channel. And slowly the price of gold is climbing also in Euros. The market outside the banks is gaining in volume, through Ebay, pawn shop auctions or even ads in newspaper.

From macro economics view I dont believe in the strong Euro, I see more the weakness of the dollar. The Euro fundamentals are not encouraging. M3 growth near 7% in the face of stalling CDP. France and Germany, the early drivers of the Euro stability concept, hurt the stability criteria year after year due to weak economics. The Greeks got their Euro ticket with cooked books, but they wont show them the red card. More to say but I want to save bandwith and your time

The Euro will accelerate its fall against gold over time. Gold outperforms the 3% saving harbours (dont forget to subtract capital gain tax and devaluation). And a lot of the money parking there will find its way to gold.

Trojagold, precious during 5000 years.

Ron has it wrong, when he keeps seeing (agreeing with) gold as a "convenient" mixture of commodity + currency !!!

The coming, International Monetary Order, is going to have gold rehabilitated in its pure, naked "wealth" status !!!
Very,... VERY... far from "being" a commodity or a currency in the sense that we have known gold during the past 35 years. Because our fiat-digit-experiment, as a "non-gold" system, is getting stuck (disfunctional). Bring gold,... in its capacity as store of wealth,... back into this system...and we can keep on running with the (modernized) system. This one and only, simple solution, lays in the hands of the politicians and not in the hands of the gold affectionados, who can't possibly fight the political paper(printing)powers.

Ron Paul should take his good intentions one step further than (understandable) pure dollar-centrism.

The more this economical world keeps on running cubically...the more political will for the gold=wealth concept, will be increasing. In order to postpone this "evident" solution...the dollar must remain to be percepted as "strong"...together with a "strong" Amerika.

Amerika will be strong again...when it accepts freegold as free as Amerika always pretented to be !!! Real freedom = real strength.

http://www.usagold.com/gold/special/DenBoard.html

Belgian..thanks for clarity of thinking...so my question now becomes do you see the potential of some nation going against the rest and de-politicizing Gold? Who might take the first step? The Dinar faction?...Thanks BTW for your time...YGM

If the purpose of the changes is to make low/lower taxes, more permanent...Than we have evidence that there is no political will left to back the dollar in what might be left of its former "hardness". Strongly suggesting that nothing will make the dollar strong, ever again.

When the political will, for hard $-money, fades away...it's time to invite, a modernized gold, back on the center stage.

In other words...let the printing presses rollllllllll. Keep taxes, IRs low...lower and don't worry about increasing expenditures and deficits. W'll overprint it all away. Was Snow too cautious and not willing to push the pedal to the metal !?

SNOW has to pay

1) He supported a strong dollar and it fell to new lows.
2) He predicted a strong jobs market and it didn't really recover to his predictions.

He has lost all credibility. The US economy has lost manufacturing jobs for 3 straight months, 3million since 2000, and now we are running a trade deficit in agriculture, a former powerhouse.

In essence, that vast stimulus that was applied during the BUSH administration is now stored in foreign reserves. Instead of recycling the money back into our economy in the form of export purchases of our goods, the foreigners sat on the money, and stored it in our bonds as reserves. This is a reflection that globablization and the unfettered believe in loose free trade is in fact an utter failure. What is on trial here? Globalization itself, which ran wild on the back of the collapse of the Soviet style command and control economic communism. In its current form, Globalism is dysfunctional, its a superset of all forms of economic theory (capitalism, socialism, communism, facism) its creating massive imbalances in the system, and no one has any sense of how to straighten it out. Its not working.

One Big answer to the most important question you probably ever asked : The "MARKING TO MARKET" of ECB gold-wealth-reserves !!! This concept, already in function, is nothing less than the official "de-politization" of gold.

Yellow Gold Miner...imagine you could mine.. your gold... out of your mine...in function of the POG moving freely !? You, your childrens' children, would be extremely "wealthy".
You could mine progressively at ultimate convenience. Unfortunately, this is only a dream...because the nation-state will turn out to be the "owner" of that deeply stored underground...WEALTH that is " marked to the market "...permanently ...and offsetting the ever existing depreciation of paperfiat/digit.

The ECB (BIS) has its aboveground, gold-wealth-reserve mine, already. This gold is destined to be marked (valued) at prices set through trade in a modern physical gold-market...a euro goldmarket...depolitisized gold instead of marginalized gold, through paper derivitization.

Consider WAG I and II as confirmation of the real purpose of the ECB's concept of MTM.
Consider the dollar's exchange rate decline (and low IRs) as confirmation that there is nothing left of the former politics of a hard dollar currency and have been abandoned almost completely.
Consider the further containment of the POG as a buying of some more (dollar)time.
Consider the dollar printing as giving up the reserve status of the dollar.
etc...

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

You do constantly help clear muddy waters.....BTW..YGM is Yukon Gold Miner :>) Although I like Yellow Gold!
PS: ANOTHER warned me years ago to be wary of Gov'ts eventually claiming below ground Gold. I heeded his words then as now. Rest easy knowing I can mine Yellow where none will see/hear and with much ease. It's called a Suction Dredge. Flour Gold is +95% pure usually and in the right place (known) many oz p/day can be achieved. One must consider all scenarios and be greatly adaptable in these times ahead I feel....Gold in the Creek Bank is still safer than the Street Bank...IMHO...YGM

The Federal Reserve today conducted open market operations through a round of overnight repos, adding $6.25 billion under 2 percent, some as low as 1.92 percent.

Easy money is easily depreciated. Choose gold.

R.

http://www.usagold.com/phone.htmlConsider looking into establishing a relationship with USAGOLD-Centennial Precious metals, and enjoy delivery to Germany with the same low spread there that they offer to clientele here in America. On a personal note, account executive George Cooper spent a year studying in Germany at the Albert-Ludwigs Universitaet in Freiburg while earning his degrees. You might feel most comfortable giving him a call (phone extention 102), although you would find everyone in the office to be quite helpful and cordial.

R.

Indeed Sir, the euro is not strong...it is the dollar that is weak/weaker.
Or somewhat more precise...the euro is more stable than the dollar. This is explicitely shown in the �-POG ! That's where the attention must be focused on.

It is The euro that wants... "gold"... to tell everybody how stable or unstable the currencies are ...how good or bad the management of the currencies are !!! Not who can "intervene" the best as to make its currency relatively stronger against another one.
The euro concept wants all the currencies to compete with freegold as the one and only denominator of "real wealth".
That's what you are (should be) reading in the �-POG chart.

But today, we are still reading a POG that is dollar dominated in a dollar papergold market. This means that the actual goldprice in any currency is moving on the wrong level. An obscenely low level and NOT reflecting-representing, the accumulated wealth.
Your stash of accumulated currency, permanently changes in saying what your wealth ( declining purchasing power) is, due to the permanent depreciation of the currency (euro included of course).

Simply ask yourself, WHY the euro is increasingly considered as a more stable currency and more attractive as a safe haven, than the dollar wich was always considered as the flight currency in times of increasing trouble. This investigation will lead you to the euro's gold-association.

BTW, did you ever see or hear the ECB's MTM of goldreserves concept in public press ? Never !

All prices of gold will one day have to move up unto a much higher level, where the real competition can begin on the real level (wealth) field.
But the existing dollar-gold relationship must therefor first be broken.

Bear in mind that if Euroland were without the euro...we would be living under the heavy price-inflationarry flack of the dollar !!! Emphasis on heavy infla, not to be compared with the relatively mild infla you do witness, today.

But we still accept the dollar-system and suffer + profit from our chosen euro-management. The ECB has to constantly balance between her hard euromoney policies and economic realities + political pressures, that exist under the dollar-regime. The maturing euro versus the aging dollar. Not an easy excercise in balancing, evidenced by the erratic exchange rate behavior.

The dollar will blink first !

http://news.goldseek.com/DailyReckoning/1102372400.phpsnip....This train keeps coming...and no one gets out of the way.

By no one, we mean the big overseas holders of U.S. dollar asset - particularly U.S. Treasuries. The Japanese have $720 billion of them, for example, the biggest pile in the world.

But are the Japanese worried? Yes! (We have an extraordinary story for you, dear reader, but it will have to wait until tomorrow...when we have time to write it.)

Every time the dollar loses a penny, the Central Bank of Japan loses more than $7 billion. We have not been counting...but in the last two weeks alone, the Japanese must have lost more than $40 billion. How long can they bear it? What can they do about it? More about that tomorrow...

Cont'd

http://www.sundayherald.com/46389"THE Pentagon has admitted that the war on terror and the invasion and occupation of Iraq have increased support for al-Qaeda, made ordinary Muslims hate the US and caused a global backlash against America because of the "self-serving hypocrisy" of George W Bush's administration over the Middle East."

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.

Monday market excerpts

U.S. gold futures closed down but above session lows on Monday after a burst of speculative long liquidation, but traders said a chronically weak U.S. dollar limited losses.

COMEX February gold futures fell $1.90 to end at $455.90 after trading from $458.30 to $452.70.

Traders said the market took its cue from a firmer dollar amid speculation over who would replace U.S. Treasury Secretary John Snow after the New York Times said President George W. Bush had decided to replace him, possibly with White House Chief of Staff Andrew Card.

"There's some caution ahead of who's going to be the new Treasury Secretary. I think that's the main focus," said a New York gold trader. "That put a caution flag out and the buyers didn't step in today."

February gold has been seesawing in a range since it hit a 16-year high of $458.70 on Thursday, in a bull move fueled by almost daily new record highs in the euro against the dollar.

Traders were likely to keep currencies in focus, analysts said, as gold has reached a very tight correlation with the euro.

----(see url for 24-hr international newswire, prices)----

HEADLINES

U.S. dollar shows no signs of recovery against euro -- North County Times, California - Business

Mexican peso strength bewilders many economists -- Borsa Italiana - News

NZ dollar now part of global system -- Stuff.nz

[-- The New Zealand dollar is now part of the continuous linked settlement (CLS) system.........Financial institutions undertaking offshore forex transactions risk severe losses, even bankruptcy, if the deal falls apart..........."The risk grows when institutions are trading across time zones, which can cause delays of many hours between a transaction being initiated and completed,"............The CLS system was operated by New York-based CLS Bank International to ensure "both legs" of a forex deal were settled at the same time, thus reducing risk.]

Bottom line: do you want to trust your financial security, your savings, to an international accounting system that is fragile to the extent that a simple time zone issue can bring about bankruptcy? Choose gold and rest easy.

Sometimes when I see some of R Paul's comments, it makes me think of the old joke where somebody is offering a bit of odd medical advice, followed by the statement, "I'm not really a doctor, but I play one on TV!"

That's what it feels like is happening when I read his comment, "Our federal government's huge debt and voracious appetite for deficit spending make our economy dependent on the actions of foreign governments and central bankers. Yet few Americans realize the extent to which their own government has sold out American sovereignty by borrowing money overseas."

Woooooooo boy! That's a doozy. Does he really *really* believe this? If he does, then somebody's got to set him straight on history and ugly truth about the very essence of sovereignty and its priviliges. Has he no memory of 1971 or any number of international bond defaults since?

Hasn't he clued in to the seedy underbelly of sovereignty? Simply put, bankruptcy procedures do not apply to sovereign states.

So in truth, our government will have sold out American sovereignty only insofar as it makes us suffer in trying to make good in paying off all of that poderous debt. In other words, we will be exercising our national sovereignty on the day we say "phooey" to our international bond holders who want redemption in strong dollars.

Hey, I warned you up front that the truth was ugly. So the question is, is RPaul too naive to see it, or is he just the government's latest mouthpiece in trying to jawbone a more effective "strong dollar" pitch than the one JSnow was using to buy time from our foreign creditors?

Gold. Get you some. --- Aristotle

I think that Ron Paul is just describing the current vacillating view of the American press, but not really indicating HIS agreement with the idea that gold is just a "convenient" mixture of commodity + currency, and I suspect that he would agree with your very insightful statement quoted below, just as I do.


"The coming, International Monetary Order, is going to have gold rehabilitated in its pure, naked "wealth" status !!!
Very,... VERY... far from "being" a commodity or a currency in the sense that we have known gold during the past 35 years. Because our fiat-digit-experiment, as a "non-gold" system, is getting stuck (disfunctional). Bring gold,... in its capacity as store of wealth,... back into this system...and we can keep on running with the (modernized) system. This one and only, simple solution, lays in the hands of the politicians and not in the hands of the gold affectionados, who can't possibly fight the political paper(printing)powers."


I hope that the politicians of the world will willingly accept the "one and only, simple solution" that you describe above, because if they don't it could get very, very unpleasant for us all before events impose it upon them.

As I see it, their are two potential disasters facing the civilized world today. Number one is the coming exhaustion of cheap and abundant energy supplies, for which we do not, at present, have a solution, and number two is the monetary mess which does have a simple, but not easy, solution as you have indicated.

Thank you for your comments, and always insightful posts.

DryWasher.

In a CBS.MarketWatch article they quoted a certain Ned Schmidt about his thoughts on today's Gold market, something to the following effect:

-------"A time exists for buying and a time exists for profit taking. And right now, the time for profit taking is here with gold having been exceptionally rewarding for many, many weeks. With year end rapidly approaching, managers are booking profits so they can spend their time relaxing over the holidays."--------

I don't have a quarrel with Ned, but I want to point out the prevailing lunacy that motivates the market players: "managers are booking profits so they can spend their time relaxing over the holidays."

Booking profits. Relaxing.

Hey, that's great -- how can I get in on it, too? Let's see, first I'll need to sell some Gold, and that will give me a much bigger pile of dollars than the pile I used to buy it in the fist place. Wow! Look at all those profits!!

OK, now what?

Seriously. What miraculous thing am I supposed to do now that'll give me peace of mind and help me relax during the holidays? I can't just sit on the dollars as is and expect to relax -- I'd spend my time worring about depreciation instead. I can't just put them in bonds -- again, I'd worry about depreciation and principal losses. Stock market? No assurance of safety there, either.

Unlike the profits-booking bozos that Ned is referring to who apparently have to measure their success with cash on hand rather than with the current market value of holdings, I find that I'm most relaxed for the holidays by simply letting my Gold continue to do the value-talking. BUT!! -- the distinction has to be made that I'm talkin' real *REAL* Gold here.

In all fairness to those bozos, if their form of Gold is really only a futures-style holding, then I'll confess I can see their point. When it comes to counting chickens at the end of the year, cash in hand is one step closer to fair accounting than counting on paperGold promises that will never be able to hatch into Physical holdings.

Gold. Get you some. --- Aristotle

It's only my opinion, but in seeing the positive light of things this is where I think you ought to put the focus of your attention within PBC Governor Xiaochuan's September-in-Shanghai speech:


------"How best to transform China's gold market from commodity trade into financial product trade? In light of current conditions, developing individual gold investment business is a practical option. At present, up to 12 trillion yuan stays in domestic residents' saving accounts. The launch of individual investment in gold, therefore, will allow residents to change currency assets into gold assets. At the macro level, it will expand channels for changing savings into investment, thus adjusting the money supply; in the micro aspect, allowing citizens to trade and keep gold can improve social welfare, benefiting both the country and the population."

"Furthermore, central banks still hold a considerable amount of gold as official reserves. Gold reserves, FX reserves, and special drawing rights in the IMF form the international reserves of a country, jointly assuming the function of warding off risks. [...] Therefore, China's aim is, through the three transformations, to establish a safe and effective system for gold trading and to give full play to the gold market's functions of investment and risk warding, thus promoting the development of China's gold market."-----


As far as the right interpretation regarding the proposed derivatized elements of market liberalization, I think Belgian has given you some excellent high ground from which to stand on and survey the field to make your interpretation.

Gold. Get you some. --- Aristotle

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh35627_2004-12-06_16-19-43_n06382162_newsmlNEW YORK, Dec 6 (Reuters) - Foreign exchange traders routinely cite the need for a weaker dollar to narrow the U.S. trade deficit as one of the main reasons for selling the currency, but this premise is built on shaky foundations.

The dollar has lost over a third of value against major currencies in the last three years, yet the U.S. trade deficit has ballooned to record levels, both in nominal terms and as a percentage of gross domestic product.

"If you move euro/dollar up to $1.50, that's not going to do it (solve the trade problem)," said Mazanec at IBT. "We buy most of our goods from China."

Also, given that Chinese labor costs are around 3 percent of U.S. labor costs, it's easy to see why those Chinese goods are so attractive to the savings-averse U.S. consumer.

"The U.S. consumer loves imports, and in order to change that, import prices would have to go through the roof,"...

----(from article at url)----

Will a depreciating currency act as fertilizer to help us grow our way to a higher GDP and casual settlement of our debts, or will we default our way out?

Wait and find out the easy way as others find out the hard way. Have gold on hand to see you safely through.

R.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh37392_2004-12-06_17-54-43_n06455090_newsmlHEADLINE: US equity inflows last week fail to support dollar

NEW YORK, Dec 6 (Reuters) - Equity market flows data released by two large Wall Street banks on Monday showed that the dollar slumped across the board last week despite strong demand for U.S. stocks from foreign investors.

Custody data from the Bank of New York showed a net $2.2 billion inflow into U.S. equity markets last week, while proprietary data from UBS showed a net $661 million inflow.

But the dollar still hit new lifetime lows against the euro and multi-year lows against several other currencies. As long as this trend continues, foreigners will be reluctant to increase their exposure to U.S. assets.

"Foreign investors remain wary of adding to U.S. equity positions due to concerns over further declines in the dollar," Woolfolk said.

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

You will recall that a foreign buyer of U.S. stocks must see that stock rise additionally by 'X' amount simply to break even for exchange rate losses of 'X' percent. An anemic stock performance on top of currency depreciation is a recipe for bad going to worse as international participants are mindful to make for the exits.

Diversify your portfolio. Choose gold sooner than later.

R.

Nice to have extra interperators....I was on the beaches of South Pacific when I should have been in College :>)

Yes, I saw the movie. Will it help sell gold? Don't know, but I know what it is selling.

This movie is a "Raiders' of the Lost Ark" wanna be. But whereas Indiana Jones fought for The real God, Cage fights for a false god. Basically, it's an attempt at positive PR for the Masons. The movie attempts to link them historically to other groups who ostensibly horded the world's treasures for posterity. That supposed posterity is now the USA.

However, when the treasure is shown, you will notice all manner of golden idols and false gods. The question becomes is the treasure the gold, the art, or the gods? The patriot community has answered that by logic. Art of a false god is a false god so we can lump those together. If they were preserving gold, them it would have been better in terms of space to melt down the statutes and cast it into bars or the like. So apparently they were trying to preserve the images of false gods.

This is corroborated by the movie attempting to alter peoples preception of the all seeing eye on the dollar bill as being that of god's eye and not, as the patriot comunity rightfully belives, big brother's eye.

So will it sell gold? Perhaps since most people won't be able to read between the lines of the movie. That is NOT to imply that gold is bad. Gold is good. Golden idols is bad.

White Rose, I solute your grasp of history. The purge of the Templars and their Grand Master in 1307 is the historical basis for our Friday the Thirteenth. It is also said that upon the death of Louis XVI by guillotine ( the former French king in 1307 having conspired to destroy the Templars), a man jumped down upon the platform and exclaimed " Jacque de Molay, thou art avenged". Sorry my responce is late in todays discussion.

Of course I meant Cage's character in the movie.

Sir Aristotle, I would like to offer some enlightenment of Ron Paul's comments. Of coures these are only my thoughts as to what RP believes as he didn't talk to me about them.

I believe that he does understand sovereignty in the fullest. I believe that he further understands that the soveriegn USA has been set aside in favor of a corporation. We have a President, Senators, Representatives, etc., all holding corporate offices and we people are the shareholders. We can vote in the corporate officers, but we cannot vote on a meaningful running of the country. I don't know if I could develope this thought other than it's so legally obvious, but I will offer one interesting persidential comment that I heard recently (two days ago?) on TV.

President Bush was being interviewed about, I think, the state of our recovery, and he said that our "company, er...country" is becoming more prosperous. He had a slip of the toungue and called the USA a company instead of a country. Interesting.

RP, I believe is trying to make the connection that the banks, or perhaps more accurately TPTB, are running this corporation. Remember Henry Ford's comment that "If the people understood the banking system, there would be an uprising by morning". Couple that with the legal fact that once you borrow, your future labor is commited to the lenders bidding until the debt is paid. In this case it's the over seas lenders.

Your comment that, "Simply put, bankruptcy procedures do not apply to sovereign states." would be true if it weren't for contracts: i.e., borrowing. Sovereigns have the free will to enter into binding contracts with other sovereigns. The problems here is contracting with TPTB and the misrepresentations, like fiat money, that are inherent in those contracts.

Perhaps this is what you were trying to say when you said,
"So in truth, our government will have sold out American sovereignty only insofar as it makes us suffer in trying to make good in paying off all of that poderous debt." (I wasn't sure if the above was what you believe or what you believe RP is saying. In any event, that's what's going on)

Also, sovereignty isn't so much related to privileges as it is to rights. Corporations have privileges. Consider that our corporate president continues to have us sovereign people succumb to using drivers licenses, a privilege, instead of exercising our right to travel.

Of course, one should sell that "speculative" gold, after each and every ridicule rally. Of course, gold is a commodity and therefor just another opportunity for having one more gamble.

Of course, gold has nothing to do with "wealth" storage. One cannot *command* a wealth-holder to sell his/her wealth . In sharp contrast with the easy manipulation of the herds that participate in the neurotic financial industry (stockmarket) where the engineers (fiat/digit creators) of this most unproductive activity hold their spell upon the mases of wagers.

It is only outside the AA financial indusphere that the idiocy of this industry (unproductive activity) is seen for what it really is. Certainly after the experienced pains of the 2000 implosion. Most (outside the US) concluded never to suffer such a bad experience, again.

That big melt away of many savings is a political issue overhere. Real savings (wealth) should not be risked in gamblings and a financial industry is not there to make everyone rich whilst sleeping. The perfect argument that supports the choice of gold for wealth consolidation on condition that the existing goldmarket is to be "changed".

In Euroland, we will never hear someone (anyone) to sell gold, the metal. The only buy/sell advises that are effective, are the one's directed to the papergold wagers.

Holders of the wealth metal don't need any advise. They all plan for themselves and their loved ones. That is exactly the reason why so many efforts are directed to avoid a growing group of metal wealth holders...independant controllers of their own destiny.

The financial brotherhood (and colluders) want you to stay locked up in the papermills of their creation. Prisonors with paper shackles.

Printing presses organize the price-festivals and direct the flows in wich the herds must move...in and out.
The management of the POG is nothing else than guiding the herds constantly away from the metal.

The complete opposite will happen. The financial industry will be brought to normal proportions. Simply a matter of sustainability.

Off the Reuters newswire:

----------Japanese Finance Minister Sadakazu Tanigaki, asked his view on diversifying Japan's foreign reserves, said: "Japan has massive foreign reserves, which has a substantial impact on currencies. But we should not have too much risk so we need to discuss the issue carefully."

Tanigaki declined to comment on decisions by other countries to divert reserves out of dollars when asked about a recent report from the Bank for International Settlements (BIS), which provided evidence of such a move.----------

Gold. Get you some. --- Ari

Still from Reuters:


------In its quarterly report, the BIS said OPEC oil-producing countries had cut the share of their deposits held in dollars in the last three years, mainly to the euro's advantage.-------

Gold. Get you some. --- Ari

What Ron Paul may be alluding to in his essay is, our falling dollar against the euro puts pressure on euroland to trade more with Asia. The problem is euroland would have to sell what China wants to buy. Among other things, China wants to buy more technology and weapons.
Meanwhile we deplete our own military power in the Mid-East with each passing day.
Frankly, China is holding a very strong hand. I don't think the sting of massive bond failures would bother China that much if it gains military might in the process.

Best Wishes

Too many folk have been picking gold to correct
and way too many people are picking the dollar to decline.
Could it be that the markets defy the "easy-pickers"
and we witness a rise in the gold price in tandem with a
correcting dollar? Well maybe.
Too many of us have been conditioned to believe that when the dollar goes up, gold must go down. But that too could
be an assumption the markets are about to challenge.
Gold is a market unto itself. It has a supply/demand equation that shows a significant supply shortfall every year. That supply deficit must be made up - regardless of what happens to the dollar. Now if you are a foreign Central Bank loaded to the gunnals with dollars, it seems a reasonable (if not obvious strategy) to provide token support for the dollar while you arm yourself with as much gold as you can - to offset the inevitable loss on your dollar holdings. Is it any wonder that demand for physical gold right now is going through the roof.

http://businessplus.hemscott.net/hstoday/AFXNewStory.dll/text?SerialNumber=103&Indate=07/12/2004&EPIC=This was easy to find because I printed it. A whole week ago Townie told us plain and simple:

---------TownCrier (11/29/04; 17:39:20MT - usagold.com msg#: 126832)
"More to the point, while invoiced in dollars, daily compensation [to OPEC] for a weaker dollar can be achieved by higher prices on oil. However, the larger troubling factor [for OPEC] becomes the loss of purchasing power among a country's accumulated "savings" in which its reserve assets have been held in dollars and dollar-denominated bonds.

As an initial step it is logical to expect invoicing [by OPEC] to remain (for a while) in dollars with oil priced high and higher as needed for daily compensation, while accumulated surpluses, in the form of reserve assets, are transitioned into something less vulnerable to these politically-driven forces of depreciation currently under witness."----------

Then today LO and Behold!!! This came across the AFX news wire giving more elaboration on the Reuters blurb. (link attached)

According to data from the Bank for International Settlements:

-------------Members of the Organization of Petroleum Exporting Countries (OPEC) have
slashed the proportion of deposits held in dollars from 75 pct in the third
quarter of 2001 to just 61.5 pct.

Middle Eastern central banks have reportedly switched reserves from dollars
to euro and sterling to avoid incurring losses as the dollar has fallen and
prepare for a shift away from pricing oil exports in dollars alone, the
newspaper said.

The BIS data, in the organization's quarterly review, state that OPEC
countries' stock of dollar-denominated deposits has fallen by 4 pct in cash
terms since 2002 in spite of OPEC revenues surging to record levels this year

OPEC officials say the cartel is trying to protect its purchasing power per
barrel----------------


Guys, it's almost silly how far ahead of the crowd we are! A long overdue thanks for the hostpitable and stimulating surroundings for the gathering of insights and understandings extraordinaire!!

Gold. Get you some. --- Aristotle

All central bankers wake up with the same question : Are we going to "support" the dollar ? To what extend are we going to provide, what kind, of support ? Those CBankers have to put the pro and contra in the (their) balance(s) and decide permanently on the support given. Shall we intervene and direct the many financial flows, or not !? Shall we talk it ($) up/down or leave it alone !?

The second question is about the available (workable) alternative, once further dollar-support and use is decided to be given up.
This explains all the evolving attitudes that the US, as manager of the global dollar, is taking. A constant dilemma between...what is good for Amerika and what is good for the globe's commonly shared, US$ ?

No need to emphasize that this is a 100% political affair and agenda. The "dollar" is nothing else but a "political" instrument. It is the financial brotherhood's task to neutralize the political content of the dollar and make it appear as a pure economic/financial instrument.

The above must make it clear that consolidating one's wealth into the gold metal...TODAY... is a political act !!! Like it or not.
All comments on gold are therefor politically loaded. The general public does not percept this as such. Of course not.

We are now in the eye of an enormous distorted perception building offensive. Nothing what is publicly presented, "is" what it really is.

That's why the coming gold-change will happen by extreme surprise. As many other big changes did happen all of a sudden. Realizing to what extend we are being fooled is guessing how close we might be to the big change.

Against the above background, it doesn't matter if the dollar-index pierces through the 80 support level or not.
The POG remains irrelevant in this context. Because the big change will be a political descission, taken by surprise...whatever the pricelevel of things financial and golden are at that particular moment.

Keep thinking about this, when considering gold.

Our planet has been living with permanent struggles for supremacy. The dollar-system has never been under fire and the struggles were happening on other fields. Today, it remains my conviction that it is the dollar-system that is targetted...challenged.

Just keep asking yourself why the goldprice (value-worth)was not allowed to reflect the globe's total wealth, starting in 1971 when the goldfix under the ancien regime was abandoned !? And WHY must the goldprice remain contained, today as never before,...whilst wealth has been increasing during the past 25 years !?

It is the dollar and only the dollar that wishes to hold on its supremacy as to tell everybody what exactly his/her wealth is or isn't. What a dilemma.

At the risk of oversimplification, the only ones who have a sense of non-trading contentment while consolidating their wealth with Goldmetal are the ones who see beyond the siren games of the financial brotherhood and have put their very own financial houses in good order. The ones who never establish a core of Goldmetal, only having an association with it insofar as they're trading in and out of its price, more often than not are running like squirrels on a wheel with lots of noticeable flurry but with no real gains to show for it in the end. Lots of rolling today with lots of crying tomorrow.

And on that score, when it comes to evaluating the value of consolidations, the passage of time shows us all that some items are always more auspicious than others. Alwasy have been, always will be -- for as long as human nature is the prevailing nature of us humans.

Gold. Get you some. --- Ari

Seeing that you squeezed in an extra post I just wanted to inject a quick word to say my remarks were in response to your previous 127092.

Au. Good as Gold. --- Ari

The "fact" that the euro exchange rate remains well above the dollar...means that dollar-support is gradually (orderly) given up and that the euro has been chosen to replace the dollar. Now we only need the official publication of the REASONS WHY, the dollar is left behind and WHY the zeuro has become the choice !!! I mean the real reason of course and not the convenient fabricated ones that we are being served, gratis.

I'm not waiting for the Big gold-announcement...hoping that it comes soon. I'm rather worried that it might come too soon and that we cannot accumulate the precious any further , extremely heavy for its ridicule price.


Japan knows very well that China will slam the euro-gold door for them. Japan is going to pay deerly for its dollar association and the privileges that this brought during the past decades. Japan can't even afford to panic and rush for gold !!! That's what the political chessplay is all about.
Will Japan decide this month to pull out of its symbolic presence in Irak or face more oil isolation !?

North Korea again : Didn't stop making nuclear material (enough for 8 nukes) because the US did not deliver the promised oil carot. True or false, but evidence of the ongoing political power plays.

A German spokesman for the industry stated yesterday that a dollar fall to �=1,50 is not a problem at all. Daimler Chrysler's debts are 50% in dollars (as an example).

So WHY isn't the world deciding to support a strong dollar, once again, and get on with the old conventional dollar systemics !? Is there a Big $-credibility problem out there !?
Have we come to the conclusion that neither a strong or a weak dollar is workable and that a "stable" dollar always was an illusion !?

All : Profit from the organised relative quiet order for as long as it lasts. Don't wait for considering gold up until it will be depolitisized.

Your "running squirrel" is that same A/FOA Woody Woodpecker running above... and not daring to look... into the $-abyss !!! We are trying to give this picture a meaning with the interpretation of the ongoing facts. And I think we do try to do this as objectively as possible as to not fool ourselves in the first place. Why are we labelled as crazy physical gold fanatics ? What's wrong with us ?

Dang, Belgian... after years of being spoilt on better and better prices for building the family Wealth-Pile, just when I'm getting comfortable (lazy familiar) with the present pace of Gold-price appreciation and factoring on many months of continuing accumulation under these conditions, you've gone and done it-- yer makin' me nerrrrrrvous!

To anyone who hasn't picked a suitable diversification level (i.e., 10%, 25%, 33%, 50%, Ari%) and subsequently made the commitment to *achieve* that pile at your doorstep, all I can say is -- what are you waiting for?

Getting yourself diversified is job #1. No, not *thinking* about it. DOING it. Get it done. Period. Don't whine and moan that you missed the $300 boat. That boat's done set sail, boys, so catch a ride on trusty ol' 460. As a matter of fact, your back'll be the better for it anyways.

On that price thing, I wonder if my hunch here is correct as a sort of western-investor truism. Hear me out.

If Gold were merely a paper listing, say, one of several choices available within someone's pension program or 401k, I'm guessing that people would allocate a goodly sum of their funds into it these days without even batting an eye about the current price per ounce that it represents. Their mentality would simply be, "Yessir, I just put 30% into Gold."

Well, you see, that's dandy! But unfortunately, that's not quite the way investing in Gold works.

It's a lot more like ordering a pizza.

You've actually got to pick up the phone to get the deal done. And that's not at all bizarre -- because you're actually going to be GETTING something, not just renaming the same dollars from column D to column G.

Alright, so you do your dialing and talk to these guys for a bit, shoot the breeze over the latest sports scores and rub it in that their Broncos got beat by your favorite team or that Notre Dame should lease its field out as cow pasture next season, then when you get around to it, ask 'em about the house special or anything else that smells good coming out of the oven, take the price quotes and figure up how many nifty pies you can come away with for your 30% (or whatever level your understanding allows.)

Right. It *should* be that easy, but I'm guessing for most people it isn't. Again, they'll superficially move from paper column D to paper column G without fuss and regardless of price or fundamentals because psychologically it all feels like a variation on the same theme that they've been trained to do -- to put their savings in Wall Street's various financial black boxes and leave it there, or at most shift from one to another.

But to actually buck the weary system and consider converting a percent of your savings into Gold pizza, suddenly the entry price has meaning whereas it didn't with column D or G??! These people are suddenly *suddenly* hyper-value conscious? They missed 300 so now they're wary of 450? And the kicker, the thing that blows my mind, is that the Physical Gold pizza we're talking about here is a helluva lot better than the papery ol' column G on ANY DAY OF THE WEEK, and some people still don't get it because they think they missed the bargain, but they'd still choose column G if they could!! Hello???!!!!! And they'll by Google at what price????????

Sheeeeeeeeeeeeeesh.

The market price of Physical Gold will conspire to move in such a way that the fewest people will have it when suddenly wanted most. I'm guessing for most people, the only sure way of getting it into your portfolio is to close your eyes and imagine it's just like column G -- only heavier. Dive right in and order your allotment of pizzas, hold the pepperoni.

Gold. Get you some. --- Ari

http://news.ft.com/cms/s/67f88f7c-47cb-11d9-a0fd-00000e2511c8.htmlSnip:

Oil exporters have sharply reduced their exposure to the US dollar over the past three years, according to data from the Bank for International Settlements.

Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent.

Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone.
.......................
***************
Misetich

From above article " and prepare for a shift away from pricing oil exports in dollars alone."

and further snip " The BIS report also showed that, in spite of oil prices having risen 85 per cent since the fourth quarter of 2001, overall OPEC bank deposits have barely risen. "Oil reserves have not been channelled into the international banking system in the most recent cycle," the report said

End of snip

All Aboard The Gold BullExpress - Part ll

Answer : Goldbugs don't know what they are waiting for. I know, because I "was" one (goldbug) myself before being reborne as a gold-advocate working to produce more (euro) fiat that can be allocated to my already 100% stash of gold-wealth. As an Eurolander I do enjoy a tremendous privilege/advantage : The europrice of gold has been flat around �300/ounce for already 15 years now !!! What a tremendous expression of "stability". As a bean-counter, I only have a 10% playing range, wich means absolutely "nothing" in the coming gold-context.
Eurolanders have no problem or excuse for not ordering the gold-pizza...NOW...or during the past 15 yrs. And the panicking �-goldprice decline towards �250/ounce, was quickly offsetted by WAG I, where the � goldprice was rushed back to its temporary stable accumulation level of plus minus �300/ounce !!!

Yes, it took me a lot of time and study to realise WHAT exactly this 15 years of flat, sorry "stable" euro goldprice was/is meaning ! Now I know that this is a fundamental pillar in the "styling" of the currency (�) that competes with Another one ($).

Ari, can you blame me for hoping/wishing that this "styling" period could go on for some more precious time...? Please Sir...I want to acquire some more heavy "wealth" before it becomes featherlight...:-)

Note, that for all Eurolanders the Dow is not worth the 10,500 points of today. 10,500($) - 34%(�) = 10,500 - 3,570 = 6,930 !!!
Idem dito for all non American dollar bond holders : minus 34% !
Goldmine shareholders must surely be hoping that the unilateral dollar decline goes into reverse. The profits (and dividends) of most mines, remain razor thin. The rare profits that are being made by the lucky few, with the papergold derivatives' gambling ...are expressed in a weakening dollar currency. Many hope that they can make profits faster (and bigger) than that the dollar declines. Only to "stabilize" their wealth on a net/net basis. So much effort and risk for...nothing.

Ari...Yes, what are they waiting for !?

The above picture is the pr�lude to freegold !!!

How long will "they" hold the euro strong in gold ? Until it is "officially" used as a reserve currency, or as an oil-currency ? What will be the political appropriate time let the POG free in euros ?

http://news.goldseek.com/RickAckerman/1102435200.phpOthers have warned many times of an overnite surprise in POG. I for one have seen a few in my lifetime...Remember the days of Wash Agreement and the & the spike of $10 & 20$ days? The days of the climb to $850.00.....I, as do a few others await the days of Limit Up Gold on the screen. That day may be at hand. One should be wary of seers in all forms, granted, but since it seems the day of reckoning for the almighty dollar is well underway, then too could the great reckoning of Gold be at hand....As I 'think' Aragon once said better to be "Five years too early than a day too late".....YGM




Snip....
The last time John "rambled" was in an e-mail message warning of an impending collapse in gold. Just a month earlier he had been one of the most bullish gold bugs I knew. But by late March, mere days before precious-metal stocks were to begin a devastating plunge, he had finished exiting the last of his once-substantial holdings in mining shares. Now he is once again quite bullish, but with an important caveat. Here is the message I received from him Monday morning:


�Within 72 Hours


"Gold is preparing to begin a serious reversal over the next 72 hours. The rise in price will be astonishing and will leave many a Gold Bull on the sidelines, only to chase an ever appreciating parabolic rise in the Price of Gold & the Mining Equities. Those that did not hold fast will be seeking medication.


"Be forewarned. Any weakness over the next few days should be used as an opportunity to purchase positions and be fully invested in Gold/Gold Shares. We are preparing to move much higher and rather quickly. United States Dollar Imperialism is ending, and quickly. I fully expect Gold to complete its detachment from the Federal Reserve Note over the next two months.

Cont'd

http://www.orwelltoday.com/eurodollar.jpgWith this old (now banned) cartoon of the Euro & Dollar....

As I was driving to work today, there was a question over the radio as to which was the hottest major chosen in US colleges these days. The answer ? Accounting. Yeah, you don't have to make anything to make money, just be creative in how you present the figures.
Actually, the guy who won the guessing contest was, himself, an accountant. He said he thought it was a great thing, as it would free him up to do more interesting things in life. "The work is boring, not the people who do it," he said. I'm not so sure about that, being the son of one, and the brother of another. Mind you, Sir Belgian does seem to prove the rule (by his admission to bean-counting this morning).

C!

Whoever answers (reflects on) your question...is speculating.
The desintegration of the dollar as the world's reserve currency, goes gradually, level by level, zigzag.
First we need to see and experience, "serious" price-inflation (hyperform) due to strong/stronger dollar decline ! We are not there, yet !
Serious = POO=+$60 - �/$=+1,60 - USTB 10 yrs=+8%
If the US-Treasury is shipping gold and succeeds in holding POO/US$/IRs in the deepfreeze, through the delivery of gold...the buy of $-"time" will be accepted by another small round of weak dollar support.

I suspect that some endyear window dressing is already happening, right now. We can only speculate if and how much gold is needed to obtain the drastic stopping of the bleeding.

In other words...The non dollar factions are giving minimal support and let the dollar succomb under its own weight, without pushing it too hard. Impossible to put any kind of timeframe around this !!! We keep muddling along whilst not knowing how much gold there is left in exchange for time and at what tempo it is delivered. But having the oilprice slashed from $55 to $41 in no time, means that something precious had to be given in exchange. We keep on watching how the POO and the dollar exchange rate evolve as to be able to speculate a bit closer to the truth.

Apparently there is a typo error in the report, supposedly to be corrected today. It concerns the 'Second Phase' statement...Instead of $457 it should read $557....YGM


And apologies to Aragorn 111 for leaving out the 'r' earlier...Also might have been Aristotle who made the statement re; early over late...No matter, it still makes great sense IMHO...YGM

Thanks to George Cooper at CPM for helping me to protect my wife's hard-earned retirement savings with another precious metals IRA purchase.

I rest easier now that my family has the right sized portion of its retirement in gold and silver (although I do intend to buy a little more every year for the next 20 years or so until I fully retire). Does anyone have suggestions for other alternatives? We currently have significant slices of our life savings "pie" in rural real estate, swiss francs and canadian dollars.

http://www.goldensextant.com/Resources%20PDF/The%20Golden%20Constant.pdfDecember 6, 2004. In the Library: The Golden Constant by Roy W. Jastram

Thanks to the generosity of John Wiley & Sons, Inc., which has graciously granted the necessary copyright permissions, we are able to republish today in PDF format and post in the Library as a public service what many consider the leading empirical study of gold: Roy W. Jastram's The Golden Constant originally published by Wiley in 1977 and now nearly impossible to find except in university or other large libraries.

http://news.ft.com/cms/s/794aff5a-47f6-11d9-a0fd-00000e2511c8.htmlSnip....
Golden stockpile delivers Swiss a wealth of problems
By Haig Simonian
Published: December 7 2004 02:00 | Last updated: December 7 2004 02:00

As the price of gold soars, Europe's hard-pressed finance ministers have spotted a new potential for windfalls to help bridge their yawning budget deficits.


But the climb that took gold above $450 an ounce has brought little glitter to Europe's central bankers.

Soaring prices have reinforced politicians' enthusiasm for selling "surplus" bullion. France's central bank and finance ministry last month agreed to sell up to 600 tonnes - worth more than $8.6bn (�4.4bn) - over the next five years to cut the deficit.

Germany's centre-left government has a similar plan. Meanwhile in Italy, the central bank is jealously guarding its 2,451 tonnes of gold from government eyes.

Cont'd.....

Snip.....
But in Switzerland, once one of the biggest gold owners, the debate over the precious metal and its proceeds is most advanced.

Philipp Hildebrand, one of the Swiss National Bank's three governors, says: "Other countries are struggling with the issues we faced in 1996, when it became very hard to justify holding that much gold."

Switzerland, whose gold reserves per head still outshine those of any other country, started selling half its 2,600 tonnes in 2000 after deciding to break the constitutional link between its currency and the metal.

Cont'd.....

I keep reading about what Euroland should do about the weak dollar; what the Chinese should do; what the Japanese should do; what OPEC should do; what Russia should do...

What everyone should do to deal with the "problem" of the falling dollar.

Let's get down to the bottom line and cut the C***.

Friends, the house of industrial civilization began burning down long ago: the burning down was the misallocation of resources into uneconomic ventures, enabled by and masked by the expansion of credit beyond real savings.

When did this begin? Well, I guess there has always been some of this fire burning, somewhere, but the fires were isolated. Not going on worldwide.

With Bretton Woods, the fire was localized in the expansion of U.S. credit, while the dollar was equated to gold in world reserves. This lit fires all around the world, via accumulation of U.S. dollars in reserves.

By 1971, the fires were going so strong, that when Nixon closed the "gold window", no country had the guts to say: "No payment in gold = you can't buy our stuff!"

Then the fires really got burning more fiercely, all over the globe: floating exchange rates. No more control over the fire.

Today, THE HOUSE HAS BURNT DOWN. There is no "solution"; any course of action is loaded with the danger of exposing the fact the THE HOUSE HAS BURNT DOWN. Humanity won't accept this fact. "It can't be! There MUST be a solution!"

But, there is no solution. Talks, consultations, meetings - bigwigs scurrying about like ants over a disturbed antheap.

There is nothing to be done. All is temporizing. Emergency measures are in vain. THE HOUSE HAS BURNT DOWN.

Have you got your gold yet?

The GAB

If I might horn in I think you are absolutely correct about your hunch. Additionally conventional pension plans and 401's make it difficult to leave. After getting browbeat and cajoled for 5 minutes on the phone by Mr. Junior Pinstripe they then bury you in transfer paperwork that would make the Fed blush. I recently rescued my wife's 401 and IRA and converted it to gold- pure tedium, and perseverance is a must. Checking off column G suits most people trained to be whiny and instantly gratified. My gratification will come as my wealth gets protected.

Gold- I have me some (a lot)

*If there were a check off box about that cow pasture at Notre Dame I'd do it. Now that's real asset re-allocation.

http://www.canada.com/news/business/story.html?id=2b3b0077-bd3e-4623-8f3b-6a51825abbc2Excerpt....
Before the case was derailed in 2001, the court heard that Barrick praised the work Bre-X was doing in 1996 as the two companies tried to hammer out a joint venture deal.

Rolando Francisco, former chief financial officer of Bre-X, testified in Ontario Superior Court on Monday that U.S. investment bank JP Morgan, which acted as an adviser during the search for a partner, said also did not raise any concerns.

"I would think that before they came on they'd do their homework," he said.

****They did alot more than homework, but I won't bore anyone with "HOW" they made 100's of Millions of Dollars!
.....YGM

http://www.alternet.org/story/16573
Removal of gold from commodity backed money is the final demise of a monetary system. The main reason for the collapse of all monetary systems is the attachment of compound interest to the medium of exchange ....

Gold was removed from commodity money backing because compound interest had grown greater than the worlds ability to mine, produce and refine the required annual amounts of gold to fulfill the contract obligations ....

Non-value based fractional reserved floating fiat money is the direct and final effect of compound interest attached to the medium of exchange ...

"If you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits with compound interest attached!"

For this reason, Article I, section 10, Const. united States of America

"No State shall Make Anything but Gold and Silver Coin a Legal Tender for Payment of Debt"

Gold and silver need no defined value, nor may interest be directly attached to this noble medium of exchange. That of course is why the Banksters HATE gold and commodity backed money that limit their fraudulent schemes.


"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits." --Sir Josiah Stamp

http://www.ex.ac.uk/~RDavies/arian/scandals/centralbanks.htmlScandals and Corruption of Central Banks...Home page holds much more ..YGM

15 minutes to go and gold refuses to go below $450.

The NY boyz must be sweating blood; the battle is desperate and they are losing, and they know it...

The GAB

http://www.usagold.com/gold/special/DenBoard.html

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Anniversary - Birthday - Holiday - Any day!

 

Show your good style and show how much you care.
Give the Gift that Keeps Giving Year after Year!

Always GOLD. Always.
 

The Federal Reserve today, despite the fed funds market trading in line with the latest 2 percent FOMC policy target, entered the open market to provide additional cash liquidity, temporarily adding $4 billion at 1.983 percent through a round of overnight repurchase agreements.

More significantly, the Federal Reserve also used its forray into the open market to buy outright $1.5 billion in U.S. Treasuries (a coupon pass targeting Feb-Oct 2005 maturities), thus injecting additional cash into the nations banking system which was newly created by this event.

Easy money; easy come, easy go. Choose gold.

R.

You push the price down - thank you so much! Now I can buy cheaper. Have it your way!

Lowering the price no longer discourages buyers; on the contrary, lower prices whet the world appetite for more physical gold. This game is just about over for the NY boyz.

I am just waiting to see how much cheaper I can buy. Of course, I may find that the price turns around and goes up and up...been in this long enough that it doesn't matter all that much.

Where did I see that post where "John" says in 72 hours this thing is over and gold takes off? Maybe yes, maybe no. Most probably, Who knows?

The GAB

http://news.goldseek.com/DailyReckoning/1102452754.phpSnip...
America is not only a debtor nation, but also the biggest debtor nation the world has ever seen. Its overseas liabilities total $3.3 trillion - or 28% of its GDP. No one has ever seen such a pile of debt. And no where are U.S. debts stacked higher than in Japan, where poor Mr. Asakawa tosses and turns at night - fearful that the whole mountain will fall down at any moment.

So worried is he that he keeps a sort of money seismometer ticking by his bedside, to alert him should the ground beneath him begin to give way. The International Herald Tribune reports:

"'This thing wakes me up, it is terrible,' Asakawa said as he toyed with a blue plastic portable currency monitor. After hours, the wireless device beeps by his bedside whenever the dollar strays beyond a set range."

Again, we stop dead in our tracks and hold our breath. We can scarcely believe it; what a wonderful, madcap world we live in.....

MOST IMPORTANT PARAGRAPH TO NOTE---

****On one side of the world, 280 million people doze happily; apparently unaware that Mr. Asakawa could ruin their Christmas at any moment. All he has to do is pick up the phone and utter a single syllable: sell! In seconds, the U.S. bond market would begin falling apart. Seconds later, mortgage credit would disappear. Seconds later, stocks would crash...and real estate prices...and consumer buying...and GDP growth...and all the other delusions upon with the American consumer economy depends.****


On the other side of the world, meanwhile...is Mr. Asakawa himself...with his ingenious little device by his bed. The alarm must have sounded more than once in the last few days, as the dollar sank on world currency markets. He must have sat up in bed, possibly in a cold sweat, wondering: Why do we still support the U.S. dollar? We are paying the price for America's overspending!

And then, waking, the horrible logic must have come back to him: Because we have no choice.

"With Japan's huge stake in the dollar losing value," explains the IHT, "the question is: What will Tokyo do next? The problem for Japan is that it is in so deep that, to a large degree, it is chained to its American debtor.

"Richard Koo, chief economist for the Nomura Research Institute, said that anything Japan might do to slow its dollar purchases would only create a self-inflicted wound. 'If they could move it all out of dollars in one day, I am sure they would do it in an instant,' Koo said. "But if they move 10%, and the dollar goes down 20%, they are stuck with 90% of the portfolio worth 20% less.'"

Poor Mr. Asakawa. The weight of the whole damned Dollar Era seems to ride on his shoulders. Experts now predict a further 20% decline in the greenback - maybe more. That will be a loss of $144 billion for Japan's central bank. But what then? How will he ever be able to get out? Or is Japan expected to finance America's deficits forever...no matter how much it costs?

Cont'd....

Flat Eurogold, Banking Spreads

Sir Belgian, I can only agree with you. The gold price in Euro was not very exciting in the last years and the Euro is managed to look as stable as gold.

My gold purchase gain from 1997 is 2% per year, close to the official inflation rate.
My 2001 gold gain is 6% per year, but was bought near the bottom.
Buy spread is not considered in my calculation. Perfect Euro management by the EZB.

Some today prices from a national bank site:
250g bar sell: 2781� , buy: 2608�, spread: 6,6%
Kruger sell: 344� , buy: 319�, spread: 7,9%
Eagle sell: 358� , buy: 324�, spread: 10,5%
These inefficient banks really want to keep people away from gold with their obscene spreads.
USAGOLD, I will call you for my next purchase!

I plan to sell half of my small gold/silver stock portfolio into the next rally and convert to physical. I hold these stocks to participate in the gold rally in face of the Dollar fall.

The contrarien inside me smells a Dollar bottom coming over the next few month. Remember the Euro falling out of bed to 0,84 Dollar after launch, and many expected a further fall to 0,75 Dollar. Dead wrong, a nice H&S bottom and now we are at 1,34.

This reversal can push the price of gold in Euro, so I better buy before. Anyway is it a good idea to have more physical gold and less paper.

http://www.gold-eagle.com/editorials_04/ackerman120604.htmlRick Ackerman thinks he can call "em with the best of 'em, despite getting egged over and over. But like Jim Sinclair, the man is often right and knows his stuff. And you will doubtless be educated by his latest "cover every base" cropdusting. Excerpts from his latest essay @ link:

"Be forewarned. Any weakness over the next few days should be used as an opportunity to purchase positions and be fully invested in Gold/Gold Shares. We are preparing to move much higher and rather quickly. United States Dollar Imperialism is ending, and quickly. I fully expect Gold to complete its detachment from the Federal Reserve Note over the next two months."

Ricky Ricky Ricky, do you KNOW what you just said!!
Then he shifts from giving his dispatch from Starbucks to the relaxed atmosphere of Stars Saloon:

"Gold will not begin its Second Phase until the Price of Gold has crossed the 50% retracement [$556 - $558] of the entire bear market. Do not be fooled into thinking this is so -- it is likely two years away from breaching this milestone for good. It very well may begin to test this level in short order, but fail and begin a decline back to the breakout area of $433. It would be advisable to recognize profits on this next assault at the 50% retracement level, and quickly. There will be a very large second-order correction in my opinion, with the breakout level being back tested for 18 to 20 months."

Sounds a lot like one of Sinclair's multiple personalities.
Then he's drilling down cappacinos again:

"Were FOREX to be halted, whither the price of Gold? Price signals could be removed from 'markets' around the globe.
Our Central Bankers have yet to meet a Bubble they did not adore, as it simply serves to postpone the Day of Reckoning. Attempts at HYPERINFLATION will cave in over the coming year and throughout 2005..."

ACCKK! We're hummin', he goes on to recommend getting locked into a fixed 6% mortgage @ this time! This is NOT fooling the cabal!

Sorry about that!

Thanks for the heads up! It's John Mackenzie that gets quoted by Ackerman.

Terrific posts today. Loaded with enthusiasm and confidence.
To bolster what Sir Ari said, So far ahead of the crowd. Could it be that it is so hard to sell Wealth Preservation is simply that others refuse to search for the reasons to prove us wrong, only to have them removed their heads from beneath the sand. It is not to say that they are making wrong investments but to safe guard their time and money.
Oh Yes,Sir Belgian. CRAZY! Crazy like a Fox. Nothing wrong with us. We've just taken of those fractured rose colored glasses the rest are wearing and see the world as it truly is concerning the markets. Yet Sir YGM and his post about Swiss Gold had me thinking that maybe the larger CB's had the littler CB's sell off their gold in anticipation of producing higher gold prices positioning themselves better when the rejection of the Dollar as the Worlds
Reserve Currency and the EURO shares the title. Is there as much Honor amoung Bankers as there in Thieves?
Sir GAB. Your post was fanastic but I had an off vision and that was you on stage with the Talking Heads singing, "Burning Down The House" ;0)
IMHO we are now in a position (Gold at $450) to enjoy the rising POG or rellish in a pull back that will allow us to accumulate more. Ladies and Knights, they are going to throw everything at us including the bathtub, sink and toilet, whether the dollar goes up with gold or not. I think that they may settle for a stable POG,rather a pull back, for a pull back will only solidify the bottom.
Slingshot---------------<>

We often discuss that same question of yours about "alternative" investments and safe wealth consolidations. But I stick to my thesis about the present goldprice still being "obscenely" low...NOW ! Gold, today and its highly probable massive re-valuation tomorrow, cannot compete imo with the risk-reward balances of the scarce alternatives that fall under "safe" investment/wealth consolidation. I do see gold today as I saw obscenely low priced, first class stocks, in the eighties. Today, gold is surrounded/wrapped into that same ultra negative atmosphere (psychology), as were stocks in 1980. I have that terrible "d�j� vue" feeling. And the stock frenzy started out of 10 years of gold exhuberance (1971 > 1980). I was succesful (lucky) in riding both rallies. I still trust my intuition.

This is NO investment advise or what so ever. Simply a friendly exchange of personal experiences. Good luck to you, Sir !

Looks like you've become a reformed gold advocate, judging from your recent post. Probably a very lucky, or is it, a smart one.

Heck, what's the difference as you, Ari and TC have already made it clear that there is no "leverage" in discussion outside of pure and physical gold accumulation.

... And if you haven't got it yet, you'll never get it!
Got Gold? All told ... cb2

http://www.nationmultimedia.com/2004/12/08/business/index.php?news=business_15695818.htmlBoT admits it intervened to stabilise baht

http://bday.net/detail.asp?id=58142

.....for Gold Bull II !

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.

Tuesday market excerpts

Comex gold futures sank more than $2 Tuesday on speculative profit taking and bullion bank sales spurred by the steady tone of the U.S. dollar and downdraft seen across the commodity markets through the day. The most-active February contract settled $2.20 lower at $453.70.

ScotiaMocatta's December Money Matters report said good physical and investment demand for gold, including interest generated by new exchange-traded funds, could drive prices "considerably" higher over the long-term, if underlying imbalances in financial markets, such as a tumbling dollar, remain unchecked.

But, in the run up to year-end, profit-taking might weigh on prices because last ditch book-squaring was likely, while any central bank intervention to stem the dollar's decline could act to derail gold's rally, ScotiaMocatta said. "However, even though a sell-off in gold may be quite sharp, it is likely to provide a good longer term buying opportunity," it added.

"Gold's refusal to back down significantly in light of the decline in mining shares is a reflection of powerful and growing, physical demand for gold in Asia, particularly India," said Gold Newsletter's Brien Lundin. Given that, he believes gold is "poised to surprise us to the upside."

"Gold has been consolidating over the last seven sessions and is due to break out one way or the other," said Dale Doelling, chief market commentator at Bullion.com in Chicago. "With everyone looking for a correction, this market will most likely do the opposite and make new contract highs."

-----(see url for 24-hr international newswire, market prices)----

http://www.reuters.com/newsArticle.jhtml?type=reutersEdge&storyID=7020855WASHINGTON (Reuters) - No decisions have yet been made on how to overhaul the U.S. tax code -- a core part of the Bush administration's economic platform -- and reforms may be more incremental than sweeping, a senior Treasury Department official said on Tuesday.

Jenner said White House calls for a simpler tax code that encourages savings do not necessarily mean the U.S. income tax will be jettisoned and replaced by a consumption or sales tax.

... the current tax code was "needlessly complicated" and skewed economic growth patterns.

"The tax code is perceived as unfair in part because it is so complicated," he said, noting that many Americans feel they are being taken advantage of by those who manipulate the code to reduce their tax bills.

"A growing and alarming number of taxpayers consider themselves to be either chumps or cheats," Jenner said. "That will eventually lead to a complete erosion of our tax system if we don't do something to stop it."

"We overtax savings. We double-tax corporate profits. We have unequal treatment of debt and equity," he said. "All of these things lead to the misallocation of resources in the economy."

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

If you want an enticement to save, choose gold. Unlike many goods there is no sales tax on the purchase. Unlike most real estate there is no annual property tax or upkeep expense. Unlike stock in corporations, it cannot go bankrupt. Unlike bonds it can't default. It is a natural channel for the consolidation of wealth, and it enjoys a highly liquid market anywhere in the world for those times when you elect to cash out with some of your golden savings.

R.

Pan (12/7/04; 16:00:21MT - usagold.com msg#: 127134)
BOT ON CURRENCY VOLATILITY: Yes, we managed (Thai) Baht, but...
---
Seems as every Central Bank is saying that they are betting against the US$ in one way or another !
Too bad they do not do as the Thai citizens do, and BUY YELLOW !
Chok Dee Krup
<;-)

Hey guys, first time posting in this board. I have a few questions for the people with knowledge. I am looking in to buying gold and silver, I am just not sure if I should buy the actual metals, or buy into the new ETF mutual fund backed by gold, which it was recently launched. Or just buy in a mutual fund that invests in precious metals. Also, since the dollar might keep falling don't you guys think that buying other currencies like Eruos, or Canadian dollars, would be a good idea? Any ideas or suggestions?
Any ideas as how much the dollar will fall?

See you

Emilio

I will quess that FROM most here, it will be -- Buy PHYSICAL at USAGOLD - Centennial Precious Metals !! Give them a call during working hours and learn more about it !
<;-)

http://msnbc.msn.com/id/6671443/MSNBC - Tougher cyber security measures urged
December 7, 2004
"We are under significant attack...
It's an economic war we are in now."

http://www.usagold.com/gold/coins/StocksVsMetal.htmlclick url

R.

physical gold quantities were locked in at whatever is currently held by nations and a sudden revaluation was made on those quantities at let's say, $20K per ounce? The reason for such valuation would be to be able to settle some accounting imbalances in a manner that left 50% of each nations stockpile intact while the remainder was used to settle some scores.

So, how many scores could be settled were the above scenario to take place? Would this leave us all in better positions in respective corners of the world, or would such an action be pure folly?

After all, the IMF settled some debts in South America by revaluing some gold. Why not take $43/ounce gold of the US and mark it to $20K/ounce and then deliver 50% of the pile to where it was owed and then see what shakes out.

Possible? Practical? Probable?

Hey fellow old timer, it's good to see a familiar handle from the days of many posts...Used to be more than one thread we could discuss w/ no problems...There's one H of alot of missing faces around here....Better stick around and see who pops in if the odd variation in discussion occurs....I'll bet there's lots of familiar faces out there in lurker land, like yourself who helped make this place a forum....I still can't handle the all tech paper stuff at other two halls....Maybe no body listening hereabouts but I'll keep speaking in my own uneducated way til the cows come home or the barn door gets locked :>)....YGM

We all got Gold, Questions & Answers! Not sharing the Gold tho!...Ken

I think your scenario has entered many minds more than a few times...I know it has mine...Seems like the only solution of last resort short of total collapse of Fiat system, and Lord knows what calamities that would entail... I believe Mundell is one of the few with answers to the dilema of the screwed up modern Fiat system we/they have created and it involves a full or partial return to Gold backed money....
Devalue Fiats to some degree, and as you say revalue CB Gold, could work and possibly be the least destructive to the system....Somebody has to suffer here somewhere in this sordid mix....Let it be the Hedgers, Derivatives, & FX players who've lived off the work of others...IMHO...YGM

http://www.resourceinvestor.com/pebble.asp?relid=7307Believe it or not Andy Smith PM analyst of Mitsui questions the ETF saying it's only a paper claim to questionable Gold. He says alot more in the article...Read on...YGM

then we are only $4 from a new "0" in the P&F chart at Stockcharts.com - right, Sir Gandalf?

Could happen tomorrow. Then we might see a string of more "0"s on down to...well, say $424 or so? Just guessing, of course.

That might slow down the physical offtake for CPM, but only transitorily, for when the decline peters out, the buyers will come in with renewed vigor all at once. Times have changed, gold is NOT viewed as it was not long ago.

The Indians will be loading up gleefully, at lower prices -they have been buying ceaselessly at the high prices, they will simply charge in at lower prices. Not to mention the MIddle East.

Get set, looks like a very good buying opportunity for gold is setting up, at cheap prices.

On the other hand, we might witness one of those extraordinary "zips" straight up. Interesting week!

The GAB

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTBDANRBO[PA][D][F1!3!!!2!20]⪯f=GIF the POG breaks the $444. level -- a short stack of little GREEN "O"s will appear and provide a CHRISTMAS PRESENT to all GOLDHEARTS !!
--
THAT may be the LAST Chance to "get Aboard the GOLD EXPRESS !"
Where have I heard that before ?
<;-)

The main reason why I ran away from paper after all these years of having participated in the financial industry, is very simple : Gold is dramatically undervalued . There is a good reason why this is so...and...there is a good reason why this will change.

If paper(gold) were still "the place to be"...I wouldn't be on this fine forum, finding inspiration and exchange ideas.
I'm not smarter than anyone else overhere but have always grabbed the luck that passed, with both hands...and did something with the offered opportunity.

Yes, I still interrogate myself, daily...about the "paper" matters...and why I don't want to touch that paper again.
What is it that makes (made) me paper-aversive after all these years (35) of paper activity ?

Yes Sir, I keep listening to the arguments "pro" paper. Never stopped watching the walks of paper. But I smell something very nasty...and it is the paper odor. Be it goldmine shares, ETF or any other gold-derivative instrument.

I see a lot of old buddies around me, with burned fingers.
The paper business doesn't seem to work out...as it did before. Maybe I'm surrounded by stupidos ? But I know their fine, succesful curriculum of the past 30 years. They are not stupid...I think they are making a mistake.
No, none of these experienced paperplayers risk going broke but they scream out their frustrations when they count their net-net profits and loses. They did not move an inch forward. They refuse to look into the reasons why this is so...why things are changing. What happened to the former pleasant leverages ? Is this a temporary difficult period ...and will it soon be over and back to paper-business as usual !? And it is exactly here that our opinions still diverge.

Why : Belgian keeps rambling that gold is extremely undervalued. They say...so what !? Gold will remain a lousy metal...GET LEVERAGED mate !

Then the argumentations of both sides start all over again.

Belgian puts his (wealth)savings in the yellow metal that hasn't moved in price (in euro) for 15 long consecutive years !? That's where my argumentation starts and where the paper boys' argumentations stop.

15 years flat gold-metal-price versus many rallies up and down with the paper-bus ! Will the next 15 years be a copy of the past 15 years............. !? When those same old arguments are being brought forward...then the answer is "yes", of course. Belgian sticks to his "change" arguments...and still waiting for that one single argument that may change my opinion on the ongoing changes.

Some gold affectionados simply cut the pie in two and bet on both, paper + physical. Matter of having peace of mind and be smartly diversified. I see that this kind of compromise is frustrating them even more...on the net-net results that are obtained, today.

CoBra, don't think that I wish or try to "convince" anyone overhere or at home. I'll be gone when the Big revaluation of the goldmetal will be in full flourishing or the day that one single argument says that we better forget about the gold-revaluation and go back to the paper circus.

Note, that I'm fully aware that if I have it wrong on the probable gold-revaluation...I have to book an enormous opportunity cost. Conclude that I do remain very open minded as to protect myself from gold-obstination.

Is the above a balanced opinion and an appropiate reflexion on your reaction !? Thanks for listening, CoBra.

Speech by Gertrude Tumpel-Gugerell, Member of the Executive Board of the ECB,
delivered at the International Chamber of Commerce
Houston, 6 December 2004

SNIP :
..."At the same time the euro's use for invoicing commodities is not as yet widespread and, in particular, the invoicing currency in crude oil trading remains the US dollar."
..."The euro's increasing importance as an international currency is quite remarkable given the currency's short history. But what are the prospects for the future? Will the euro's internationalisation gain momentum in areas � such as the invoicing of commodities � where the US dollar remains currently the currency of choice? "
------------------------------------------------------------------------------------------------------------------------
Is not as widespread **YET** !!!

http://www.ecb.int/press/key/date/2004/html/sp041206_1.en.htmlI forgot to post the link.

http://www.norges-bank.no/english/publications/annual_report/2003/ar-2003.pdfGoodmorning Belgian,

Where do you place an non-OPEC oil-producing country like Norway in the present geopolitical situation ? They don't participate in the euro-system, they have very little goldreserves.
Norway invests their (dollar) oil-revenues in the Pertroleum Fund (the Petroleum Fund is the government's instrument for transferring wealth from oil and gas reserves to a broad-based portfolio of international securities).

In their annual report for 2003 can be read : "In 2003,
the Executive Board decided that the gold bars deposited
in the Bank of England should be sold but that the
gold coins and bars for exhibitions should be retained. In
the light of this, the Bank made no new agreements to
lend out gold bars towards year-end. At end-2003, none
of the gold bars had been sold and a little more than half
of the gold bars were on loan."

AND

"How large are the gold reserves in Norges Bank?
This information is available in our Annual Report in the Report of the Executive Board on the Financial Statements. Only a small portion of the gold reserves is kept in Oslo. Most of the reserves are lent to other financial institutions."

In january 2004 there was the following press release :
"Norges Bank has sold 16 tonnes of gold bars in January and is planning to sell the remainder of the Central Bank's holdings of gold bars at a later time. Excluded from the sale are seven gold bars that have been used for exhibition purposes and a large number of gold coins that were transported to England when Norway was attacked in 1940. Norges Bank and the University of Oslo are discussing whether the gold coins can be put on public exhibition.
The background to the sale is that gold only accounted for just over one per cent of the Bank's international reserves, and thus contributed little towards diversifying the risk associated with the reserves. The return on gold has historically been low. Revenues from the sale have amounted to about NOK 1� billion, which has been invested as part of Norges Bank's foreign exchange reserves. At end-2003, Norges Bank's gold reserves consisted of about 37 tonnes of gold, made up of 3� tonnes of coins and 33� tonnes of gold bars. (2004-01-28 14:00)"

Why have they sold a part of their gold en lent out a few tonnes ? It can't be for oil and they have no particular interest in keeping the dollar or the euro strong in gold ?

Den Haag, today : EU - China summit ! Read the future between the lines.
Russian CB : Structural Changes are being done "gradually".
(Trichet : don't rush into the euro, s'il vous plait)
China buys IBM's hardware division. Whoeeepssss.
Daan Joubert : US$ lost 72% against the yen in 30 years.

It becomes clearer "who" the euro-allies are. Next step will be..."what" do they want to achieve ? Follow the trail...

Norway has oil = black gold and for the time being wishes to remain "neutral", just because of the oil (its wealth).
Norway's semi neutrality will evolve, together with the evolvement (building) of the euro. These are the Big Changes that we (and many others) are talking about...witnessing. Let the ECB and BIS maneuver this out. (cfr. the UK case)
(Sorry, but don't have time to study the 111 pages pdf)

Looks like they just couldn't resist in getting some more of those worthing less dollars. 104 now. Why?
Don't try to buck the trend Mr Yen. You'll just lose that much more.
As Another and FOA said, they have no choice.
Got GOLD!

http://www.gold-eagle.com/editorials_04/willie120704.htmlA - brilliant - outstanding series of deep thoughts AND argumentations.
IMVHO an almost perfect analysis of how we are dancing around the volcano's crater. All correctly formulated in one big synopsis.
After attentive reading of the essay, one can only ponder if gold can possibly remain excluded from the ongoing changes !?
The most probable solution lies in the total disconnection of gold from its currency context. Completely and not halfhearted as was decided in 1971 with Nixon's delinking of the dollar from gold. This was NOT a complete de-linking but rather another form of re-linking (unfixed) as to bridge the transition period that we are leaving behind us.

