http://www.investorsinsight.com/article.asp?id=jmotb022805What really bothers me, other than the fact that so much of this is still pretty hazy to me.... (still wading through Another/FOA archives trying to decide just where we are in that scenario-- and now to top it off, how THIS fits in)....is the fact that so many of us are in the "worlds awash in liquidity exported by U.S. to return as hyperinflation when CB's start to unload $$'s" camp, that it feels very 'majority opinion-ish' which is starting to spook me.

ANY of you good Sirs please feel free to rebut,bolster, or otherwise comment on this piece....I'm still way back on the learning curve.

The easiest way to see when (or if) the Ben Franklin under scrutiny is in a state of money-ness at any given time is to recall some of the basic money supply components.

Most basic is the M-1 measure of money supply which is defined by currency (held by the public), travelers checks, and demand (checkable) deposits.

The M-2 measure of money encompasses the M-1 components and also included are savings deposits, small time deposits and various money market accounts.

While Ben Franklin is in my possession (or in the till at a store) it is among the currency in circulation and thus counts as part of the official money supply as defined and measured by the above criteria.

When I deposit it in a bank, say my checking account, the size of my account increases (as a numerical entry) by $100, but the Franklin note has concurrently left public circulation when it sets in the bank till and is thus no longer counted among the money supply -- otherwise the bank would be guilty of double-counting one-hundred dollars.

Technically, what happens is the Franklin note gives up its $100 monetary ghost which then resides within the monetary system in a spiritual (digital) form as a portion of the bank's liabilities which is attributed as part of my checking account (a demand deposit).

In this instance, the physical body of the Franklin note retires to a non-monetary reserve status of vault cash which can be counted toward the bank's supply of reserve requirements, but isn't counted as money. This is all done on the asset side of this particular bank's balance sheet.

It is the liability side of the balance sheet on which the money resides and where the official supply here is measured.

To carry this one step further and demonstrate how the money supply may be expanded, you need only to imagine that the bank now holds among its assets a greater fraction of cash than mandated by the Fed as required reserves. As the bank lends this available cash out into circulation again for example, Ben Franklin then becomes counted as part of the money supply again -- even as my own checking account remains $100 greater than it was prior to my initial deposit of that note.

As a result of the new loan, the money supply has grown.

The currency>>reserve>>growth mechanism works exactly the same even under a gold standard.

I wonder how many people are comfortable with the notion that a gold coin is (behaves as) money while it circulates, that it ceases to be money when it is deposited into a bank, and that even a standard gold-based money supply grows (inflates) as loans are sought and granted.

As thought is given to this, the thing to come away with is a better understanding of the true nature of money and the vacillating nature of the circulating medium (currency) as it relates to the money it merely represents on one hand or the reserve asset function it serves on the other.

Considered evaluation, especially on the central bank level, argues that gold is underutilized in a currency function; meanwhile it is more robust and best employed as a superior reserve asset -- as a tangible mark(able)-to-market wealth asset that is more suitable for this reserve asset function than a monetary (representative paper or digital dollar) "unit of account" ever could be.

I know this is a major wrangle for the mind to grasp all in one go. Take two aspirin and call me in the morning(?).

R.

For the life of me I can't figure it out. Everyone and his brother were bad mouthing the US$, even Greenspan, up to and including the end of 2004.

Suddenly an abrupt turnaround has taken place and the dollar has stopped its decline and a host of $ bulls have surfaced. Your article from Mauldin goes around and around the bush explaining the reasoning for a strengthening dollar in 2005 and frankly I don't see it.

Every bear cited debt and deficits for the reasons for the dollar to fall and fall it did. However the debts and deficits for the most part have not changed. In some cases some deficits have increased (ie: trade) therefore where does the argument come into play now for a strengthening buck??

"On my command....release HELL !"

Hi Slingshot. Well I would like to say that my husband saw my reasoning, however, I think he just got sick of me nagging him... wore him down.

My sister, well instead of giving her reasons why I think gold will keep going up I gave her 5 reasons to hold metals.
Those were....
1. Do not count on your superannuation - consider it a tax until you get your money out. The government will keep changing the rules.

2. Where else can you put your money. Property is too expensive - we both know the hassles with tenents too. Consider gold a piece of property but easier to sell.

3. There is no mention of Gold on the Australian Tax website - why is that? Is it because they cant tax gold when you sell it? As far as Im aware there is no GST on gold either. (equiv. to VAT in the states). Maybe someone can answer that for me as Ive never sold gold.

4. If someone sue's you, they cant get what they dont know about.

5. She has already invested into the share markets via her superannuation, why put all her eggs in one basket?

Gold is a great safety net because its private.

As for me, Yeah I guess Im a goldbug now, how I got here is when I started reading about 911 - a year after it happened. Then I came across an article on the gold dinar, and I guess something just clicked because after that I started reading
about gold. So putting the Euro into the picture it seemed like a war on currency more then a war on terror.

I also have some silver so maybe im just a metal bug?

@ Ned and Chally

Add this observation to the "conundrum". Previously, we saw often DX strength in foreign markets, with the US open bringing downturns as the big boys sold in the FOREX. More often lately, we are seeing the DX fall overnight and jump again in the US open.

It looks more like ESF sponsored "homeland defense" to me now, instead of the foreign intervention we witnessed so often last year. The "talking heads" signal weakness and the traders swarm in to swallow up those who jump at the "bait".

CNBC has even started playing Nicholson's line from "A Few Good Men" as a tagline for some of their segments.

Col Jessup: "You can't handle the truth!".

Yes, the Fekete article was very thought provoking. It helps me understand why there may not be a Dollar crash anytime soon. It also helps me understand that in "managed markets", there are no possible economic models that will assure us of eventual outcomes.

Feteke does mention that he believes the Carry Trades are "sucking the life blood" out of the world's productive enterprise. I tend to agree with this.

If this is true, there is only one decent investment that a person can make, to preserve savings, and hedge against losses in the "managed markets". That is physical gold and silver.

The $US Tresury bonds rate of interest used to be refered to as "the risk free" rate. I think the new standad is gold. Sinclair says that gold will be accumulated by Central Banks big time starting in 2006. I don't know how he can know that, but if you are "managing markets", the leverage from gold is astronomical IMHO.

This is all very interesting, that's for sure.

kak

I would recommend that you take extra care before accepting his latest commentary. You can send a job to your printer, but that that doesn't necessarily make it right. In other words, don't believe everything you see in print. Taking Fekete's article together with the Mauldin-Gave article posted by Chally, this is one of those times.

R.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=As Comex Gold is now in PaperTrading mode ie: Mar is not a delivery month, it's interesting to analyse the first two months of '05 from a Gold/Dollar perspective to perhaps shine some light on the road ahead.
Two days prior to the Dollar rally in late Dec, Gold started to tank. It continued leading the Dollar until equilibrium at approx 10 Feb when they both reversed. Feb of course WAS a delivery month and Gold was moving briskly within Comex as the price declined ...17000 odd Contracts in fact.
With Gold/Dollar reversing in unison, the Gold movements abated.

March IS a Silver delivery month AND we don't as yet have a replacement for Swiss Bullion in the Market so any GoldPrice shennanigans this month are and will be reflected in Comex via Silver delivery notices methinks.

Well, I think of Bill Bonner's wise attitude: we know what we think SHOULD happen in the market, but it may or may not happen, or happen when we do not expect it.

My guess is people get tired of a trend, and speculators know this. So, they figure out when the trend is sort of "worn out", and that is the weak point where they can bet against the trend continuing, and - sometimes, I guess - they win. ("A speculator who dies rich, has died before his time")

So we see the price of gold is softening. Those who were going to buy, did so and pushed the price up. Then the desire for gold petered out; sure enough, that's when the speculators or the dastarly "cabal" come in - when the buyers are tired out - and bring it down again.

Eventually, the urge to buy takes over again. People come in and bid the price up, once again.

I have said before, "I only KNOW one thing: paper money always loses value, and gold will prevail eventually."

So no matter how many games the "cabal" and the speculators play, my position remains and will remain unchanged.

The old bat doesn't care for those games - he wants to sleep well during the day!

These gold games we are witnessing, cannot go on forever. They may go on longer than we think, but not forever. The tactics we are witnessing are only BUYING TIME for the international monetary system. Long term, the tactic is fruitless and will fail. Much higher prices of gold will prevail, because ever so slowly, gold is moving into hands that are going to hold on to it, no matter what.

The Swiss have traditionally adopted a "keller politik" - a "cellar policy": buy gold, put it in the cellar and forget about it. That's my policy. I hope this helps.

The GAB

http://www.abcs-of-gold-investing.com/

"keller politik" -- That's my policy. I hope this helps.
Owner of a GOLDEN cave !
<;-)

Gave says:

"The most interesting part of the BoK's announcement is that, on aggregate, the growth in foreign central bank reserves has started to decelerate. This means that we are moving from an environment of plentiful, and weak, US$ to an environment where US$ aren't as plentiful (and weak) as they once were. So anyone who has borrowed in US$ could be scrambling to meet its obligations."

My two cents worth:

This might be true, if all other factors remain equal - but they won't.

As foreign central banks deposit less bonds (from their reserves) in the Fed, the Fed will simply substitute foreign-owned bonds, with bonds bought from the US Gov't. which means, quantities of cash in the US banking system. That money, in the US, is very inflationary. As foreign-owned savings leave the Fed vaults, their place will be taken by bonds bought with printed up paper dollars.

This is the beginning of the "big float" that so worried this Forum some time ago. Foreign-owned debt turning into money within the US, in huge quantities. That means a dollar FALL, together with higher interest rates.

Opinions welcome!

The GAB

http://www.futuresource.com/charts/charts.jsp?s=CL&o=DX&a=D&z=610x300&d=LOW&b=LINE&st=Another observation we can make is gleaned from the Dollar/Oil perspective.
ALSO about Feb 10 (ref. previous post) we see a return to "sense" in the Oil price as it ceases to track DX and begins to run contra. A check of Bond Yields shows a similar turning point.
So, from Feb 10ish to now the Markets - Bond/Dollar/Gold/Oil, have been acting "sensibly"

Of course, this CANNOT be allowed to continue ;-(

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

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh68959_2005-03-01_16-58-39_n01269319_newsml[PIMCO is a major holder of of U.S. government debt. It is one of the world's largest fixed income players, managing global assets of about $445 billion.]

NEW YORK, March 1 (Reuters) - On the ski slopes, Chris Dialynas likes to go downhill fast -- and that's exactly where he fears the U.S. economy could be headed unless it cures its dependency on debt.

He believes Americans conditioned to consume must learn to save and that "the time for extreme sacrifice is upon us."

Dialynas argues the U.S. must also curb its reliance on foreign capital to fund its massive trade deficit.

Countries owed many billions of dollars by the U.S. would also share the pain under draconian U.S. policy initiatives advocated by Dialynas, managing director at the world's biggest bond fund PIMCO.

Stressing that his views are not those of PIMCO, Dialynas believes the U.S. should seek renegotiation or even forgiveness of its debt with countries that have large trade surpluses with America.

He argues that the United States has borne most of the costs associated with big changes in the global economy and America's creditors should now take the strain to help correct severe trade and financial imbalances.

His drastic recommendations include: a 15 percent cut in U.S. social spending; an increase in U.S. tax rates; U.S. capital controls to discourage capital flight; and a 40 percent revaluation of China's yuan currency.