Gold in the epicenter and all currencies rotating around it as satelites closer to or further from the gold-axis.

Enjoy the reading.

Another round of US$-debt-paper...billions of it... has to find an Asian buyer. The Big monetary crater gets stuffed with more of the same paper. The lava that will flow with the eruption, will be... golden !

First oil down from $55 to $40...now gold in free fall ! Dollar exchange rate up, might be next.
This is NOT conventional market behavior. This is much more than classic intervention. Gold has been thrown (delivered) into the pool ! Anyone with another thesis ?

So as I type, the USDX has gone from around 81.0 to 82.1 (rise of 1.4%) in the last 24 hours. POG has gone from $455 to $435 (fall of 4.4%) in the same period. Yeah, that looks like a measured market response to me. I guess this is where we put on the steel helmets, hunker down in the foxhole and wait till it passes.

C!

I don't think it's anything so dramatic. There have been repeated noises of a serious correction as soon as there is any sign of strength in the dollar. The gold shares have been selling off at the least excuse for weeks. What is startling is that when gold corrects to the downside, you can see $20 in the day - on the upside it's always capped at $6, so it never looks as dramatic. Sinclair, Murphy and other "old" traders have mentioned that in the last bull, gold moved both up and down by these amounts.
And let's not forget that momentum is mass times velocity. Paper has virtually no mass, so it can be moved with little effort.
C!

The 15 tonnes GLD dumped certainly did not help.

"The U.S. ETF jumped from 103 to 88 tonnes overnight so somebody dumped a whole load yesterday and rather set the tone for today." (end)

**If this is so then the ETF crowd knew in advance or they are now part of the Gold control crowd playing with your money (if you believe in this new ETF paper gold play)......
I can't wait for the commentaries this day will bring from those I follow....YGM

Hope you were on the short side of this day..If so I salute your courage.... You now have the $$$ to add to your stash of Physical as I know you do often....The game goes on as per usual....Regards....YGM

http://www.goldensextant.com/
Introductory Snip:

December 7, 2004. New Essay by Reg Howe

To serious students of our paper-based monetary system, discerning both its future -- a collapse -- and its past -- the gold standard -- are relatively straightforward. Plotting our present position in this unfolding Greek tragedy is a far more difficult matter. The central banks charged with administering the global monetary system have done their best to obscure its parlous state, and to penetrate the wall of official deceit is a daunting task.

Unearthing new data and reassessing old data, Reg Howe shows in Déjà Vu: Central Banks at the Abyss that the stewards of our monetary system, by systematically betraying their trust, have brought us to the end of the line. The parallels with the collapse of Bretton Woods a generation ago are striking, down to the emergence of a counterpart for Jacques Rueff, this time in the unlikely form of a Russian central banker.

But as Reg notes, the pending collapse of the dollar standard presents an opportunity, not just a crisis. Somewhere along the way -- we would argue 1913, but others might choose 1934 or 1971 -- the United States strayed from the path charted by the Founding Fathers. Now the republic has morphed into an empire, the very antithesis of what they envisioned. The end of the current monetary system will present us with the challenge and the opportunity of finding our way home.

http://www.usagold.com/Order_Form.htmlBelow is an extract from my 11/22/04 Client Letter. I'll look for verification of the sale you mentioned, because if the reality is as you stated I consider it an important development for the gold market (and not all bad, by the way.) I didn't think the new bullion trust owned enough gold to make this big a dent in the market early on, but it looks like these sales triggered stops with the paper traders. Thus you get a day like today. We warned early on that the bullion trusts would trigger a greater degree of volatility in the gold market. I think some were looking in the wrong places to find the primary problem for the gold market in terms of these trusts. The primary problem isn't the double counting of gold, or whether or not the physical is present, though it is an important consideration and needs to be monitored. The primary problem for the gold market represented by these trusts is that the bears have a two by four they can pull from behind their back at will -- weilding it in either the financial press the way central banks' holdings were used in previous years, or by outright selling as described below to blow the longs through their stops. These dips will create buying opportunities for the astute who understand that the monetary problems behind the gold bull market are not occasional, but inherent.

I refer you below.

By the way, those of you who wish to receive our email Client Letter can do so by going to the link above. Prospective clients will receive a temporary subscription; established clients own a permanent subscription by virtue of their enlightened choice of gold brokers. You will also receive our new edition hard-copy newsletter (News & Views) which contains some interesting viewpoints on the gold market. Established clients may also request the new edition of News & Views by contacting jill@usagold.com (or by telephone 800-869-5115, Extension #104).

__________

"A thought on the newly introduced gold bullion trust: If successful, this gold trust (and its competitors) will concentrate a large amount of gold in a handful of funds controlled by managers who for the most part do not have the same attachment to gold as its true-believers - those who grew and nurtured this market in the early years. These fund managers will not buy gold as an insurance, but as a "play." When it comes time to take a profit, there will be massive sales into what is essentially a very thin market. If fund managers acted independently of one and another, this would not be a problem. But as we saw during the bubble years (and in the present) fund managers and Wall Street as a whole are primarily governed by the herd instinct. In other words, they buy as a group and they sell as a group. To sum it up, what we gain in the price going in, we very well could lose going out. Gold is likely to become substantially more volatile as a result. . .

I should add to my post below that I do not consider the trusts a deterrent to a rising gold market, just an interesting addition to the mix and the analysis thereof. To tame the beast, we need first understand its nature. For the speculator, in volatility there is opportunity. For the physical holder (and blue chip gold stock owner), these down drafts are blips on the screen and nothing to be upset about. The tenets supporting your gold ownership haven't changed since yesterday this time.

And by the way, I don't buy the notion that gold stock prices anticipated this downdraft. The stocks are reacting to a unique set of circumstances that have more to do with local currency strength and forward sales positions (hedges) than they do any anticipation of gold price movement. As I have said many times in the past, gold stocks are stocks first and gold second. There is no substitute for the real thing. There's nothing wrong with owning gold stocks. Just don't believe for a minute they are a true substitute for owning the unencumbered metal itself.

I SHOULD know by now that you have one of the more astute, balanced and experienced insights into the games played in a market you have had so much experience with...I shall in future pay more attention to my client emails....Looking always in dark corners one finds little to shed light I guess....Days like this test ones fortitude and convictions......YGM

if their Physical holding did indeed drop (I read as much as 22 T) then could holders of Certs have taken delivery of Physical???

The few words you shared gave me a great sense of calm in the midst of a volatile market. It is still a great frustration that the downside is often $15-20 while the upside is capped at $6 max per day, but the fact that the price is still within its long term uptrend is sufficient to carry me through.... and hey, I can get more metal for less paper (how about that...)

Thanks again!

I am wondering if any of the large dollar holders are going to use this rally to lighten up on dollars? Surely they're not just going to wait and see how fast the dollar drops before this rally is over, are they? How soon would we be able to determine if there were any big sellers into this rally? (I'm thinking Japan, China, Russia,.... well just about anybody actually?!)

http://stockcharts.com/def/servlet/SC.web?c=$GOLD:$CRB,uu[h,a]wallyyay[pb52][vc60][iUa12,26,9!La60,130,45]⪯f=GA breakout in the GOLD/CRB chart would indicate that gold is behaving in a non-commodity manner (currency?/wealth?).

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

http://stockcharts.com/def/servlet/SC.web?c=$GOLD:$USB,uu[w,a]wallyyay[pb52][vc60][i]⪯f=GIt is bull market.

http://stockcharts.com/def/servlet/SC.web?c=$SPX:$GOLD,uu[h,a]wallyyay[pb52][vc60][i]⪯f=GSP500 is losing against gold.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=41770
Currently, governments own about 42 percent of the total land area in the U.S. Land trusts own an additional unknowable amount of land. Fast-forward 50 years. At the current rate of "preservation," governments and land trusts will own most of the land, and by 2100, private property will be a distant memory.

In this new world, people will have to live on property that is owned by the government � or a land trust. Farmers will have to farm land that also is owned by the government or a land trust, and industry will have to operate using resources that are publicly owned.

Get the picture? He who owns the land controls its use � and gathers its wealth.

--Henry Lamb, executive vice president of the Environmental Conservation Organization and chairman of Sovereignty International.

END SNIP

Blacks Law Dictionary Deluxe Fourth Edition Page 1499

RYOT. In India. A peasant, subject, or tenant of house or land. Wharton (my emphasis added)

RYOT-TENURE. A system of land-tenure, where the government takes the place of landowners and collects rent by means of tax gatherers. The farming is done by poor peasants, (ryots), who find the capital, so far as there is any, and also do the work. The system exists in Turkey, Egypt, Persia, and other Eastern countries, and in a modified form in British India. After slavery, it is accounted the worst of all systems, because the government can fix the rent at what it pleases, and it is difficult to distinguish between rent and taxes.

Now you know why the Ryots of India purchase so much gold and silver! They are systematically prohibited from owning anything else of value.

Arguendo, but isn't this almost the same Ryot-Tenure system operating in America today? Don't pay your annual rent and you will soon learn whom really owns your land and house.

Gold is portable land value, and you'll never pay property taxes on it either.

The DXU bounced off 80.9 on Friday and again yesterday. This is the new "maginot line," and the bounce is a pure technical reaction the sovereign currency interventionist have awaited to strike out and force some temporary short covering. There is 22 years of support at 80.5. IMO the dollar is not going to plunge through 80.5 on the first, second, maybe third or fourth attempts. IOW it's prolly gonna take a while to bust this hump ..... just like it took a while to bust $292.50 and $330.00 POG! But bust it will.

Look for reversals at upper resistance .83 dxu and if violated .85 dxu

NIA/DYODD

At the time of this post, the dollar is up about 1.2% over the past 24 hour period, and gold down about 3.4%.

He who holds gold futures needs deeps pockets, nerves of steel, and maybe a strait-jacket.

Indeed Sir : NO PROPERTY TAXES ON PORTABLE GOLD !!!
The full meaning of this escapes most gold-watchers-commentators. Idem dito for the non VAT on bullion-trade.
No (income)taxes on the plus-value of bullion.

And then we still find people who cannot see/accept that the goldprice is under constant intervention. Because gold has to be seen as a commodity and therefor subject to free market laws. Whilst they easely accept it as quite normal that interventions happen with the regularity of a clock in many other fields of the financial/monetary industry-economy (forex for instance).

@Clink : I'm not at all panicking, Sir. Why should we ?
Just wanted to pull the attention on the nature and the purpose of the "intervention". Metal * holders * cannot make any mistake in "timing"...in sharp contrast with paper traders. Biiiiiigggggg difference.

Not particularly pleased that my intuition of yesterday proved correct: gold hammered down to $436.80 as of this writing. Wow! The N.Y. boyz are desperate, that's what this tells us.

I said, "maybe $424". Let's see where they run out of gas. Then, Boom! Up she goes.

Another thought sneaks in: Does this operation have the collusion of the European C.B.'s who are in fact crying "Uncle!" at the U.S.'s benign neglect of the exchange rate of the Dollar? "Enough, enough! We'll do what you say, trash gold, whatever you say, but - Stop the Fall of the Dollar. It's killing us!" Could that be?

This may or may not be fact. Just a personal SUSPICION.

Events will perhaps reveal more.

The GAB

Reg Howe - "The golden constant" - RW Jastrum : >>>
Gold is NOT money and then... gold IS money !!!-??? Quite a remarkable kind of "constant" we have here !!!-???

Main problem is to define what exactly "wealth" means and who/when/what is "determing" the ***" exchange rate "*** of universal wealth. Real wealth owners with their wealth in full property, know very well what the exchange rate is, at any given moment. Let's walk in the steps of these giants.

http://econ161.berkeley.edu/Economists/keynes.html
@Sir Belgian,

I modestly enjoy pointing the gold rigging scheme out to the Keynesian non-believers, after all THEIR "Saint John" himself was the primary advocate of adopting the paper gold standard that initiated and enabled commodity and gold market rigging in the first place, to wit:

"What is the charm to awaken the sleeping beauty, to scale the mountain of glass without sliding back? If every Treasury were to discover in its vaults a large cache of gold proportioned in size to the scale of its economic life, would that not work the charm? Why should not that cache be devised? We have long printed gold nationally. Why should we not print it internationally? No reason at all, unless our hands are palsied and our wits dull�" -J.M. Keynes


Keynes knew his flawed theories would blow up in the future, but justified these actions as "a time of special need" ... after all, why should he or any in that generation care, by the time their economic and financial "time bombs" exploded, "in the long run" they would all be dead anyway ...


"Now 'in the long run' this [way of summarizing the quantity theory of money] is probably true.... But this **long run** is a misleading guide to current affairs. In the long run we are all dead." --J.M. Keynes


The End of the Gold Standard:

"The theory on which the Federal Reserve Board is supposed to govern its discount policy, by reference to the influx and efflux of gold and the proportion of gold to liabilities, is as dead as mutton. It perished, and perished justly, as soon as the Federal Reserve Board began to ignore its ratio and to accept gold without allowing it to exert its full influence, merely because an expansion of credit and prices seemed at that moment undesirable. From that day gold was demonetized by almost the last country which still continued to do it lip-service, and a dollar standard was set up on the pedestal of the golden calf. For the past two years the United States has pretended to maintain a gold standard. In fact it has established a dollar standard; and, instead of ensuring that the value of the dolalr shall conform to that of gold, it makes provision, at great expense, that the value of gold shall conform to that of the dollar. This is the way by which a rich country is able to combine new wisdom with old prejudice. It can enjoy the latest scientific improvements, devised in the economic laboratory of Harvard, while leaving Congress to believe that no rash departure will be permitted from the hard money consecrated by the wisdom and experience of Dungi, Darius, Constantine, Lord Liverpool, and Senator Aldrich�"--J.M. Keynes

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1I show a low of $433.80 on SPOT === Very close to your $434. !!!!
THIS is a real "CHRISTMAS PRESENT" for the people, especially outside the US$ arena !!
Time to LOAD UP NOW, as this opportunity will be seen in the future to be JUST like the time of the POG at $252.
<;-)

Would you know what money is, go borrow some.

Would you know that Gold is indeed wealth, is property, get you some.

(Money ain't property -- it's an elaborate accounting system backed by a society's rule of law, nothing more.)

Gold. Get you some. --- Aristotle

http://www.publicdebt.treas.gov/opd/opdpenny.htmDuring Oct 50 billion increase.
During Nov 96 billion increase.
So far during Dec 10 billion increase.

They want to borrow 1-2 Trillion more to fund private accounts for social security.

Not a single spending bill has been veto'd in over 5 years.

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

'Tis the Season!
Give the Gift of
GOLD JEWELRY

Just penetrated 8197, once again
and the Canadian and the Euro are again gaining
strength .....\US$ 8193

The fluctuations in the market value of the physical don't bother me that much. It's the same gold like yesterday in the stash. Sitting there, heavy shiny yellow and doesn't care these market turmoils.

The unhedged miners bounce from resistance at their 200 DMA and recover half of their days losses. A 5% beating at the low hurts, feels like plundered. But maybe the worst is over now.

That is the difference between physical gold and paper. I got it both.

Dollar Rallies by Most Since May Against Yen, Gains Versus Euro - Bloomberg (12/8/2004 11:45 AM)

Layoffs Surged for Past Three Months - CFO.com (12/8/2004 9:03 AM)
Manufacturers Cope With Costs Of Strained Global Supply Lines - WSJ ($) (12/8/2004 6:52 AM)
Productivity Growth Near 2-Year Low - LA Times (12/8/2004 6:37 AM)
Is the Current Account Deficit Sustainable? - NBER (12/8/2004 9:15 AM)
California, U.S. in a Housing 'Bubble,' UCLA Forecast Says - LA Times (12/8/2004 6:34 AM)
NASD Warns of Risky Home-Equity Investing - Reuters (12/8/2004 11:52 AM)
OPEC Frets Over Excess Supply - Reuters (12/8/2004 6:43 AM)
Corporate bond investors play it safe - FT (12/7/2004 8:38 PM)
Airlines may face 'profitless recovery' - Dallas MN (12/8/2004 6:38 AM)
Colgate overhaul to cut over 4,400 jobs - IHT (12/8/2004 7:11 AM)
Honeywell plans to cut jobs in U.S. - Arizona Republic (12/8/2004 8:57 AM)
IBM Selling PC Unit to China's Lenovo - Reuters (12/8/2004 6:46 AM)
Insurance Firms Subpoenaed in New Probe - Wash. Post (12/8/2004 6:47 AM)
Merck Cuts 2005 Estimate - TheStreet.com (12/8/2004 8:55 AM)
Nortel to file results next year - CNN/Money (12/8/2004 9:04 AM)
Steelmakers Raise Prices for 2005 On Asian Demand - WSJ ($) (12/8/2004 7:08 AM)
Europe's Frustration Grows as Dollar Hits Another Low - NY Times (12/8/2004 6:44 AM)
Has a Chinese Enron Popped Up in Singapore? - Pesek, Bloomberg (12/8/2004 7:11 AM)
Japan's Economy Grew Less Than Expected in Third Qtr - Bloomberg (12/8/2004 6:49 AM)
Japan linker bond sale sends message - FT (12/7/2004 8:58 PM

Cytek

The dollar is just in for a short term rally do to over sold positions and GOLD overbought and then the trend will reverse and continue. The dollar won't stop it's slide till it see's the low 60's and GOLD way over $500.

In Sweden right now, and talking to local's , they are buying GOLD for protection. The funny thing is they too don't believe the numbers that Washington is putting out.

Yes GAB, the AA financial media did their best to sell the news that EU finance ministers would issue a joint statement to the ECB...asking for a higher dollar/lower euro. No, they are not crying uncle.

Not a day goes by or we detect many signs of the ongoing currency-struggle. This will continue for quite some time and we will get used to it.

BTW, news just in...Bush asks Snow to stay. Gives us an idea about the drama that is going on behind the screens.
Watch the reactions in the markets.

http://www.usagold.com/ProductsPage.htmlWhat's the thing to do on a day like this? Being a lowly sitemaster of modest means, I nearly held my breath as I counted up my pennies and figured out which ones weren't already earmarked for expected expenses. Happily I discovered there to be an unreasonable excess and promptly called over to the trading desk at USAGOLD-Centennial Precious Metals and was patched through to Jonathan. As easy as 1-2-3 he took my order for 5 Krugerrands, 22 Swiss Helvetias (totalling 4.1 oz), and 10 tenth-oz Maples (stocking up on gift items for future birthdays and holidays) for a grand total just on the heavy side of ten ounces.

Now, as soon as I can patch together today's update to the daily market report and be done with that, I'll write out a check as payment for the gold and walk it over to the post office.

And that is how it's done. It is not my usual practice to share the details and timing of my gold purchases, but I thought with the large number of new visitors now interested in buying gold for the first time in their lives, it might be helpful for them to read about the process and see how very easily it is done through the good teamwork of Jonathan, George, MK, Marie, Jill, and Jamie at USAGOLD-Centennial -- serving gold investors since 1973.

Choose gold, and give them a call today as easily as I just did. 1-800-869-5115

R.

http://www.usagold.com/gold/special/DenBoard.html

You wondered (127162) if I am short the metals. No, sir, not short but hedged (insured) enough (with long puts whose strike price I've been raising, keeping at spot, on spread trades) so that today's metals' prices downfall did not produce any panic here. While some paper positions suffered paper loses, other positions gained and some sold (short) options also lost value. These I can now buy back for cheap. It's all a strategic, zero net sum, paper game, no more or less. The amount of risk is directly proportioned to the amount of gain/loss potential. I limited my upside gains, somewhat, by hedging but, boy, am I glad I did! Overall, today was not too bad. If the downside continues, it might even offer some opportunities.

It is days like today that validify all the constant warnings about the derivatives markets. I haven't heard yet, but I'll guess that the silver market traded on market only orders today. This means that those weak hands that were forced out today did so at a huge disadvantage. A great deal of money changed hands today, probably very little physical metal but lots of cash! If you aren't familar with derivatives, leave them alone! Gold stocks also have many more factors attached to them than simply the POG. To invest without risk, buy physical metal. I'm greedy and enjoy leveraged investments but fully understand the risk.

M.K. is, imho, correct in that the fundamental, underlying situation has not changed. All the forces that were combining to raise the prices of gold and silver still exist. These have built up over many years and will not be neutralized in one day. So, if this is still your opinion too, then today's washout is an opportunity, not a setback.

I have a feeling...intuition, trader's instinct, gut feeling.....that this pullback won't last long at all. I won't try to make any price level predictions as I don't believe anyone can do so (without luck) and I don't place much credence in any such predictive systems but I just don't think the current upside move of the last few months is over. ???

If it's physical you want, this downmove is a gift, no? If it's the long side of paper you want, ditto, no?
Note, today's move will NOT be reflected in this week's COT numbers as they are calculated through Tuesday of each week. Many weak paper gold holders are now gone. I believe this will be a long term benefit to the metals. YGM, thanks for the concern for this old paper trader. Keep the faith...
rich

Despite the fed funds market trade in line with the FOMC's two percent policy target, the trading desk of the Federal Reserve system stepped in with an intervention to tweak the open market, 'permanently' injecting newly created cash to buy up $425 million in Treasuries, targeting the inflation-protected variety of securities maturing from January 2007 to April 2032.

The Fed also today added $5 billion through overnight repos at 1.992 percent.

R.

http://www.theglobalist.com/DBWeb/printStoryId.aspx?StoryId=4281
Much has been made of the large U.S. budget and trade deficits in explaining the U.S. dollar's recent weakness. But is the sinking U.S. dollar mostly a reflection of global dissatisfaction with recent U.S. foreign policy? Joseph Quinlan � chief market strategist at Banc of America � argues that the dollar will continue to drop until U.S. legitimacy is restored.

The message from the foreign exchange markets since November 3, 2004, seems to be simply this: The free ride for the "rogue nation" is over.

A Crisis of Legitimacy?

Rarely has U.S. foreign policy influenced the global financial markets and weighed on the U.S. dollar as it does today.

In the November/December 2004 issue of Foreign Affairs, Robert Tucker and David Hendrickson forcibly make the argument "that the United States has a serious legitimacy problem" with the world.

A lasting problem?

I believe it does. More worrisome, the authors correctly note that it takes time to restore one's reputation and legitimacy. In other words, America's tarnished global image could weigh on U.S. dollars for some time to come.

The sooner America's image is restored, the better the prospects for the U.S. dollar. My hunch, though, is that this may take time � leaving the dollar vulnerable to more downside pressures.

Adapted from a December 3, 2004, Banc of America Capital Management research report.

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.

Wednesday market excerpts

Precious, industrial metals hit by dollar rally

Gold bullion shed more than 2.5 percent, leading other precious and base metals lower, while copper traded on the London Metal Exchange, the world's biggest metal-trading market, fell over 3 percent at one point.

Silver, which has dual roles as both an industrial and precious metal, witnessed the heaviest loss as prices tumbled almost 10 percent.

"The dollar is what prompted all of the selling," said AG Edwards & Sons commodity commentator James Quinn, adding that trading volumes in metals futures were huge.

The most active Comex gold futures February contract settled $15 lower at $438.70.

Market watchers had recently called the gold market overbought after prices scaled 16-year highs above $457 on a spot basis last week, but since has struggled to maintain upside momentum. However, until the overnight rally, the U.S. dollar's persistent weakness had propped gold prices up.

By the same token, the U.S. currency had been widely deemed overextended to the downside and due a corrective rally at some point. That rally was sparked overnight by chatter that foreign central banks may move to intervene in the currency markets to stop the dollar's seemingly interminable demise and alleviate some of the pressure placed on their own currencies.

Weak economic data from Japan overnight and news that Russia was considering a restructuring of its foreign exchange reserves also spurred movement in the currency markets, dealers said.

The net effect of the dollar's climb was a sustained wave of fund long liquidation and bullion bank selling in gold.

Larry Young, senior precious metals trader with Infinity Brokerage in Chicago, said: "This was mainly a reactionary day. It all started overnight as the U.S. dollar rallied and the Australian dealers started selling." He said Asia and European-based players then followed suit to set the U.S. gold market onto the back foot from the start of trade.

However, Young stressed that the price weakness is merely a correction within a continuing long-term uptrend in the gold market. "The overall uptrend in gold can stay intact even if we fall back to $430. In fact, we could pull all the way back to $423-$424 and still be in an uptrend," he said.

Peter Grandich, editor of the Grandich Letter pointed out that "the metals have been taking two steps forward and then one sharp step back, eversince bottoming in 2002."

"This is never enjoyable for bulls but has always proven to be the pause that refreshes," he said.

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

HEADLINES

Bush Asks Snow To Continue As Treasury Secretary -- Nasdaq - Global Markets

Dollar rebounds, pares euro gain on news Snow to stay -- ample.com

Dollar Finishes Stronger after Roller-Coaster Session -- Nasdaq - Global Markets

Paper Assets Glitter, Gold Slumps -- The Street - Latest New 14:49
TheStreet.com

Finally. A Plan to Destroy China's Economy -- business2blog (Weblog)

Stocks, the dollar and Treasuries rally in tandem while the yellow metal is trounced. -- TheStreet.com

Home prices a dollar under $350,000 -- Federal Way Mirror, Washington - Business

Analyst: Snow decision re-affirms weak dollar policy -- MoneyAM

Thanks, Rich, I enjoy & need the Silver education & I want to add 100, 10 oz wafers (AG) to my mediocre Silver stash and wonder if the market could be lower for Ag yet? My funds aren't free til mid Jan (then I shall call CPM) so I will appreciate any and all Silver discussions along with the Golden ones....Keep us informed huh!...YGM

http://www.csmonitor.com/2004/1209/p17s01-cogn.html(excerpts) Commentary: "A Global Accounting..." from the December 09, 2004 edition by David R. Francis --

During a dollar crisis in the 1970s, Treasury Secretary John Connally told his European counterparts, "The dollar's our currency; but it's your problem."

There's still a lot of truth in that today. The reaction abroad to the current drop in the greenback's value differs sharply from that in the United States. Japanese and European officials reportedly have already talked behind the scenes about intervening in foreign-exchange markets to prop up the dollar.... where businesses worry that their exports could become uncompetitive. Economic growth could stall.

But here in the US, Treasury Secretary John Snow appears blas�. The administration has given no hint it will use its $82 billion stash of foreign-currency assets to support the price of dollars by buying them on foreign-exchange markets. "Nobody cares in Washington," says consulting economist David Hale in Chicago.

That has put more pressure on foreign central bankers - the Alan Greenspans of the rest of the world - to step up to the plate. Will they buy more dollars so their own currencies don't rise too much? Or will they sell their greenbacks because their value is falling?

The response, so far, illustrates how topsy-turvy the world of central banking can be.

Some usual US partners have decided to trim dollar losses. Canada, Australia, and New Zealand have already reduced the dollar share of their foreign-exchange reserves to less than 50 percent, compared to a global average of 66 percent, says Hale. "Our traditional allies have abandoned the US dollar."

Meanwhile, our chief Asian economic competitors - Japan and China - have stepped in over the past two to three years to prevent their own currencies from rising.

Major foreign nations won't find it so easy to bail out of dollars as smaller countries do. If China's central bank, for instance, decides to use some of its surplus dollars to buy euros for its reserves, it further depresses the dollar - and the value of its dollar reserves. .... The euro market can accommodate billions of dollars in a transaction, but not tens of billions, notes Richard Cooper, a Harvard economist.

In any case, it's not clear that central bankers worry much if their dollar assets are devalued. Prior to the creation of the euro in 1999, a common currency for 12 European nations, the Austrian central bank simply revalued its gold holdings upward to cover a capital loss, in its books, on its dollar-denominated assets.

-----(see url for full commentary)----

Bottom line: On the chessboard of international trade, strategies take shape and the players make their move with expendible pawns, slyly protecting their kingly gold in reserve through to the final winning maneuvers.

R.

http://streettracksgoldshares.com/us/value/gb_value_usa.php& promptly bought back three T....I still think something stinks with this outfit!

OK!...Dump 15 T @ $450.+ kickstart the downtrend (that you KNOW is coming) and start buying back at support level, which seemed to be $338.00 range...This should be evident if the stats of GLD show more Tonnage (above 91T) at close tomorrow...The GLD does seem to me to be another tool of Gold Price Manipulation, even tho others may profit outside of the Cabal....Why not have sold 15 T over two days at substantialy higher POG? and let the market do it's own correcting....New s--t, different day if you ask me, but what would I know!

You dump 15 tons. What do you get? Another day older and deeper in debt.

Was that just the bathtub or the whole she-bang?
Somebody please yell, INCOMING! so I can run to the Coin Dealer.
Guess we do not have to wait for them to tell us how much they dumped , just pull up GLD and see for yourself.
Great Day to be a GoldBug ;0)
Slingshot-----------------<>

@Rich Powell #127191 et al.

The last speculative blow-off in silver, back in April/May 04 took about a month to bottom. It was accompanied by a similar, but less dramatic, blow-off in other metal prices (lead, zinc, nickel, copper and gold), nearly all of which recovered to exceed their former price-levels (nickel is the exception - aside from silver, which almost got there.

The rapid fall in POS has again been accompanied by a (smaller) sudden fall in base metal prices and in POG. It will be interesting to see if prices continue to fall over the next week or two, or whether they will recover more quickly.

Back in April, the BOJ had just completed a $15T Yen dollar-buying play, which added quite a bit of buoyancy to the greenback....that buoyancy has not been added this time and it would indeed be a brave player who steps up to the crease with present sentiment...but it might happen, because someone may HAVE to do it. That could see metal prices fall more over coming weeks. If noone steps up to the crease in the buy-greenback game, then....mmmmm....maybe there will be an upward turn in the metal prices sooner rather than later...

Also, remember, back in April there were the other two "scary" factors: China had just announced direct intervention to slow its economy (steel and cement) and the FED had just reversed monetary policy by tightening IRs one quarter of one percent. Neither of those two "sudden" factors are present this time (although there may be others that are injecting uncertainty into the metals market).

My hunch is that you are right, Rich, this "speculative correction" will be shorter lived than the last, and probably not as deep...but, noone knows...there MUST be more dollar manipulation along the way...

FWIW DYODD and good luck

:-)

St. Peter don'tcha call me cause I cain't Goooh,
I owe my wealth to the Gold in the Hole, da da da da,-
da da da duh! :>))

Pardon my ignorance gentlemen, but where can I get details on GLD's transactions. I hear you all saying they dumped 15Tons. Where can I see that?...

Check out the link from YGM's Post #127197.
Go to the very end to see amount of tons in GLD account.
Slingshot----<>

http://sg.biz.yahoo.com/041208/15/3p3wm.html
Snippit:

SYDNEY (Dow Jones)--The increasingly gloomy outlook for the U.S. dollar has become a persuasive rallying cry for gold bulls, but several leading analysts and investors say gold will have more going for it in 2005 than a cooperative currency market. "If that was the only thing, I probably wouldn't be as bullish," said Daniel Hynes, natural resources analyst with Australia's ANZ Institutional Banking, who believes the yellow metal could reach US$500 a troy ounce before looking toppish.

The faltering U.S. dollar "is an important plank (of support for gold), but I don't think it's the sole one," said Alan Heap, global commodity analyst with Citigroup Smith Barney, who "certainly wouldn't be surprised" to see gold hit US$500/oz. Along with others, Hynes and Heap have detected a positive shift in gold's supply and demand fundamentals that will complement its strong inverse correlation with the U.S. dollar if, as many expect, the latter continues to weaken.

Not only is fabrication demand firming, but mine supply is on the decline and central bank supply, though not necessarily falling, is considered very much under control, analysts say. As a result, gold is likely to scale new multiyear peaks in 2005 and post an average price somewhere in the vicinity of the 16-year highs witnessed in recent days.

Also -

(1) On the demand side of the fundamental equation, gold-watchers are particularly encouraged by the rising trend in fabrication, underscored by increased jewelry demand. Several analysts cited recent figures from the London-based precious metals consultancy GFMS Ltd. and the World Gold Council that showed rising demand for gold jewelry, by far the largest component of fabrication. "Generally, when the price is higher people tend to spend the same amount of money and just buy less gold, but (the rising price) doesn't seem to have had such an effect this time around," Hynes said. "One has been a generally more buoyant global economic picture, but also I think, probably consumers have become somewhat more used to, and accepting of, higher gold prices," he said. "We've seen a pickup in bar hoarding in recent times," he said, adding that there is further scope for increased speculative physical holdings according to GFMS. "So it is entirely possible we could see continued support from the speculative community even if we saw a sell-off on Comex," Heap said.

(2) If a shaky U.S. dollar and a surprisingly firm demand outlook aren't enough, investors and analysts are also encouraged by the supply side of the market. The signing of a five-year pact among 15 European central banks in 1999, capping aggregate bullion sales at 400 tons a year, was thus welcomed as a source of supply certainty. But several observers now believe it possible for actual European sales to fall below the total five-year limit, perhaps by a wide margin. "Based on announced or considered sales... it is hard to get to the total of 2,500 tons over five years and we continue to suspect that the risk may be that less gold is sold over the five years from October 2004," UBS analyst John Reade said.

(3) "We've got a situation where (mined) production of gold is going to be declining for the foreseeable future," he said, alluding to GFMS figures and projections. According to the London consultancy, mine output was essentially flat at 2,590 tons in 2003 and is forecast to slip to 2,506 tons in 2004. "One of the big changes in the mining sector as a whole has been a significant cut (in) exploration expenditure, which is obviously reducing the probability of finding new projects to exploit," the leading fund manager said.


Black Blade: Gee, where have we heard all this before? well. I have brought these points up before, but the wrning signs were most evident in exploration expenditure. Now many miners are crying for qualified explorationists but they won't find them. It's a dying science with few takers - Game Over" because they "ain't coming back" (I among them). ;-)

Thanks for the thoughts.
It's funny how all the metals moved down together today. Base or precious, all were down. Sometimes a big or well below expectations sales or export number in any one of the grains will move ALL the grains either up or down. Do market groups sometimes react on one sentiment rather than on individual information? It seems to be so with stocks (equities), no? Bad earnings numbers from one big blue chipper can set the tone for the whole index.

And yes, there were other factors that may have triggered the last big silver downturn that you refered to. That was a $0.77 downturn, again, in the overnight markets. This time it may have been selling in gold or the threat of Bank of Japan intervention or a bull move bounce in the dollar bear market or...? but I believe silver was once again vulnerable to a big downturn. I say this as last Friday's COT numbers showed the same extreme fund long versus commercial short position that preceded that last downturn. Leonard Kaplan (uptick) often refers to this ability of silver to run up on speculative buying until there simply isn't much buying power left and any excuse or "trigger" can push silver way down. If silver ever gets any real supply/demand shortage sentiment behind her, we may start seeing weekly silver moves measured in dollars rather than cents. The implied volatility in silver options seems to confirm that silver is still (and has been ever since she broke through that old 580 level) an unstable, dangerous (opportunity also!) market. Soybean option prices also became outrageously expensive when beans were priced over $10.00/bushel last year but, like any normal market, they returned to normal once the price did. Not so with silver! Are there yet wilder days ahead..??? In the physical market, I guess this would be seen as wider spreads between the dealers' buy offer and sell offer when compared to spot.


I was amazed at how much commodities across the board crashed when news broke that China wished to slow down its rate of growth. I never believed that they could slow it down a great deal...still don't believe it. BTW, the price of concrete is due to increase by close to 10 percent next month due to the shortage of cement powder. This shortage is real here in the Northeast. But, back to China and that news that you referenced. It showed what market perception can do...even though I don't think there has been any real relief in the demand for cement, steel, etc. specifically from that Chinese market. Market sentiment!! Are the metals' markets becoming more and more susceptible to market sentiment, perceptions, rumors...?
They are a wonderful puzzle. I have never grown tired of watching and trying to understand. Much like ethics, I don't believe there are any solid, never changing "correct" or "right" answers to many economic questions. Economics, like life, evolves and changes. Now then, about that question of the tree that falls in the woods with no one to hear it fall....(;>
rich

http://english.donga.com/srv/service.php3?bicode=020000&biid=2004120981518
Snippit:

The soaring gold price has spurred gold smuggling. The Korea Customs Service said Wednesday that as of late last month, the number of reported gold smuggling incidents was 14, worth 12.8 billion won. Compared to the same period last year, the frequency doubled and the amount increased 37 times. The form of smuggling has improved from family groups bringing in small amounts of gold bars to organized groups. A gold bar smuggling organization, caught last August, illegally shipped a 120-kg gold bar (worth 2 billion won) on a cargo-passenger ship that regularly operates between China and Korea. Such bold and large-scale smugglings are perhaps attributable to the gap between the local gold price and the international gold price. The local gold price has sharply increased due to the rise in gold buying by the wealthy, who have not found attractive investment subjects this year.

Meanwhile, legal gold imports are also increasing to a great degree.


Black Blade: Barbarous relic indeed. Well call me a "Barbarian" then. ;-)

http://www.mineweb.net/sections/whats_new/397615.htm
Snippit:

SPOKANE, Washington--(Mineweb.com) While the administration of U.S. President George W. Bush may have a more favorable attitude toward domestic hardrock mining, federal officials Tuesday predicted inadequate budgets and staffing will still delay the permitting of mining projects.

Black Blade: Yet another "fly in the ointment" for future Gold and Silver supply and PM mining in the US.

http://www.thenational.com.pg/1208/business1.htm
Snippit:

PLACER Dome Niugini has entered into a joint venture with Nautilus Mining to explore gold-bearing mineral deposits on the ocean floor in the Bismarck Sea near Manus and New Ireland, making it "another world first for Papua New Guinea".


Black Blade: Now that's "offshore". If the US won't allow mining then move "offshore". Interesting article (see link).

http://jsmineset.com/home.asp?Another Over the Transom from One in the Know

For more than twenty years, the Federal Reserve trade weighted dollar has found support at .825 and on the USDX at .8194. That is a strong support line never penetrated by the dollar for twenty years!

Now for the past week the dollar stayed below the Fed .825 and .8194 USDX support. And today, Wednesday, the dollar made an attempt to go above the Fed .825 . The support line NOW is strong resistance! The dollar could not stay above the support line for more than a couple of minutes!

I expect at least one more attempt at trying to get the dollar above support line Fed .825. My guess is that this attempt will happen on Thursday or Friday of this week. After that, the dollar goes into a freefall, breaking below the USDX once again at .8194.

With the dollar freefall, look for a parabolic rise in the price of gold, easily going to 526 and beyond! It could hit 600 or higher this round. I expect gold shares to go way above current value, farther than people expect.

During the next five weeks, look for strong selling in the bond market. The dollar is headed for a nosedive. Gold will be going ballistic! The strong selling in the bond market will be the answer to "Alice in Bond-er-Land."

The dollar heading south of this strong .825 (USDX .8194) support line of the past twenty years tells the whole story.

(Unsigned but reliable)

Lots more to digest @ LInk...YGM

http://www.timesonline.co.uk/article/0,,2-1395222,00.htmlSnip: TONY BLAIR is seeking to secure George Bush's backing for a new international treaty that would end America's isolation on global warming, The Times has learnt.
Downing Street last night confirmed that the Prime Minister had held "lengthy discussions" with Mr Bush about a fresh initiative that would bypass Washington's steadfast opposition to the Kyoto Protocol.
The deal, described by one source as "Kyoto-lite", would involve scientific agreement on the scale and nature of the threat, as well as an international programme to develop the technology needed for renewable energy and the reduction of carbon emissions.
�.
The Government accepts there is little prospect of America, the world's biggest producer of greenhouse gases, agreeing to cut its emissions. Mr Bush claims that signing up to Kyoto would export US jobs to China and India, whose rapidly expanding economies are also contributing to global warming. [while the above remark, attributed to President Bush is not in quotation marks, it sound like it's out of their play book. Crocodile tears for displaced workers, while Mankiw, Bush's former chief economist (?), says that exporting jobs is good for the American economy. Well, where there is a contradiction there is a clue.-Toolie]
�.
Speaking in New York earlier this week, Mr Byers pointed out that American political opinion was shifting after the hurricane damage this autumn in Florida and Louisiana which cost billions of dollars in insurance payouts. "Pressure for (Mr Bush) to act is growing domestically . . . major companies like Boeing and DuPont are expressing concern," he said. (end snip)

From Hurricane related insurance claims to companies like Boeing and DuPont expressing concern. Another non sequitur, insurance companies would surely have something to gain from a cessation of hurricanes, but how would two large pollution dependant companies like Boieng and DuPont benefit from Kyoto. I may be the last person to figure this out but it looks to me as though Kyoto is cover for �Peak Oil�. Is this �Old Europe� offering Bush a last chance to 'share' the worlds remaining oil for help in Iraq? I think so.

http://www.scoop.co.nz/mason/stories/PA0411/S00544.htmSnip: An emissions charge is planned from 2007. This will directly expose the New Zealand economy to the price of carbon. The price will be pegged to the international price of carbon, around $15 at the moment, but capped at $25.
All revenue raised will be recycled back into the economy, through, for example, the tax system. The charge will introduce a price of carbon into our economy and is a major step towards emissions trading in the future. Many of you, from your involvement with the Projects to Reduce Emissions programme, are already aware of the new global currency that the Kyoto Protocol creates.
�.
�..Since that time transport law has be rewritten, the state transport sector has been reengineered, funding has been increased markedly and will increase markedly again, we have brought back the rail track and have subsidiary strategies for walking and cycling, railways, transport research and so on developed or being developed.
�.
I was at an OECD roundtable meeting in Paris recently and over two days we talked about cars. In particular we came to discuss a large and expensive research project, funded substantially by automakers. The project sought to find a solution to the problem of climate change, given the contribution that cars make to that problem. If you will excuse the cynicism, the underlying concern of automakers included the end of cheap oil but they are not exactly in a position to acknowledge publicly that concern and I won't dwell on it.
Instead let me dwell on the fact that the project sought a solution, singular. In other words the project was designed as a silver bullet hunt and the one quarry was hydrogen and fuel cells.
The project's main finding, after an exhausting analytical process and after a global consultation exercise, was that our future will comprise many incremental gains across many technologies involving many fuels and many different transport modes.
It was very comprehensive research, and a tribute to the investigators and the industry that they could find their original thesis so solidly disproven. (end snip)

An interisting read, well worth a trip to the link.

http://groups.yahoo.com/group/gata/message/2654More publicity for ETF and as such could cause more open disclosure of many unanswered questions....This is a real tempest in a teacup now!...Stay tuned!...YGM

http://groups.yahoo.com/group/gata/message/2654Latest GATA dispatch.


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

gata-subscribe@yahoogroups.com

.... one of us should go to bed!

Best wishes as always,

cp

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOLITEx|tenforeHaven't seen the like myself...(but I'm not much for charts)...Gold dropped $4.75 and within minnute bounced back in one click to +$0.50...Done this 3x to varying degrees as I've watched....


Hey Chris old man, you sleep a long time dead and this is all too funny and strange to sleep, especially the Bullion Desk joke/part...LMAO....Ken

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Hey, YGM..... Funny, we haunt this forum together while monitoring the NetDania chart all night. Yes, I've twice noticed that -4.75 reading at NetDania too. I'm sure it's an anomaly. The supposed dips there have not shown up at Kitco, BullionDesk, or this UK site which always provides a pretty good minute-by-minute chart.

Surfin and making waves I guess...Too cold w/snow for outside star gazing...Idle minds and the devil takes hold...Now don't you go crashing the Gold market again, the bonds will do the trick for us all...Things are getting crazier by the day...Off to slumber for me I guess...Best regards to & for, all you do...Ken

PS: You & Bill(GATA)still owe me dinner & an evening of reminiscing! :>)

JOBS-DATA DISTORTIONS FRUSTRATE EASY COMPARISONS
By JOHN CRUDELE
December 7, 2004 -- BACK in the 1970s, Western economists would chuckle at the way the Soviet Union compiled its economic statistics.
Without fail, for instance, the Kremlin would announce record annual wheat crops even though there were reports nightly on TV about severe food shortages in that country.
That was fraud.
Now consider the U.S., circa 1990 through 2004. I picked those years for a reason so you won't think either political party is beyond gilding the economy.
There's no obvious fraud involved here�..
But changes in the way Washington compiles economic statistics have certainly caused the figures to be misleading. They are numbers on steroids.
At the very least today's official evaluations of the economy may not be comparable to those in the past, rendering useless the historical trends that economists like to follow.
In fact, the chutzpah showed in some of these changes may be causing a disconnect between how Americans feel about the economy gauged through things like consumer-confidence surveys and what Washington says is happening.
Even worse, by changing the way it compiles its statistics, Washington could be leading astray economic experts as well as policy makers at the Federal Reserve.
This column, the second in a series about the new tricks of the economics trade, will continue to look at the sleight of hand used in the employment figures.
Last Friday, the U.S. Bureau of Labor Statistics reported that 112,000 jobs were created in November. There's no arguing with the fact that 112,000 was a disappointing amount.
It was far below the 200,000 jobs that the experts had been predicting, and was made worse by a large reduction in October's growth. The 112,000 new jobs aren't even enough to keep up with the increasing population.
Worse, Washington could only come up with those 112,000 jobs by adding 54,000 positions it believes but can't prove were created by newly formed companies�. (New York Post)

This latest old new variety of gold-certificate (ETF) shows us again that the colluding goldmasters want to bring more of the same, "market", into the global gold sheme.
It are those who "organize" the betting that collect the big profits. They just need races and horses.

This new effort to expand the existing goldmarket has only one purpose : Avoid, at all goldholders' costs, that gold becomes a general store of wealth. Gold must remain "speculative" and one does not speculate with wealth.

It is up to each and every individual to decide what gold means to him/her personally. But the existing goldmarket keeps blocking the wealth choice. Don't be surprised if "this" gold-speculative-goldmarket is imploded !

http://moneycentral.msn.com/content/invest/extra/P87483.aspBank predicts a 'hard landing' by mid-2005. And regulators say too many homeowners are cashing out their equity to play the market.
By Reuters

Economists at HSBC have waded into the debate over whether the U.S. housing market is overinflated, declaring a bubble exists, something the Federal Reserve has long been reluctant to do.
Only days after the Federal Reserve Bank of New York said there was little evidence of a nationwide housing bubble, HSBC, a giant bank and financial services company, issued its assessment of the situation with a report titled, "The U.S. Housing Bubble -- The case for a home-brewed hangover." The bank insists that a bubble exists and prices are likely to deflate gradually over a few years, triggered by Federal Reserve interest rate rises.
"This bubble-psychology has manifested itself in very rich valuations,'' HSBC chief U.S. economist Ian Morris wrote.
House prices relative to income, rent, replacement-cost and home-equity have all set new highs, Morris said.
"Expectations of future house price appreciation are spectacularly, and unrealistically, high,'' he said.
The debate over whether a housing bubble exists has raged in recent years as prices have surged. But the Federal Reserve has often said it does not see a bubble.
Over the four years to the first quarter of 2004, official figures show house prices rose 33% nationally. Over the same period, prices in Washington, D.C., were up 70%, in California 60% and in New York and Florida 50%.

Cashing out to play the market
If anything, the trend has sped up. The Office of Federal Housing Enterprise and Oversight reported that prices as of Sept. 30 were 13% higher than a year earlier. Just weeks later, though, Federal Reserve Chairman Alan Greenspan sought to reassure lenders that the ride wasn't over.
"Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities," Greenspan told America's Community Bankers.
Stock brokers are apparently reaching out, too. Wednesday, the regulatory agency NASD warned that too many house-rich Americans are borrowing money against their homes to play the stock market.
In an alert to brokers who may be encouraging the trend, the NASD reminded Wall Street that it has a responsibility to steer investors away from unsuitable financial strategies.
About 11% of gains from mortgage refinancings were plowed into the stock market and other financial investments in 2001 through mid-2002, up from less than 2% in 1998 through mid-1999, a recent Federal Reserve study showed.

A hard landing ahead
The New York Fed has said the decline in interest rates in recent years justified the price increases.
Its 12-page Fed said the rapid increase in home prices was itself not evidence of a bubble. "Rather, it appears that home prices have risen in line with increases in personal income and declines in nominal interest rates,'' it said.
Some economists worry that the run-up in housing prices in recent years has created a bubble similar to the stock market excesses of the late 1990s and could jeopardize the entire U.S. economy if prices fall sharply.
The 47-page HSBC report, issued in late June, said a "hard landing'' is typical after a housing bust because the wealth effects -- which can affect consumer spending -- from real estate are more powerful than from stocks.
"Prices are 10 to 20% too high and can overshoot on the way down,'' HSBC's Morris said, most likely deflating gradually over a few years rather than crashing like stocks.
"We think the party stops by mid-2005. A series of rate hikes will cause a reassessment of likely future house price risks and its associated debt, thereby triggering housing's fall.''
Morris said that as the hangover hits around the middle of next year, he expects relief in the form of renewed Fed easing will be required.
Much of the difference in how HSBC views the run-up in prices compared with the Fed's assessment stems from a debate over which price measures are used.
The New York Fed said it was important to adjust for quality improvements due to renovations and extensions. Unfortunately, such a price index does not exist, so the Fed uses a quality-adjusted "new'' home price index.
HSBC's Morris argued that this approach has pitfalls because the existing stock of housing does not improve in quality by anywhere near as much as the improvement in new homes.
------------------------------------------------------------------------------------------------------------------------
Link to the Fed report :
http://www.newyorkfed.org/research/epr/04v10n3/0412mcca.pdf

Keep Joe Sixpack stupid and let the printing presses rock & roll...keep on intervening in the market, keep the wealth aspect from gold hidden to the public,... The greater the bubbles will be, the more we forummers can profit from this.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=Curious to note $Gold is repeating (albeit more pronounced) the Oct/Nov pattern whereby it plateaued - dropped and then (hopefully) spiked up.
As can be seen, $Gold is/has been a bellwether for the Currency moves .... it remains to be revealed IF these moves are "orchestrated" ... or otherwise.

http://www.ecb.int/press/pdf/wfs/2004/fs041203en.pdf...and again...
In the week ending 3 December 2004, the decrease of EUR 34 million in gold and gold receivables (asset item 1) reflected the selling of gold by a Eurosystem central bank (consistent with the Central Bank Gold Agreement of 27 September 2004).

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=LOWAnother curiosity ... Oil first, then Bonds, then PoG. 'ol Buck is due to "correct" substantially methinks.

We might well be on the verge of a $ plus $Gold runup. That WOULD be a Hoot!

http://news.goldseek.com/LemetropoleCafe/1102610013.php
December 8, Bill Murphy, Le Metropole Cafe

--World Gold Council's ETF Dumps 15 Tonnes Of Bullion Right BEFORE Price Collapse--

"--World Gold Council's ETF Dumps 15 Tonnes Of Bullion Right BEFORE Price Collapse2

Not necessary they KNEW in advance,its rather that the future market FOLLOWED the sale as happened before when a CB announced a past sale.Maybe the first time an unleveraged Goldvehicle has lead.But still,the futures and the ETF are a snake feeding on its own tail.And if you own both sides,you don't have to fear the snake.

Why go for the ETF when you can buy physical Gold?And the banks are selling it at a 90% discount???

And if someone has taken delivery (the lions fighting for the last little dogs bellies)?Taking delivery =pushing the price down:what strange logic,when you buy,it normally increases the price.

An old Another thought:a physical sale (respectively the prospect of)actually increases the Goldprice.So the futures have been run up to 455 as there was anticipated a Goldsale (fletch,fletch).The bloodsuckers emptying the ETF?

...US Treasury goldreserves pass through the ETF as to land in Asia or ME !? Oil for gold and Asian products for a pushed up dollar, through goldsales and goldprice containment. Illustrates what the real "exchange rate" of gold actually IS. Gold exchanges stands for MUCH MORE than its paperprice is suggesting. That's the whole secret behind the gold paper-show.

President Bush coming to Brussels (NATO + EU). What will be the present ? A promiss that something will be done on US fiscality/monetary/deficits ?

Any thoughts on the Snow show ?

@986 : The general rise in houseprices is in sharp contrast with the containment of the goldprice and IRs. Reminds us daily about the looooonnnggggg revaluation that gold still needs to pass through.

@Knallgold : Gold is the only tangible where only a few know where it comes from...where it goes...where it stays...and how it is really valued internally. The secrecy surrounding the goldmoves, remains intact and is one of its major force. A unique aspect only attached to gold....the metal of course.

What if..... the ETF events of yesterday were just a talk, a test to see if the POG could be talked down, without the movement of any physical ? Just a little test to see how papergoldmarket sentiment would react on the news of an outright sale of 15 tonnes physical. Make a lot of noise on the ETF, make a nice website with all the tonnes nicely published, shake it and test the outcome.
Just a wild tought...

Is there a serious split within the administration about the policies that should be followed ? Loose or tight ?
The dollar exchange rate will tell us what choice has been made.

OPEC meeting, tomorrow : POO up 1,5%

ECB not happy with the erratic (brutal) fluctuating exchange rates (because of the derivative monster). Says very little about the exchange rate levels.

http://streettracksgoldshares.com/us/value/gb_value_usa.phpNo update as yet...Page says update daily between 6 & 6:30 AM...NY time....Not very punctual boys & Girls!

Nothing "wild" about this kind of thought, 986.
It is remarkable that the financial media haven't been giving much attention (trumpet) to the (minor) goldevent.
The POO-dive ( minus 24%) was happily wellcomed. The official explanation is pointing to the speculative positions that were unwinded !? I simply don't buy this, as it is presented. One does not fool around with such an important commodity as oil.

Maybe it all boils down to efforts of trying to stabilise the dollar exchange rate and show goodwill to the rest of the world and try to calm down the greedy, impatient financial industry !? Who knows ?

Maybe they are waiting for the US Labor Dept. to crunch (revise) the numbers for them!

Saudi Arabia will come to Cairo " WITH AN OPEN MIND " ??? Jesus, what does this mean ? Is this arabic Alan-speak ?
Most of the Arabian oil agrees on a supply cut (1 mil.bpd)
Can someone try to translate this "open mind"-thing ?

Hahahah! You got the first laugh of the day from this small corner of the world....Bullion desk gets the second for refusing to post the GATA rebuttal to yesterdays claims...All too funny....POO meeting and they still can't get the Dollar past the 82.25 ceiling spoken of at Jim Sinclairs last eve...Looking forward to the next couple days??? I am...Regards...YGM

Druid: Doesn't this derivative instrument "treck" the gold price derived in the futures market? Would this not suggest that this instrument follows a price that is derived elsewhere and if it follows then there must be a leader? And if in fact, there is bullion transferred from point/customer A to point/customer B (more along the lines of moving a sign from cage to cage), would this not be an excellent instrument to "lead" or direct bullion where you needed it to go for whatever purposes you needed it to fill?


If you're someone of great import who might have to answer to your citizens one day and you're sitting on a hoard of paper that you need to convert, then why not disintegrate this new ETF by blowing the volumes off the charts and take delivery of your bullion in this fashion so that you don't upset the futures markets?

A thought that crossed my mind about this latest revelation in the ETF was that it was planned not only to bomb gold, but also to demoralize all those newbys who bought it as the "Best way to invest in gold!!!" only to see it lose 4% only weeks after purchase. The financial planners would turn around and say "See? I told you investing in gold was a bad idea...."

All here know that 'investing' is not why we have the metal in hand, but to the un-initiated, it could turn them away from all gold and gold shares.

http://www.suburbanchicagonews.com/couriernews/city/e09129dig.htmGold coin dropped into Salvation Army kettle:

The Salvation Army of Elgin has received its first donation of gold coin in three years. The 1-ounce 1978 gold Krugerrand was placed in a kettle on Saturday at Dominick's on Randall Road in South Elgin....

If they gave one away imagine how many more they have...
Many I suspect....YGM

This is an expression that is characteristic of our present day state of mind.

An "open mind" means that you have no fundamental principle which rules your thought, namely, that you CAN know the truth, that you ARE able to know Reality.

Some people think William James was a great philosopher. What he did was subvert the intellect with his "pragmatism" which denies we can know anything. Once we are "pragmatic" - it is a great compliment these days, to be spoken of as "pragmatic" - means you don't hold anything as true. You can come around to anything, because you have an "open mind".

Try being "open minded" and you can easily wind up a homosexual if circumstances favor it, or you can commit whatever monstrosity seems convenient - for you are pragmatic and open minded. See? "The Gulf War I cost 500,000 lives of children, but it was worth the price" - Madelien Albright, being "pragmatic".

And thus we march forward to our doom. For Reality does not forgive Man, when he abandons intellect.

*******

When the Arabs say they have an "open mind", it means one of two things:

a) They are corrupt and have been stupidified by Harvard training, or
b) They are talking the talk that Westerners like to hear.

Islam is anything but "open minded"!

The GAB

Thanks for your reply with which I mostly concur. Sorry for brief answer as time is of essence these days.

Also, my friend YGM, thanks for your kind words and keep up the good work, Ken. It's great to have you back.

Gotta luv the new volatility - Gold ETF's may want to make public their rules going forward; Ain't I the original skeptic from anything coming from the WGC and their ilk?!

Cheers cb2

http://www.goldensextant.com/
The purpose of my post (#127163) was to make the forum aware of the NEW essay titled "Déjà Vu: Central Banks at the Abyss" by Reg Howe, which was added to the above link on 12-7-2004.

As I understand Sir Belgian's post, he is commenting on the OLD speech titled "Gold Is Money - Deal with It!" by Robert K. Landis given in London, England, October 2, 2003 because of his reference to ""The golden constant" - RW Jastrum".

I was NOT attempting to reopen the debate about the question "Is Gold Money?".

I look forward to reading all of your posts, and I thank both of you gentlemen for them.

Gold. It looks like a good time to get you some more at bargain prices.

DryWasher.

www.goldenjackass.comWHEN COMPLEX SYSTEMS FAIL, by the GAB
Forty years ago or so, I read a book, "Design for a Brain" by H. Ross Ashby. I read this after reading "Cybernetics and Society" by Norbert Wiener, professor at M.I.T.

In "Design for a Brain", Mr. Ashby was exploring the constituents of system stability, the elements which provided for sustained operation of a system, through self-generated signals which activated controls which avoided the trespassing of the "parameter", the point at which a system fails and collapses to a lower level of operation. I only got the gist of Ashby's treatise, as he went progressively into more elaboration of his theory and a lot of math which was not comprehensible to me.

Feedback and response to it are essential to any system.

Of course, gold used to provide the feedback which kept the international trade system in balance and served to correct, through periodic (relatively) small crises, the over-expansion of credit by the banking systems of each country. That feedback is now gone. Our international monetary system is running wild at present, it has no self-correcting mechanism.

Let us imagine a table upon which a heavy ball bearing rolls about. The table has a small ridge around the edge - the parameter. The ball bearing is growing in size and velocity. It is going to go over the edge at some point, that is clear. An "accident" or a combination of small accidents will push the ball bearing over the edge.

This image represents our present International Monetary System, which is headed for inevitable collapse. If we look at total reserves in the central banks of the world, the graph is parabolic, which clearly is pointing to a blow-up. Nature always puts a stop to parabolic growth.

Passing on to a philosophical approach, it seems to me that our world has forgotten the notion of limits. Greenspan's last feeble attempt to bring up the subject of limits was his comment on "irrational exuberance". Nobody wanted to hear that, so he shut up! Democracy cannot stand limits, just like a spoiled child cannot stand limits without a tantrum. Humanity is going to get its "comeuppance" very soon.

There cannot be stability without the recognition of limits, and democracy will not accept them. Stability implies limits. Democracy implies instability.

It seems to me that after the blow-up of our industrial civilization, due to the collapse of the very complex monetary and financial system which is underpinning it, the world is going to fall into a degraded system, as predicted by the theory of Ross Ashby, and this new, less complex system will be made up of a great many small countries, each under the dictatorship of a more or less brutal warlord. In the Middle Ages, after the fall of the central power of Rome, that is what took place in Europe. However, there was the Church and the faith of the people which gave it power, to counterbalance the power of the warlords under feudalism. This will be a crucial element lacking in the world about to be born. It will be a nasty time!

The Rube Goldberg contraption that is the present monetary and financial system of the U.S. - and all other countries as well - is ridiculous and destined to fail, inevitably.

Thanks for reading!

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOLITEx|tenforeLove your link to the STREAMING SPOT chart, Sir YGM !
BUT, I do not know if there is getting to be TOOOOO much volitility in the GOLD market ?
Some of the Hobbits are getting "seasick" !
I shall have to just send them back into the MINE !
That always makes them calm.
HOLD ON to your hat, as the ride is only going to get WILDER !
<;-)

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With the ff market slightly higher than FOMC target in anticipation of Tuesday's scheduled policy meeting, the Fed's trading desk responded with $15.75 billion in freshly injected money to the nation's banking system. Of this, $7.75 billion was provided through overnight repurchase agreements at terms scant over 2 percent, and in the best predictor of next week's policy decision, the remaining $8 billion, arranged through 14-day repurchase agreements, was provided at an average cost to the borrowers near 2.15 percent.

As I've said before, this does not bode well for the dollar because, under the present int'l system archetecture, the banana currencies are the ones who move their interest rates around (generally higher as compensation for forward weakness), whereas the key reserve currency may sit still at a very low rate simply as a reference anchor to all others. Clearly, things are awry from the 'operators manual' and in light of dollar depreciation despite the relative interest rates levels seen across the international board, a de facto abandonment of that old system is underway, right under our noses.

Choose gold to see you through.

R.

http://www.usagold.com/gold/special/DenBoard.html

December Buyers' Group


Denmark 20Kr Gold Coin Set

For the first time ever we have compiled complete date sets of the Denmark 20 Kroner Frederick VIII and Christian X gold coins. This collection has a representation for each year these coins were minted, beginning in 1908 and ending in 1917. The coins have been placed in a display case to preserve the state of the collection, making for an excellent presentation.

Available quantity is limited to a mere 37 sets, so we recommend quick action if you want to secure this unique piece of history. If this offer has you gift-minded for the holiday, place your order by December 10th to ensure pre-Christmas delivery to your door.

For details, please visit the URL above.

Orders can be placed online or by calling the trading desk.
Order yours today!

1-800-869-5115 Ext. 110

It's kind of cheerful seeing the equities up nearly every day like today, isn't it?
It means someone's satisfied with what they paid for at least- a happy shopper. And it's that basic consumptive trade. Capitalism. The American Way.
Here in my USA, the holiday season begins when most people are happy with the spirit of giving, planning for the new year or out shopping.
This mood seems right for the stock markets. Even if it seems unnaturally ebullient, Noel, Christmas, Xmas has been a commercialized event for what seems like forever, and no one will deny that a tradition isn't a tradition until most people take ther old one for granted.
What harm is there in the season to be jolly? Certainly not having that extra, strong boost to deserving retailers and credit issuers? After all, they rely on it, or at least they used to before they diversified and merged into other industries.
Yes, overall we Americans and the industrialized markets who idolize us, do look so forward to browsing, even struggling along cluttered rows of monolithic malls and departmented stores with their recycled gadgets, garments and gizmos. It's just the ritual of overworked, underpaid shoppers unwinding, versus those that might think small or craft gifts themselves.
If someone's holding up the market, so much the better- not only is it our lifestyle, right and tradition. It's making the most of the year before it's gone.

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.

Thursday market excerpts

Comex February gold futures endured some follow-through selling Thursday but managed to hold a steadier course than silver in a much more liquid market.

Indeed, February prices managed to hold above Wednesday's low of $435 for most of the session on bargain hunting until a late burst of commodity and bullion bank selling dunked values briefly to $434 and fresh one-month lows. However, a rebound was staged late on to allow prices to settle at $437.20.

Many market watchers deem most of the heavy selling to have passed and expect a recovery to be staged Friday unless the U.S. dollar renews its push higher.

"I expect we've seen the worst of it and can now recover. But, as always, it all depends on the dollar," noted a floor dealer with a futures commission brokerage with a large hedge and commodity fund client base.

"Most of our customers have done all the selling they intend to do," he added.

Holdings of gold in the U.S.-listed exchange-traded fund streetTRACKS gained slightly to 91 tonnes from 88 tonnes as of Dec. 8. Traders said holdingsfell significantly from 103 tonnes the previous day, mainly due to redemptions based on arbitrage between the value of shares and gold bullion itself.

"In the first week of streetTRACKS, you were able to sell the shares at 70 to 80 cents an ounce above the gold price," said one U.S. gold trader.

"When that arbitrage finally came back in line, it wouldn't make sense to hold the shares, because you are going to pay 40 basis points to hold them when you could hold bullion instead."

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

HEADLINES

U.S. dollar continues climb from historic lows -- Today's AFX News

Dollar Rises Against the Yen After Schroeder, Koizumi Call Drop Unwelcome -- Bloomberg - Japan

Treasury debt prices reel on spotty auction demand -- UBS Warburg

Snow agrees to keep Treasury seat -- The Register-Guard

Euro finds feet below 1.33 dollars, market takes a breather -- Channel NewsAsia - Business

NY silver ends sharply lower; gold, PGMs fall -- Reuters.co.uk - Stocks & Shares

BoC's Dodge says forex on cenbankers' Jan agenda -- Borsa Italiana - News

http://streettracksgoldshares.com/us/value/gb_value_usa.phpHere is the update from GLD site today Dec /09/04
They bought no Gold over nite...

Total Net Asset Value Ounces in the Trust as at 4.15 p.m. NYT Total Net Asset Value Tonnes in the Trust as at 4.15 p.m. NYT Total Net Asset Value in the Trust
18 Nov 2004 260,000.00 8.09 114,920,000.00
19 Nov 2004 1,859,994.06 57.85 828,806,907.20
22 Nov 2004 2,799,952.98 87.09 1,253,785,205.50
23 Nov 2004 2,799,952.98 87.09 1,254,751,438.19
24 Nov 2004 3,099,933.30 96.42 1,390,568,824.08
26 Nov 2004 3,229,921.97 100.46 1,456,602,906.16
29 Nov 2004 3,329,909.96 103.57 1,502,482,070.50
30 Nov 2004 3,329,909.96 103.57 1,509,624,832.88
01 Dec 2004 3,329,909.96 103.57 1,507,776,858.64
02 Dec 2004 3,329,699.18 103.56 1,512,255,390.24
03 Dec 2004 3,329,699.18 103.56 1,493,759,189.63
06 Dec 2004 3,329,699.18 103.56 1,508,360,596.14
07 Dec 2004 2,829,802.88 88.02 1,278,328,839.45
08 Dec 2004 2,929,780.58 91.13 1,279,831,486.60
09 Dec 2004 2,929,780.58 91.13 1,280,403,410.75

#Updated between 6.00 a.m. and 6.30 a.m NYT next day


Now the QUESTION..How can the Net Asset Value go up by
$571,924.15 when the total Tonnage of Gold held did not change and Gold declined (as per London Fix) from $445.75
to $436.00 on Dec 8th...In fact it declined in all of the last 5 days of trading....What am I missing here?...YGM

NAV as cited was up by half million $ because the London PM Fix on which it is based was 20 cents per ounce higher today than it was yesterday.

R.

@Belgian Msg #127227

Ahhh...how deep is the Snow? I wish I knew what lies beneath it. And is it light and fluffy, so as to be easily blown away with little effort and mishap...or is it heavy and wet, sticking to everything, and with hard, icy lumps that might hurt a lot (of people) if it gets the wind behind it...

One wonders at the dynamics in this transitional administration. It seems to me that the only ones relishing the next four years are Wubblu and his new Rice-paper-thin Secretary of State. (Apart from the neocon minders in the gloom behind the stage, pulling strings and shoving levers, for all they are worth...a cynic might say they are "punching above their weight".)

OK...the one shining light of the outgoing administration (Colin Powell) is leaving "politely", like the good (outstanding) soldier that he is...doing his damndest to bring both global sanity and national loyalty in his last hours at the helm (a difficult juggling act, under the circumstances). Rumsfeldt is still there, but with greatly diminished credibility at home, internationally and (especially) amongst the military. Other lesser-lights are going or have gone.

Greenspan, the anchor man (not formally part of "the administration", but an important counterweight) is there "inspiring confidence" in the in the economy, if not the currency ... but he is 78 and could pop-off at any time.

So...that leaves Snow... Even Wubblu is not so vain or so dumb as to realise that carrying through with his desire (as recently leaked from the White House) to replace the good Snowman at this stage would send perilously destabilising signals to the global financial community - potentially causing a full-scale run on the dollar and, in that one stroke, removing any hope that (a) he will be able to enact economic reforms at home (b) continue to fund the war in Iraq and (c) engrave his name in posterity as a "great wartime president".

Aside from the risks to the dollar, the good Snowman may contain some unpleasantly hard lumps. Wubblu may jar his ankle if he sticks in the boot too hard; and those flying lumps may do untold damage in all kinds of known and unknown places. Though perhaps not one whose integrity has been demonstrated beyond doubt in strong public light, like Powell, I suspect Snow may well be a man of integrity, trying to be both loyal to his president and strongly proud of and of service to his country, America - the two sentiments do not necessarily overlap. As treasury secretary, one gets to see the inner recesses of lots of places (Fort Knox, for example)...not all of them spotlessly clean. He would know (as O'Neil did before him) where America is headed unless it receives leadership of selfless grit that is true, honest and capable of inspiring its people to follow along a road that may be both hard and unfamiliar. Like O'Neil, he may be prepared to say so...