Dialynas expressed concern that "the potential exists for policy makers in a few Asian countries to immediately direct a sale of the holdings of their U.S. assets."

If this ever happened, Dialynas argued, it would produce a "very hard landing" in the United States, which could include a rapid increase in interest rates, a sharp depreciation of the dollar, and a stock market fall.

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

Should the International Monetary Fund create a new program along side the one for HIPCs, but aim this one at HIRCs -- Heavily Indebted RICH Countries? Let's not hold our breath.

However, any way you rationally slice it, the dollar does not emerge an unscathed beneficiary as we inevitably transition one way or Another out of this politically unacceptible, unbalanced position in the international economic and monetary system.

Choose gold today in preparation to see you come shining through the fallout.

Final word goes back to the article:

.....Asked if he could really foresee a day when [debt forgiveness for the U.S.] could happen, he replied: "The simple answer is 'no'." Asked if he still advocated such a U.S. debt renegotiation or even default, he said: "Ultimately, if all this debt keeps accruing and keeps accumulating, the only way out is to restructure the debt -- default is the last ditch."

"There are other countries in history who believed they could just print their currency or expand their money supply and everything would end nicely. And of course, we know things in those instances didn't end nicely."....

Choose gold. Get your necessary diversification started today. Call USAGOLD-Centennial for access to professional consultation and gold that is priced right to fill your needs.
1-800-869-5115

R.

General Motors (GM 35.52 -0.13) has posted a larger than expected decline of 12.0% in US sales (consensus -4.9%) while Ford Motor (F 12.58 -0.07) has reported a US sales decline of 3.0% (consensus -6.2%)...

Soon only the rich will be able to afford a new car. Real wages are falling for most workers in the USA. In twenty years the US will be like CUBA. Millions of beat up heaps roving the streets. 10% of US will be living high on the hog, everyone else will be poor. The majority will be old and poor.

Here is more... an excerpt from commentary one year ago that I archived called "What Are Commodities and Why Invest in Them?"

(excerpt) -- Taken together, commodities form an asset class-similar to stocks and bonds-that can diversify a portfolio and provide a hedge against rising inflation.

Most assets do not benefit from rising inflation, particularly unexpected inflation, but commodities usually do.

By contrast, stocks and bonds tend to perform better when the rate of inflation is stable or slowing. Faster inflation lowers the value of future cash flows paid by stocks and bonds because those future dollars will be able to buy fewer goods and services than they would today.

Commodities may also react differently from stocks and bonds to other changes in economic or market conditions. For example, if OPEC unexpectedly reduced the supply of oil by a significant amount, the price of oil, gasoline and heating oil would likely rise. Natural gas prices might rise as well if industrial consumers switched from oil to gas. Rising energy costs could lead to higher commodity prices overall, which would presumably weigh on corporations� bottom lines and possibly result in inflation that would weigh on bonds.

Commodities may also provide a hedge against other "event risks," a catchall phrase meaning the risk of war or other geopolitical event that could cause other assets to fall.

Because commodities are distinct from financial assets and react differently to changing economic conditions, commodities can diversify a portfolio of stocks and bonds.

In a diversified portfolio, assets do not move in sync with each other, which limits the volatility of the portfolio. Lower volatility reduces portfolio risk and should improve the consistency of returns over time.

As a rule, individual commodities or even the asset class itself would be too volatile to be the only asset in a portfolio-few investors would consider this anyway -- so the volatility of commodities should be considered from a portfolio perspective rather than separately. In a portfolio setting, the volatility of commodities, stocks and bonds should complement each other because these assets do not move in tandem with each other. In other words, volatility in an asset class that is not correlated with the volatility of other assets in a portfolio is a key source of diversification.

Because of its potential to reduce risk while improving returns at the same time, diversification has been called the only free lunch in investing, and it is the primary reason for investing in commodities.

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

And if anything is a truism, it is surely this: Everybody likes a free lunch.

Diversify. Choose gold. Call USAGOLD-Centennial and own gold today!

R.

http://www.usagold.com/gold/special/TwentiesAlert.htmlCall and ask how you can prudently diversify, and also seek to maximize your profit potential through a diversification comfortably WITHIN your diversification. The knowledgeable brokers at USAGOLD-Centennial have been assisting profit-minded clientele for years in the savvy trading of graded gold $20s as a golden means to ultimately ratchet up the weight of their total gold holdings. Call and inquire -- this program may or may not be right for you. The staff at USAGOLD-Centennial can help steer you on a diversification path that's firm and tailored to your investment needs and goals.

See url.

R.

I wonder who put loco weed in his pipe tobaco.

I'm not sure some of you understand what Fekete is really saying. He is basically saying that the Fed has set up the US Bond Market as a safe haven, in an effort to stem disinflationary forces bearing down on the good ole USA.

If many can understand how the gold market has been managed for the past 40 years, it's not hard to see how this could apply to the US bond market.

And it is a brillant way to prop up a dying currency, at least in the intermediate term.

Towncrier, I do not accept everything that Fekete says is right, I just think that he may be on to something. I think his thinking is thought provoking.



Everyone will have to decide for themselves.

Today that means gold protects a certain quality of life and standard of living that's just not possible any other way. Would you expect that in say, a year or less the global economy would support a continued boom in raw material consumption and consequent CRB/commodities outperformance? If so, diversify your holdings and venture into options, stocks or futures as the underlying health of those derivative venues cannot buckle unless stressed. At the same time you can take advantage of a smooth transition in all markets and financial entities- governmental, public and private. Good on you then.

http://cbs.marketwatch.com/news/story.asp?guid=%7BC1D9779C%2D354E%2D4EAA%2D90EB%2D2AA3FB3D0CCB%7D&siteid=mktwCurrencies: Dollar ends mixed ahead of Greenspan - Leslie Wines - March 1, 2005
"Market to focus on Greenspan on Wednesday."
Here is a headline that in one year would need a new "nutshell" if the goal is to spin the news.

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 Events

Gold moved lower today, to $432.66 in subdued trading. Dollar-watching was still the order of the day, and the American currency appreciated broadly against major currencies. This was bad news for gold, which declined steadily in New York trading to test market support in the $430-432 range. Positive momentum from last week's short-covering rally now appears to have run its course, at least for the moment. Although many analysts are still short term bullish, gold will need a significant dollar-negative event to push through stubborn technical resistance at $438.

After two solid weeks of dollar depreciation, a correction was in order and it came from economic data in Europe. German unemployment rose to a seasonally-adjusted 11.7%, a postwar high. "The psychological effect of this unemployment figure is absolutely catastrophic,'' said Martin Huefner, chief economist at HVB Group, rather dramatically. "People are psychologically shocked and that may cause them to delay purchases of consumer durables.''

This news added to the anemic growth outlook for most of Europe, and combined with robust growth in the American economy was enough to send the euro (and gold) tumbling.

"The euro has come under quite a bit of pressure, and that is weighing down on the gold market,'' James Moore of TheBullionDesk.com said in an interview reported by Bloomberg. "Currencies will provide most of the direction for gold prices this week,'' he added.

Despite today's setback, many analysts still expect gold to break through the $438 barrier and trade higher, although no one could be sure when. "Exchange rates will continue to play the key role in guiding the gold price," Barclays Capital said in their daily report.

John Reade of UBS Investment Bank expected gold to be higher for the remainder of the year, but expressed concern about possible IMF gold sales...

-----(see url for full report, 24-hr newswire, market prices)----

The prevailing conclusion to my msg#: 129725 this morning is that monetary inflation is a force to be reckoned with. And whereas the business cycle would suggest balanced expectations for deflation, the reality is that central banks have been brought into being in modern form with no small part of the intent to forever goose away the deflationary turns of the cycle.

Thus, in a monetary world that can be characterized as a predominantly one-way trend of inflation building upon inflation, as PIMCO has pointed out in a previously cited article, tangible assets (as is gold) make for good portfolio holdings in this economic environment.

Buy gold, then lift up your feet and go with the flow.

R.

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=LOWI am not a very good chart reader but to me, the gold and oil charts look like you could throw a blanket over them. I've noticed this apparent relationship more than once over the years--not sure of the meaning.

Thanks for the (2) posts today. Your thoughts have helped immensely, please discuss strength/weakness in the USD ANYTIME!

Even with PM and oil weakness the CRB still eeks out a small gain........ +.26 ...305.26


There's going to be a terrifing RUMBLE in 2005 !! Are you ready?

Druid: TC, many thanks for your very clear and descriptive response. I'm heading out of town as of this minute and will get back to you upon my return. Have a great evening good Sir.

@ Fer Res.

GM announced that they were going to make On Star, the eves droppping cell phone, standard equipment on all their vehicles by 2010(?). Could it be that people don't want Big Brother cars?

Oh, well.

Couldn't link to this, but it's another offering from InvestorInsight. Sinclair long ago went on about this scenario.
Interesting that once again Scott Ritter, who was one of the first to cry "NO WMD's here"! (Iraq) and a favorite whipping boy for Hannity and the Neo-Con press, has surfaced again. Given the subject matter and it's import, he just might have some credibility this time. Anyway, here is the story.....

WHY IRAN IS NEXT

In recent weeks, the news media has been overflowing with reports on the increasing tension between the U.S. and Iran, supposedly based on the Islamic country's unwillingness to drop its nuclear programs. A clear-cut case of another tyrannical nation whose government needs to be ousted in order to make the world a safer place, it seems. But WWNK has found information that's largely been flying under the radar screen of the mainstream press... and that might paint an entirely different picture.

On February 18, Scott Ritter, ex-Marine and former United Nations Special Commission (UNSCOM) weapons inspector who played a major role in Iraq, dropped a bombshell during a speech delivered to an audience in the Capitol Theater in Olympia, WA. The event's sponsor, United for Peace of Pierce County (UFPPC), a Washington state activist group that nonviolently opposes "the reliance on unilateral military actions rather than cooperative diplomacy", had invited Ritter and independent war journalist Dahr Jamail to talk about the war in Iraq.

In his speech, Ritter claimed that President George W. Bush has received and signed off on orders for an aerial attack on Iran planned for June 2005, citing an anonymous official as the source of this information who--according to Ritter--was involved in the manipulation of the election outcome in Iraq, which reduced the percentage of the vote received by the United Iraqi Alliance from 56% to 48%. Ritter also stated that "this would soon be reported by a Pulitzer Prize-winning journalist in a major metropolitan magazine", an allusion to New Yorker reporter Seymour M. Hersh, believes the UFPPC.

In a January 17 article in the New Yorker, Hersh had written that "Strategists at the headquarters of the U.S. Central Command, in Tampa, Florida, have been asked to revise the military's war plan, providing for a maximum ground and air invasion of Iran."

But why? Is Iran really such an imminent threat that it would justify invading that country, with a U.S. army already stretched to the max by its commitment in Iraq? Aside from the 'official' nuclear-threat argument, there may be other, economic, reasons that seem far more logical.

In October 2004, William Clark, award-winning writer and author of the soon-to-be published book Petrodollar Warfare--Oil, Iraq, and the Future of the Dollar (spring 2005), gave his opinion on the reasons for a pending U.S.-Iran crisis in an essay titled "The Real Reasons Why Iran is the Next Target: The Emerging Euro-denominated International Oil Marker".