No...the Snow is not going to be blown away, but will be allowed to melt slowly in the light of another day...

Just thinkin' out loud...

FWIW

;-)

My city has two coin shops. I have visited both on many occasions, and always found a plentiful supply of bullion coin and junk silver. Today, one shop could supply !one! Maple Leaf while the other had only a single $100/face bag of 90% quarters.

I thought this might be due to the current price dip, but I was told the lack of supply had persisted for some time. Both shops suggested they "could get what I wanted" but I wonder, since neither shop is in the habit of going without stock.

These shops each had a number of prospective customers and the odd "hanger-on". There was a palatable sense of anxiety and tension, where in the past things had always been cordial and easy-going.

Fortunately my mission was only to "add on" so there was no great dissapointment, but it feels un-nerving to have a regular supply go dry all of a sudden.

Well, I'm just musing out loud, but thought some might find this "interesting".

Have golden evening!
- Survivor

http://www.comcentral.com/mp/play.jhtml?reposid=/multimedia/tds/celeb/celeb_9069.html
Follow the link to a very candid interview with Jon Stewart of Comedy Central.

Best Wishes

The Good:

The ETF has aleady greatly increased public awareness about gold as an investment and provided a means for many USDs to enter the gold arena that either couldn't or wouldn't have been here otherwise. The more individuals with money on the table, the greater the pressure to provide appropriate governance in the market. For example, I like seeing published lists of numbered bars opened for scrutiny. I like seeing our esteemed colleagues studying and bringing into the open questions about their validity. I like the fact that we will be able to follow an individual physical gold bar's movement in the marketplace. The pressure from investors on the ETF to keep the bars in the primary custodians hands should be tremendous as it is those bars that are both inspectable and auditable. All bars are currently being held by the custodian. If we begin to see bars being held by the subs, or worse yet, the sub-subs, time to worry.

The Bad:

When you own shares of this ETF you own just that, shares. Paper. Unless you are a principal, you can never exchange them for Physical Gold. However, keep in mind that if the product performs as intended, each share will represent 1/10 oz. of physical unencumbered gold held by the custodian(s).

The Ugly:

The inauditability and uninspectability (are those words?) by the Trustee of the PG held by the sub and sub-subcustodians. Reminds me of the early US bankers issuing many more paper gold dollars than they could possibly redeem in PG. Led to a collapse before, certainly could again. Very, very ugly.


Still, as this product evolves and competitors emerge, if I can hold back my innate fear and paranoia, the potential to educate and involve the public in holding gold as a wealth asset is tremendous. As we look back, it may even be a turning point in the history of gold. If/When that happens our PGIP will be much more recognizable, liquid, acceptable, and valuable as money and that will be a good thing.

I'm anxious to see where this trail leads!!! It won't be long before we find out.

Remember:

Often imitated. Never duplicated. GOLD.

Noble1

Think you are getting very close with your view on the Snow affair. Especially after what happened with O'Neil. I hear some rumors about Bernanke as well (?).
In the mean time, the currency struggles keep on going. And the one who says currency...also thinks about gold.
And all the debt, that currencies intrinsically are...loses all credibility (utility) when gold says so,... by exploding. That's why gold has to be taken "out" of its currency context.
Holders of the Treasuries and central bankers, are facing though dilemmas that come rushing towards them. They will have to take far reaching decisions, some day. All muddlings do have an end. Thanks Sundeck.

GAB, there must be "more" than what you reflected on this new expression of "open mind" !
Today, Saudi Arabia the oil central banker, goes to another OPEC meeting in Cairo...after the oilprices crashed down 24% in no time...and the oil central banker says that it will come with an open mind !
Hey...even Jude Wanniski (polyconomics.com) woke up and opened his mind too...with...oil AND gold !

Remember that central bankers (Trichet), oilpeople and the Chinese, were gathering (informerly) in Vienna...just before the POO crashed...

Let's change the old play of "cheap gold" for "cheap oil" !?
Let us open our minds...for the concept of " FLOATING GOLD " !?

Let this planet have its "FreeGold" and all the oil you want is yours !? Disconnect gold from currency and let this planet keep using its currencies as numeric utilities for trade settlement !?
Then, the dollar (system) is relieved of its constant gold-burden (management-intervention) and the world keeps turning around with less useless sufferings.

Sooooooooo simple ! Bring up the political will to do it ...and get on with it ! Cheap, abundant oil for everyone and freegold as a universal store of wealth for everybody.

I would warmly wellcome such an evolution in the minds...

http://www.detnews.com/2004/autosinsider/0412/03/autos-23405.htmOoh, I thought one could produce cars with US-paper.

http://www.heritage.org/Research/TradeandForeignAid/wm383.cfm"Unhappily events took a different turn in 1973, and we found ourselves in a different and unsettling environment. On Aug. 15, 1971, President Richard Nixon convened his advisers at Camp David to abandon economic freedom overnight. He introduced wage and price controls and incidentally closed the gold window and collapsed the Bretton Woods Monetary System. These events dominated the decade of the 1970s, later known as the malaise decade.

The conventional wisdom, of course, is that 1973 was the year of the oil embargo, when the Organization of Oil Exporting Countries set the price of oil soaring. But OPEC's actions were a direct result of the August 71 decision to close the gold window. How do we know this? Because OPEC told us so. Five weeks after the Nixon shock of August 15, it met in extraordinary session in Beirut and passed its Resolution XXV.140, which reads,

The Conference,

having considered the report of the Secretary General concerning the recent international monetary developments and their adverse effect on the purchasing power of the oil revenues of Member Countries;

noting that these developments have resulted in a de facto devaluation of the United States dollar, the currency in which posted prices are established, vis-a-vis the currencies of the major industrialized countries;

recalling Resolution XXI.122 which calls, inter alia, for adjustment in posted or tax-reference prices so as to offset any adverse effect resulting from de facto or de jure changes in the parity of monies of major industrialized countries:

resolves

1. that Member Countries shall take necessary action and/or shall establish negotiations, individually or in groups, with the oil companies with a view to adopting ways and means to offset any adverse effects on the per barrel real income of Member Countries resulting from the international monetary developments as of 15th August, 1971.

2. that the results of negotiations shall be submitted to the next Conference. In case such negotiations fail to achieve their purpose, the Conference shall determine such action as necessary for the implementation of this Resolution.
"Such action as necessary," at least in my suspicion, included the 1973 Arab-Israeli War, the immediate impetus for the boost in oil prices. As their 1971 declaration shows, the sheiks of OPEC understood the implications of the closing of the gold window far better than the Western elites did. The severing of the link to gold meant a great inflation was coming, though repressed by wage and price controls to get past the 1972 election.

Again, a handful of economists understood what was taking place, but could get no one to listen. In particular, Robert Triffin of Yale warned prior to 1971 that the huge accumulation of international reserves made a world-wide inflation inevitable. Under the Bretton Woods arrangements, the Federal Reserve in effect served as a world central bank, creating dollars that served as reserves for other banking systems. Its creation of reserves was in theory limited by a $35 gold price, and for a brief period of time the public could actually redeem gold at this price through the London Gold Pool. But the Gold Pool was dissolved in 1969, and the Fed would redeem gold only from other central banks, who were discouraged from presenting claims.

So dollars created in financing the Vietnam War accumulated abroad. Finally the Bank of England asked that its dollar holdings be protected against a devaluation of the dollar; This was taken as a demand for gold, and led directly to the Aug. 15 meeting, wage and price controls and the rest. Again, the correct answer would be to keep the gold link but change the price, increasing it to provide the liquidity the world economy needed. This was in fact suggested by Jacques Rueff, but rejected by American elites because it would benefit France, which held large gold stocks, and South Africa, which produced gold.

Instead, U.S. policymakers in the 1970s reversed the mistake of their counterparts of the 1920s. Where the latter had imposed a deflation, the former unleashed an inflation. Inflation of course always creates winners and losers. In this case, the Arab sheiks were clever enough to get to the head of the line, insuring that they were the winners."
------------------------------------------------------------------------------------------------------------------------
I don't agree completely on Bartley's other opinions, but he is one of the only ones who connects directly the closing of the gold window with oil/dollar.

Today we see "how" price-inflation (PRICE !) has been contained. Oil has a huge partner now...Those that produce and have been putting a dam against price-inflation. Asia !
That's what the recent "gold-re-distribution" is (was) all about.
The Big preparation for "floating gold" ! Once the productive ones AND the providers of energy, do have freegold...everybody will be happy, except for the dollar-system that will see its dominance being reduced and forced to co-operate with the submitted. On a level playing field, that is. "Fair" competition !

It speaks for itself, that such a transition doesn't go with a lot of nasty armtwisting and war. But soon, we will realize that there is no other alternative. That's exactly WHY the euro (concept) came into existance.

Thanks 986.

[miningmx.com] -- CENTRAL Banks could drop positive clues about the gold price by not meeting the 500t/year quota as determined by the Washington Agreement, said Kelvin Williams, marketing director for AngloGold Ashanti. The renewal of the Washington Agreement, signed this year, places a total 500t/year limit on all official sector sales.
In an interview with miningmx, Williams also said central bank attitudes towards gold had changed because its profile as a store of value had been rehabilitated. "The central banks have started to behave in an orderly basis and on an ordinary basis, treating the gold market with the same kind of respect that they would treat the market of a currency of another central bank," he said.
"Instead of behaving towards gold as if it had no owners, they acknowledge a kind of consensual ownership in gold. That's been a big plus and it has sterilised their [the central banks] negative impact on the market and has made them a neutral and known entity," he said.
It was conceivable that, in the next five years, central banks would become a positive gold sentiment indicator because the central banks "... don't particularly want to sell what gold they've got; that on the whole, the role of gold as an official sector store of value has had some rehabilitation," Williams said�
------------------------------------------------------------------------------------------------------------------------
"central bank attitudes towards gold had changed because its profile as a store of value had been rehabilitated"
Is this the start of the public revaluation of gold ?

There's more than the custody issue in this new ETF to give birth to a multitude of manipulation theories. For instance the cast of characters acting in this play on gold is remarkable by itself:

The Sponsor World Gold Trust Services, LLC which is wholly-owned by World Gold Council

The Purchaser UBS Securities LLC

The Trustee The Bank of New York (BNY).

The Marketing Agent State Street Global Markets, LLC, a wholly-owned subsidiary State Street Corporation

The Custodian HSBC Bank USA, N.A

The Custody Agreements English Law

The Subcustodians The Bank of England, The Bank of Nova Scotia (ScotiaMocatta), Deutsche Bank AG, JPMorgan Chase Bank, and UBS AG

The Subcustodians of Subcustodians Unnamed Anonymous Players

Authorized Participants Bear Hunter Structured Products, LLC and UBS Securities LLC (other AP's will join the cast as needed)

The Shareholders The Investing Public

This is a wonderful cast and the starring roles are played by some of the investing world's finest actors, able to transform themselves into whatever their character and the script calls for.

For instance, The Authorized Participants have a wonderful opportunity to display their acting versatility. These are the folks that gather up gold in 10,000 oz baskets and deliver them to GLD for 100,000 shares of freshly printed GLD shares. They sell these into the market at whatever premium (or discount) the shares may have relative to the gold they delivered to the ETF. The following advice is offered by the script aka "The Prospectus", page 51 :
"Certain Authorized Participants are expected to have the facility to participate directly in the gold bullion market and the gold futures market. In some cases, an Authorized Participant may from time to time acquire gold from or sell gold to its affiliated gold trading desk, which may profit in these instances. The Sponsor believes that the size and operation of the gold bullion market make it unlikely that an Authorized Participant's direct activities in the gold or securities markets will impact the price of gold or the price of the Shares. Each Authorized Participant will be registered as a broker-dealer under the Securities Exchange Act of 1934 (Exchange Act) and regulated by the NASD, or will be exempt from being or otherwise will not be required to be so regulated or registered, and will be qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants will be regulated under federal and state banking laws and regulations. Each Authorized Participant will have its own set of rules and procedures, internal controls and information barriers as it determines is appropriate in light of its own regulatory regime.

Authorized Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants that wish to create or redeem Baskets. An order for one or more Baskets may be placed by an Authorized Participant on behalf of multiple clients. As of the date of this prospectus, Bear Hunter Structured Products, LLC and UBS Securities LLC each intend to sign a Participant Agreement with the Trust and, upon the effectiveness of such agreement, may create and redeem Baskets as described above. Persons interested in purchasing Baskets should contact the Sponsor or the Trustee to obtain the contact information for the Authorized Participants. Shareholders who are not Authorized Participants will only be able to redeem their Shares through an Authorized Participant."

This is a marvelous role. The Authorized Participants can have their cake and eat it too. An actor's dream role to fame and fortune.

I'm sure we can all imagine wonderful ways that this cast can ply their trade in most profitable ways. But it troubles me that The Shareholders, the ones that provide the money to stage this play, are really no more than an audience. I wonder if they will be cheering when the curtain falls.

Let us smile, mate. This AA reflexion takes a bigggggg leap "around" the real, ongoing, hart of the gold-matter. How shrewd (hypocritical) !

CB start to "behave"...a changed "attitude"...respect...treat the "market"...
This talk comes from a pillar (AA) in the decades old ,dollar-gold collusion !!! What a farce.

If gold, as a store of "value" (he can't say wealth), has had some rehabilitation...what was this gold than doing in the official sector vaults, during the past 25 years !? Bear in mind that AA was one of the biggest (colluding) gold forward sellers.

Of course 986...we are getting closer and closer to the "public" (!!!) re-valuation of gold. But that this hint comes from one of the biggest aides (AA) in the gold-management, is a bit cynical to me.

Euro CBs + dollar-allied CBs, were the ones who have been making gold-resistribution commitments. The only CB that remained/remains absolutely silent on its gold-value-wealth-reserves is the Fed and US-Treasury. Because they are the prime managers of the globe's reserve currency ($). And the dollar-CB-Treasury's attitude towards the value/wealth of goldreserves are different than the rising competitor's CB(s) (�).

K.Williams (AA) keeps talking very caustiously and in very general terms, without naming the different "horses" (CBs).
More importantly, he forgets to tell us, WHY the changing (different) gold-attitude of the different CBs is evolving after 25 years of gold-management, supposedly NOT being a store of value ! AA is the N�2 biggest goldminer and not elaborating on the status of its one and only product !

Soon, the goldminers' status will be reviewed (as well) when gold is not only going to be partially re-valued (K.W.) but completely restored in its ancient function of "universal store of wealth". That's why K.Williams (AA) talks whilst walking on eggs.

The one and only clue of ETF and all other goldpaper is childishly simple : Settle gold in paper and avoid as much "physical" goldtrade as possible ! Simply because it is impossible to have a free trade in physical gold AT THESE DECADES OLD OBSCENE PRICES !!!!!!!!!!!!!!

When are people finally going to question the ultimate, all embracing, *** PURPOSE *** of the swelling tsunamis of derivatives !? Answer : When the whole paper-bazaar explodes and all the bombastic yadayada-gurus are gone !

Soon the whole productive world will be dominated by the ever growing leverage power of "unproductive" hedge-funds.
An absurd cancerous anomaly that will have had its time, sooner rather than later. Real Wealth doesn't belong in unproductive domination tools that exploit the competing producers.

Paper has become the modern barbaric relic...NOT GOLD...the metal of course. This upside down world will soon realize that all the body's blood has accumulated in the brain and is responsible for all the idiotic behavior.

http://www.usagold.com/gold/special/DenBoard.html

Let the fireworks begin

http://www.fff.org/blog/index.asp
Snippit
"The demise of IBM's PC operation makes an important point about the ridiculous and destructive nature of federal antitrust legislation."
-----------------------

I offer this food for thought to those who support anti-trust "protections" from the gold cabal.

Best Wishes

Just the look at the graph of gold's price through the early hours of today (at the "other" site) gives me the impression that gold is ready to revive and renew its ascent. Look at the sharp up-and-down movements...the buyers are out in force and if not met with sellers, the price would be CONSIDERABLY higher right now...this will fatigue the sellers - there are far more buyers than sellers at present prices, in my opinion. (The fact is, available gold from production does not satisfy world demand, and if the banks are holding back...something has got to give!)

If not later today, we shall see a strong upmove on Monday.

Just my feeling. The GAB

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh10121_2004-12-10_10-41-58_pek201749_newsmlBEIJING, Dec 10 (Reuters) - Apparently seeking to soothe market concerns, China said on Friday it has not cut the U.S. dollar assets held in its $540 billion foreign exchange reserves and would not make changes based on short-term market moves.

It also pledged to tighten its crackdown on "hot money" flows, or speculative funds seeking to make a profit from a possible rise in the value of the yuan...

Recent media reports that China was selling U.S. Treasuries caused jitters in global markets and hit a U.S. dollar already suffering a broad-based decline, which analysts said in turn put more pressure on the yuan to rise.

------(see article at url)----

As is almost always the case in matters like this, more important than precisely what is being said is the very fact of the matter that such an issue as this has cropped up in the first place.

In all your days you have only seen the dollar's merit as an international reserve seriously questioned during the 1960s (in which heavy rumblings for gold resulted soon thereafter in the implosion of the international B.W. gold exhange standard) and rumbling continuing during the 1970s resulted in IMF gold restitutions and some U.S. Treasury auctions that nonetheless witnessed gold reach $850 per ounce by January 1980.

And here we go again, albeit on a greatly accelerated timeline of evolution.

On the related issue mentioned here again, to review some of my initial thoughts on the problematic flows of "hot money" and a potential use of gold to assist in the solution, I refer you to the following:

TownCrier (10/13/04; 10:56:00MT - usagold.com msg#: 125469)
SUBJECT: Rising gold similar to Monopoly's Get Out of "Jail" (i.e., a jam) Free card

Simply use the "(Forum Archives)" link atop this page to navigate to that date.

R.

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

'Tis the Season!
Give the Gift of
GOLD JEWELRY

My take on Snow's continuation is that he is one of two, GWB and Treasury Secretary, who are needed on a continuous day-to-day basis to approve ESF activities in the market places. Hence there can be no vacancy in the Treasurer's chair during times of volitile markets. He's a puppet who's needed on the strings to keep the show going. The show must go on!!

Unfortunately, I find it difficult to understand what the author is trying to convey here, as his story is far from from factually accurate.

1/ "Do you remember when the feds were viciously attacking IBM during the 1970s, when IBM was pioneering the PC industry?"

No, because the PC came out in the '80s.

2/ "IBM and its monopolistic control over the PC industry are exploiting the consumer!"

No, it was the mainframe monopoly that was the issue, which IBM is still exploiting (profitably) to this day.

3/ "Well, if IBM was so powerful, then why did it finally lose market share in the PC business? If a firm is an all-powerful monopoly, as the feds alleged, then why wouldn't it still be all-powerful, exploiting and getting richer and more powerful as each day passed?"

IBM didn't have a monopoly on the PC - it was an open architecture. The two companies in the PC world that did - Intel and Microsoft - have gone from virtually nothing to two components of the Dow in the intervening period.

IMHO, Mr. Blog has missed the target, big time.

C!

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh16718_2004-12-10_16-00-44_n10385719_newsmlNEW YORK, Dec 10 (Reuters) - U.S. gold futures slipped but held above a one-month low on Friday morning, as this week's more muscular dollar continued to spark profit-taking and the lightening of long positions in the precious metals.

In other precious metals, silver fell about 1 percent after losing around 15 percent Wednesday and Thursday, while platinum rose and palladium was barely changed.

Benchmark metal gold was gyrating up from session lows near $432 an ounce as traders digested moves in currencies after they shrugged off mainly upbeat U.S. economic data.

TheBullionDesk.com said in a daily report..."Moves higher by gold are likely to be met by further profit taking, while downwards pressure should continue to find good scaled down support from physical and bargain hunter sources."

"It's jobbing around on the dollar," said a gold trader at a bank.

"There has definitely been a lot of liquidation. Everyone is still long everything, so the end of the year comes and you try to put something in your pocket."

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

Everyone likes Christmas shopping sales, so think of the latest move as a $20-off holiday sale, and let it be nothing short of solid gold that you put in your pocket by year end.

R.

I have commented a couple of times in the past about the stupifying amount of "value" change is represented by the back -and-forth swings in the currency rates. Sinclair puts it rather neatly today, in his inimitable, curmudgeonly fashion :-

"Markets everywhere, especially in currency and US Treasury instruments, have become akin to pure casino games. Anyone who accepts the degree to which both move in single sessions as being something normal is is world-class nitwit. We experience a crisis a day and look the other way. That might buy time but it will not prevent the final cataclysm that a crisis a day always produces."

Well, I guess that means I'm not (necessarily) a nitwit, in his eyes.

C!

http://www.forbes.com/feeds/ap/2004/12/10/ap1704225.html12.10.2004, (AP) -- OPEC agreed Friday to reduce output by about a million barrels a day in hopes of staving off further price declines without triggering a new buying frenzy, delegates said.

Sentiment for turning down the spigots gathered momentum earlier this week when oil giant Saudi Arabia indicated it was receptive to the idea.

"It's important that we stop the collapse of oil prices," Saudi oil minister, Ali Naimi, told the London-based Arab newspaper Al-Hayat.

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

Meanwhile, I have learned today that President Bush has appointed U.S. Deputy Secretary of the Treasury, Samuel Bodman, after serving one year in that capacity, as the new secretary of the Energy Department.

Prior to that post, from 2001, he served as Deputy Secretary of the Department of Commerce.

One news report says that "...Bodman will inherit some of the daunting challenges facing the current administration: continuing concern about soaring oil prices, and a winter that is predicted to bring record-high heating costs. Although crude prices in recent days have eased from staggering highs--topping $55 in October--they're nonetheless remarkably high. Crude oil futures climbed past $43 per barrel Friday, after OPEC agreed to cut oil production by 1 million barrels per day."

It shouldn't come as much surprise to see how closely linked are both the fiscal and energy matters when the same single individual, from a very broad pool of possible candidates, is put in the position to serve so prominently in each of these two capacities.

R.

at least not "world class" !
<;-)

Yep, you just couldn't resist that one, could you ?!
C!

In order to justify anti-trust law, one must assume that government is motivated by the goal of serving the public interest.
The truth about government is quite different.


Best Wishes

http://www.whatdoesitmean.com/index575.htm
As if the man-handling of gold and silver this week weren't insult and injury enough, I just read the following article on the latest to come from the US Senate and House of Representatives. The House of Representatives passed it on 12/7 and the Senate on 12/8.

It seems our "National ID" is in high gear to come to every man, woman and child in the once-great USA. Bush lobbied hard for this and, according to the article, only opposed it when a senator proposed that the same provisions be required of illegal aliens. Let me get this straight -- the Federal government wants the individual States to surrender their regulatory rights over driver's licenses and birth certificates for US citizens...but the Fed doesn't want the same authority over illegal aliens?

Oh, this is another terrible day in the USofA.

Lady GFG

(I don't post often, but read here daily. An ongoing "thank you" to everyone here).

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

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

Friday market excerpts

Gold futures closed at a one-month low Friday, tallying a loss of 5 percent for the week as strength in the dollar weighed on prices ahead of next week's Federal Reserve decision on interest rates.

A sharper than expected rise in U.S. wholesale prices fed growing expectations that interest rates will rise next week and over the coming months, pulling the dollar higher.

Against this backdrop, COMEX February gold closed at $435.30, down $1.90 for the session. The metal racked up a one-week loss of $22.50.

"Market volatility has obviously picked up and could remain high for the foreseeable future," said Dale Doelling, chief market commentator at Bullion.com in Chicago.

"The good news is that it only took a couple of trading sessions to take gold from highly overbought to its current oversold condition, and this could provide traders with a good enough reason to get back on the buying bandwagon," he added.

Peter Grandich, editor of the Grandich Letter, pointed out that over the past two years, gold has hit certain key prices and sold off sharply, but "each time it hit them, the sell-off was shorter in duration and eventually that level was taken out. This pattern of trading is ideal and is common in secular bullmarkets," he said, so from here, the market will likely take "two steps up and one back [and] continue all the way to $500-plus."

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

The following is from an ISDA (International Swaps and Derivatives Association) communique offering members guidance on the upcoming revamp of the Turkish currency system.

REDENOMINATION OF TURKISH LIRA

December 10, 2004

Effective 1 January 2005, the Republic of Turkey will redenominate its currency by dropping six zeros.

Turkey's currency will be renamed "New Turkish Lira" and "New Kurus", with one hundred New Kurus equal to one New Lira.

It is intended that the term "New" will eventually be dropped.

Turkey has also made announcements concerning rounding, references to old lira in legal documents, and Turkish tax. Information about the redenomination has been published by the Central Bank of the Republic of Turkey and is available in English at http://www.tcmb.gov.tr/yeni/eng/ under the heading "New Turkish Lira".

We understand that many ISDA members have already begun taking steps to prepare their systems to receive New Turkish Lira, and, in the case of outstanding trades, to adjust for the redenomination. Other members may wish to take similar steps in this regard and notify their counterparties to inform them of the redenomination, if they have not already done so.

It is worth noting that the redenomination of Turkish lira involves a relatively straightforward change involving a single currency. ...continuity concerns, and some of the concomitant tax and accounting concerns, are not expected to arise with the redenomination of Turkish lira.

Under the governing law of the ISDA Master Agreements (either New York or English law), the redenomination would be extremely unlikely to constitute the type of radical transformation or impossibility necessary to frustrate an outstanding contract. In addition, as a matter of Turkish law, all references to old Turkish currency in legal documents shall be considered to have been made to New Turkish Lira.

It is expected that New York and English law would operate in a similar way by reference to this Turkish rule of law regarding Turkey's lawful currency (the lex monetae), assuring the continuity of outstanding Turkish lira contracts.

The definition of "Turkish Lira" found in Section 1.7(ag) of the Annex to the 2000 ISDA Definitions ... states that "'Turkish Lira' and 'TRL' each means the lawful currency of the Republic of Turkey". Members should note that the ISO code for New Turkish Lira will be "TRY", and Turkey will have both TRL and TRY as currency codes in 2005.

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

It isn't the new currency, per se, that is my focus here, but rather the fact that the currency had in fact depreciated to the point where notes had six zeros. Consider this -- EVERYONE with a note in their pocket was a millionaire, but they certainly weren't wealthy. This is how paper savings can be rendered worthless, where yesterday's earning of few zeros are always pitted against today's prices with more zeros. Eventually so many zeros requires a resetting of the boards from which it all begins anew.

Choose gold. It's value endures as the zeros come and go.

Today an ounce of gold in Turkey is valued at 623,000,000 lira.

R.

Economic Team

Snow: We support a strong dollar.

Bodman : We support energy independence.

Treasury : We support deficit reduction.

Administration : The social security fund is near collapse and needs reform.

HOGWASH

The deficit so far in the 2005 budget year reached $115.2 billion against $112.5 billion
in the first two months of fiscal 2004.

After increasing the debt 50b in Oct, and 96b in Nov, 25b in Dec. and counting.

http://www.publicdebt.treas.gov/opd/opdpdodt.htm

Huge surplus in social security, enough to last 40 years!

...considering todays total confusion on relative values in terms of fiat and gold:

Here's a brief excerpt of Tim Wood's; Cyclesman site -

"There is a time to hold stocks. There is a time to hold bonds and there is a time to hold gold. My opinion is that profits from gold should now be taken and held in cash".


... and no, I'd be far from underwriting such nonesense, as I've been far from underwriting any TA in times of utter market management.
(Here, I should note to have met up T.W. briefly and read an introduction to his following EW and Dow Theory - though brilliant rhetoric - expose' and was somehow left with a feeling of utter desolation).

OK, just to go back to the above quote - what profits and what cash comes to mind?- and not only for an � participant. And really, who in his right mind would want to hold cash (fiat IOU's) at negative IR anyway.

So here we are - having had all the warnings ever that the US$ is oversold, gold overbought and presto the picture changed overnight! OR DID IT?

Nay, I'd say! It's only another bunch of weak hands which has got shaken out, while the overall dismal picture of irredeemable US debt has become more extreme.

A real bull market in gold - as experienced over the last few years vis a vis the US Currency - will become reality and a true secular trend, when gold will start to appreciate against all paper fiat (confetti - thanks Belgian) currencies.

The US "regime" (and not only its FED) is furthering this long term trend by advocating reckless borrowing. In the end 'beggar thy neighbor', or competitive devaluation will be the name of the game.

... and then even Einstein will admit that relative to gold there may be no value nor wealth!

cb2

PS ... Did I write above? Please also be reminded that some serious co's are vying to find and produce same reality! Not relativity... reality!

PPS ... The ETF discussions are totally beside the point, as I see them as "another" substitute for the last vestige of ir-reality. And yes, dangerous for the short term markets, in particular as the WGC ETF Gold Fund has proven the onerous role of the World Gold Council - a synonym for all the wrong reasons to own the reality of gold.

PPPS ... Or'Well it's relatively easy to rant ... as long as you don't have to pass immigration at any US destination. Fingerprints and mug shots are as sure as the wellcome to the US, subtitled Homeland Security ... somewhat familiar to Europeans before neo-con's were called by an old Latin word - Fascis - !

PPPPS: ... Sorry for ranting and @ MK -pls feel free to - eradicate relative to your own wisdom! Thank you!

You've been brainwashed if you think social security has a surplus that means anything.

Since you're obviously already aware of the unified (net) budget deficit, why don't you now try explaining to us all exactly HOW the social security system can draw upon its "surplus" which is technically just another bunch of specially earmarked bond commitments of the Treasury. When the issuing agent is already completely in debt, how do you figure the Treasury's debt securities being held in the name of Social Security qualifies as a surplus by any stretch of the imagination?

You better get your fundamentals understood before you go quoting cashflow factoids as if they had real meaning. In this case Social Security's pay-as-you-go cashflow "surplus" means absolutely nothing.

@Belgian Msg #127262

Ahhh...paper derivatives, you just can't get enough!

Last week I received a promotionl email from my on-line broker advising me that they had kindly reserved for me a $10k allotment of "Multiplex SITES", meaning "Multiplex Step-up Income-distributing Trust-issued Exchangeable Securities" a new hybrid security...

This message is neither an endorsement nor otherwise for this paper product, it's just that I was struck by the product's title and thought to myself: "How like Belgian's post about 'the swelling tsunamis of derivatives.' "

There really is no limit to the "creativity" exhibited by the modern financial fraternity. Will these products all become "barbarous relics" as Belgian suggests; or "naked swimmers" when the tide goes out, as Buffett suggests?

All these diverse products are leveraged, perhaps several times over, off underlying things of value (like residential housing, retail property, or gold in the case of the GLD ETF). The real wealth is held by others and the "investing public" - not a term Ben Graham would have used for products like these - hold the promises and take the risks of exposing all "when the tide goes out", or the tsunami recedes...

Disclosure: I declined to take up my $10k allottment, and offer no advice as to what others should do, on the grounds of it being "horses for courses".

:-)

Sundeck

PS: Hey, let's think up a catchy name for a new derivative product...how about an "IAUSGGHLIEBEPIDA" = "Inflation Adjusted, US-Government Guaranteed, Highly Leveraged, Irrationally Exhuberant Bond for the Exhorbitently Priviledged Investor of Diminished Appetite"

;-)

Great post Sir 968. This Williams, comes out and states, "Central bank attitudes towards GOLD had changed because of its profile as a store of value has been rehabilitated". Well, Beat me with a stick! Oh! your not going to treat it like a Barbaric Relic anymore? Hmmmm. Could it be that the infusion of 15 tons of Gold into the market did not meet your expectations and the support of gold at $434 is the Publics Revaluation of Gold as Sir 968's statement. I think the CB's could not leave the sleeping dog alone. They equated gold to a casino gambling chip and lost. They abandoned all economic sense for a few percenage points and greed. England feels the pain of her mistake. Argentina will be better off with its accumulation of 40 tons even with dealing with the IMF. This Gold ETF which I reguard as a tool to suppress the POG did not accomplish what TPTB envisioned. Why? Gold at or above $450 has caught the eye of the mid level investor. The small time investor for the most part would play to a weak hands but the mid level, like a shark will smell BLOOD. It is true and I believe what Sir M.K. said that gold at $500 is cheap. Has anything changed for the good since $300 gold?
My reading or indications say NO. The statement by Mr. Willians indicates to me they have blinked. Their belief that gold would continue to slide downward in price has some reservations with the introduction of Gold ETF's. Correct me if I am wrong but the $20 drop has been accomplished with less tonnage being dumped on the market. So the absorbtion rate is faster, producing a quicker support level than before which translates to a market that may absorb higher levels of golden infusion into the market.
This reversal with Saudi Arabia as to cut 1 million barrels of oil in production. First they turn on the spigot and now they turn it down. Must have loved oil at $55. Maybe they have realised Hubbert's Peak or the change to EURO's or Gold is not too far down the road. As Belgian stated as to Gold being restored to its ancient function of universal wealth, I do most firmly agree. All these electrons circling the nucleous (derivatives,IR's, ETF's) are collasping inward that will precipitate an explosion of Gold.
WITH ALL THAT SAID!

I turn my attention to the Lurkers who visit this Forum. To the regular astute posters I ask for their patience for Slingshot has achieved the Webster's definition of ,ad nauseum ;0) when posting. My postings are very CHOPPY in linguistics, but still I post. WHY? Because I have aways believed the Small Time Investor (STINT) has a role to play in the Great Gold Rush. This forum has many editorials from experts in the Hall of Fame. They may be the pinacles but for the foundation you will have to turn to is the forum archieves.There have been many who have left for whatever reason but still their opinion carries weight in future dialog amoungst posters present. Let me say that whatever posts were made,gives light to who we all are now. So all you Lurkers out there come on and post your words upon the forum for you never know, your simpliest question or statement can invoke a multitude of discussion and all can benefit from it.

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

Depressing Week? Heck No! Gold held up to its value above the 200 day moving average. Silver? Silver does as Silver does ;0) In fact I enjoy the volatility in silver as it shakes out the weak hands. Is Silver not controlled by a few? Yet these few who are making money now will find themselves swamped as Gold takes off out the reach of Joe Sixpack as he turns to silver to save himself. CAUSE AND EFFECT Kiddo.
National I.D.Being a Freedom Loving, Lady. Have no fear.
Slingshot------------<>

Thanks Randy..yes it very obvious when rereading how NAV is determined...They also have VERY POLITE letter responder at their site who clarified by emal today...YGM

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=LOW&b=LINE&st=We can see quite clearly here the transition from "commodity Gold" to "currency Gold" ... next will be FreeGold, of that I'm certain!
When? REAL soon, if they intend to maintain ANY credibility in Fiat on the way through.
As it stands at present, some Fiat-minded "experts" would suggest Cash as a good option "at this point in time".