Clark blames "unspoken macroeconomic drivers" for the U.S.' determination to attack Iran, in particular the fact that the Tehran government plans to open a euro-based oil exchange in 2005 or early 2006, which--if successful--"would solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency." This, says Clark, would deliver a devastating blow to U.S. corporations, which own both the London's International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX), the main global oil traders.

All three current oil markers, the West Texas Intermediate crude (WTI), the Norway Brent crude, and the UAE Dubai crude are dollar-denominated. Iran, however, has required payment in euros for its European and Asian/ACU exports since spring 2003. "It would be logical to assume the proposed Iranian Bourse will usher in a fourth crude oil marker--denominated in the euro currency," predicts Clark... a probable scenario in light of the fact that "the European Union imports more oil from OPEC producers than does the U.S., and the E.U. accounts for 45% of imports into the Middle East."

In June 2004, the UK Guardian noted that "Some industry experts have warned the Iranians and other OPEC producers that western exchanges are controlled by big financial and oil corporations, which have a vested interest in market volatility." BP, Goldman Sachs and Morgan Stanley, proud owners of the IPE since 2001, refused to comment. In light of the fact that Iran, holder of the second biggest oil reserves worldwide after Saudi Arabia, exports 2.7 million barrels of crude/day and produces 13 million tonnes of petrochemicals/year, the Guardian foresaw bright prospects for the new oil exchange.

That is not the only reason, though: Other recent events indicate that Tehran's IPE and NYMEX competitor might be just what a large part of the world has been waiting for. Not only has the euro substantially risen against the dollar since late 2002--in May 2004, the countries using the euro as their currency increased from 12 to 22. Within the last two years, notes Clark, Russia as well as China raised their central bank holdings of the euro, "which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second World Reserve currency."

According to a July 2004 article on Rigzone.com, an insider website for the oil and gas industry, Chris Cook, a former IPE executive turned independent consultant, commented that recently the Saudis, too, have declared their interest in the project. Since 9/11, says Rigzone, "Saudi Arabian investors are opting to invest in Iran rather than traditional western markets as the kingdom's relations with the U.S. have weakened."

A lot of good reasons for the U.S. government to set their eyes on regime change in Iran, says William Clark. And it wouldn't be the first time, he says. His award-winning 2003 essay "The Real Reasons for the Upcoming War with Iraq" suggests that Saddam Hussein signed his own death warrant in 2000, when he announced that Iraq would no longer accept US dollars for oil being sold under the UN oil-for-food program, but that the country's official oil export transaction currency would be switched to the euro.
------------------------------------------------------------
Hmmmm......

"Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes... known instruments for bringing the many under the domination of the few... No nation could preserve its freedom in the midst of continual warfare."

--James Madison, 4th U.S. President, Political Observations, 1795

I'm afraid that Scott Ritter lost all credibility when it was revealed that he was convicted of trying to engage in ... ahem ... "adult" activities with a minor. Shades of Michael Jackson if you get my drift.

- Black Blade

Ah'm not puttin the guy up for sainthood, mind you, and I guess he's not really central to the story, but that's a seriously sad charge(conviction?)

..btw, did that surface pre/post WMD?

http://www.financialsense.com/editorials/fekete/2005/0301.html
Evidently, Dr. Feketes article, "Decoy of the Falling Dollar" caused enough questioning e-mail (including my own) to his box, that today he is out with further explanation and reasoning on the subject, titled, "Greenspan has taken the horse to water -- but can he make it drink?" and he does admit to some conjecture.

Similar to Knotakare's statement earlier regarding the bond market as a safehaven, Fekete believes that the Fed in collusion with Japan may be setting up to massacre the dollar bears thereby intensifying the deflationary spiral they professed to fear only a couple of years ago. (Snip below from the article)

..."Note that the Fed's contingency plan to steer away from hyperinflation is essentially deflationary. It is designed to massacre all short sellers of dollars mercilessly by relentlessly pushing interest rates further down. The trouble with this plan is that it makes bond speculation on the long side of the market risk-free. If you now recall that speculators frustrate the Fed's anti-deflationary measures by speculating, risk-free, also on the long side of the bond market, then you will understand why I am inclined consider the deflationary scenario as more likely than the inflationary, at least for the rest of this decade, but possibly for the next one as well.
Be prepared for further mind-boggling increases in the money supply as the Fed is desperately pumping liquidity into the economy. Contrary to expectations the dollar will not get much weaker, and may indeed get stronger because the new money, rather than flowing to the commodity market as the handlers of the speculators would hope, is flowing to the bond market where speculation has been made risk free by the Fed's foolish policies."....

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

I think the Good Doctor may be way out on the limb here, it certainly is different than what we have come to "reasonably expect" from our teachings of supply and demand. A good article for those who want to explore a different take on things.

As in, the 56oz 'half gallon' of ice cream at the OLD half gallon price!

....but take heart, hedonically speaking, you'll never miss the 8oz. difference. See, we upped the butterfat content and calories per serving, so the price is ACTUALLY falling! Quite an improvement, no? ;)

@ BB,

I know nothing of Ritter's personal issues, but to suggest that his problems render him not professionally credible might be a case of throwing out the baby with the bathwater. Catherine Austin-Fitts spent years in court clearing her name for the "crime" of publicly revealing HUD fraud, so whistleblowers get turned into criminals by any means TPTB can find.

The Admin's WH Press plant was recently revealed to run a male prostituiton website, but they're turning their back on his behavior, because his politics are acceptible.

Thankfully, I don't have to endorse someone's behavior to study the merits of their work. The folks he's telling on are no more "clean" or credible than he is.

Only the actual evidence really matters, and all too often it becomes overburdened by politics and prejudice.

Yeah, it was all over the news a couple of years ago. He had attempted a "meet" at a McDonald's and the police swept in for the nab. Apparently it wasn't the first time either. Anyway, several of his apologists ignore the arrests and cite his background as a former UN weapons inspector.

- Black Blade

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=30587
I found an old link to the story (see link)

Sorry to tell you folks, that it looks to me like gold is about to be smashed pronto.

The price has been dribbling down, so now is the time for the cabal - or whatever maleficent force operates on gold -to intervene vigorously on the down side.

I hope you all have plenty of dry powder to take advantage of the drop to purchase at bargain prices.

My expectation - I do hope I am totally mistaken - is $418 by Friday. I am no expert, please, this is just my personal feeling. Place no confidence in my prediction!
"For information purposes only" etc etc.

Such is the life of a goldbug (sigh!)

the GAB

Why do Ritter's personal troubles make his evidence suspect?

For one, audiences completely ignore any other malfeasance if there is a juicy sex story to divert them.

"There are more reporters covering the Michael Jackson story (More than 1,000 press passes issued) than all media from all countries covering Iraq."

. . . from urbansurvival.com


In 2004, we had Scott Peterson, Martha (convicted on testimony by a sexual weirdo, as well) and the ENRON/WC execs personal trials to divert CNBC and Bloomberg from any real business news. My guess is MJ will have to carry the load in 2005.

Lord knows they would never air the Blanchard case, FNMA accounting scandal, $Trillion missing from HUD, or anything that might affect more than a few individuals.

The allegations of $billions disappearing from the Iraq "reconstruction funds" gets "Ho Hum" coverage, only on CSPAN from an emasculated Congress uttering feeble white noise. But to assuage our desire for "public justice", Bernie Evers' $5K shower curtain gets more airtime than a CLIO nominated SuperBowl commercial.

Oh well, kiddies! If you want entertainment, fire up the box. If you want information, do your homework! Lots of sources get quoted here daily, but they all have to be weighed on the merit of their evidence by anyone who cares about more than "spin".

My biggest question right now is "what is going on behind closed doors with the US$, silver, and gold? They sure seem whacky of late, and all these irrelevant media diversions are downright annoying!

Not sure if you're right about gold, but silver is getting whacked again overseas. It may have trouble holding $7.00 unless some buyers show up.

http://www.ameinfo.com/news/Detailed/54970.html
Snippit:

Gold remains the ultimate hedge against volatile financial markets, several delegates to the Hedge Funds World Conference in Dubai told AME Info yesterday. Some investors are concerned that US imbalances are likely to precipitate a global financial crisis in the near future.

Black Blade: Very thin I know, but much is said in this simple statement.

On the previous posted material: Sometimes you do have to consider the source. The man is obviously mentally unbalanced and that does make him and his allegations rather suspect. Besides, it is off topic and I will leave it at that.

http://www.alwayson-network.com/comments.php?id=8853_0_24_0_C
Anyone seen the monetary policeman?

There seems to be a lot of phonies about wearing uniforms,but their badges are made out of paper or deep storage hoo-haw.

http://www.borsaitalia.it/fwa-cgi-bin/news.pl?id=1109776962nL02558182&tit=UPDATE%201-Gold%20perks%20up%20after%20rumoured%20producer%20sales&type=internazionali&ling=ENLONDON, March 2 (Reuters) - Gold steadied on Wednesday in Europe after a bout of rumoured producer selling dried up and investors stepped back up to the board, traders said.

Bullion had tested the bottom end of a week-long trading range around $428 earlier in the day, pressured by a firmer dollar and what several traders suspected was producer sales.

"There was some borrowing in the forwards this morning, coupled with the price being lower," one trader said.

"But it could be anything...new mine or project related."

Another trader said it was encouraging that once the selling dried up, the market bounced.

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

Expect higher gold, but ups and downs along the way. The market never goes anywhere in a straight line. The best you can do is try to catch the dips and not get rattled out of your participation by volatility.

R.

http://www.federalreserve.gov/boarddocs/testimony/2005/20050302/default.htmWASHINGTON, March 2 (Reuters) - U.S. Federal Reserve Chairman Alan Greenspan on Wednesday said the current budget situation could be "fiscally destabilizing," harm the economy and lead to higher long-term interest rates.

"If you really project how the actuaries interpret current law into future spending and tax obligations, you have an extraordinary rise in the unified budget deficit," Greenspan told the House of Representatives Budget Committee. "If that is literally the path in which we find ourselves, we'll find sooner rather than later that long-term interest rates begin to rise."

"When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you, and add interest costs to that ever rising debt at ever higher interest rates, the system becomes fiscally destabilizing," Greenspan said.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh92087_2005-03-02_16-27-19_wat002700_newsml
^-------(from Reuters article)-------^

Full text to Greenspan's testimony can be viewed at the hyperlink atop this post.

A few excerpts from that testimony follow:

"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver. If existing promises need to be changed, those changes should be made sooner rather than later. We owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. They need to ensure that their personal resources, along with what they expect to receive from the government, will be sufficient to meet their retirement goals."

"Addressing the government's own imbalances will require scrutiny of both spending and taxes. ... In the end, I suspect that, unless we attain unprecedented increases in productivity, we will have to make significant structural adjustments in the nation's major retirement and health programs."

"Our current, largely pay-as-you go social insurance system worked well given the demographics of the second half of the twentieth century. But as I have argued previously, the system is ill-suited to address the unprecedented shift of population from the workforce to retirement that will start in 2008."

"Much attention has been focused on the forecasted exhaustion of the Social Security trust fund in 2042. But solving that problem will do little in itself to meet the imperative to boost our national saving. Raising national saving is an essential step..."

"Unfortunately, the current Social Security system has not proven a reliable vehicle for such saving. Indeed, although the trust funds have been running annual surpluses since the mid-1980s, one can credibly argue that they have served primarily to facilitate larger deficits in the rest of the budget and therefore have added little or nothing to national saving. In my view, a retirement system with a significant personal accounts component would provide a more credible means..."