Why? It all goes to "future" expectations. We are all aware of the flattening yield curve and how AG put in place those 3 hikes. The logic is:- as future expectations deteiorate,(sp) the Market is more prone to hold Cash than committing to longer dated (aneomic yielding) investments.
What those rate hikes did was slow down this move to Cash by providing incentive to linger a while in the short end. It's NOTHING to do with inflation.
So logically the only "solution" (as these systemic patches are only band-aids) is to Globally devalue against Physical Gold.

No amount of money creation can turn this Systemic Sucker back into a cyclical Inflationary Pig!

Nice to see a report about a coin dealer. I can tell you the major purchase is 1 oz gold Eagles and it flows to Maples and down to Krugs. Fractional coins are left in display and 1 oz are being ordered. Bags of silver? I did not see on the floor in their usual place but the display on silver had no large silver bulk. One and Five ounces were plentiful.
Slingshot-----------<>

I'd 2nd your comments if I may! There are some terrific thinkers and genuine from the heart posters that have disapeared from this great hall....Each familiar handle I see from past days (or new one) gives strength of numbers & purpose to those of us still on the trail of knowledge..
Regards....Ken

I might have to agree with Ag Mountains on this one. Social Security my well have a 1.5 trillion surplus that is held in US Treasuries, but the problem is the same as with any big stash of Treasuries, when you try to sell such a large amount , it will crash the system. It would be the same as if the Japanese or Chinese sold all their Treasuries.

The latest report in the press is that Social Security will run a 11 trillion deficit over the next 75 years because of demographic changes ( I'd sure love to have their crystal ball) .The basic point that Federal Reserves is making seems correct.Social Security is making money, not losing it.

...what does this mean:

"Huge surplus in social security, enough to last 40 years! "

To my fellow Ladies and Knights of the "Mighty Oaken Table of Yore", I give you Salutations. I have overcome the forces of evil and their influence upon nature to destroy me. Four times, the Dark Forces have sent the winds against me, but I still prevail, to tell the story that must be told to all, to survive!
That story is "The Prophecy of Oro"

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

It's even worse than that. My humble point was that even in a smooth-case scenario where the bonds weren't sold but were simply held til maturity so that the interest and principal payments in theory could be used by Social Security to make up for the future cashflow shortfall, even in that case the big question is this: where is the Treasury going to come up with the money to pay??! There isn't any surplus fund of cash to draw upon. So if the Social Security system reaches the point in the baby boomer income cycle where it no longer has annual cashflow income that it uses to buy Treasuries but actually needs to start relying on the bonds to supplement the entitlement cashflow stream to retirees, the Treasury which is already in debt and getting in deeper will have to issue new debt bonds to whomever (the Fed, maybe??) will buy them at whatever interest rate simply to be able to have money to pay on the SS notes.

Maybe you can explain it to Federal_Reserves better than I can, there is no surplus, only a big letter of debt that will try to get passed around like a hot potato to see if anyone will buy it.

So there you have it, when it comes right down to it even if the Social Security managers refrain from selling their bonds, the Treasury is going to have to sell new ones to pay off those old ones. And like you said, when the big buying spree rolls into reverse and turns one way or another into a selling spree, we'll probably be flooded with inflationary money by the Federal Reserve Banks as they buy the new bonds to keep interest rates as low as possible and ultimately get the inflationary numbers up to where the government obligations can be more easily cleared on a nominal basis but in worthless dollars. That's why we need to stop trying to save in dollars and bonds and start switching our saving into gold. It doesn't need to get forever passed around like an inextinguishable flaming potato.

is a secret way to make the tax system more regressive.

Income tax rates have dropped, social security taxes have risen.

The words from the old storyteller fell into a deep sleep. Those around him brought blankets to keep him warm from the night's chill. The dawn came ,yet they found him peacefully at sleep and his face at times moved as to give indication of what he was dreaming. But dreams they were not, for they were visions. Visions on which was to beset the Goldbugs and weeks past till the storyteller was again amoung the living.
************************************************************
He awoke, Gandalf BEWARE! and those about him put him at ease. Tell us more, they asked. A warm cup of broth was given him. As he siped the warmth he began to speak.He began to speak softly.

Gandalf knew he had to find Oro in the East. Hammerton would fall and all those within her would perish. He could feel Therroth rise from his earthly bonds by the forces given to Cyrus. They would then march south and slaughter all before them.
Slingshot----------<>

Whilst Bodman was publicly presented, the POO declined $2 ($40), after OPEC agreed to cut 1 mbpd and meets again next month.

This "type" of volatility is NOT a market-initiated one ! It are rapid changing fundamentals, behind the curtains, that have those brutal effects on the markets.

But...in the mean time...a deep undercurrent keeps on building...
Dearest forumers, reread Towncriers two titles : 1/ China not cutting US$ holdings and 2/ Rising gold is similar to the monopoly's "get out of jail" with freecard (B. >>> freegold).
What exactly is Randy trying to say ?

Part of the "hot money" is "GUIDED" into the yellow wealth metal. And it must be understood that this "guiding" should happen subtly...orderly...gradually, for as long as this is possible. Disturbing volatility should be avoided. Easier said than obtained.

There is an enormous amount of hot money out there...there is a declining amount of "available" gold out there and "guiding" is a very normal phenomenon in things financial.

Yes, gold is slipsliding away from its money-context. Those who keep shouting that gold=money...must simply accept that gold is (remains) to be treated as money. Meaning,... being constantly victim of political intervention = jail-regime in the monopoly game.
"Money" is...has to...be "managed" !!! We maneuver towards freegold to get a freecard for getting out of this gigantic (global) money-jail.

BTW : Is there an ETF in Euroland...China...India !? Do the Andy Smiths expressed regulary their dreams about installing papergold in those places where gold= store of wealth ? Yes, they (the jail guards) keep on maneuvering to paperize gold in those places where the "metal" remains the personal, private wealth holding.

Get your eyes wide open and put all those messages (events) into the "right" evolving context. Reread, 986's post on K.Williams - Anglo American. Central Banks...money...gold !

The very reason why we don't see huge bomb-dropping in the financial/monetary hemisphere...is because the nuclear gold-bomb is growing and will bring the Big Change, that is so desperately needed to keep on functioning. Doing my very best of not sounding bombastic but as realistic as possible.

I'm still wondering if the ETF is an "official" instrument to exchange US-treasury gold !? Think I'm pretty close ?

We need a free(gold)card to get out of the money-jail !

Thoughts remain warmly wellcome as a source of inspiration, of course. Thanks Towncrier ! Correct me if and where I have it wrong.

http://www.321gold.com/editorials/phillips/phillips121304.html"The selling of 15 tonnes of gold from the streetTRACKS Gold Trust, appeared apparently, before the price of gold dropped so dramatically, on Tuesday/Wednesday. The importance to this action does not lie in the present arguments being aired so fully on the web, but in the very nature of the Trust and how it fits into the market place. We have to say that this week has shown the present and future nature of the animal and we are impressed by the power it is attracting. The World Gold Council is gagged from marketing these features by New York Stock Exchange bureaucrats in their endless wisdom.

Because of this week's behaviour by the Exchange Traded Fund, we now subscribe to the view that it is set to become far more than a home for a new type of Gold Investor [so widening the market in gold], we expect it to become a key gold market vehicle. This is a view expressed slightly differently by Mr Pierre Ljhhyjhassonde of late, but with the same conclusion. Why?

It is not just that it is a definite bridge between paper shares and physical gold [and a very short one at that]. It does that as none has done before.
.
It is not simply a vehicle to attract the small man, the Pension fund, or those who want to remove themselves form the business risks attendant on gold mining companies, which it does superbly.

Its real additional value lies in the speed of dealing and the cost of dealing.
Essentially it is acting as a "Jobber," the wonderful [wholesaler] fellow who on the old London Stock Exchange would stand in the middle of the floor, dealing only with the Stockbroker's dealers, whose "Blue" buttons would then run to the phone to phone the completed execution of orders to their office. They in turn reported to the Institutions or individual Investors who had placed orders with them. The beauty of this system is that there has been no such concept in the Gold market before. It represents the near immediate conversion of the piece of paper representing a small portion of gold into an actual transaction in physical gold! The difference between the Jobber and H.S.B.C.'s role is that the Jobber held a position in the Stock he wholesaled, protecting himself through the "Spread" he offered on the price. The Trust using H.S.B.C. cannot afford to hold positions in gold, it has to run as close to a 'zero position' as possible."


Druid: This is a pretty interesting perspective concerning this instrument. My opinion, as lowly as it may be is that, this instrument was created to facilitate more dollar (confetti) flow, thereby, buying more time for the home team and creating the perception that a broader range of investors could participate more easily in the "gold" market. If in fact, this instrument creates a legitimate claim on physical bullion, then it's purpose could be that it serves a much more efficient way to take delivery of bullion while circumventing the futures market. My question would be that, if this represents a way to take physical bullion off the market, then why would the price not go up drastically as this would be a squeeze on the supply of bullion? Let's face it, there's no doubt that there appears to exist a tacit price cap on gold in the futures market that keeps getting more difficult to manage, then why the drastic drop in price as of late?

Gold is NOT declining in price, because the dollar is strengthening...but...the dollar is strengthening, because the goldprice is succesfully being lowered !!!

The easiest way to achieve this gold-support for the dollar-currency, was (still is) in attaching the goldprice to the dollar exchange rate ! In other words...gold is dollar-money and the low goldprice says that the dollar is strong.

The ETFs are telling us that the dollar needs more and more support from the "gold-price", because more and more hot money goes...is guided... into "gold the metal", resulting in a dangerous disconnection of the goldprice linked to the dollar exchange rate . And we all should respect and be fair towards the global dollar-currency and not undermining this globally used trade numeraire, by brutally buying physical gold .

Yes, you can...are allowed to...buy the metal...as long as you don't touch the dollar and goldprice (exchange rate) link ! Fair deal, no !?

And the euro ALSO sees it that way. Even Arabian oil, finds this OK.

But the more frenetically that more paper is being created...the less fair the dollar/goldprice-deal is being experienced. Way too much paper for way too little available goldmetal !!! We have a problem here, folks.

Expect the dollar-creators to start a charm offensive : We promiss w're gone produce less paper ! Yep, right...get our dollar-paper (perceptions) back up again...with golden viagra.

Realize that in the mean time, a lot of political attitude versus gold has been changing, already. China's liberalization of gold is one major evidence, amongst many other evidences.

ETF bricks are needed to fill the holes that are being drilled in the wall that should keep high goldprices away from the dollar currency. Gold, its price...is preparing a verdict on the dollar. Postpone it, once again. And let low (contained) goldprices evidence the good management of the dollar. What a farce.

This will result in a massive default of the dollar in its reserve function AND the default of the paper-dollar goldmarket as well. The dollar should have thought about that in 1971 !!! Too late now.

Wait up until the eurozone (and others) withdraw from the IMF. The dollar's credibility will be put in question, again and again...whilst the euro expands...gradually, orderly.

Conclusion : Accumulate the metal in proportion to the kind of credibility that you allocate to the dollar, now and in the future.

The article y've just been posting, simply evidences how badly papergold is needed !!!
Euroland experimented with gold-certificates, in 1980 for less than one year. Were immediately abolished !!!
I will have no further comment on this seducing monster and additional gold manipulative machine. All is very clear to me, now. Amen.

A lot of opinions of late about the new ETF. I haven't really passed judgement on this vehicle....but I soon will. I shall attempt to explain why.

I have looked at Central Fund a couple of times and I see that it holds X million oz.'s of gold and Y million oz.'s of silver. It has a real asset base that is held in storage (it is auditable? accountable?) The share price is based on asset base/# of shares + 'premium'. 'Premium' might be described as the future view of the POG/POS. I notice that in Toronto the 'ticker' has changed to CEF.NV.A. Coincidentally this happened almost at the same time as the introduction of 'GLD'. Wonder why?

Anyway...Central Fund has been around for a long, long (1961) time. No one seems to get their knickers in a knot over this 'gold fund'. Since its asset base seems to grow over time, I'd like to think that it is taking supply off the market. There is REAL demand for REAL metal. If I'm correct with my thinking so far, can we not apply this to this new 'street-traks' thingy? I believe these guys had built up a base of some 103 tonnes before unloading 15 in the middle of last week. Why would they do that? How could they do that? If each share held represents 1/10 of an oz. and they hold 103 tonnes there are XYZ shares held in this 'fund'. If I got rid of 15 tonnes does that then not imply that I got rid of that many shares? Where did these shares go? Is the fund stating that 15 tonnes were taken delivery of and the corresponding shares were liquidated?
How can this be otherwise? If the 15 tonnes were sold for cash let us say, the shareholders (assumed staying at same quantity) would not be holding 1/10th of an oz. They would therefore be holding slightly less than 1/10oz. and a little cash.

So what's up with that?

Anyway.....off on a little tangent there. So I am going to judge this new gold investment vehicle by the amount of gold that it holds. If this 88 tonnes grows steadily over time or at least HOLDS then I might be positive about its existance. However if I see this 'unexplainable' up/down in its holdings then I have to wonder what its up to.

Please help me with my ponderings.

Thanks.

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

I think (always trouble) that, when there is a net inflow of public funds into the ETF, the "authorized participants" create additional baskets of shares by crediting unallocated gold from their unallocated account with the custodian to the unallocated account of the ETF which is then transferred to the ETF's allocated account resulting in an increase in the physical gold held by the ETF. The opposite happens when there is a net outflow of funds. We should expect to see the amount of physical gold go up and down accordingly.

In other words, both the number of shares outstanding and the total number of ounces held will fluctuate with the net inflow/outflow of daily public purchases/sales in order to maintain the 1/10 oz. gold/share.

Remember:

"Markets, if anything, are a humbling experience"-Michael J. Kosares from the ABCs of Gold Investing. 1st ed. p. 146

Noble1

Druid: Belgian, once again, great posts and thanks for your many contributions. My angle on this has to do with the fact that the best use of any idea, good or service is multiple applications. There is no doubt that keeping the price of gold down and/or under management creates many perceptions and benefits for those doing the managing. The primary driving force for this outcome is dollar usage and all the benefits derived for the debt creators which are far and above those derived by the debt users. Yes, physical gold bullion is the antithesis of this dollar debt based system and completely turns it upside down.

My basic premise is, could this newly created ETF serve a couple or more purposes the primary being as a relief valve for more hot money flow but also as a vehicle to direct physical bullion? Let's face it, the players(on both sides of the trade) who understand value are probably falling all over themselves to get as much bullion as they can at the lowest possible price without to much disruption of the entire daisy chain dollar linked based system. You can already discern this scramble with oil. I know you don't want to cover this ETF alchemy anymore but these are just some wild-eyed, crazy on the fringe, lunatic thoughts.

When too much power gets too concentrated and purposely harms ...purposely misleads...ordinarry folks, the rebel in me, wakes up. The 321-article is one of those drops too many.
I'll leave the ETF-thing for what it is and isn't, sit back and relax. Freegold is building anyway, regardless of any paper-stunt, more or less. Nice WE, Druid and thanks.

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I know must of us believe that the dollar will keep declining in value in the future. There are plenty of reasons to support that argument. Therefore, there are many countries that stand to loose huge amounts of wealth if this takes place. My question to you guys is, Would USA, Japan, and China allow the currecny to devaluate and loose billions of dollars in the process? At what point the USA, and Japan will take action to stop the bleeding? Would the Euro be the next world currency? Even if the dollar falls out of favor, we still must have another currency that facilitates trade. So I think that a good combination of mutual funds that invest in metals, owning physical gold, international mutual funds, and Euro Currency seems to be a good strategy to weather the storm.
Any suggestions?

Thanks

Italy's largest bank, Banca Intesa, has decided to sell its $60 million stake in BP's hugely controversial Baku-Tbilisi-Ceyhan (BTC) oil pipeline...
http://www.bakuceyhan.org.uk/press_releases/intesa.htm

ExxonMobil Skirts BTC Pipeline, Signs Deal to Export Azeri Oil by Rail
http://www.rigzone.com/news/article.asp?a_id=18270

May I suggest you order a bar of bullion here at CPM ...and hold this bar of gold in your hand...feel it...and think about what exactly YOU ARE HOLDING !
Y're wellcome. Regards B.

IF RUN WITH INTEGRITY, the GLD Exchange Traded Fund, might be positive for the gold price. OTOH - What's that I hear about brokers shorting stocks that they don't own? And GLD is traded by STOCKS, isn't it?

Consider who is behind the ETF: The World Gold Council, which has never demonstrated the smallest iota of ZEAL in the promotion and explanation of gold as a means of protection against the inflation of fiat money. Lackeys of the banking system that promote jewelry so gold can find new markets! Traitorous behavior to humanity, in favor of the FIAT MASTERS.

Consider that the ETF is born on Wall Street, and the institutions it deals with: the very scum of the banking system that imposes jail-money FIAT on this wretched world.

Consider again, that all that gold - supposing it's there - will be subject to massive waves of pumping up and dumping down by SHORT SELLING, since the ETF produces shares, and we know that brokers can and do short sell shares they don't even own, as a routine practise. This is going to discredit gold as if it were CYANIDE POISON.

Now, you still think that the ETF is going to be an institution run STRICTLY for the benefit of those who wish to have the protection of gold, with the ease of acquisition and sale that paper offers?

Let us not be naive (naive means "suckers", for the uninformed)

Disgustedly, the GAB

@ the forum
I haven't posted often but tonight I thought that I would comment on the gold price decline this week. Friday I decided to take advantage of the price drop to buy some bullion from CPM. Yes it will feel good in my hands when it arrives! Thanks wall street bankers.

Also, I've been reading / studying the Gold Trail Thoughts! while on vacation last two weeks - it's one of the most amazing, interesting things I've ever read. The trail has changed my way of thinking on the metals, dollar, euro, etc. I highly recommended it to all who have not read it.

On oil: any comments on the price decline of crude oil?? Even as OPEC is going to reduce supply, the price drops ---- what's up with that???? Did the citizens of the USA decide to stop driving giant SUVs?

Have a good evening all.

dave

http://www.bis.org/review/review.htmFirst one must read this speech in it's entirety (well worth the time)and use the methods of interpreting Greenspeak...This speech is PRIMARILY about how to handle or offset risk in todays world (and all that entails which in the world of Printing Presses and Derivatives which says alot)...The speech speaks to offsetting/sharing risk over generations and a lot more.....One may percieve that thru paper Gold (ETF), the Banker mindset would see a way to hedge risk in other Paper Financial Instruments.....Make no mistake if we, as humble Gold Advocates, can see Gold in the many Hundreds or even Thousands of $$ so do the Bankers who have obviously envisioned and made real this new Paper Gold Instrument....

In their thinking one can buy insurance if you will, against catastrophe of other widely held Debt Instruments and Derivatives, and they may even have another tool to control Gold.....A double edged sword if you will.....The BIS has over the years given much time and effort to studying the Derivative market and the risk it poses to (what they think are reasonably sound)sound markets.....We all know that if not for the bailout of LTCM and Tiger Management etc the Derivatives scandle could have caused a total meltdown....Here is the speech to read.....

Central Bank Articles and Speeches ("BIS Review")



6 Dec 2004 Mervyn King: What fates impose - facing up to uncertainty
Speech by Mr Mervyn King, Governor of the Bank of England, at the Eighth British Academy Annual Lecture 2004, London, 1 December 2004. Read PDF (14 pages, 484 kb)


I will comment more on this at a later time as work calls again.....Looking for a more educated understanding if you will than my ever doubting mind might formulate...YGM

My guess would be that the damage to the oil infrastructure in the Gulf of Mexico from the last few hurricanes is gradually being repaired and that is causing the POO to drop

Nice to hear, that you also experience that "special" feeling when holding your gold-property in your hand. Now, you are going to tell them, what you think that the exchange value of your gold is going to be...and not the other way around.

The oil-owners are of that same opinion : We are the owners of oil-value and wish to decide on its value. All those who posess or produce value are in constant battle with those that produce worthless fiat and digits.

Don't pay too much attention to the wild/volatile fluctuations of the oilprice. Just watch how there is an evolving change in the "valuation" of the black gold !!!
Last week, a spokesman from the petroleum institute, said something remarkable : Throw away all the existing statistics on oil-reserves !!! The world needs to co-operate on making new and "reliable" statistics.

After decades of "value" distortions/falsifications, by the colluding politico/financial/monetary masters...it is time to come back to the fundamental basics of valuation.
Basta, with the virtual, screen flashing, rubbish !

Gold in our hands is saying "halt" to ever expanding and recycling paper illusions.
We are constantly invited to fight each other in capturing the organized "price" fluctuations of paper unvalues.
Be it stocks, debtpaper, fiat or any other certificate of...nothing.

99,99% of the paperholders/speculators, know nothing, don't want to know anything, about the exact nature of what they are holding or speculating/gambling, on. They only want to ride the price of everything. How productive or "wealth-producing" is this sport !?

Dave, look what's evolving "behind" the "pricing" of oil.

That BIS-speech is an example of how pure academics are "intellectualizing" the real world. That's the easiest part of the job. Making the right choices and anticipate the changes, are other pieces of cake.

That's exactly what all our talk about goldmetal in hand or paper certificates is all about. Do you "trust" the forerunners of the collectivity !? Or do you wish to take your own destiny and protection...risk-management...in your own hands !?

Some wise people do think time has come to give the "individual", the possibility of protecting him/herself...by giving him/her, his/her gold back in hands. FreeGold that is. A general move to get all the produced wealth, consolidated as a sound base to build further.

WHY must so many "certificates" (ETF) replace that real thing, gold, so easy to hold in one's hand !? All the argumentations "against" holding physical gold-property in hand are infantile and absurd.
Expect the price-hyper-inflation to come and then it will become clear that holding goldmetal in hand, is far from absurd. The collectivity cannot stand the heat of deflation/default and hard money ! They always want/demand price-inflation ! And the collectivity will always get what it wants. And now they will even get much more what they ever wished for. That's why freegold will be the key to get out of this gigantic jailhouse.

Yes, the money-managers of the world (FED/CB/BIS & al) are constantly assessing the risk-factors, inherent to the management of fiat. Yes, there always exist imponderabile . But once the whole management of fiat is getting stuck in the masses of mud, it has been producing itself,...other choices (freegold) are imposing themselves.

Review, what made 1933...1971... happen to gold. Back then, the forming mud was analysed too. Followed by drastic "changing" measures. This time it will not be different ! The "third" step in the gold-affair, will be the freegold step. Fixed gold...>>> Contained gold...>>> FREEGOLD. As natural (cyclical) as can be.

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

Brief, sober and to the point analysis of what is superficial perception and deep reality.
Don't postpone your courageous decisions (CONCLUSIONS) on how to protect yourself in a balanced, non bombastic, way.
Prolonged doubts often evolve into panic. No good.

Financial markets have indeed become gigantic "pump and dump", machines ! Emphasis on "gigantic" and "machines".
The most misplaced reaction to this, is reacting with...SO WATH !
Problem is that this pump and dump machine cannot be "deflated", without causing a lot of pain. One cannot throw any part of the paper + digits into a shredder and get on as if nothing happened.

The few optimists left, don't even dare to suggest a solution to this impossible situation or a possible clear outcome. That's why they "stay" optimist for the good and the bad times. That's why they don't dare to report on the real state of affairs and keep on perception building till they drop.

I do keep on making the same mistake, over and over again, in not realizing that reactions (measures) on evolving realities are happening "extremely" slow and very hesitant.
The state of "denial" is one of the stongiest episodes in the evolution process. That's why it always ends in panic.

These very long periods of blatant denial, must always cover the "impossibility" of the situation. A further disorderly dollar-decline would automatically result in a general disaster. A percepted stable dollar is no solution either. Continued doubts about the impossibilities are confusing and paralyse each and every conclusion ...appropiate action.

Nevertheless, people slow down on their speculative reflexes and actually make things worse. The pump and dump-machine slows down. More people start to diminish their risk-exposure and start looking for protection and security...that is NOT found in the classic places/items!!!
Hey, we are un-winding and things are slowing down...first gradually and then with increasing momentum.
The ETF fabricators are shrewdly exploiting this psychology. Leave the speculative goldmines and come to ETF. The goldmines cannot be forced anymore into forward sales (shorting gold)...let's "pool" some gold in another paper goldmine and do the same trick...pump and dump the goldprice within its big containment operation.

Ohhhhhh no,...not with the Belgian shrimp...! I'll swim in my own little gold-pool. Yellow as the metal and not white as the paper.

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

 
 
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Anyone with common sense can see that the whole fractional reserve banking system is an endeavor doomed to fail.

When Joe goes to the bank to borrow money, he creates an asset of almost the same size for that bank:

Joe gets an asset (the money he borrowed) and a liability for the same amount (what he owes). These two entries cancel each other out. Joe is essentially where he was before he walked into the bank.

The bank, however was able to write him a check and use that amount as an asset which today, can be sold into the derivative market. The bank has a new asset with no liabilities attached.

This in itself, does not smell right.

But....,

As a part of this swindle, the bank charges Joe an interest charge, which is essentially a tax on his labor.

This gives the bank not only the original asset, but also the tax on his labor. The bank has accumulated this asset and many more like them using practically no real labor. It has added nothing to the productive capacity of the economic system.

It is a system of welfare for the rich. But like any welfare system, its extinction lies in the withering away of the energy inputs necessary to continue producing endless assets to leverage.

All who have eyes let him see that the financial system is the ultimate leveraged collective hedge fund .... !

"Find out just what the people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress." -- Frederick Douglas (1857)

"Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?" --Senator Carter Glass, Author of the Banking Act of 1933

"Where would we be if we had I.O.U.'s scrip and certificates floating all around the country?" Instead he decided to "issue currency against the sound assets of the banks. [As opposed to issuing currency against gold.] The Federal Reserve Act lets us print all we'll need. And it won't frighten the people. It won't look like stage money. It'll be money that looks like real money." [Emphasis added.] (Source: 'Closed for the Holiday: The Bank Holiday of 1933', p20 - Federal Reserve Bank of Boston) --Treasury Secretary Woodin, 3/7/33

"For a long time I felt that FDR had developed many thoughts and ideas that were his own to benefit this country, the United States. But, he didn't. Most of his thoughts, his political ammunition, as it were, were carefully manufactured for him in advanced by the Council on Foreign Relations-One World Money group. Brilliantly, with great gusto, like a fine piece of artillery, he exploded that prepared "ammunition" in the middle of an unsuspecting target, the American people, and thus paid off and returned his internationalist political support.

"The UN is but a long-range, international banking apparatus clearly set up for financial and economic profit by a small group of powerful One-World revolutionaries, hungry for profit and power.

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, FDR's son-in-law as quoted in his book, My Exploited Father-in-Law

@Belgian
Thanks for your reply sir and an excellent point on value versus price. I am going to try to learn to look more at 'value' rather than the paper 'price' of a good such as oil, gold, etc. This is contrary to what we Western minds have been have been told for many many years. This will take some time..... what value can be placed on oil.... what value can be placed on gold...........

Excellent Belgian excellent thoughts...............

have a great day

dave

"PUMP AND DUMP MACHINE"

I am most confused concerning reforms of the financial and social insecurity systems, namely, how do mere mortal men reform a ponzi scheme without collapsing the pyramid? Only Gods or Magicians possessing supernatural powers may perform such miracles with supernatural acts?

The machine is required to "pump and dump" at ever increasing volumes and velocity pursuant the servicing of the compound interest algorithm. The system cannot terminate pump and dump, "real" stability would expose the fraud of the posiwid system. The ponzi system built upon inflation, like all pyramid schemes is now completely reliant upon three key measures, the exponential increase of volume and velocity into infinity and interest rates.

Infinity may never be achieved in the present system as interest rates are capped at zero, hence volume and velocity are also capped by the zero bound interest rate!

When volume begins to dry up and velocity slows, the FED (or any CB) cuts interest rates to ARTIFICIALLY stimulate volume and velocity (economic activity), but also to relieve the pressures of cyclic built up compound interest. The artificial stimulation is a chaotic manipulation of the system as the system cannot produce the sustainable necessary inflationary economic inputs thru the productive means of the economy without the artificial stimulation or relief from servicing the compound interest algorithm (Lower rates induce increased economic activity which provides the liquidity to TEMPORARILY service the higher compound interest while the lower interest rate policy bleeds off the higher overhead servicing pressure).

Derivatives, hedge funds, etc. are merely new forms of creative economic activity that further induces arbitrary chaos into the system. The system cannot survive without chaos, for chaos provides "hope of further enrichment" and has become the supporting lifeblood of a system now completely detached from the productive "real economy." The system is operating on temporary life support thru interest rate manipulations.

New investment vehicles, as mentioned above must be invented, promoted and propagandized to suck up and deploy the excess inflationary fiat that ALL governments and CB are now reliant upon to sustain their economic existence and more importantly their legitimacy. The new fiat must be contained once created or commodities and the general price index would rise until the average Citizen could no longer afford to exist.

In the beginning of these ponzi fiat systems, taxes and bond markets are used to perpetuate the illusion of notional value by regulating volume, velocity and interest rates thru the pretended rule of law. The first sign of an overextended collapsing monetary system is the extension and invention of circular investments .... take the floating exchange rate scheme for example, this market (FOREX) has grown into a $2 trillion a day zero sum hegemonic baton passing speculative trading market under the aegis of stabilizing free market exchange rates ... the overproduced (inflated) sovereign CB fiat that governments produce to sustain and finance their existence must flow somewhere or the fraud of fiat money would be exposed to the economically ignorant public in the general price index.

The system has reached a zero sum inflationary potential, IOW the volume and velocity of the induced inflation may no longer be backed by global productivity that provides a stable investment dividend return. Dividends are so low that they no longer exist! The systems players are forced into an endless game of speculation as fiat is endlessly legally counterfeited.

FOREX markets continue to grow as fiat is inflated ad infinium. An entity that once only required, for instance a million dollar hedge is now forced into a $100 million hedge position to protect global paper profits as fiat grows and grows. FOREX like derivatives flows the fiat into speculative markets employed to defend positions, by this means the deployed fiat is capped into one or more nonconsumptive sectors, all the while CBs continue to inflate, almost guaranteed that the vast inflation they produced will never be employed in consumption activities.

The ponzi scheme is designed to create artificial demand for the artificial money ...

In the end it's "inflate or die," as all governments are parasitic vampires that overspend and never produce! They rely upon the inflation they induce at the cost of real production and human action to sustain their fiefdoms and self appointed authority, without inflation they would deflate along with their pretended authority.

The paradox to the systems demise is the inducment to JOIN the system, namely the poison pill of inducement: "the attaching of compound interest to the medium of exchange."

When the servicing of compound interest becomes greater than the inflationary potential, the fraud of money is exposed and the scheme collapses.

NIA/DYODD

According to Dan NORCINI's report to Jim Sinclair on DECEMBER DELIVERIES of DECEMBER GOLD CONTRACTS....

Duetche bank was one of the major "stoppers"....and also happens to be related to the GOLD ETF......I'm not sure what a "stopper"is.

All together , apparently , 15,000 + contracts of December contracts are being set aside for delivery.....

Based on the 4.8 % drop in the price of Gold since monday ..

Whoever is taking delivery so far since Monday saved 29.9 million on their delivery cost.

Deutche Banks savings equal about a 3rd of that.....

Might be just a coincidence.........................

I'd have to give them credit for good timing at the very least...

Randy -- Is the FORUM working properly ?
GW

The reason why the situation, you correctly describe, is so terribly confusing...is simply because the dollar-system succeeded in "exporting" the bulk of the price-inflation it has been creating for the past 70 years !
Take a trip around our planet and see in how many parts of the world, price-inflation is asthonishing.

The dollar-system, a western invention, *escaped* the hyper price-inflation within its own borders. And today the dollar-expansion (dollar inflation) still goes on without causing any significant price inflation at home (US) nor in Euroland, thanks to the euro.

That's why we all think, we are genial...and that we can manage everything. What a hubris.

Example : The recent dollar exch.rate decline was (is) perfectly mirrored in the Dow Jones. The 30 yrs USTB (infla-indicator) have been taken out of circulation. The goldprice is under perfect control. IRs say nothing...etc
The non US world is storing the ever expanding produced dollarunits and swallows all the created $-inflation.

Just wait up until this dollar-inflation comes back, like a boomerang . A homerun. Then we suddenly are going to be dropped without a parachute into our own created $-mess.
Nothing less than spiralling price-hyper-inflation. This time it will be "devastating", beyond present imagination.
For the very reasons you have been describing.

Euroland saw this coming and has taken its precautions. Euroland learned how this inflation-export of the dollar-system works, and did not entered into the same trapped modus operandi. Take this (euro) factor into account when looking into the very near future.

The dollar knows very well that it cannot go on, exporting the inflation that it creates. We see the very first signs of resistance >>> change in oil-pricing policies, where the dollar is loosing its former grip ! Asia (and other regions)will certainly be the next one, who will show its teeth to the dollar...because there is that euro-alternative that is maturing.

�50 (euro) for a pair of Adidas shoes and $100 (dollar) for a pair of Nike shoes, both produced in Asia. Hyper price-inflation for the dollar and inflation for the euro...resulting in new trade-flows...balance of powers !!! W're only at the very beginning of this (global) infla-spiral.

It will be "hyper", because the dollar expansion and export have been going on for such a long time (35 years). During this time, Western and Eastern industrial basises have been changing (evolving) dramatically under the growing gigantic dollar (management) umbrella. Now, other parts of the world, increasing in strength, want also to have a say in the management of the dollar. The dollar-system, as it has been expanding, cannot allow such a change in its existing management. The unmanageable dollar-problem will then be returned to sender (US).
Resulting in the "hyper" inflation of the prices at home.

It is too late to rant about fractional reserve banking and what should have been done 35 or 70 years ago. Let's look at the building-changing future, cross the Rubicon and adapt to the coming circumstances. Analyse the past with the sole purpose of being able to look into the future.

Give "gold" a place in your thoughts as you try to guess how our financial/monetary planet will look like, a decade from here. Don't exclude the high probability of freegold on the basis of negative historic thinking. It is exactly the opposite.

Think, WHY there are no attachments to gold like...IRs, VAT, income tax, etc...
Deep inside the vaults, gold is still considered as NOT being money. It still "is" the ultimate universal wealth reserve !!!

Thanks for reporting this....

"Duetche bank was one of the major "stoppers"....and also happens to be related to the GOLD ETF......I'm not sure what a "stopper"is."

Any holder of a future's position who decides to take delivery of that contract is called a "stopper".

Do you happen to know how many contracts they are taking? If the ETFs are holding the physical metal to back their stock offering, then they would have to purchase the physical somewhere, no? Whether for ETF backing or not, I'm somewhat surprised that an entity like Duetche Bank would take gold via delivery from Comex rather than from some other less transparent source....quite surprised. Have you any other info or sources of info on this matter? TIA
happy weekend!
rich

From that same post by Cometose...

"Based on the 4.8 % drop in the price of Gold since monday ..

Whoever is taking delivery so far since Monday saved 29.9 million on their delivery cost."

Not necessarily so. The "stopper" will have to pay the price at which the contract was purchased. They may have been (but probably were not) bought when the POG was higher than it is now or they may have been bought many years ago when the POG was under $300/ounce! These paper contracts can be bought or sold many years in advance.

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http://www.etherzone.com/2004/henr120904.shtmlLou Dobbs Interviews A Crook
by Ed Henry - December 9, 2004
Why social security reform is impossible and fraudulent.

Bravo! Thank you!

The following is the exerpt from the JSMINESET site ie Jim Sinclair

Regards,

Cometose

PS This is a message from Dan Norcini to Mr Sinclair , I think.



Friday, December 10, 2004, 6:33:00 PM EST

Trader Dan On Gold Deliveries For December



Dear Jim,

Re: The deliveries.

Of the 15,686 contracts delivered against December Gold, the biggest stopper thus far has been Deutsche Bank. They have stopped 5,890 which is better than one third. That is a total of 589,000 ounces valued as of today's close at $256.7 Million.



It is possible that they might have been taking delivery for GLD as you can see they are one of the custodians for GLD, something that I learned from an astute reader.

According to the email sent to me, a listing of custodians for GLD are as follows:

a.) Bank of England

b.) The Bank of Nova Scotia (ScotiaMocatta)

c.) Deutsche Bank AG

d.) JP Morgan Chase Bank

e.) UBS AG

Either that or they are simply doing as you suggested in your recent essay and are using the Comex warehouse stocks as a supply of physical gold for their clients.

I do not know but the delivery period is still in force so we are not through yet.

Best ,

Dan

Wow, what a wicked interpretation of the Big Picture! Are we heading to Japn style troubles? Is there any other possible scenario? Why do you get your reference material?

Thanks for the excellent info.....more...more!

http://news.ft.com/cms/s/2de6146a-4c78-11d9-835a-00000e2511c8.htmlFree-floating currencies feel pain from dollar
by Steve Johnson - December 12, 2004

As far as I'm concerned the problem with Social Security is the kind of problem we ought to be having. How to manage a declining population without widespread chaos and suffering.

Bush wants to put Social Security in the Stock Market. Most of us here believe that the coming energy crisis will cause considerable social and financial dislocations. Not exactly the recipe for an increasing stock market, but lets face it, just about any financial commodity whether it is a stock , bond, real estate or gold can be bid up and up and up if you keep putting money into it This surely is what was learned from the dot com boom. With a steady new steam of buyers the PE of stocks goes up and up. Bush's plan will be a boon for those currently holding stocks. They can sell when it suits them,and make a nice profit .The same thing basically applies with gold

Of course a declining population is the death knell for the stock market, because it is predicated by the concept of perpetual growth.

http://www.economagic.com/em-cgi/daychart.exe/form"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve." --Robert H. Hamphill, Credit Manager, Atlanta Federal Reserve Bank

All fiat money is borrowed into existence, and as a condition of borrowing there is a compound interest algorithim attached to the contract and hence compound interest is a prerequisite attached to every dollar in existence. Credit and credit derivatives are money nowadays .... and all commercial credit demands a time value a.k.a. interest rate attached at issuance ....

When the volume and velocity of economic activity declines, the government assumes the role of the borrower of last resort thru deficit spending .... if they did not, the compound interest algorithim would suck out the available circulating liquidity causing a major recession or depressionary slump. Circulating notes would become scarce and commerce would slow down with the declining circulation of notes. A major correction occurs to adjust the general price index to lower circulation, this is known as depression and/or the slump!

This weeks payroll is provided by last weeks volume and velocity of new loan issuances ... if the commercial credit system and associated retail outlets (banks) slows or terminates lending, then there is not a sufficient or adequate amount of circulating currency to service compound interest and also pay your salary, in the end you get layed off as available liquidity is diverted to service the compound interest equation.

Now consider that all issued credit money is really "debt backed by debt" with compound interest attached .... every time you borrow debt backed by debt in the fractional reserve system you are digging yourself in deeper and deeper by compounding interest upon compounding interest upon even more compounding interest .... and on and on exponentially. This is the dirty little secret kept hidden from the public and the major cause of INFLATION and HYPER-INFLATIONS. It is all caused by compound interest (slave tax) attached to the medium of exchange.

The money supply must continue to expand faster and faster until it expands exponentially or the system will collapse when compound interest becomes untenable and unservicable.

It's really a very simple equation once you understand how the system operates ... The recent proposed $2 trillion injection under the disguise of keeping Social Insecurity solvent is just a temporary monetary prop to garner public and political support for a proposed hyper-inflation to avoid depression.

Consider the effects of the inflationary compound interest algorithm on monetary aggregate growth.

1776 to 1991 M growth 2 Trillion in 215 years

1991 to 2000 M growth 2 Trillion in 9 years

2000 to 2003 M growth 2 Trillion in 3 years

2004 to mid 2005 estimated M growth 2 Trillion in 1.5 years

"THE HYPER-INFLATION"

*****(estimated) After that it must grow by 2 Trillion in 8 months then 3 months, then 1 month then 1 week then 3 days then 1 day then 8 hours then 2 hours then less than an hour and so on and so forth until we are down to nanoseconds and beyond... or the System will collapse...the end.

The above estimated "day of deflationary reckoning" has been postponed by the US borrowing $2+ billion daily (83% available global savings) and thru outsourcing, outsourcing has acted as a defacto payment system to support our current credit driven reality. Unregulated and unreportable derivatives have been used to retain the confidence factor and create an illusion that prevents the average investor as well as the public from recognizing how dire and untenable the global financial situation has really become.

"Without the confidence factor, many believe a paper money system is liable to collapse eventually." --Federal Reserve Bank of Philadelphia, Gold, p. 10

The world is at the cross roads, begin hyper-inflating NOW or face a massive deflation and depression. That question is currently surrepticiously being bantered about by hard money advocates in Asia and ME .... our futures are now being decided militarily, politically and economically!

And BTW, "Homeland Security and FEMA" represent the emergency government in place if the answer is a massive deflation and depression.

All a hyper-inflation can do at this point is to delay the inevitable! And that is why I hold physical gold!

"Approach each new problem not with a view of finding what you hope will be there, but to get the truth, the realities that must be grappled with. You may not like what you find. In that case you are entitled to try to change it. But do not deceive yourself as to what you do find to be the facts of the situation."

~ Bernard Baruch (1870-1965)

American financier & government advisor
------------------------------------------------------


**This Gold Dory Bar I hold in my hand radiates warmth, food, and life support with no attached forms of humankinds "Deceptions".....YGM

**More power to the James Turks, Chris Powells and Bill Murphy's of this world.....GATA is serving the greater good of all who value the freedom of Gold!!!

"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble
----------
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker
----------
Gold can a path through hosts of warders clear. And walls of stone more swiftly can displace than ever lightening could."

Horace
----------

"Gold opens all locks, no lock will hold against the power of gold."

George Herbert
----------
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."

Antony C. Sutton
----------

"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."

Hans F. Sennholz
----------

"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne
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"There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic - and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold."

Janos Fekete
--------------------------------------------YGM.

The technical interpretation of the price-chart of oil, points in the direction of a declining oilprice to +/-$30 !?
At the same time we see $-POG having a tendancy to go up with declining dollar exchange rate (compensated also with higher Dow).

How is the prospect of much lower oilprices to rhyme with a weakening dollar !? My answer remains : gold for oil is being transferred.

Note, that the $-POO breaking down through $40 might confirm the TI.
THOUGHTS ANYONE ?

If you go to a Casino you are encouraged ...nay, obliged to play with "chips" ...and when leaving, your Chips are Cashed-in.
The Comex "chips" would require "cashing-in" ie: reprocessing to qualify as "good-delivery" methinks, so this talk of "stoppers" MAY BE indicative of liquidity problems at the pointy end.

Goldfields shareholders voted no to Iamgold. Harmony renews its bid for Goldfields.
This (enforced) merger is to keep South African Gold under its jurisdiction. They know perfectly well, WHY !
------

Deutsche Borse bids for LSE ! David goes for Goliath. A pure "euro" matter.

Changes are proceeding...

http://business.timesonline.co.uk/article/0,,8209-1399377,00.htmlThe pressure cooker builds momentum....YGM

http://www.taipeitimes.com/News/edit/archives/2004/12/13/2003214920SNIP:

The simple matter is that the balance of payments does not determine exchange rates. The underlying rate of exchange is set by the relative purchasing power of monies and has nothing to do with the state of the balance of payments. And it is the supply and demand of currencies on foreign exchange markets that determines the relative purchasing power of monies.

Consider that exchange rates are the prices paid whereby one currency is used to purchase another. Currency values are determined by increases in "the supply of money relative to how much real output is produced." Just as the purchasing power of goods is determined by supply and demand, so it is for the "price" of money.

With a fixed supply of money, increased production of output means that producers find there are less units of money to cover the increased amount of goods. As such, the purchasing power of money will increase since each currency unit will buy more goods.

If there is a larger stock of money relative to given amount of output, the purchasing power of money must fall since there will be fewer goods for each currency unit.

In simple, terms the purchasing power of money is set by the "relative scarcity of money" in terms of real output.

-END SNIP-

"The decrease in purchasing power incurred by holders of money due to inflation imparts gains to the issuers of money." --St. Louis Federal Reserve Bank, Review, Nov. 1975, p.22

"The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money." --Federal Reserve Bank of Chicago, Modern Money Mechanics, p.3

"Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess." --Irving Fisher, 100% Money

"Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people." --Rt. Hon. Reginald McKenna, former Chancellor of Exchequer, England

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people." --Friedrich A. Hayek (1899-1992) Austrian Economist, Author and 1974 Nobel Prize-Winner for Economics

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http://quotes.ino.com/chart/?s=NYBOT_DXY0
Lower price of oil means less demand for dollars. Lower demand fundamentals means dollar exchange unit will continue to decline!

"Dev Null Dollar!" Got Gold?

http://www.usagold.com/Order_Form.html(Overview excerpt) --
Last week's financial news was dominated by talk of intervention in forex markets to strengthen the dollar. Given thelack of follow through, one wonders if it's not a sound and fury signifying nothing. Meanwhile back at the White House, the president decided to keep John Snow Secretary of the Treasury -- an event which serves notice to all that the weak dollar policy is likely to remain in place for the second term. Were the weak dollar policy about to be scrapped, the Bush administration would have signaled the policy change by giving Snow his walking papers. It didn't. ...(continued)

Meanwhile, the financial press reports a long list of...(continued)

(Gold market excerpt) --
We just completed a nasty week for the gold price (essentially a $20 correction), but in retrospect we all need to take into account that in order for gold's bull market advance to gather strength these corrections are necessary. Market corrections are indicative of a healthy two-way market, as opposed to the straight-line bubble psychosis that marked world stock markets in the 1990s. We all know by now where that sort of thing leads us, so I'll take these corrections any day over the phoney new paradigm markets which defined the previous investing era. ...(continued)

....Those of us who are long-term holders of the metal for asset preservation purposes (as well as long term profits) would be best served by becoming accustomed to the volatility rather than losing sleep over it. The overarching economic trends which have fueled this young bull market in gold haven't suddenly reversed since Monday of last week, they have intensified. Don't let the trading mentality now entering the gold market in full force deter you from your own well-thought out strategy. ...(continued)

----------------
As a prospective client, to receive your own timely access on a trial basis to the full weekly client letters, request your FREE introductory information packet from USAGOLD using the URL above.

R.

http://www.dani2989.com/gold/goldeuros27112004gb.htmHow shall Euro-Gold break 350 Euros, if Dollar-Gold and Dollar-Currencies move in lock step?

Europeans in this forum, have already declared that Europe has no intention of fixing the gold price in Euros; hence should it not increase!?

The attached article examines Dollar-Gold & Euro-Gold, with minimum prices of 600Dollars and 450Euros. If, and only if, the minimum targets are achieved; 1.33 (600/450) would be the Euro-Dollar rate. We are already there!

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh50770_2004-12-13_15-34-16_n13372528_newsmlNEW YORK, Dec 13 (Reuters) - Treasuries prices ticked lower on Monday as U.S. retail sales data proved strong, surprising many in the market who had bet on a weak outcome.

...Treasuries had begun the day firmer as investors bet November sales figures would be soft, but sales rose 0.1 percent when analysts had looked for a 0.1 percent drop.

Sales were also revised up for October, putting consumption on a firmer footing than first thought and suggesting analysts may have to revise up forecasts for economic growth this quarter.

"Barring a collapse in December, real consumer spending will perform much better in Q4 than most economists currently project," said Stephen Stanley, chief economist at RBS Greenwich Capital.

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

A very reasonable 'spin' (interpretation) of consumer spending in terms of monetary significance is that it is effectively the same thing as a flight from the currency and into the reality of tangibles while the dollar's purchasing power remains assured in the present. In other words, a "get while the getting's good" mentality.

Of course. How could it be otherwise. The alternative would be to sit on the dollars or speculate with them for gains or losses in some other form of postponed-dollar derivative. You only have the enrichment, the true WEALTH, of your income when you convert your dollars into the satisfaction of tangible goods and services. It is not "anti-establishment" or "unpatriotic" to do so.

It is a fundamental principle of life to be productive and to then gather unto yourself the just rewards deemed by the market to be proportionate to your productivity.

Choosing gold, among all things, as the consolidation of your excess productivity, is therefore a natural expression of your need for tangible compensation of wealth while preserving a good degree of liquidity to adjust the balance and use of your wealth over time.

Dollars, as with any other currency, are ever potentially "here today, gone tomorrow". People inherently know this, and therefore seek to buy real things at a pace commensurate with the immediate risk of currency depreciation. How can anyone, therefore, fault Americans for their continued buying sprees? The only issue to be resolved by each individual shopper is how they go about striking their personal balance between productivity and consolidation of their excess -- call it savings. Thus, choosing a form of tangible wealth that remains vigorous and liquid over a span of your lifetime, such as gold, is a far superior choice versus choosing something like, say, ice sculptures or potato salad.

Call USAGOLD-Centennial today and consolidate your currency at the favorable gold prices available now. The call is free and the staff is VERY friendly and professional -- assistance is gladly extended to first-time gold buyers.

R.

http://www.usagold.com/gold-price.htmlSome price graphs over shorter and longer time horizons to help you see in proper perspective the ripples from the waves from the tides from the inalterable current of the deep gold sea.

R.

http://www.bloomberg.com/apps/news?pid=10000100&sid=aywR0L.eZzXc&refer=germanyBank of England Says Dollar Decline Increases Risk to Banks
Dec. 13 (Bloomberg) -- The possibility of a further slide in the dollar and a decline in demand for U.S. assets has become one of the potential risks to financial stability, the Bank of England said in its semi-annual Financial Stability Review.

Foreign sales of U.S. assets such as Treasury notes or changes to China's policy of pegging its currency to the dollar could bring ``potentially abrupt movements in currency and interest rate markets,'' the central bank said today.

``In the present benign environment, there is a possibility that lenders, borrowers and investors may be inclined to under- estimate long-run vulnerabilities and take on too much risk,'' Andrew Large, the central bank's deputy governor for financial stability said in a written statement.

Concern about the impact of a slump in the dollar on the world financial system has deepened in recent months on speculation foreign appetite for U.S. government debt will diminish, making it harder for the world's largest economy to fund its record budget and current account deficits. China, the world's second-largest holder of U.S. Treasuries, denied on Dec. 10 making ``significant'' cuts in its dollar-denominated assets.

There has been ``little sign'' of a major risk emerging since its June report, the Bank of England said, though the 6 percent decline in the dollar's value against a basket of currencies has increased the chances of one or more institutions being hurt. The main U.K. and international banks ``remain robust,'' the bank said.

The sale of U.S. bonds by international investors would reduce their price and undermine the dollar, the Bank of England said.

A sudden change in China's exchange rate policy -- which effectively pegs the yuan to the dollar -- could also bring abrupt movements in currencies.



***Between Deposits lent out, Derivatives trade and other forms of Bank asset speculation most people would be surprised to know almost 'ALL' Banks could become insolvent in a matter of days if only one or two of the many possible trigger events were to occur....Banks worried about risk? ie: BIS and it's many years of covert study on risk factors in financial markets, yes they worry, as they know all too well what a fragile sorry assed mess they have created....YGM

http://www.thestandard.com.hk/stdn/std/Business/FL14Ae02.htmlSee previous commentary. The prevailing Asian mentality has no qualms about consolidating the fruit of ones excess productivity into the enduring wealth and security of gold.

Owing to the measured pace of market liberalizations there and the recent opening-up of the gold market to investment by the citizens, the impact upon the gold market by Chinese demand has only just begun to be felt. Thus are the tracks into the future laid. Be on the train, or else find yourself left behind or under it.

R.

The answer is to be found in the ongoing $-� "currency struggle" and the euro-strategies ! The whole affair being centered around gold's past and future.
The difference between the existing dollar-gold and the building euro-gold.

There is not a one-line answer to your question, ge. Dollar-gold will continue up until euro-gold takes over. This will happen when the dollar collapses under its own weight and loses its status. The space and time in between is filled with "strategy" and duel.

Nobody is interested in this academic interludum. People want to see things "happen". Those Eurolanders that suspect what's coming do profit from the gold bonus (low europrice) that is available now for euro savings (wealth).

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.

Monday market excerpts

Gold futures closed $5 an ounce higher Monday, with many analysts upbeat about the precious metal's prospects following a 5 percent drop last week.

Gold saw a "brutal week in the metals, but such action is necessary," said Ned Schmidt, editor of the Value View Gold Report. "Corrections are the market's mechanism for cleansing itself of excessive short-term optimism."

Comex February gold futures lost $22.50 an ounce last week, but today rose 1.2 percent to close at $440.30.

The dollar was mostly lower, unable to shake off investors' concerns about U.S. deficits and the country's ability to finance them before U.S. data this week on trade, the current account and foreign investment flows. These include a Federal Reserve policy meeting and figures on U.S. trade on Tuesday, the Bank of Japan's quarterly Tankan survey on Wednesday, and data on the current account deficit on Thursday.

"There's a lot of numbers and news coming out this week, and things are a little quieter than usual, so positions are being squared as much as possible," noted a senior dealer with a New York commission house.

The action in the dollar and metals suggest that the "rate decision might be to raise rates 50 basis points rather than 25 basis points, as so many expect," said Schmidt.

"That announcement, whatever it is, will likely set the stage for a buy signal on the intermediate measure," he said.

Should the FOMC "raise rates by 50 basis points to 'save' the dollar, equity markets will be shocked [and] a significant sell off there would develop and one is long over due," he said.

That in turn, would support gold.

-----(see url for 24-hr international newswire, market prices)----

HEADLINES

November retail sales see 0.1 percent boost -- Columbia Daily Tribune, Missouri - Business

Retail Sales Rise a Surprise? -- The Motley Fool

Few Gold Mining Companies Disclose FX Sensitivities - Survey -- Nasdaq - Global Markets

NY gold ends atop $440/oz, boosted by lower dollar -- Reuters.uk

Dollar weak against euro ahead of US data -- RTE OnBusiness

Experts list ways to make dollar's loss your gain -- Fox11, Arizona - Business/Finance

Can we preserve our economic way of life? -- San Diego Daily Transcript - Finance

Shoppers defy holiday gloom, power up retail sales -- Channel NewsAsia - Business

@Am. Exp

I endorse your comment about,

"Now consider that all issued credit money is really "debt backed by debt" with compound interest attached .... every time you borrow debt backed by debt in the fractional reserve system you are digging yourself in deeper and deeper by compounding interest upon compounding interest upon even more compounding interest .... and on and on exponentially."

But then you put the blame in the wrong direction when you continued with,

"It is all caused by compound interest (slave tax) attached to the medium of exchange."

You had the blame correctly applied when you mentioned, "every time you borrow" and "you are digging yourself". The people using credit, under the present banking system, are to blame. The people are addicted to convenience.

So here's a plan to correct this problem in a controled manner. Let's have people stop making purchases with credit and start using cash (yes I know fiat cash is borrowed too but this will be a controlled recovery - slow and easy does it). As more and more give up convenience and use cash, the less inflation we will have. Note that I said less, not completely eliminate it. But that will come in time.

This means that people will have to start paying cash for their motel rooms and car rentals and internet shoping. Do I expect this to happen? Not a chance. Presently every person that is using credit is litterally voting for (desiring) hyper-inflation. And since so many want this system, it looks like they're gong to get it. Perhaps they should beware of what they wish for. It's just not fair that the people who use cash will have to suffer for the irrationallity of others.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh57683_2004-12-13_21-57-15_n13616693_newsmlNEW YORK, Dec 13 (Reuters) - The dollar retreated broadly on Monday, as investors' persistent worries about the U.S. current account deficit outweighed expectations of higher interest rates.

The U.S. current account data for the third quarter are due on Thursday, with Wall Street economists expecting a shortfall of $170 billion from $166.18 billion in the second quarter.

f the data suggest that Americans are buying foreign goods more quickly than U.S. businesses can sell their goods and services overseas, keeping the outflow of dollars heavy, the market will most likely continue to bet against the greenback, analysts say. That could well offset any positive effect of an expected increase in U.S. interest rates on Tuesday.

Tuesday's [release of Trade] data, meanwhile, are expected to show the U.S. trade gap swelled to $53.0 billion in October from $51.56 billion in September...

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

Numbers of this size are almost certainly beyond practical comprehension. And where economics have become skewed almost beyond meaning, you can be sure that wayward politics is tilting the foundation. Buying gold at consequentially low prices is one good way of using the untenable political position to your own personal advantage in preparation for the political righting or releveling of the playing field -- logically expected and explainable even to a cynic as, at a minimum, the necessary adjustment to prevent universally unwanted collapse and ugly "end game" scenarios upon civilization as we know it.

R.

Gonlyold - When you said: "Presently every person that is using credit is litterally voting for (desiring) hyper-inflation. . . . It's just not fair that the people who use cash will have to suffer for the irrationallity of others."

Do you lump all credit card users into one basket, or do you draw a distinction between those who use a credit card to buy what they cannot afford pay for, and those who use a card in order to write only one check a month and pay the account in full?

A golden thanks for your thoughts
- Survivor

December 13, 2004
Northern Miner Interviews Jim Sinclaim

Looking ahead to the coming year in gold, we present an edited version of an interview with James Sinclair, gold trader and chairman of Tan Range Exploration (TNX-T). The interview was conducted by Walter Birch of Gold Market Insights, which is sponsored by Monex Deposit Co., a gold broker based in Newport Beach, Calif.

Walter Birch: Do you feel that gold is a good investment now, and why?

James Sinclair: The investment characteristic of gold has certainly changed in the past two years, and what has changed is the definition of what role gold is playing in the present environment. That role is no longer of a commodity nature but rather of its historical currency nature.

The proof of the fact that gold is a currency is the way it trades. If you're watching the action of gold, as we do here, you'll see that it's tied directly to the U.S. dollar.

Regardless of what the circumstances are, whether we're discussing oil or the condition in Iraq or the economic realities of the triple U.S. deficits [budget, trade and currentaccount], it's the action of the dollar that commands the price of gold. So the answer to your question is yes, gold's an attractive investment, because it's a currency based on fundamental factors that have historically given birth to and sustained decadelong gold bull markets.

WB: What portion of an investment portfolio should an average investor have in gold?

JS: To define gold correctly as an investment, it should be defined as an insurance investment - a policy that you take out and hope you need never collect on. But if you do need to collect, you'll find that a modest position in gold goes a long way.

The percentage that, in my opinion, forms the foundation of the insurance purpose would be 10% of an individual's portfolio, defined as 10% of your liquid net assets. GMI: What are your thoughts on the stock market? How bad can it get, and how can gold help in that regard?

JS: One of the primary, fundamental factors for a long-term bull market in gold is that you must have a period of time in which the value of paper assets - that is, their ability to store value - comes into question.

When the paper asset comes into question, then the hard asset becomes more attractive - subjectively, even if an individual wouldn't (ordinarily) be the type to invest in gold.

So, when the stock market is in question and has reached a level that might be considered over-valued in light of present economic conditions, or when the economy itself is negative to the best interests of the stock market, the tendency to shift from paper to a harder asset is historically sound and historically real, especially if inflation is there.

The equation between the stock market and gold is not that the stock market has to be in a significant down; rather, the stock market has to have a question of its value as a storehouse. This is a currency characteristic, because a storehouse of value is one of the primary definitions of what a currency needs to be.

A sideways-to-weak stock market is positive for the precious metal gold, for gold as an investment, and for gold-related investments.

WB: What do higher oil prices mean for gold in the months ahead? JS: I don't see the direct relationship that most people interpret. Rather, the oil price affects the dollar, and the dollar affects gold. If oil prices are to rise, as they most

certainly would if there were any continued terrorist activities in the major oil-producing nations of Saudi Arabia or Kuwait - those that sponsored a token increase in production in order to attempt to offset price - then the dollar would be affected directly by that because of the impact of higher oil prices on the U.S. economy. A lower dollar would immediately be translated into higher gold, just as a higher dollar is usually translated into lower gold.

WB: Can you comment on the Federal Reserve's monetary policy and its impact on gold?

JS: The Fed, when it creates money, creates it from its own member banks. The Fed has two choices: it can either buy bonds or sell bonds to them. And it's not as if the bank members make any decisions; it's either debited or credited to their account. When they want to expand money supply, they simply go to their member banks, which are held within the Fed system (it's an internal bookkeeping measure) and they put in cash and take out the bonds, no questions asked.

If they'd like to reverse that later because they put too much liquidity into the system, they just do it the other way around: they stick the bond into the member bank's account and take out the cash. That's how the manager of monetary aggregate has control in the traditional way.

These days, everyone is reading this huge expansion of M3 and saying 'Oh my goodness, what's going on?' The truth is, because the Fed system is inefficient, compared with the nontraditional "Bernanke Electric-Mayhem Money-Printing Machine," which is defined as the Japanese intervening in the yen, then you've got to increase what the Fed would do traditionally - I'd say, by orders of magnitude 3 - just to get the same effect.

What you see in the price of milk and in everything we consume, from clothes to food, is a tsunami [seismic sea wave]. It's huge and travels across the ocean of the economic world at 700 miles per hour, as a tsunami does from an earthquake. It is a wave of hyperinflation caused by the use of this outrageously foolish, non-traditional tool [yen intervention].

Because of the enormous amount of liquidity injected into the world system and the inability to reverse the transaction, we're going to be hit by a wave of inflation that no one's going to understand.

When you see milk at more than US$4.40 a gallon, in a sense, that's as bad as paying US$3 on the coast for a gallon of high-test gasoline.

It's negative to the U.S. dollar, and anything negative to the common stock of the United States of America, the U.S. dollar, offsets positively the gold market.

No one can offer an argument against it because it simply is a fact. Anybody who watches a 3-minute chart on the USDX [U.S. dollar index] and a 9-minute chart on gold has to know that the dollar creates the direction of gold constantly. And then, during the U.S. hours of trading, the maniacs on the floor of the Comex multiply that times infinity and create wild moves in the gold price. The minute the dollar reaches new lows, gold will reach new highs. I firmly believe that. So the extraordinary expansion in aggregates we saw in mid-2004 was the Fed stepping into the breach that the Japanese left after their completion and abrupt end to yen intervention. When a huge buyer of U.S. treasuries all across the maturities

stepped out of the market, the Fed had no choice but to step in, and that's the whole story.

WB: Can you comment on the U.S. election, and its effect on gold? JS: I don't think it mattered who got in, because the fundamental, underlying reality is that you have three extraordinary deficits.

You have a deficit in the U.S. budget, which is not going away because there is no way to pull out of Iraq, to de-mobilize our special forces in Saudi Arabia, Jordan and all the other countries where they're presently operating, without opening up Pandora's Box to al-Qaeda. Regardless of who had taken office, Bush or Kerry, the problems of 2005 are negative to the dollar and therefore positive to gold. The first phase of this bull market in gold didn't end with the election but most likely will run through the end of 2005 as a minimum.

No matter who had taken office, there would have been a bullish gold environment. Timing is always a critical question to the person who is trader- orientated, but to those who see gold correctly as a currency and as an insurance mechanism, does it matter exactly when you purchase insurance?

In light of present fundamental conditions of budget deficit, of current- account deficit, of trade deficit, and without any policy programs being instituted that have a historical, substantive basis for correcting those problems, there's only one way the dollar can go, and therefore there's only one way gold can go: it's lower for the dollar and it's higher for gold.

The insurance investor, the fundamental investor, the person who wishes to build a foundation by increasing his or her asset base and decreasing or eliminating debt should simply make that commitment in what I think is the most logical gold investment: the 1-oz. gold coin as the fundamental building block of an investment which functions as insurance.

To be a bit early is not going to be costly in what is a generational bull market, but to be 10 minutes late would probably make the investment impossible. And with so much adjustment of circumstances that some might call manipulation of markets and events, one single trigger event could make it too late to make the investment.

I believe every single person reading this analysis should get off this manic, trading-everything, speculative, gamble-holic, casino approach and get into the insurance mode. The theory here is you reduce your debt or eliminate it, you build up your assets and recognize that homes go up and down just like securities, while debt stays at one level.

For those who have borrowed on their homes and refinanced their homes, it's extraordinarily important to pay attention to the difference between what they owe and what they have, what with the potential for interest rates to rise.

You need to bear in mind that the U.S. dollar is a piece of paper, a promise to pay, built on psychology, guaranteed by nothing, while gold is a currency, not a commodity.

A gold coin seeks no agenda, has no nationality, and is universally acceptable. It's a storehouse of value because it will buy for you right now exactly what it would have bought many, many generations ago. Although our regulatory bodies suggest to us that it is not correct to say that the past is the proof of the future, on what else do you have to make judgment?

Gold coin is right. It's right for fundamental reasons, it's right for fundamental people, and it's right for making the fundamental decision to insure your family and to insure your ability to weather problems and storms that you don't cause but are caused by others.

In my opinion, it didn't matter who was elected, because the problems are set, there are no solutions, and I don't see any statesmen coming down the horizon.

Whenever you manipulate and hold a price down, as happened with the Swiss franc in the 1960s and gold for 40 years or more under US$40 per oz., markets create a coil effect by "stabilization," if we use a kind word, or "manipulation," if we'd rather use a different word.

A market that finds itself restrained by spin, by adroit intervention by the Exchange Stabilization Fund, is counter-productive, because what you're doing is creating pent-up emotion.

So when it finally lets go, when one drop of Saudi oil goes up in flames, gold will be US$529 per oz., in my opinion, and oil, if we're lucky, will be US$55 per barrel.

Are you willing to take that risk? Are you willing to take a risk that now everything is fine in Iraq? That this new appointed government is, in fact, going to receive sovereignty and that there will be elections, and that those elections will be in the best interest of the West? That's a long shot, a real long shot, . . . almost an impossibility. It is not, by any means, a defined affair over there, and the investment that is least favoured by any further complexities in the Middle East - embarassments or worse than that - is the U.S. dollar. If the U.S. dollar is affected negatively, it offsets into gold positively.

How do you insure yourself against further terrorist actions, against more complexity in the Middle East, against one drop of Saudi oil going up in flames, and how do you do it conservatively? You own 1-oz. coins without any debt attached to them. They're not the promise to pay; they've already paid you.

If you could take a look at all the gold in the world, you'd find a cube so small you'd go into shock. A standard is something in which the supply is controlled; you can't increase it, most certainly not by political edict. There's only one way you can increase the supply of gold, and that's by increasing its price.

So, the probabilities are strong, the fundamentals support, and the technicals will underlie a rise in the price of gold to a minimum of US$529 per oz. in this first phase of a generational bull market that has at least until the end of 2005 to run.

WB: Do you have a near-term price target for gold?

JS: I hope the maximum level for the price of gold in the first phase of this bull market will not exceed US$529 per oz. The simple reason is that: US$529 is the normal price that would be assumed to be attainable within the bull characteristic of this market; a price above US$529 is a runaway.

Gold will, at some point in a generational bull market, go into a "runaway." A runaway is a characteristic of gold when it attempts to balance the balance sheet of the United States in terms of its external liabilities. This means that you take the gold owned or ostensibly owned by the U.S., multiplied by the market price of gold, and it should equal the external liabilities of the United States. In 1980, that number was US$900 per oz., and gold reached a high of US$887.50. The number at present is US$1,450 per oz. and rising. If anything like that were to happen, it would be most unfortunate. But if it does occur, it would likely happen in the second or third phase of the bull market in gold, probably in the 2007- 08 and 2010-11 area.

WB: Can you comment on the current Bush-Greenspan years, and compare them to the Nixon and Carter presidencies as they relate to gold?

JS: You have a public now which is desensitized, and an economic system which is desensitized, in terms of the removal of alarms. There are no more currency parities, for instance, which would have been an alarm. We can have the 30-year, U.S.-treasury market move two full points in a day and no headlines will read CRISIS! We have Enrons and Long Term Capital Managements that turn upside down and the public fails to perceive a crisis. The world today is in more dire circumstances than it ever approached

during the Nixon-Carter years, and we have a public which is desensitized and fed news which is replete with spin and fabrication.

All of that doesn't lead to solution but rather allows the circumstances to become so skewed and so out-ofhand that when the public does realize what the situation is, if you haven't made your investment in gold prior to that, the probability is that the price will prevent you from doing it by rising violently.

WB: With the public being desensitized and the news controlled, do you see more and more coil and tension building up that could lead to a crisis and a need for gold insurance?

JS: You're in an environment that's being "painted" every day to look fine. The news reports have a marching order, as it were, a principle of "never upset the social order," and they constantly massage events. The news morphs constantly, and Saudi Arabia could easily be that trigger event that sets all of this spin spinning out of control.

WB: To summarize, can you review the primary reasons for owning gold now?

JS: The primary reasons for owning gold are the lies, falsehoods, manipulations, lack of corporate ethics, and amoral business environment that have created a potential for a significant alteration in the value of the U.S. dollar. A new low in the U.S. dollar is a new high in gold, and it's just that simple.

Technically, fundamentally, there's no question in my mind that a new low in the dollar is coming. Historically, people have wanted to see the dollar rise. Historically, there's been a subjective desire to come to the aid of the U.S. common stock.

But the U.S. has never had as many enemies as we have now, nor has the country ever suffered the degree of embarrassment that the present conduct has caused the U.S. to experience. The total of that is a poor potential for the value of the U.S. dollar, which is the ultimate reason for owning gold. We're in deep trouble, and you don't even need to go to economics; just go with geopolitics, and it's a good reason to own gold. If you examine economics, it's a wonderful reason to own gold.