"In the end, the consequences for the U.S. economy of doing nothing could be severe. But the benefits of taking sound, timely action could extend many decades into the future."

^-----(from URL)-----^

The consequences of doing nothing can indeed be severe, but you have it in your power to take personal action to provide the necessary savings and stability of yourself and your family.

As outsized government debt is the nature of the problem, you should definitely not rely on debt-based financial instruments (such as bonds) as being any meaningful element of your portfolio intended to get you through that portion of the financial storm. Greenspan himself makes no bones about the likelihood that bonds fall as this unfolds.

To ensure you have meaningful savings and meaningful purchasing power when the world is awash in incredible debt, choose gold as a key element among your personal resources.

R.

http://www.aireview.com/index.php?act=view&catid=5&id=1469March 2, 2005, Australasian Investment Review -- The spot gold price appears to be firmly entrenched in a new bull trend...

Most factors supporting the trend are not new; continued US dollar weakness, high oil prices and fears of inflation. But what is new, the precious metals experts at NM Rothschild point out, is the stark reduction in the speculative long position on COMEX and the increasing likelihood that any proposed IMF sale will be vetoed by the US.

Both have encouraged bullion buying recently.

The non-commercial speculative long position on COMEX fell from 13.3 million ounces in December to 1.1 million ounces on 11 February, NM Rothschild notes, adding that it is hardly surprising that the gold price fell over this period.

The experts now believe the reduced level of "speculative longs" has opened the way for renewed Fund buying, and this may see the gold price rise to fresh 16-year highs.

...in India, a substantial part of the annual demand for gold comes from the agricultural sector as farmers put their savings into gold due to the lack of other available [i.e., reliable] alternatives. Last year, demand in India, which is the world's largest gold consumer, rose at its fastest rate in six years, reaching an estimated 610 tonnes.

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

It might be fair enough to say that NM Rothschild quit the LBMA paper gold regime because it saw far enough ahead to be bearish on the whole business of swapping psuedo-gold, and bullish on the merits of real gold.

With the previous comments of Greenspan and the debt-burden in mind, you would do well to take a page from the playbook of Indian farmers -- choose physical gold as your reliable means of real savings for a more secure future.

R.

I believe that silver's bounce off of $6.99 back to the $7.30 range is encouraging.

The metals seem persistent in the face of current dollar strength.

http://www.futuresource.com/charts/charts.jsp?s=DX1!&a=D&d=LOW&b=LINEFirstly thanks to Cavan Man for (inadvertently) correcting an errant link posted yesterday re: Bonds/Dollar etc.

The Dollar it appears is in the early throes of a classic Bull move here. The rush to 85 then retracement should have seen it retest 80 quick-smart...but it didn't!
Gold otoh has been lock-step with alt currencies "until today" when it showed resilience to the currency decline.

We can but hope this fledgling contra Gold stand is the precursor to it's casting off Currency shackles once and for all!

Wholesale gas jumped from $1.40 to $1.45 this morning.

Don't look for any fuel price relief in the near future.

Thanks TC for pulling out those snippets of AG's latest rant. While I do not have the time to read his entire piece, the tone of these snippets suggest he is trying to get tougher on the gov't to reign things in and is also trying to warn the general populace to brace for trouble. As usual, he is well behind the curve and it is too little, too late. He should have been giving this speech years ago and should have been much more aggressive or forceful in his convictions today.

Fortunately for us here at the castle, we have been on this topic already for several years. Black Blade's (and my)favorite line 'get outta debt, stay outta debt and get gold and silver' ring more true today with AG's 'startling revelation' that all is not well in America. I wonder though..... is anyone really listening to him now?

http://aslwww.cr.usgs.gov/Seismic_Data/telemetry_data/MBWA_24hr.htmlWas only saying yesterday to family the lack of seismic activity in the Pacific Rim might be a bellwether for another Bigun ...this one qualifies!!

Mother Nature it would seem is far from finished with us.

http://www.bis.org/review/r050228a.pdfSpeech by Dr Nout Wellink, President of the Netherlands Bank and President of the Bank for International Settlements, on the occasion of a luncheon conference of the Limburgse Werkgevers Vereniging, Herten-Roermond, 26 January 2005.

SNIPS :
"I would like to dwell briefly on the factors underlying the strong euro. The prominent role of the dollar is tied up with the United States � global leadership, in both economic and political terms. Its prominence does not necessarily signify that the dollar is strong. At this moment, the dollar is weaker vis-�-vis the euro than in the period between 1980-2000, because the United States has lived beyond its means for so long. Both the average American citizen and central government are consuming too much and saving too little. Private savings in the United States make up a meagre 0.4% of disposable income. In the euro area, citizens lay by more than 10% of their income. While the low level of private savings in the United States is not easily accounted for, stock exchange and housing price movements are probably an important factor. From surveys it emerges that especially citizens in the higher income brackets are dissaving. They look upon their assets as a substitute for savings. Not only American citizens are not saving much, if at all, even central government is dissaving, witness the high budget deficit. The expense of the war in Iraq and internal security is one of the causes of the high budget deficit. On the balance of payments, the national savings deficit of the United States translates into a current account deficit to the tune of 6% of the gross domestic product, or about 1.25 times the total annual output of the Netherlands. This means that funds must be raised from other countries on a structural basis. This cannot go on forever. A tad more Calvinism would not hurt. In some areas a lot can be achieved with little effort. The American administration might decide, for example, to raise tax on energy consumption, after the European example. This measure would bring down the public sector deficit and put a brake on private spending. Besides, it would enhance national security by limiting dependence on oil imports. And this measure would benefit the environment into the bargain. However, it is not just the United States that should be doing something to lessen the global imbalances on the balance of payments."

"The countries that for internal reasons have resolved to stabilise their currencies against the dollar, have had to buy up substantial amounts of dollars to prevent their currency from increasing in value in dollar terms. As a result, they have built up unprecedentedly high dollar reserves. I'm referring to Japan, China and several other Asian countries. This policy cannot and will not be continued forever. Neutralising the monetary consequences will be at increasing cost. On top of that, the potential foreign exchange risks rise with each dollar by which the reserves increase."
----------------------------------------------------------------------------------------------------------------------
Wellink calls the things by by name....

http://earthquake.usgs.gov/recenteqsww/Quakes/usvdam.htm@ Topaz

Here is the latest USGS report on the Banda Sea 7.1 quake.

http://www.borsaitalia.it/fwa-cgi-bin/news.pl?id=1109791381nN0228001&tit=NYMEX%20crude%20hits%20$53%20amid%20Texas%20refinery%20troubles&type=internazionali&ling=ENNEW YORK, March 2 (Reuters) - U.S. crude oil futures rocketed to $53 a barrel Wednesday afternoon to their loftiest level in four months as gasoline futures soared to an all-time record after a series of refinery snags in Texas.

At $53 crude for April delivery was up $1.32 or 2.6 percent. April gasoline was up 5.2 percent...

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

On the basis of a "refinery snag" I can understand why local refined products such as gasoline would be up, but a refinery glitch alone isn't a sound excuse to pin on globally rising crude.

Of course, the media can hardly sound the alarm that the dollar is weakening, losing global reserve status. You'll be told anything but that.

R.

http://www.iran-daily.com/1383/2227/html/ieconomy.htmHEADLINE: China Spent $195b To Maintain Currency Peg

BEIJING, March 2--China's central bank spent 1.61 trillion yuan ($195 billion) buying foreign currency last year to maintain the yuan's peg with the dollar, a rise of 40 percent over 2003...

As a result, China's foreign reserves in 2004 soared to a record $609.9 billion from $403.3 billion in 2003...

...market players say the central bank has been virtually the only buyer of surplus hard currency such as the dollar.

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

If the CB doesn't mop up this glut of coincidentally overvalued reserve currency, the forex consequence would be a decline in the dollar's purchasing power across the board.

With the People's Bank of China consequently driven to use open market operations to drain 669 billion yuan from the domestic banking system last year in order to dampen inflation, the subsequent obligation of paying interest on that level of open market transactions is akin to pouring so much money down a hole on a desktop -- its a loss to the bank, but it ultimately ends up back in the street, all to little avail but to buy time.

Use that time wisely. Buy gold.

R.

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

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

Wednesday Market Events

Gold markets finished virtually unchanged from yesterday's close, gaining a fraction of a dollar to $433.01/oz. at 1:30 EST. Although there was little in the way of volatility, the precious metal tested technical support several times and emerged unscathed, soothing the nerves of dealers who worried that gold could dip to $410 if support at $430 broke down. Toward the end of the day, gold's price was boosted when rumors of producer selling dried up, and by the impact to the dollar of statements by Federal Reserve Chairman Alan Greenspan.

...The dollar was the other catalyst of gold's movement today. There was a brief rally prior to Alan Greenspan's testimony before the House Budget Committee, which helped to depress the price of gold. However, gold recouped its losses after his testimony, as Greenspan's statements were not especially dollar-positive.

Greenspan conceded that current budget deficits are not sustainable, due in large part to the enormous future liabilities of the government.

"So long as health-care costs continue to grow faster than the economy as a whole, the additional resources needed for such programs will exert pressure on the federal budget that seems increasingly likely to make current fiscal policy unsustainable," he said.

"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver. If existing promises need to be changed, those changes should be made sooner rather than later," he added.

This was enough to spook currency markets. "They were expecting Greenspan to be hawkish on the economy," said Jeremy Friesen, senior currency strategist at RBC Capital Markets in Toronto. "But he is using this time to drive home the message that fiscal discipline is needed ... and to convince policy-makers to make hard choices."

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

ONE TONNE GOLD: Eighty 400-ounce bars
(For scale, the pallet plus stack measure only about 12 inches high in total)

http://www.usagold.com/gold/special/grp.html
- - - - 12480N - - - -
+
- - - - 12389K - - - -

Congratulations to our two winners of the Napoleon Bonaparte 20Fr gold coins!

The winners this time happen to be clients from Utah and from California. If that might be you, you can check your numbers to see if luck was on your side. Otherwise, no worries, Jonathan tells me the winners will soon be notified by phone.

He also tells me that the March Buyers' Group is in the works, and the coins are on their way in. Look for an announcement middle of next week. Stay tuned... he predicts it'll be a rapid sell out!

R.

I live in Darwin, Northern Australia and last night at about 8.15 pm local time we had a very nice earth tremor which lasted for about 2 minutes. The house shook and woke the kids up. They were worried about a tsunami. Luckily the epicentre was at 100 km below surface. We live in interesting times!

TC,

OK, I'm confused.

Is a pound of gold 12 troy ounces or 16?

If only 12 per, 60 bars would make a ton.

Care to clarify my confusion?

...we aren't worrying about It's lackluster 'performance' of late, my precious, and here's why... a chart of monthly Gold prices averaged over several decades shows that Gold is USUALLY cheaper this time of year, and USUALLY after July, too...

S.

Today's surprise move in the gold sector was definitely unexpected and the USD grind higher for technical reason. The relative price decline in the POG did not materialized but gold rose instead or held its own on the back-drop of higher crude.

Could the specter of inflation expectation be picking up now that oil is closer to 55 that 40?

Will the investment community now ride the gold and PM sector bandwagon to protect themselves from higher inflation expectation?

It has always been by strong believe, that holding gold related investment is more of an inflation hedge versus an investment as maintaining ones asset from a currency crisis, since those are the two main reasons for holding gold and gold shares.

Go figure.

In light of this fact is should be expected that as long as crude can stay above the 50 level, the price of gold and gold shares have found an unwitting ally. Higher crude then translate to higher gold and gold share price.

Cheers

http://www.nasdaq.com/asp/quotes_news.asp?cpath=20050302\ACQDJON200503021707DOWJONESDJONLINE001042.htm&selected=9999WASHINGTON -(Dow Jones)- American workers will be able to make contributions to their 401(k) plans much like they do to Roth IRAs under proposed rules issued Wednesday by the Treasury Department and Internal Revenue Service.

The item would allow workers to contribute to their 401(k) plans on an after- tax basis, with those contributions growing tax-free and be withdrawn tax-free. This is similar to "Roth IRAs," a savings account that allows these types of contributions.

This is a major change in how 401(k) plans now operate, where workers contribute pre-tax dollars into the accounts, and the accounts grow on a tax- deferred basis. They pay taxes when they withdraw from the accounts.

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

A tool for social engineering -- offering incentives for officially-preferred behavior.

Rarely do officially-sponsored programs come with "no strings attached" (such as penalties for early withdrawal) and beware that rules may change to suit changing government agendas over time.

As always, evaluate the pros and potential cons of any program, and always be sure to maintian a vital position in "no strings" gold.

R.

http://www.bloomberg.com/apps/news?pid=email_us&refer=columnist_pesek&sid=aKmRPPpmFAfg
Snippit:

March 2 (Bloomberg) -- Asia's economies are rolling the dice with an enterprise that may alter the complexion of the global financial system, affecting powerful central bankers like Alan Greenspan on the other side of the world. It's called ``The Asian Bellagio Group,'' a name that is borrowed from the European Bellagio Group, a gathering of academics started in the 1960s. Asia's group includes officials from Japan, China, South Korea and Southeast Asian nations who met in Bangkok last week to discuss the dollar's slide.

The group is a formidable crowd, considering it holds well over $1.1 trillion of U.S. Treasuries. In fact, if Federal Reserve Chairman Greenspan is wondering why his recent rate increases aren't working out as planned, he need only look to the East. Greenspan recently referred to a ``conundrum,'' whereby U.S. Treasury yields fell in the face of rising official rates. Yet trends here explain why: Asia's vast purchases of U.S. Treasuries, which reduce U.S. yields, are rendering the mighty Fed impotent in its efforts to cool the economy.


Black Blade: Pretty much what has been discussed here in the past. Asians have the lion's share of foreign owned US debt - so the polite way of saying this is - they have Alan greenspan by the juevos. That ain't all - China and India (and Asia in general) are in a global bidding war for oil and natgas supply. They know they have the additional leverage of owning a large chunk of US debt.

So as not to be consistently confounded by the differences between troy(apothecary) ounces and customary(avoirdupois) ounces and their corresponding yet unequal pounds (12 troy vs 16 customary) and such, there are only two relationships that I worry about when talking about ounces(always troy) of gold and tonnes of gold:

one troy ounce = 31.103 grams

one tonne = 1,000,000 grams

Such that one tonne of gold is 32,151 troy ounces.

Thus, we stand right at 80 "400 ounce" bars in total, each containing between 350 and 430 fine troy ounces by industry standard.

R.

....tacks on another 1.39 to 306.65 !!

Something is going to get ugly very soon, rising dollar, rising CRB, gold up and down LARGE.

Crash helmets on !

http://www.energybulletin.net/4566.html
Snippit:

Governments have long been preoccupied with securing energy sources, most notably oil and natural gas. After all, energy is a foundation of modern society: Economies fail and governments fall if there's not enough energy to ensure that the lights work or that factories can continue to make widgets.

The struggle between global energy haves and have-nots is nothing new�1970s oil shock, anyone? But in recent years, a range of factors has shoved access to energy up the geopolitical agenda of many countries, supplanting the nuclear arms race as the dominant driver of geopolitics.

First�and most obviously�Big Oil in the White House, the second Iraq war, and the related unrest in the Middle East have all accelerated the process of energy access becoming a geopolitical survival of the fittest. The United States is by far the world's largest energy consumer, yet it is making no real effort to reduce energy consumption. Meanwhile, the prospect of continued unrest in the Middle East�due in no small part to the activities and attitude of the U.S. government�suggests that the overall level of energy prices will be significantly higher for years to come.

On another front, unabated growth in energy demand is exerting ever-greater pressure on energy supplies. The rate of energy demand growth, at 2 percent per year, has slowed sharply since the 1970s. But demand is growing from an ever-larger base, since global energy consumption has roughly doubled since 1970.

Energy is also at the crossroads of the simmering conflict with Iran, one of the largest vendors of oil to China�which is suspected of selling missile technology to Iran. And in January, India initialed an agreement to import gas and oil from Iran. Needless to say, neither India nor China is likely to stand by idly if the United States decides that Iran is the new Iraq.


Black Blade: Much the same that I have discussed here for nearly five years now - even before I posted "The Rise And Fall Of Hydrocarbon Man". There have been some changes - many quite profound since then. The world is about energy and now the Third World has enterecd the fray demanding their "fair share" just as predicted. It will only get worse as a new Global Bidding War has begun as China and India seek out energy supply from traditionally secure US sources such as Canada, Venezuela, Iran, Russia, etc. Get on the defense now while you can - get a modest position of Gold and Silver "portfolio insurance". These are definitely "Interesting Times".

From TC w/ thanks!

Greenspan-speak:

"I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver. If existing promises need to be changed, those changes should be made sooner rather than later. We owe future retirees as much time as possible to adjust their plans for work, saving, and retirement spending. They need to ensure that their personal resources, along with what they expect to receive from the government, will be sufficient to meet their retirement goals."

"Addressing the government's own imbalances will require scrutiny of both spending and taxes. ... In the end, I suspect that, unless we attain unprecedented increases in productivity, we will have to make significant structural adjustments in the nation's major retirement and health programs."

"Our current, largely pay-as-you go social insurance system worked well given the demographics of the second half of the twentieth century. But as I have argued previously, the system is ill-suited to address the unprecedented shift of population from the workforce to retirement that will start in 2008."

"Much attention has been focused on the forecasted exhaustion of the Social Security trust fund in 2042. But solving that problem will do little in itself to meet the imperative to boost our national saving. Raising national saving is an essential step..."

"Unfortunately, the current Social Security system has not proven a reliable vehicle for such saving. Indeed, although the trust funds have been running annual surpluses since the mid-1980s, one can credibly argue that they have served primarily to facilitate larger deficits in the rest of the budget and therefore have added little or nothing to national saving. In my view, a retirement system with a significant personal accounts component would provide a more credible means..."

"In the end, the consequences for the U.S. economy of doing nothing could be severe. But the benefits of taking sound, timely action could extend many decades into the future."


Ned -speak:

"We are euchred.."

1 troy ounce = 31.103481 grams = 1.09714 avoirdupois ounces.

12 troy ounces = 1 troy pound = 0.822857 avdp. pounds.

One 400 troy ounce bar = 12,441.3924 grams = 33.333 avdp. pounds.

Eighty 400 troy ounce bars = 32,000 troy ounces = 2,666.667 troy pounds = 2194.28 avdp. pounds = 995.311392 kilograms.

1 metric ton = 1000 kilograms = 2,205 avdp. pounds =
2679.6924 troy pounds = 32,150.74 troy ounces.

1 short ton = 2,000 avdp. pounds = 29,166.66 troy ounces.

1 long ton = 2,240 avdp. pounds = 32,666.592 troy ounces.

Aargh! Sir Town Crier beat us to the punch while we were hacking the brush on this trail... best to follow his simpler path! (cackle)

S.

.....is that Mr. Greenspan is beginning to talk more and more boldly about the system becoming unglued. Is it me or has anyone else noticed that in the last 3-6 months Greenie has been issuing more and more warnings?

I will watch this trend.

Oh, metric tonne. I was calculating an English ton, or 2000 lbs.

http://www.atimes.com/atimes/China/GC02Ad07.html
Snippit:

China has also joined the United States and Japan in developing strategic petroleum reserves, with the creation of 75 days of emergency reserves in four locations in Zhejiang, Shandong and Liaoning provinces.

Nevertheless, in the face of sporadic power shortages, growing car ownership and air travel across China and the importance of energy to strategically important and growing industries such as agriculture, construction, and steel and cement manufacturing, pressure is going to mount on China to access energy resources on the world stage.

As a result, energy security has become an area of vital importance to China's stability and security. China is stepping up efforts to secure sea lanes and transport routes that are vital for oil shipments, and diversifying beyond the volatile Middle East to find energy resources in other regions, such as Africa, the Caspian, Russia, the Americas and the East and South China Sea region.


Black Blade: Another interesting article on the Global Quest for securing energy supply. Folks, the fun is only beginning.

@Sir Ned #129796

Yes, Sir Ned, I agree...as a matter of fact I was getting around to posting something on that very subject, but you have beat me to the draw...

It goes without saying that Chairman of the FED is a very "political" and a very "responsible" position...

Being very political, one's tenure may become very uncertain if one is not very "responsible".

We mostly know what "political" means, but what does "responsible" mean in this context?

Well, let me cite, from memory what I understand the situation was in Australia, in 1972, when the new Labor Prime Minister (Gough Whitlam) came to power with a bag-full of new, expensive planned reforms; after Labor (roughly equivalent to US Democrats) had been in the wilderness for about 20 years.

Australia had benefited from a minerals boom which had just busted and Australia, as well as much of the World, was in recession. The then Head of Treasury (I think) told the new PM that there needed to be a period of fiscal restraint, which apparently was not a "responsible" thing to say... The new PM apparently erupted along the lines: "If you think I have waited 20 F**&^%g years in order to do f%$#@*g nothing then you have another f&^#$@#h think coming!"

I can't remember if the Head of Treasury was soon replaced, but Gough implemented many of his (generally good, and well-needed) reforms and the country moved (eventually) into a period of double-digit inflation.

Perhaps Sir Al, whose tenure is nearly over anyway, can afford to be more responsible to his conscience, to the people and perhaps less "responsible" to the Pres and the Congress???

Just my thinking aloud...but, after all, in order to be able to "control things", one must be in power. If one is overly "responsible" and gets the boot, then one cannot execute change. Hence one's political skill is often about preserving one's tenure by being as "responsible" as the circumstances will permit. Greenspan knows probably better than any man alive what the fiscal and monetary position of the US is, and he has known it for many years. Perhaps the SECOND term of a crusading Pres, which coincides with the end of his term, is the time to truly become responsible...

;-)

This easy to read PDF is a "Must Read" for anyone wanting knowledge on how the Gulf States view Gold --AND their level of understanding about a seriously declining US$.

Go to the link above @Gulf Research Centre & download the article referred to above which is 2 article from btm of the page. It will NOT dissappoint!

RANDOM SNIP's - -
Today, US treasuries have a negative real interest rate, even when one applies the official inflation figures that have been softened by the political correctness of dubious statistical methods.Therefore, longer maturities appear
especially uninteresting. The stock market on the other hand, is commanding valuations at historical highs and does not look attractive either.