The maniacs on the Comex, who are really just a bunch of knuckledragging morons, only multiply whatever happens in the U.S. dollar by 100 in the gold price. Gold can go up and down 20-30 points a day, but when it finally goes, it's going to be just like it was back in the 1970s, when I remember appreciations of US$100-150 per oz. - except that, this time, I don't think it's coming down.

It's not a good prognosis: we're in a lot of trouble. Finally, you're going to run out of fingers and toes to put in the dyke, and the water's coming over the top and down through the middle. And the price of gold will go straight up, and if you don't own it, you won't have a chance to own it.

If you do own it, own it for insurance, not for just another game of casino that we've turned every market in the world into through the creation of paper. And a little goes a long way: every investor should have 10%, and you should have coins. It's an insurance policy that you hope you never collect. It's as simple as that.

Thank you for posting the James Sinclair interview - an analyst for whom I have great respect.

I agree with him on most of what he has to say particularly the references to gold as insurance for the average investor -- a position which I endorse wholeheartedly. Second, I considered the comments about a "sustainable bull market" extremely important. We do not want a runaway market. We want a ratcheting market that allows as many people as possible to participate at moderate prices. From a macro point of view, it will be extremely important for Americans to be able to trade their dollars for the metal, bring the gold within these borders, and keep it here in the event there is a breakdown. This is going to be an extremely difficult time for Americans, in my opinion, and I think Sinclair frames our predicament well. Though a politically inspired solution is possible, it is not likely. For Americans, what cannot be accomplished in the macro sense, must be accomplished individually. Gold ownership is very important -- both for the individual and for the country.

My compliments to Mr. Sinclair on an important interview that I believe should receive wide play.

http://jsmineset.com/home.asp?RQ=EDL,1&ARFG=1&GID=0&linkid=6I had the priviledge of meeting this man a number of years ago @ PDAC @ the Royal York in Toronto and have remained impressed and more so of late....His assuredness of long term convictions do rub off and tend to calm this grudge bearing Miner (Myself)...YGM

All use of the credit system transfers monies to the moneylenders. Your innocent purchase causes a fee to be paid by the retailer to the credit provider. But since the retailer in effect has no money other than what he gathers from his customers, this fee in reality comes out of your hide. Get off the merry-go-round.

@ Survivor

Survivor asks, "Do you lump all credit card users into one basket, or do you draw a distinction between those who use a credit card to buy what they cannot afford pay for, and those who use a card in order to write only one check a month and pay the account in full?"

Good Sir, I wish that there was a way of not being so blunt about this, but unfortunately, yes, using credit whether it's paid off within a month, to save interest payments, or paid off in years, it is a devastating endeavor.

As you may have begun to notice, with so many people opting for credit, vendors are now getting bold and offering credit only transactions. The person who wants to pay cash is ousted from that vendors market. This is involuntary servititude at the least. Whereas the original transaction was to be between the vendor and the purchaser, it now obligates, forces actually, the purchaser to include the bank with all it's own rules and requirements, into his dealings. I think that you will find that cash is still supreme. Of course, gold is certainly better than fiat cash.

Interesting replies, and points well taken. I agree in principle, and I stand prepared to forsake the convenience of plastic at any moment. But the places in the marketplace where I use plastic have already imbeded the charges for its use in the prices I pay. I am being charged for the convenience whether I use it or not.

Keep in mind that I need the "credit" afforded to me by plastic like a hole in the head. The same transactions could be done by cash or cash card, but since the system likes me to use credit mode, the system pays me back a little to use it. Its the least expensive way for me to do business. Fiat folding money, fiat checks, and paid up fiat plastic are all layers of the same fiat onion. When I choose one of the fiat layers to use for everyday business, it will always be the one that is most advantagous to me as an individual at the time. You see, all of the fiat methods: "include the bank with all it's own rules and requirements". There is nothing special about green folding fiat. Its just another layer in the onion.

And if it all tumbles to the floor tomorrow, I'm prepared for that as well.

- Survivor

http://www.usatoday.com/news/nation/2004-10-04-debtsolutions-cover_x.htmAlthough some like myself have none of the above I fear the next few years will bring a debt crisis to ALL doorsteps...as evidenced in this one of MANY examples of systemic future economic collapse we see warning signs of.....Physical Gold & Silver will be the lifeboat in the coming 'Perfect Storm'....YGM

Excerpt...USA TODAY reported Monday that taxpayers have a hidden debt of at least $53 trillion in government obligations, mostly from Medicare, Social Security and the federal debt. This debt equals $473,456 per household, dwarfing the $84,454 in personal debt per household owed for mortgages, car loans and other borrowing.....

Cont'd @ Link...(this is from Sept/04)

PS:....Who's going to pay the piper, not the Banks or the Gov period! The house of cards has possibly 6 or 7 years to re-invent itself....What then? The same as always, "He who has the Gold makes the rules!"

http://www.jubilee2000uk.org/worldnews/europe/opendemocracy010903.htmExcerpt....
The coming first world debt crisis
Ann Pettifor
1 - 9 - 2003
The reckless financial policies of leading western powers in the last two decades make it likely that the next seismic debt crisis will be in America, not Argentina. It can be avoided, says Ann Pettifor of the Real World Economic Outlook, only by serious efforts to bring regulation and balance to the international economy.
Jubilee Research at the New Economics Foundation (NEF), the team that spearheaded global awareness of a third world debt crisis released provocative new research in September 2003 which argues that the "first world" is approaching a major debt crisis. These findings appear in the first of NEF's annual reports on the global economy, Real World Economic Outlook � which shadows the IMF's annual World Economic Outlook.

The report predicts that a giant credit bubble, created by central bankers and finance ministers (the engineers of decades of "easy money") has now reached a "tipping point". This point � at which the "bubble" of financial assets exceeds GDP by nine times � has triggered financial crisis elsewhere. Another "tipping point" would be a rise in interest rates � not unlikely for economies like the US and UK which have massive foreign deficits.

The financial system: unbalanced, unfair, unsustainable

On a global level, there is $100 trillion of debt outstanding, but only $33 trillion of income with which to repay those debts. Even the drastic recent stock market falls have barely dented the credit superstructure. When this credit bubble bursts in the United States and Britain, it will be middle-class consumers that will first bear the brunt of the financial crash.

That will be unjust and unfair, because American and British consumers have been actively encouraged in their borrowing by the financial deregulation policies of both central bankers and governments. Moreover, politicians and bankers have watched as dutiful and compliant consumers have propped up these two big economies � helping to keep the global economy afloat. They will be rewarded for their heroic efforts by bankruptcy, losses, liabilities, and personal anguish � which will extend some time into the future. The impact of a collapsing credit bubble will reverberate around the world, and hurt the poorest most.

The crisis will be exacerbated for individual consumers, because the end of the credit boom will take place in a deflationary environment. Deflation is in part a consequence of the policies of central bankers and finance ministers for opening up markets, and clamping down on wages and prices. Deflation is good for lenders, but bad for debtors. This is because the value of debts rises in real terms in a deflationary environment. This is in contrast to inflation, which ultimately erodes the value of debt.

A financial crisis under debt-deflationary conditions will be catastrophic for many debtors. It will also be grossly unjust and unfair, because while central bankers and finance ministers have clamped down on prices and wages � they have used the credit bubble (borrowing) to inflate asset values (stocks, bonds, and property) to extraordinary heights.

Cont'd.....

The complete K. Williams (director Anglogold Ashanti) interview :

Gold not dependant on dollar weakness
David McKay
Posted: Mon, 13 Dec 2004
[miningmx.com] -- Interview with Kelvin Williams, marketing director, AngloGold Ashanti


miningmx: Do you think the central banks are sellers of gold in a rising market?

Kelvin Williams: I think we've seen an evolving role for the banks. And when I say role it's a bit of a misnomer because they are effectively playing a role vis-�-vis their assets, not vis-�-vis the gold market. However, what they're doing with their assets has a consequence for the gold market. Now you know very well that what they did for 10 years in the late 80s to the late 90s was behave on an individual basis, opportunistically attempting to diversify particularly where they had very large gold holdings into what they saw as income generating holdings, largely obviously of currency denominations. That activity became a self-fulfilling prophecy because those that did get out, and those that got out first, looked better for it in their portfolios.

Now that era really changed, not so much with Washington Agreement but with the UK announcement of the sale of 50% of its gold. That's because it attracted a lot of quite critical analysis about whether, not only was this a good or bad thing for gold, but whether it was a good or bad thing for the Bank of England, or the UK Treasury? Was it sold at the right price? Did it yield the right returns?

So I think over the last five years we've started to see a much more level playing field between the gold market and the central banks.

Now the obvious thing is that the central banks have started to behave now in an orderly basis, treating the gold market with the same kind of respect that they would treat the market of a currency of another central bank. So instead of behaving towards gold as if they have no owners, they acknowledged a kind of consensual ownership by all of them in gold. That's been a big plus and it has stabilised their negative impact on the market, and in the last few years it has in a sense made them a neutral and known entity.

Now if you look at where we are now, it's quite conceivable that in the next five years that neutral role will swing to be a positive indicator. It won't be a positive interventionist type of indicator because someone's an aggressive buyer or known to be in the market and people say �oh well the Russians are there or the Swiss are there or whatever�. It will be quite a passive indicator saying: �well, the Washington Agreement said these guys could sell 500 tons and they've only sold 350�. That's an indicator that they don't particularly want to sell what they've got, that on the whole the role of gold as an official sector store of value has had some rehabilitation. So I think that we should look to supportive signals that are not given in any way in speeches or stuff like that, but will come out of the stats.

miningmx: The Indian market appears to have tolerance for higher gold prices. Comments?

Kelvin Williams: I think we still know less about the workings of the Indian market than we ought to given its size and importance. I think that we still have incomplete or insufficient monitoring capacity to capture final sales as opposed to imports or inventory purchases. We have also heard some conflicting reports about the latest season that lead one concerned to hear more about what has actually happened in India in the last two or three months. It's certainly true that the trade and the bullion pipeline has proved to be more robust in the face of the latest run up.

miningmx: Are you still concerned about jewellery offtake in the Indian market?

Kelvin Williams: Diwali should have been big gift-giving time, and in many areas at the retail end there wasn't quite as much off take as you would have expected. But that said, it is very encouraging that the trade is prepared to take on inventory in the rising prices, because the Indian response in previous rising prices has always been driven by the trade. They're the ones who've stopped buying, they're the ones who said: �Oh dear, prices are up $15/oz, I'm not buying,� and therefore you've got dislocations in the pipeline, though not necessarily at the consumer end. So I think it's worth watching. I certainly think it's very encouraging that in the last 24 months the Indian market has held up pretty steadily.

miningmx: What is driving the gold price at the moment and does the potential drop off in supply have the contribution attributed to it?

Kelvin Williams: Look, a big picture view of this is supply demand really comes into play in a falling market. This is when the demand issue becomes the buyer of last resort and puts the support under the price.

In a rising market supply, neither supply nor demand tend to play a role. Firstly, as the price increases very often demand falls off, so it's contra-indicative. Secondly, as the price increases so scrap supply increases, so again it is contra-indicative. But the difference is because gold is like currency you get the bullion banks in a sense funding inventories and protecting the market from an immediate impact of higher scrap sales or lower jewellery demand.

So, in a rising market supply demand can't play that kind of driver and again and the final point about demand is also that demand in general takes place in a very fragmented way. So even if you've got rising demand in India, it's a consequence of 5,000 different purchases, not one big trading buy. So our view is that physical supply demand is a price mover or a price holder in a falling or weak market.

If you're in a rising market, the only thing it can do, that can continue to drive it, is investment demand because investment demand buys more as it gets higher, it doesn't withdraw. Investment demand gets more and more pleased as it gets higher, so that's what's been balancing the supply and demand these last 24 to 36 months. As the demand has dropped below current supply, so investment demand has pumped it up.

What we look at is the kind of investment or speculator interest; that is, position-taking against risk in another market.

In this case, people have been selling dollars buying gold, they've also been selling dollars and buying silver. They've also been selling dollars and buying some of the commodities although there's a much weaker correlation in many of the base metals than there is in this case. The correlation on euro dollar exchange rate and dollar gold spot price has been close to 90% to 95% for months at a time. If anything, gold has run a bit ahead of the ratio so whilst it's still driven by the euro, the depreciation of the dollar against the euro, it can also be helped by other things and in that case we're really looking at a situation where everything seems to be favourable.

It's not only that the dollar must go further, it's also that since the Bush election the American administration seems to indicate that a soft dollar is what they seem to think the answer should be.

miningmx: What are the risks to a weaker dollar? For example, could China float its currency, or might we see the central banks intervene to support the dollar?

Kelvin Williams: There have been official sector interventions before. There has been the Plaza Accord (signed on September 22, 1985 to make the Japanese yen stronger, and the dollar cheaper), and you've seen in some of the analysts� comments recently that there's some appeal for a second Plaza Accord.

On the whole, it's not a convincing scenario. America in some respects has isolated itself a little bit in recent months in foreign policy issues, and there's probably less willingness to solve their deficit problems by collusion. There's also the fact that much of the adjustment has already been made and is hurting in some places. I think it will play its way out. Whether the dollar has got another 10� to go against the euro or whether it's a further 15�.

miningmx: Just to allude back to your question: what about the RenMinBi (Yuan) value?

Williams: One can only observe that if the RenMinBi is revalued, it will be because of political decisions. Having consciously kept a pegged currency - whether it's for political reasons or for what other reason - to move away from that requires conscious decision. You don't just say: �well I'm going to float it on Tuesday,� you consciously understand the consequences. There may well be behind-the-scenes political discussions aimed at both currency exchange rates and consequently trade which might lead to a decision on the part of Beijing to allow the RenMinBi to drift up.

If it does so, it would most certainly take the pressure off the euro and for gold. If it does, then I think we would have to take a view that gold would have to get on its own. It would then have to stop relying on the euro exchange rate to be its trigger and, quite honestly, I think there's enough uncertainty in economic circumstances and global interaction to keep interest in gold even if the dollar did stabilise against the euro.

miningmx: As part of the World Gold Council (WGC), do you believe AngloGold Ashanti has created a competitor for itself in the exchange traded fund (ETF), StreetTRACKS? Surely investors either buy equities or the ETF?

Williams: We've had this debate several times in-house, in the WGC. We can't, and we don't see it that way. The gold equity market is a small market anyway and those who are taking direct gold positions are taking them in much more the currency risk diversification mode or portfolio diversification mode than they are as an equity investment. So the equity investment still offers characteristics that simply aren't there in gold. Quality of assets, quality of return, focus of management, short term, long term regional risk, so I think it is quite a different category.

miningmx: Shouldn't gold producers be hedging in a rising market on the basis that it makes more sense to lock in prices on the way up rather than on the way down?

Williams: You ask one of those universal questions about human nature. Just go back to fundamentals. If you were to ask us on the broadest, most catholic view on hedging, it is exactly that: we hedge for revenue management. We don't see how you can put in place billions of dollars worth of assets, and then allow the revenue outcome to be fixed by market forces completely out of your control. Insofar as you cannot influence the traded price of your metal, then what you can at least do is select in the market the pricing for your metal, for some of your metal, in order to secure cash flow, the ability to pay dividends, the ability to fund and complete capital expenditure programmes, and so on.

AngloGold Ashanti has been a consistent dividend payer and has been the highest dividend payer in the gold mining industry. Therefore, this revenue management thing is something that we are more aware of as an important part of our business. This, however, is at odds with, we think, a minority interest in the gold equity shareholder constituency. These are the people who would like gold equities to play the role they played 30 years ago which is to simply to be options on the gold price.

Now it's true that that's what they were 30 years ago. That was an exciting time; it was a time when the gold price was being deregulated, the gold market was being deregulated, there were lots of uncertainties, and it was a very leveraged way of playing on the gold price. But we see in our constituent shareholders, a lot more fund investors who like to see a managed approach to the risk, and who want some of the price upside, but also want the cash flow dividends. So, we do still see a role for hedging.

miningmx: Now we come to the question that if that's the case, why don't you sell some stock at 450/oz?

Williams: I think if we had new projects that would have their value significantly enhanced by a fixed price now, or by a price programme such as hedging, we would do it now. In the meanwhile, what we would like to do is to take the existing activities and operations and give them as much benefit as possible from the higher gold price at the current cycle.

In big picture terms, we would be inclined to strip the hedge off for the next couple of years in the belief that the price would go higher or will stay in this kind of trading level. So we don't have to hedge and we can benefit from the higher spot price, but make sure that we don't lose sight of the long term benefits of managing our hedge book. It's a very long speech I'm afraid, but your point is certainly correct and we have been asked by directors from time to time: �is this a price at which you should continue taking some new price contracts�. It does cause us to look at it and say, well yes, but not at the moment.

miningmx: On the rand and the gold price: do you ever see that relationship being decoupled?

Williams: Let's say first, it's not anymore a rand-dollar relationship; a rand-gold relationship. It's certain that some of the commodity prices play a role in the rand's strength. But you can see from those index graphs, that the rand has gone a great deal further than any kind of weighting in relation to platinum or gold prices.

Will the stronger rand ease? Our own planning approach has been to put into our business plans a �stronger for longer rand� assumption. It's publicly stated by both the South African Reserve Bank and, to a lesser degree, by members of cabinet that the value of the rand is not their primary concern.

The SA Reserve Bank takes a much more black and white view by saying its concern is only inflation. It says whatever happens to the exchange rate is not its concern. In fact, if you look at the inflation rate target, it is much happier with the stronger rand because it's shielded South Africa from a $50 oil price. So I think one must set aside the Reserve Bank as being a party likely to address the economic consequences.

I think that the Minister of Finance (Trevor Manuel) probably recognises that for a developing economy, with a very large unemployment percentage in its economically active population, a strong rand at this stage is probably not best for the society or the economy. What he, the South African government, or the Reserve Bank could conceivably do to help ease that position, whether it's with the exporters, or the manufacturers, or the motor car exporters to Africa, or the metal producers, is a moot point.

We all know that governments are able by signals in speeches or public circles to indicate what their view is about the strength or weakness of the currency. This would not be uniquely South African if they had to do it. We've had the Europeans do it, and had the Americans do it by saying they think the dollar is too strong, or the yen is too strong. Certainly, the Reserve Bank could more aggressively increase it's foreign exchange holdings. There are a number of things.

But I think as managers of the South African asset, AngloGold Ashanti's approach has been that we have to knuckle down and try and make the bed that we've been given to sleep in. I would say simply, in conclusion, that the South African management has done an absolutely sterling job of controlling rand costs on the basis that they're not going to be relieved or saved by a weakening currency. They're going to have to manage it in a strong currency regime.
------------------------------------------------------------------------------------------------------------------------
Especially read Williams' vision on the ETF !

55.+ BILLION
Estimates off by quite a bit at 51

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Meanwhile, the fed funds market appears to be anticipating only a 25 basis point rise in target rate as it was trading this morning at approximately 2.2 percent. The Fed's trading desk conducted open market operations to add additional liquidity, providing $3.75 billion through two-day repos -- collateralized two-thirds by Treasuries at 2.219% and one-third by mortgage-backed securities at 2.29%.

R.

http://www.usatoday.com/money/perfi/retirement/2004-10-04-debt_x.htmI read the rest of the report that YGM pointed to yesterday, and one of the most interesting, and possibly illuminating, parts was the table halfway down this page. This indicates that while other developed countries spend between 7.5-10% of GDP on Healthcare, the US spends a whopping 14.6% - or 50-100% more. While they also mention life expectancies which tend to be higher elsewhere (and I believe to be due to cultural and racial characteristics as much as anything), they neglect two very important aspects - what is the QUALITY of the healthcare provided, and whether this includes the 20% (?) of the population of the US not covered either by government or private programs.
So while no politician will touch this most important of issues (let's face it, life and happiness are mentioned in the Declaration of Independence, and good health is a prime factor in both of these two !) with a ten-foot pole, because everyone believes that it will mean that their electors will think they get worse care, no-one in this debate seems to have pointed out that the principal problem - and presumably solvable by example - seems to be the appallingly poor management of the system compared to other countries. Is this just a massive case of NIH syndrome ?
C!
PS. Sorry, no pun intended - that was Not Invented Here, rather than the National Institute of Health.

The Anti-Gold Cabal, the nefarious Cartel, is charging the trenches again, the carnage is horrendous, their losses are staggering, but still they keep assaulting the Gold forces.

This trench warfare is utterly debilitating to the Anti- Gold forces. In this warfare, the Anti-Gold forces fight by hurling gold AT THE ENEMY. They shout, "Take THAT, you BARBARIANS!" as they throw more gold at the Pro-Gold forces. Curiouser and curiouser!

The enemies of Gold want us to have gold cheaper. We insist that we should pay MORE for it. If they had their way, they would throw it at us at $195/oz, maybe less.

Looks to me like the Anti-Gold forces want to push gold down to below the 200 day moving average, somewhere around $409.

Will they succeed in offering us such a bargain?

Thought: could this possibly be the preparation for a big scare coming up?

The GAB

http://iw.thomsonfn.com/iwatch/cgi-bin/iw_active?sec=∈d=134&mgp=134These wild swings are not just the Cabal at work...Their machinations knowingly and partialy unwillingly favor the massive short covering by the years of borrowers who are short real Gold in the Gold Leasing fiasco & the paper trade...Only a fool could not detect the Physical accumulation by CB's, and others that has swung into high gear of late...Gold could be $490.00 on a swing and the game would be the same predictable crap...
Probably the fist clear signal that John Q public is in the mix will be AFTER the Institutional buying/owning of Barrick turns to selling...

(First the Institutions set the stage in mining stocks, whether going up or down...Then John Q)...

Then we will know the tide has turned...After all the awareness that has been raised with respect to the ABX Hedge book and Gold at $435 to $450.00, look at the performance of the biggest and most potentialy bankrupt Miner today still storming along....(@ Link above)

Mark my words and don't order up any Crow de la` Orange (cause I won't need it) there IS "CB BUYING" in Gold and we won't know of it for some time...The ones doing so are at the top of the food chain and unlike Canada have no Gold in the Ground reserves to covet...All we have seen and will see is systemic and all is planned well in advance and in favor of those who control the world of money...It may be called 'Conspiratorial' and that would be correct for all Central Banks and the Fed & BIS especially, were concieved in, and thus function by "Conspiratorial Means".........YGM

http://english.aljazeera.net/NR/exeres/553289FC-4269-4C71-910A-E4CC032B4C60.htmBe surprised if Bin L skunks don't get in on the mix of this....

http://english.aljazeera.net/NR/exeres/CC39AE2A-D2D4-44C9-B378-01CB446BEAA6.htmChop off six oooooo's and issue new money....With the help of the IMF...Have to wonder if Turkey had any Gold left to give up? The IMF at it's best!

I agree with YGM. There are no "anti-gold" forces there are only anti high priced gold forces. They want as much gold as possible for themselves at as inexpensive a price as possible. I agree, so do I, and so should we all while the game is still afoot. Watch out what you wish for, soon enough we will not be able to exchange so small an amount of fiat for so large a value of AU or AG. Fortunately as relatively small players we are still able to exchange fiat for meaningful amounts of value. Centennial is a great place to begin the process, or continue to walk in the footsteps of the giants ahead. Got gold.

http://www.federalreserve.gov/BoardDocs/Press/monetary/2004/20041214/default.htmDecember 14, 2004

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output appears to be growing at a moderate pace despite the earlier rise in energy prices, and labor market conditions continue to improve gradually. Inflation and longer-term inflation expectations remain well contained.

The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters to be roughly equal. With underlying inflation expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.

In a related action, the Board of Governors unanimously approved a 25 basis point increase in the discount rate to 3-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

In addition, the Committee unanimously decided to expedite the release of its minutes. Beginning with this meeting, the minutes of regularly scheduled meetings will be released three weeks after the date of the policy decision. The first set of expedited minutes will be released at 2 p.m. EST on January 4, 2005.

A passage from a story long ago.slingshot (5/9/02; 15:38:14MT - usagold.com msg#: 75284)
Siege Engine
Time Is Running Out.
The Lord of the Castle has burned the Midnight Oil with his Knights and has failed to comprise a viable battle plan.
All of strategies revolved in only the defense of his citidel and with the size of his garrison provided very little offensive capabilities.
The trebuchet has been effective as it relentlessly batters the wall below the tower.
It is morning and the first light of day begins to shine into the room and replaces the candlelight upon his maps.
Suddenly, there is an alarm for all to man the walls.
There is more excitement. As he ascends the stairs he can hear the comments of his men and he knowns fear when he hears it.

He looks out beyond the field and into the rising sun.
For a momment he is blinded but soon sees the open green field below and what now stands just in front of the treeline far away.

The Goldbugs have formed ranks. Three and four deep and the full lenght of the treeline. They are armed with shields and swords. Bows and maces. Standing shoulder to shoulder.
They begin to bang their shields and shout.
FREE GOLD, FREE GOLD, FREE GOLD!

US chain store sales fall in Dec 11 week-report
Tue Dec 14, 2004 08:55 AM ET
NEW YORK, Dec 14 (Reuters) - U.S. chain store sales fall in the second week of December, as retailers continue to markdown items in order to draw customers into their stores, a report said on Tuesday.
Sales in December to-date were down 0.8 percent compared with November. Sales at major retailers rose by 2.0 percent on a year-over-year basis for the week ended Dec. 11, said Redbook Research, an independent company.

"The increasing popularity of gift-cards, the majority of which are purchased during the week before Christmas, should result in sales being pushed into the latter part of December and January of 2005 as sales are not recorded until the cards are redeemed," the report said.

The Redbook data are compiled from a sample of same-store sales at general merchandise retailers representing about 9,000 stores. Same-store sales measure revenue at stores open at least one year.

At the beginning of the war, or somewhere there abouts, didn't the Saudis family pack up and fly to Geneva? Taking with them plenty of valuables that needed a fleet of aircraft.Leaving only heads of state.
How many returned in the interum or are still in Geneva?
Slingshot-------<>

Not sure of that, but I am sure their Gold is in Geneva or the BOE...Possibly spread about and some in the Fed also....If they can control their military they'll have blood in the streets before they leave now...IMHO....YGM

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.

Tuesday market excerpts

Gold futures settled softer on Tuesday after the dollar firmed and traders turned an eye to the expected hike in U.S. interest rates.

The dollar fought off a bout of selling in the morning after data showed the U.S. trade gap ballooning almost $5 billion to $55.46 billion in October, reaching a new record and topping Wall Street expectations of $53 billion.

COMEX February gold futures finished down $3.00 at $437.30 after trading between $441.30 and $436.50.

With a lack of pressure on the U.S. currency, gold fell, as players squared positions amid thoughts -- later proved true -- that there would be a quarter percentage point rate increase this afternoon, dealers said.

"The rate hike is priced into the market, although some heavily motivated gold bears might try to use it as an excuse to move the price lower," said Brien Lundin, editor of Gold Newsletter.

The Federal Reserve's decision to tighten monetary policy for a fifth time this year took borrowing costs to 2.25 percent, putting U.S. rates above euro zone rates, now at 2 percent, for the first time since early 2001.

"More important to gold in both the short- and long-term will be the level of Asian demand for the metal," Lundin said. "Indian buying has supported and advanced this market in recent weeks, almost (regardless) of price and price trends," said Lundin.

---(see url for 24-hr international newswire, market prices)----

HEADLINES

US trade deficit blows out even further -- Australian Financial Review - Market Wrap

Trade Deficit Hits Record $55.5B -- CBS 11, Texas - MarketWatch

FOREX-Dollar trims gains after Fed hike rates -- Reuters.co.uk

US Trade Gap Seen Trumping Dollar Yield Advantage -- Reuters - Business

http://www.strategypage.com/messageboards/messages/40-258.aspThis and read at link...

Middle East Newsline March 28, 2002
SAUDIS BUILD MISSILE CITY
TEL AVIV [MENL] -- Saudi Arabia has constructed a complex for the deployment of long-range missiles.

The Israeli daily Yediot Aharonot reported on Wednesday that the complex was built in the Al Sulial desert about 500 kilometers south of the capital Riyad. The complex contains huge missile silos, residential areas and factories in King Khaled City.

The newspaper published photographs from the Ikonos satellite of what was identified as two missile bases and a complex of 33 buildings, eight of them capable of storing Chinese long-range missiles. Yediot identified the missiles as the CSS-2, reported to have a range of between 2,500 and 3,500 kilometers. The missile, 24 meters long, is capable of carrying a nonconventional warhead.

The Saudi military has expanded the missile complex since 1995, when a French Spot satellite photographed the area. Riyad received deliveries of the CSS2 in 1990 as part of a deal for up to 120 missiles and 12 launchers.

http://www.listensoftware.com/hrxp/cmarticles.asp?contentid=892Excerpt....
Why has gold prices climbed to over $400 and ounce? The primary force has been rich Middle East buyers of gold. The Dresner Bank took money from Middle East oil and starting buying sizable block of stock in Krupp and Mercedes. In Gold auctions, bids by Dresner, for all the gold offers demonstrated gold had become an efficient commodity. A high trade volume was needed. The International Monetary Fund introduced large volume sales of gold and made it possible for oil-rich interest from the Middle East to enter into the market.

The dollar was the internationally reserved currency for price and payment of commodities. However, in 1979 Sheik Yameni, Saudia Arabia, oil minister shocked the U.S by telling them if the dollar currency dropped 5 percent in its value they would move away from it. The theory was the Saudis were experiencing with a new currencies hold a variety of commodity securities.

Africa demonstrated gold could be used as a medium of exchange. Africa used gold to secure the exchange of oil between Saudi Arabia and United Emirates. This caused sharp surges in the price of gold. At the time the dollar remained weak but stable against other foreign currencies. Gold prices jumped from $270 an ounce to $375. If oil continues to be used as a medium of exchange price increases are expected.

Complete at link....

http://www.epinions.com/content_3309019268With one MOST pertinent observation......YGM

snip------Saudi women buy gold in kilos and our expatriate people buy gold coins,


Make no mistake 'Another and FOA' have given us the Trail of Gold to follow and it leads to the Middle East....YGM

That's for sure a Fly in the ointment. Middle East is one heck of a powder keg.
Slingshot-------<>

http://money.cnn.com/2004/12/14/news/economy/tradegap.reut/index.htm
Snippit:


Rising oil prices lets U.S. imports outstrip exports by $55.5B in October.

WASHINGTON (Reuters) - The U.S. trade deficit widened nearly 9 percent in October to a record $55.5 billion as sky-high oil prices helped propel imports into uncharted territory, the government said on Tuesday. October's unexpectedly large shortfall pushed the deficit tally for the first ten months of the year to $500.5 billion, surpassing the record of $496.5 billion for all of 2003.


Black Blade: Yep! All is well. Today the Fed raise rates a quarter point again. Of course this impacts Government debt, but with Japan and China bearing the burden buying depreciating US paper for reserves it only stands to reason that they may have to reevaluate this policy. Meanwhile, energy prices look poised to run higher again with the onset of winter and OPEC reaching their production limits (even as they talk of reducing production - actually they can't run flat out without causing irreparable harm to the reservoirs).

http://www.iht.com/articles/2004/12/14/bloomberg/sxmuk.html
Snippit:

Next year, Asian central bankers may have no choice but to come to the rescue of the world economy, which may be heading for a slowdown after this year's 5 percent growth, the fastest in three decades. Currency flexibility in Asia is part of what is needed to restore balance to the global economy, which may be in the doldrums if a steep and prolonged fall in the dollar erodes the U.S. consumer's purchasing power.

By continuing to resist appreciation in their currencies against a slumping dollar - which the Hong Kong-based investor Marc Faber calls a "doomed currency" - central banks in Beijing, Bangkok and Mumbai will be over-extending their bet on the shopped-out U.S. consumer. In the process, Asia will be tolerating higher inflation and sacrificing some of its own consumption.


Black Blade: Should get "interesting" in the coming year.

http://www.financialsense.com/fsu/editorials/2004/1214.html
Snippit:

by Richard J. Greene
Portfolio Manager, Thunder Capital Management
December 14, 2004


Dr. Kurt Richeb�cher points out in hard numbers the failing U.S. economy in his monthly newsletter "The Richeb�cher Letter". He points out that U.S. working-age population is growing 1.2% which requires an additional 2 million in job creation a year. Despite this, overall wage and salary income in real terms remains below the levels of December 2000! This clearly points to the fact that we are losing high-paying jobs in favor of inferior and part-time jobs. He also points out that a lot of the profit rebound of corporations in recent years have come from inventories, as commodity prices have surged, and financial engineering. It has gotten to the point that corporations can report whatever profits they fancy through selective use of derivatives as we have seen all too clearly with Fannie Mae. Yet that stock remains firm despite this. This week it was reported that a Chinese company lost over a half trillion dollars in oil derivatives trading. These are the types of risks that are being undertaken to create a financial profit. It just so happens this example involves the airline industry attempting to cope with uneconomic jet fuel costs. Expect more occurrences moving forward as we believe this is just the tip of the iceberg.

By far the most incredible in subterfuge is the not widely understood practice of hedonic pricing. This practice adjusts the real price of a product for quality adjustments and is widely used for high tech products, particularly computers. By this method if a computer has more power for the same price in previous years, the sale of the computer is counted as more in GDP. For example, if an $800 computer you bought this year has three times the power as the one you bought for $800 last year, then it is reckoned this should count as $2400 to GDP. Mind you, the company counts it as an $800 sale while the economy counts it as a $2,400 sale. So since about 1986, the GDP numbers have been accumulating and compounding sales and growth that never happened. Now I have only been around since 1957, but since the first caveman rolled a log and made a wheel to move a rock there have been quality improvements in products. Only in 1986, some genius decided we have to get more credit for quality improvements that have ALWAYS been the case.

That point marks the time when government statistics have increasingly had little relationship to reality. They were adjusted to defraud you and make you believe things are better than they actually are. So now when an economic number is released, do what I do; view it, digest it, and if it's bad, say to yourself, "Holy cow, is that the best number they can make up?" Managing money in a fiat money system gone mad is a challenging task. The one question that cannot be reckoned with is, "how much longer are investors and providers of capital going to believe in this complete and utter fraud?"

As the day of reckoning approaches I have but one bit of senior advice own: gold and silver!


Black Blade: Interesting article. And where have we heard this before? I had a long-winded post some time back discussing everything from "hedonic deflators", "seasonality", "imputed income", and a number of other bogus US Government statistics and how the data is "massaged" to decieve the American public. John Crudele of the New Post Post has pointed out that these statistics are absurd and that anyone who believes the "logic" behind them must be complete morons. Meanwhile get prepared by staying outta debt, stash emergy cash for several months expenses, get Gold and Silver portfolio insurance, and start a program of non-perishable foods and basic necessities.