Thus,it is obvious that gold as a real asset is an important tool to maintain the capacity for future investment, as it is more than a mere financial asset, which always has a liability on the other side. Together with a concise development strategy, it could provide crucial independence and be more interesting than simply switching from petro-dollar to petro-euro recycling. If so, why has the recent attempt to establish an Islamic currency solution failed?

Currently, the gold reserves of the GCC countries are not sufficient to represent such a virtual fall-back value. Furthermore, as will be seen in the next section, it may become increasingly difficult to acquire further
gold reserves because of the tricky nature of today's gold market.At current prices, it is inconceivable that this short position could be covered. A much higher gold price would be needed. This,in turn, would not only seriously hurt the profits of the banking system but would also endanger the already ailing paper dollar whose liquidity is fuelling the US and world economy alike. This is why Veneroso, Embry and others assume that an official sector of central and commercial banks has started to manage the gold price at least since the plight of the LTCM hedge fund in 1998, which purportedly held a huge short-position in gold. Occurring trading patterns suggest that apart from lending physical gold into the market, the gold price is suppressed by derivative short selling and spread trading. Similar accusations exist in the case of silver.

The likely outcome is the current manipulation scheme of the gold price will fail like the Gold Pool in the sixties. Once it fails, it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the GCC countries.

Conclusion
The paper dollar standard is a dead man walking. Its debt,
accumulated over the recent decades, is too high to be effectively repaid. It will either default or be inflated to such an extent that itwill not hurt to "pay" it back. Therefore, the accrued imbalances in global finance and the inherent weakness of worldwide growth models that rely on a continuance of US deficit spending are likely to usher in a serious crisis of currency systems during the course of the coming years. As the dollar is not only the currency of the US but the most important reserve, trade and debt currency on which all the other nations rely, it will not be a regionally confined currency crisis as happened in Mexico, Asia or Russia in the nineties; but will affect all other currencies and economies as well.

ETC ETC - - - Read the lot!

http://www.grc.ae/Sorry about that - - - -

...to the article at the link below... you have to pay for it, it is not a free download.

S.

...it may be had as a PDF at:
http://www.lemetropolecafe.com/img2005/Midas/The%20Role%20of%20Gold%20Digital.pdf

S.

I downloaded it yesterday to my "desktop" & had forgotten where it came from.It came from a GATA e/mail! I assumed (wrongly) that if I followed the source I would get the goods. --- Bug*er paying for it! Well done.

http://groups.yahoo.com/group/gata/message/2901Latest GATA dispatch....


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

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So after casting suspersions about Scott Ritters character you then follow it up with your very unbelievably tainted view:

"On the previous posted material: Sometimes you do have to consider the source. The man is obviously mentally unbalanced and that does make him and his allegations rather suspect. Besides, it is off topic and I will leave it at that."

Far from being mentally unbalanced I believe Scott Ritter has impeccable character & has proved to be a solid rock that could not be challanged by the evil ones!

What he reported as fact- -turned out to be true. NO weapons of Mass Destruction! As a whistleblower he has become a target for the evil machines black ops (oops)
You do yourself no good in deningrading him with NIL evidence.

His warnings on IRAN should be taken seriously & I believe it to be a subject well WITHIN topic. Another case of American intervention will definately upset World Currencies ---GOLD will be affected one way or another.

http://www.bloomberg.com/apps/news?pid=email_us&refer=home&sid=aPSc48vjVuNk
Snippit:

March 2 (Bloomberg) -- Federal Reserve Chairman Alan Greenspan told Congress the record U.S. budget deficit is ``unsustainable'' and that spending cuts are needed before costs balloon for Social Security and other benefit programs. The U.S. may have made promises it can't keep to baby-boomers who are getting ready to retire starting in 2008 and any changes to government programs should be made ``sooner rather than later,'' Greenspan told the House Budget Committee. ``Our budget position is unlikely to improve substantially in the coming years unless major deficit-reducing actions are taken,'' the chairman said.


Black Blade: So after many years on the job Greenspan just figured this out on his own did he?

C&P from another forum I thought made some interesting points on silver:

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

Trading silver for gold

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

A funny thing happened on the way to the coin dealer....... (true story).

Recently at an area coin dealer/pawn shop/PM dealer's shop when someone walked in on a Saturday morning with a bag of 90% junk. He wanted to trade it for gold. Shop owner told him he would pay his "going rate" and charge his "going rate", giving nothing on the trade or even narrowing the spreads. Reasoning was that he was in business to make a profit, and it mattered little to him if it was an outright purchase followed by an outright sale, he still kept the same spreads.

I think you are likely to find this to be the case with any "dealer" out there. They are looking at the profit margins rather than the metals involved. This is also why "ratio swapping" can get very expensive, playing the silver:gold ratio according to market movements. You are effectively paying the dealer commissions (profits) on both ends of such a trade, both when buying and when selling (taking a loss on the sale and paying a premium on the purchase).

Depending too on the markets, you may actually find it easier to trade your gold for silver than visa-versa. Few dealers out there look on silver as the preferred holding, at least for themselves, partly due to demand fundamentals (customer demand) and handling and shipping costs involved with the silver in comparison to the gold.

The only "historic ratios" between gold and silver are those artificially bestowed by governments or via market supply/demand, with the exception of the true "natural" ratio of the presence of the two respective metals in the ground. What the ratio "should be" is alot harder to determine than what it actually "is" at present...... usually more speculation than anything. Assuming there is a "correct" ratio, or that the ratio will ever return to any particular level can be a big mistake, just as assuming "known" silver supplies really bear any real meaning in comparison to what is actually out there.

"The numbers" in silver have been bantied around since the late 60s, and according to some of the earlier writings, we should have been "out of silver" a long time ago. According to Butler and others, the numbers are getting very low, yet there is still silver available. Nobody out there knows the real numbers where silver availability is concerned, and never will. For the most part, it's all an investment sales pitch, and as others point out........ "wearing very thin". Where did Butler's writings originate, and who bankrolled most of his work ? How much silver does he own himself ?

You see, the problem is that the claims as to silver supply always stop short of anything even remotely close to reality. The assumption that "official supply" numbers represent all of the silver above ground is very misleading, but used as "statistical" because anything beyond recorded numbers cannot be proven or disproven one way or the other. This is why silver is touted as such a fantastic investment to begin with...... because incomplete information (and outright misinformation) can be spread for marketing purposes with little or no rebuttle and the "gurus" know that there is no earthly way to prove or disprove their claims. This supposedly makes them "experts" in their field because nobody challenges their claims.

Knowing the "REAL NUMBERS" as to privately held silver inventories compared to COMEX or similar documented inventories (if that were even possible) would likely send most silver investors into a cold sweat. And it is just that "impossibility" of knowing the complete numbers that keeps the silver myth alive and well.

We talk about "market manipulation" on both sides of the PMs (silver and gold), but do we ever stop and think or wonder just what is REALLY behind the silver tout ? Which metal has historically been the REAL threat to the financial fiat elite and continues to be looked upon as the supreme financial commodity throughout the centuries ?

Is silver just another side-show to help take the attention (and purchasing power in the way of fiat) away from gold in the same way some of us suspect the exchange traded (paper) gold funds are ?

Sometimes we just refuse to see things that are plainly in view right under our own noses, or to at least consider possibilities that things just might not always be as they appear.

"Tell a lie big enough and often enough, and it will eventually be accepted as the truth".

"Make a statement that can neither be proven nor disproven, and you will remain relatively safe in your assertions".

The only blind faith I care to stake my and my families future on is my faith in GOD. For anything else, I'd like to see a little more convincing reasoning than the same worn out drivel being preached about "silver shortages". When diminishing supply stories stopped working, we started seeing more and more COT figures, technical analysis, wild suppositions, and anything else that could coufuse the situation and make the case for silver "sound good". The only thing that doesn't seem to make silver sound good as an investment these days is a good old fashioned dose of REALITY.......the reality that silver remains cheap, and for a likely reason. Wishful thinking doesn't equal scarcity.

http://www.ecb.int/press/pressconf/2005/html/is050303.en.htmlThe key ECB interest rates remain unchanged.

http://news.xinhuanet.com/english/2005-03/03/content_2641522.htm
Snippit:

BEIJING, Mar. 3 -- Consumer demand for gold in the Chinese mainland increased 12.8 per cent last year from 2003, according to the World Gold Council (WGC). The mainland's consumer demand for gold reached 234 tonnes in 2004, up from 207.4 tonnes in the previous year, according to WGC statistics. The growth jumped from 1.7 per cent in 2003.

Gold demand remained robust in the mainland, the world's fourth-biggest gold consumer after India, the United States and Turkey, the WGC said in a statement to China Daily.

"Gold demand in the mainland is expected to maintain such a growth momentum in 2005 as a result of China's steady economic growth and bullish gold prices," said Albert Cheng, managing director of the WGC's Far East operation. "We hope gold demand as retail investment in the mainland will have a big breakthrough this year," Cheng said.


Black Blade: China is the sleeping giant here. Once Gold becomes widely available throughout China the real fireworks begins.

http://www.federalreserve.gov/boarddocs/speeches/2005/20050302/default.htmSpeech by Governor Edward M. Gramlich
At the Benjamin Rush Lecture, Dickinson College, Pennsylvania
March 2, 2005

SNIPS :
"The trends, especially for Medicare, are so alarming that these two programs alone could, in the space of little more than a decade, account for about half of federal spending. Changes have to be made in these large entitlement programs to avoid a real fiscal disaster."

"The historical record for the United States, presented in a form similar to that for budget deficits, is shown in figure 3. Again, the dotted line is the primary deficit ratio, which in the case of international accounts is just the trade deficit. The solid line is the ratio of net international liabilities to domestic GDP, a measure of the nation's ability to afford its liabilities. As recently as 1985, net U.S. liabilities to foreigners were zero. But since 1990 the United States has embarked on a long-term period of high trade deficits, and now the international liability rate is close to 25 percent of GDP and rising sharply. International wealth portfolios are getting increasingly heavy in dollar-denominated assets. How long can this process continue?"
------------------------------------------------------------------------------------------------------------------------
Isn't it ironical that a papermoney portfolio is called a wealth portfolio ??? Are foreign exchange reserves wealth portfolios ???
What a contrast to Bundesbank's Weber pronouncement : "Our Gold is the wealth of the German people."

This could just as well be a silver bug talking here. I could have written this yesterday after reading a rather depressing scenario for gold and silver by Feteke. And I too am a silver bug (and gold too).The forum posting author is right, of course,...But one can make exactly the same argument about gold; just add to the supposed time frame to zero supplies...But Feteke and others have stated that relatively abundant gold does not matter for gold to be effective redeemable money,,,, Does it matter if there isn't very much left? I would think it would. If one has to rely on mine production for replenishment of gold,,,,if we evolve a need for it to get out of the present fiscal mess, then the price has to be allowed to rise greatly in terms of all currencies in order to dampen consumption and demand for it....Thence the vault supplies WOULD rise. Gold has not risen appreciably in real value terms in even USD,,,if one allows for the inflation/dollar shrink. And we all watch (and some even see) the vault supplies shrink right along with the currency unit sizes. The cost (smile) of manipulation to "then".

Please consider, if the FED and the other cbs are in nihilistic mode,,,,that they quite possibly will defend this system to OUR bitter end (again using the Feteke point of view), then it is in their interests to force the complete liquidation of all above ground supplies AND drive all miners out of business. This would also allow this system to stagger on for X (another unknowable number of) years (similar to silver), and use up these same supplies in the same way as those of silver were consumed - albeit at a slower rate. This would be rather effective in depriving the system of its redeemable bail out in the form of a return to a gold standard.

If one is to believe that Ted Butler is remotely correct in his anecdotally based assessments of above ground supplies, then we are already there for silver...That silver is too valuable already to be used for just money. Gold being relatively speaking use---less for almost everything else, is much more suitable as the preferred currency (back to) alternative,,,,But being use----less, it can also be used up without any particular damage to a viable economy.

Or the X numbers of central banks have oodles of supply in the vaults, or black silver, or legislation in the wings to confiscate same, or nationalization,,. But all precious metals supply and demand numbers are suspect. Both gold and silver are so controlled and regulated,,,,after all the PURPOSE of COMEX is to control the price - that's why the CFTC ignores infinite short attacks on BOTH - and that supports a nihilistic end game too.

Because if this goes on to the VERY end, there would not be ANY viable money at all. Back to conch shells,,,whatever.

But could one expect less, when the crooks are running things?

Just a muse on a so-far quiet day. Back to hibernation, it's cold out there!

Regards,

Of course you are right that the same could be applied to gold. I'm not saying that I believe or agree with all points made in the C&P, but do believe that if every grain of gold and silver ceased to exist on a moments notice that there would be little if any true or lasting effect on the world economy as a whole. Something else would soon take their place as monetary representations if that were to even be considered a "necessity". What we consider a "viable monetary alternative" could take shape in most any form as long as mankind deemed the item involved as being of sufficient "value", regardless (as you point out) of actual scarcity. After all, in the end, the value of gold and silver is nothing more than human perception.

Druid: The Euro/gold/oil/dollar relationship and architecture is the 800 pound gorilla that will smash the yen/bond carry trade that Fekete is espousing. Governments don't mobilize armies to protect bonds. Maybe the good Professor should view the carry trade as a mechanism to buy time for oil and GOLD.

Buy time for oil and gold, or for the dollar and POG-management ?

IYou said "Governments don't mobilize armies to protect bonds."

I'm not so sure you can say that. According to "The Creature from Jekyll Island" (among others), the principal reason for the US entering WW1 was that there was a significant risk that the loans advanced to the UK and France would not be repaid in the event of a German victory. As Morgan had lent more to the first two than the latter, it made better business sense to ensure that the bigger debtor(s) won. As I recall (it's been a while since I read it), Morgan also made a bundle off the subsequent US war bonds as well as the British and French ones.
Now I would be the first to admit that things have changed since then as those bonds were payable in currencies equivalent to specie !

C!

Is there some way to learn if a central bank has been selling? I know there is a report that comes out every month or quarter wherein the banks are supposed to set out their dealings with gold.

The POG action of the last few days suggests to me a central bank may be selling.

ECB's weekly financial statement :
http://www.ecb.int/press/pdf/wfs/2005/fs050225en.pdf

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=LOWRationale flew out the window today.
Gold sadly, could not stand the heat of a rising Dollar and retreated back to it's currency mean. There may well be some noise about Gold sales getting around but I'm too lazy to go look for it!
Oil/Bond is lock-step (although it (Oil) is closer correlated to 10Yield. These BOTH will reverse tomorrow imo.
Buck is in strong tech upswing with maybe a hint of downside risk if Yields drop too quickly.

So it goes!

I'm curious. What are the specific telltales that suggest to you that the price action is attributable to CB selling in the last few days?

I ask because there are numerable elements that compound into the price outcome and it seems incredible to me that anyone could filter out any specific signals of CB gold movement deep beneath it all.

For example, as shown in 968's post, the ECB on Tuesday revealed what reserve portfolio transactions had occurred during the course of last week. In addition to a liquidation of EUR200 million worth of foreign currency, there also occurred a net decline of EUR99 million in gold as two CBs sold under the umbrella of the Central Bank Gold Agreement while another CB bought a small quantity.

Did your telltales tell you anything was happening last week, or was that already rightfully factored into the ambient baseline?

To be sure, sales of that sort are generally to be expected for the next 4-1/2 years under the terms of the Agreement, and additionally the market expects to see Switzerland continue to sell approximately 20 tonnes into the market over the next three weeks -- which is a pace consistent with their gold market activity over the past 5-1/2 years.

What is it about the past few days that make you think something else is afoot, and how can you discount the odds that any given ripple in POG isn't a more superficial result of derivatives, the fickle winds of COMEX, or assignments of unallocated gold into double duty, producer gold loans, forwards, etc?

Thanks in advance for any insights you can offer to me on this.

R.

http://groups.yahoo.com/group/gata/message/2902Latest GATA dispatch....

Spread the word!



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http://biz.yahoo.com/bw/050303/35548_1.htmlDALLAS--(BUSINESS WIRE)--March 3, 2005--A study published by a research foundation in Dubai has endorsed the Gold Anti-Trust Action Committee's findings that Western central and commercial banks have rigged the gold market but have much less gold than they claim to have and so are vulnerable to rising demand for gold.

The study recommends that the oil-producing countries of the Middle East diversify their ever-depreciating U.S. dollar holdings into gold.

The study, "The Role of Gold in the Unified Gulf Cooperation Council Currency," was written by Eckart Woertz, vice president of CFC Securities in Dubai, for the Gulf Research Center.

...predicts that the gold price suppression scheme of the Western banks will fail just as their similar scheme of the 1960s, the so-called London Gold Pool, failed when the drain on Western gold reserves became too great.

Once the scheme fails, the study says, "it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the Gulf Cooperation Council countries."

The study concludes: "The paper dollar standard is a dead man walking. Its debt, accumulated over the recent decades, is too high to be effectively repaid. It will either default or be inflated to such an extent that it will not 'hurt' to pay it back. Therefore, the accrued imbalances in global finance and the inherent weakness of worldwide growth models that rely on a continuance of U.S. deficit spending are likely to usher in a serious crisis of currency systems in coming years.

"Gold will be a suitable means of asset protection and ultimate payment in such a scenario. It will preserve the wealth of individuals and central banks alike and will ensure important maneuverability for the latter."

The Middle East's oil-producing countries are especially obliged to heed the Gulf Research Center's study because their economies are based on a wasting asset, oil, whose depletion will leave them with little more than sand if the payment they receive is substantially depreciated or defaulted upon. In exchanging a real asset for paper assets that represent only unpayable debts, oil-producing countries are at imminent risk of massive expropriation.

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

Shades of 'The Gold Trail', ground broken by Another and FOA that many lucky readers have been following here and staying well ahead of the curve for at least seven years now.

As this fundamental information becomes more widely disseminated and understood by market participants, the mechanisms of radically undervalued gold and the purposes served by it will come off the rails and gold will once again be seen in its proper, full-bodied form as king among reserve assets.

Keep spreading the word.

R.

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

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

Thursday Market Excerpts

(MarketWatch) -- The dollar managed narrow gains in the wake of U.S. economic data, dampening investors' appetite for fresh gains in gold, as the financial markets await Friday's all-important February payrolls report.

COMEX April gold closed at $433.80, down $3. Low for the session was $430.10.

Kevin Kerr of Kerr Trading International called the recent pattern in gold "backing and filling."

Trading such as this is "healthy for the bull market and is actually quite a positive sign for gold to test the elusive $450 level on the next round of dollar weakness," he said.

But Kerr noted that gold could be vulnerable to "further consolidation" if the growth in U.S. payrolls last month proves strong enough to roil the dollar in the currency markets.

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

HEADLINES

Venezuela gov't devalues bolivar currency 10.7 pct

Bangladesh CB urges fund managers - Make use of forward trade to ease pressure on forex

Dollar depreciation good for economic growth

CFTC Tells Congress Of Challenges Fighting Forex Fraud

ECB holds rates steady

You two are great and just had to smile when I read your posts on the sale and purchase of precious metals. I would hope that everyone has thought about when they were to put their investment to good use. Yes, it is sort of a banger when you pay a premium on one side and get less than spot on the other, for either metal. Silver has been blessing and a curse. Picking up the metal at about $3.80 spot and a 25 cent premium holding tight at $6.00 and the premium run from 50 cents to $1.25 Should I have dumped the whole she-bang at $8.50? I may have to live with that but I could not see letting it go for paper and having to scratch for it to get back to my same level. Why did I not trade it for Gold? I believe silver will shake out the weak hands and the POS is going higher IN THE FUTURE. Besides why did I want to help flood the market and lower the POS using my silver. POS came down, I brought some more and for a time the silver ran short and the premium went up and stayed up as the POS climbed again. Maybe it is just a matter of when you jump in and when you drop out and the hope the premium or the sale will not hurt you. Remember you went to the coin dealer. He didn't call you.;o)

I'm in for the Long Haul.

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

http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=3535265HEADLINE: Venezuela gov't devalues bolivar currency 10.7 pct

CARACAS, Venezuela, March 3 (Reuters) - Venezuela on Thursday devalued its bolivar currency by 10.7 percent, a move expected to generate more revenue from crude exports priced in dollars to help finance President Hugo Chavez's programs for the poor.

Analysts said the move will bolster the central bank's foreign exchange profits and the government will reap more local currency, but warned the devaluation was likely to increase inflation...

"Obviously manufacturing sectors include in their production a high level of imported goods ... without a doubt this increase will be passed on to prices," said Lope Mendoza, president of business group Conindustria.

The latest devaluation was the country's second since a fixed exchange rate was established to stem the currency's slide. The last bolivar devaluation in February 2004 weakened the unit by 16.7 percent, but helped boost government revenues...

WHY YOU CAN'T SIMPLY RELY ON "THE SIGNS"

Domestic financial markets have been speculating over the expected devaluation since December when then Finance Minister Tobias Nobrega said it would go ahead in early 2005, but later backtracked, saying he could not give a date for the move. With oil prices seen staying high, most analysts said the government's financing looked manageable through 2005.

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

As evidenced in that final excerpted partagraph, the signs intended for public consumption always tend to set the most people up to have the rug pulled out from under term. Therefore, the lesson is to be prepared for anything, at any time. Especially regarding China's currency peg, and the international reserve status of the dollar.

Getting back to this story, apparently the government deemed oil prices are still not high enough, so for the time being, if they can't boost the dollar price of oil, at the least they can boost the domestic price by devaluing their local currency against the dollar/oil standard.

Thus, as local savers in one corner of the world or another are fed up with this ever-looming government-led erosion of their nest eggs, they begin more and more to rely upon gold as the secure building blocks of wealth for their savings and retirement.

You should, too.

R.

http://news.yahoo.com/news?tmpl=story&u=/ap/20050303/ap_on_bi_ge/russia_metals_reserves_2R.

Why are you more concerned of CB gold selling instead of being worried by less buying ($-)T-bills by Asian CB's ? ECB gold is marked to the market (MTM) !

http://www.thedailystar.net/2005/03/04/d50304050152.htm(Daily Star) March 04, 2005 -- Bangladesh Bank yesterday asked fund managers of different commercial banks to take advantage of forward trade to ease pressure on foreign exchange.

The central bank officials briefed a group of managers in Dhaka on how they can utilise the forward trade facility without minimum risk citing several examples and making in depth presentation, sources said.

In a bid to ease pressure on foreign exchange, the central bank last week relaxed its regulations relating to forward trade so that the fund managers can trade foreign exchange beyond their limits.

According to the sources, the central bank prefers to inject greenback in the market cautiously and is not willing to take the foreign exchange reserves below three billion mark, having taken different measures to maintain the level.

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

You see Bangladesh do this here with respect to greenbacks; is it really so hard to imagine IMF/Dollar System supportive agents doing the very same with respect to gold in the post-Nixon environment? Recounting from ancient times, we have gone from market standards of property barter, to a barter/monetary halfway-house in the form of a gold coin standard, to a Bretton Woods sanctioned gold/dollar exchange standard, and most lately to a post-Nixon dollar-denominated gold derivative standard which we are still essentially operating under today.

The growth of political rumblings in recent years toegether with the coincidental development of the unique euro system speak to the effect that we are in a phase of transition to a new standard which shall restore to gold a degree of market valuation freedom not seen since the ancients valued it freely and intuitively as property worth holding. By contrast, in today's gold market an "ounce" is watered down with so many paper encumbrances and clones that nobody can really say for sure what commanding view a physical ounce could have if only the smoke were cleared. But take heart, goldmeisters, the winds of change are certainly blowing.

R.

http://www.iht.com/articles/2005/03/03/news/europe.htmlMarch 4, 2005
BUDAPEST -- Frustrated by travel restrictions and uneasy about the war in Iraq, citizens of Central Europe who once pledged allegiance to the United States are now recalling their European roots...

...the ease of traveling and working in other European Union nations -- compared with the difficulty of securing visas to travel to the United States -- is making "old Europe" a more attractive ally, analysts and local residents say.

"It's changing. Central Europeans are waking up to the reality that, from here on out, their bread is going to be buttered more in Brussels than in Washington," said Charles Kupchan, director of European studies at the Council on Foreign Relations in Washington.

That trend is apparent in Budapest. Prices, which were once listed in Hungarian forints and U.S. dollars, are now displayed in forints and euros.

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

Among other things, the euro can enjoy price of place in the world -- a growing currency union at a cross-roads of people right in the middle of everything. The dollar headquarters, on the other hand, is relatively isolated, sandwiched between two large oceans.

Meanwhile gold enjoys the mystique of being everywhere, and yet so prized and hard enough to come by that it's practically "nowhere" at all. Unlike a government controlled currency, gold will never hyperinflate away into zero value. A great fundamental characteristic for a savings agent.

R.

Feb. Retail Sales Up on Spring Fashions
Thu 4:55PM ET - Associated Press
Despite a spike in oil prices and stormy weather in the Northeast and Midwest, consumers extended their shopping spree into February, handing retailers better-than-expected sales for the month.

What's next yoghort sales? Who cares about the price of Oil, people are buying new clothes despite having less money to buy them. Let's CHARGE it.

Historically wars, huge deficits (trade and fiscal), bring a shine to gold. Conditions are excellent for gold right now and have been for some time. That's why its been in an up trend.

The national debt is now 7.7 trillion and rising at the fastest rate ever. Up some 40% in the last 5 years. Our trade deficit is near 600billion, all time highs as a percentage of GDP. Both factors have the US standing on the edge of a cliff - the precipice of disaster!

I have no idea what Congress is thinking. Greenspan told them to reign things in this week at least on the deficit. There is some movement afoot to do something about the trade problem too. Here and there more table pounding regarding increasing the savings rate.

We have to keep a careful lookout. If these congressman start taking steps to hold the lines on spending and do something to help out on the trade side, i.e. start acting in a responsible fashion, gold could take a hit. For now though things are fine, gold is still in a solid channel line up trend, and it looks like the bozo's in Congress don't have a clue! That means nobody believes they will and can do anything to change things. Thusly, the crisis will come first, then the change.

To a great extent, I sense some bank may be selling mainly due to gut instinct, which has often proven right in the past (but that was more true before the severe period of the gold bear ended).

I noted there have been a couple of days in the past week, when gold fell against almost all currencies, which seems to indicate artificial downward pressure, at least to me.

Also, a recent article from Bill Murphy indicated aggressive selling from some source had been occurring, which to me means a central bank.

I probably shouldn't have used the word "dumping"; it could very well be the planned selling under Washington II, onto which the shorts are leveraging.

The good thing is that some CB's have now entered the buy or accumulate column. Add in grassroots demand from Asia and the ME, and things are sure better than they were five years ago.

http://www.miningweekly.co.za/min/news/today/?show=63937From today's News.

"In a written reply to a question from Parliament, Manuel said he favoured including five-year quotas for gold sales allocated to central banks in 2004 for the process."

--------
Max......It sounds like South Africa's Treasury supports the proposed use of International Monetary Fund (IMF) gold sales to fill in the WAGII quotas that EU central banks just don't seem to want to fill. Or is this just more talk when nobody wants to do the walk? What's in it for SA? I'll bet there's something in it for Mr. Maneul and the bankers.

Now what is that delicious phrase? Oh yes, timing is everything! The thing that just drives me right up the wall and back again is knowing that while the paper game of metals allows the day traders to play, the metal buyers are people that are automatically in the long game. One can't (unless mentally deficient) expect to win running metal and wallet back and forth to a gold and silver dealer to address every rally and tank (respectively) to make an expressed DAILY living! It's the long haul for us. And much the greater gamble. One seems to always to be standing and looking down the long dark valley of death for that ray of sunshine and hope.

I am confident that all that the Venerosas and the Butlers predict for our metals will eventually come to pass, and yet while I grind my teeth (as a Canuck )for the past three years with the gold in hand a losing value, and silver bouncing along the bottom of the inflation channel (albeit the volatility is pretty to look at graphically), as a moderately good investment that one can't touch, I know that the day traders on the futures markets are salting profits away and are able to plan and buy their security now for the hard falls ahead�

I cannot do the same thing, and what works for them, is a double whammy of pain for me.

And we also have to listen to all the uptick dissemblers, anti-metal bug slurs, AND the CFTC telling us to suck it up, boys.

I'm not getting any younger either.

Had to get that off my chest.

Nice talking to you.

Thanks.

G.

Will have to admit to playing into the "paper games" of sorts with some of the Krugerrand stash on occasion, selling into the spikes and buying back on the dips. Since '99 have managed to add a couple dozen extra ounces to what would otherwise have been a "static" investment in ounce terms, mostly by watching the AU and DX charts only. No rocket science involved there. Would be harder to do on the silver side I suppose due to the higher cost of shipping and spread percentages, being located in rural middle-America as we are. There are ways of beating them at their own game though, even in physical........ ;)

http://www.theaustralian.news.com.au/common/story_page/0,5744,12437066%255E601,00.html
Snippit:

PLANS to reopen one of Australia's largest goldmines have been abandoned because of acute labour shortages that are threatening to delay mining projects worth billions of dollars.

Black Blade: Similar but not quite so severe situations exist at other mines worldwide. Same with the energy industry. The experienced workers left when prices cratered and they won't come back after being burned. The universities don't teach these skills anymore either. This will continue to be a limiting factor for the production of metals and hydrocarbons.

http://www.nypost.com/business/22211.htm
Snippit:

March 3, 2005 -- Alan Greenspan thinks it's time to cut Uncle Sam's credit cards in half. In a stern rebuke yesterday of the government's unwieldy spending, the Federal Reserve chairman told Congress that its current budget habits are "unsustainable" � and warned they're "fiscally destabilizing" to our economy. Greenspan said, "We may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver.

Pointing to a record budget deficit of $412 billion in fiscal 2004, Greenspan said: "When you begin to do the arithmetic of what the rising debt level implied by the deficits tells you �and add interest costs to that ever-rising debt at ever-higher interest rates � the system becomes fiscally destabilizing."


Black Blade: I guess old Al has had an "epiphany". ;-)

@ BB

What'd he do? Clean his glasses so he can actually SEE the numbers?

http://www.commondreams.org/views05/0303-29.htmhttp://www.commondreams.org/views05/0303-29.htmhttp://www.commondreams.org/views05/0303-29.htmsnip:

If you don't like [the chapter 13 feature of] the bankruptcy bill, try this one: You may have read of the hardship on the families of those who have been called to fight in Iraq, including, of course, severe financial stress leading to many bankruptcies. Democrats in the Senate tried to put an amendment on this bill exempting military personnel, and the Republicans voted it down.

Goldilox -

The banksters need to close the bankruptcy loopholes before there is a mad rush to the exits. Not unlike moving class action suits to more condervative federal courts "just in time" - when an inordinant number of "miracle" drugs are proving to be on the preferred prescription list of Dr. Kervorkian and company.

If one needs evidence of systemic failures, just watch how the big boys are closing the doors on all their Ponzi schemes, like SSI and corporate pensions.

Protect your family and your assets - you know the drill!

http://www.commondreams.org/views05/0303-29.htmSorry about that!

Galearis, I know how you feel. I have long felt (even before I could articulate it, or knew such a place as this existed) that gold was true wealth. As a little kid, I wanted a cigar box full of gold coins. When it came down to it, it was hard to give up the fiat environment most of us were brought up in. I started buying at $305, and stopped at $375. At that point, I was happy with my stash, and have moved on to other positive things, mainly debt elimination. Still, with 90% of my savings in metals, I still watch the price, and hate to see it go down, even a little.

Sometimes, I think of "locking in profits." But always come to the conclusion that I would be trading something I control for something ultimately controlled by others. For the most part, I trust my credit union. I belive they'll be open tomorrow, and I can go down and get cash if I want to. But, what if they did not open tomorrow? The thought creeps me out enough to feel that my course is the correct one.

My worst fear is having to sell metal to pay for an emergency or a debt that is suddenly "called." My creditors seem content to accept their monthly payments now, but I think that might change if things go bad. Like a person, they will fight dirty to survive. So, I'm content to sit on my stash as-is, and for the most part I'm sucessful in ignoring it. Insulating it with fiat and getting rid of every penny of debt are the only things I care about now.

I'm kind of glad things haven't blown up just yet. Every month the system holds, I get stronger for the inevitable. I would wager this is true of most of the folks here, especially those who are accumulating.

-DoubleEagle (do wish I had twice as many of these, I will admit!)

...job report not so good?

;)

Ka-Ching!

http://www.ecb.int/press/pdf/wfs/2005/fs050225en.pdfI have a question. The weekly ECB financial statement for Feb 25 (linked below) indicates net sales of about 9.4 tonnes for that week. Presumably these sales were by member banks and are covered by the WA annual limit of 500 tonnes/yr. However, since the Swiss CB is not a member of the ECB but is a signatory of the WA, can we assume that Swiss sales of gold are not reflected in the ECB numbers? If that is the case, and the Swiss are selling about 6 tonnes/wk then we must add that to the ECB sales which gives us 15.4 tonnes for the week ending Feb 25. The sale of 15.4 tonnes/wk for 52 weeks would be 800 tonnes/yr.

We also know that the Swiss sales will end this month so the current rate (if I am correct in my assuption above) of gold sales reflected in the Feb 25 report is well above the rate that is sustainable under the WA. Perhaps this higher rate of sale has created some pressure in the market as canamami suggested?

I do tend to think that most if not all of this gold is being rearranged and not sold into the so-called "free" market but yet it would give the perception of increased CB selling that would tend to depress prices.

Get out the meat and keep 'em runnin'

@DoubleEagle
Staying the course may mean that my daughter (and her husband) who are conventionally gold/silver hostile will inherit most. That's not necessarily a bad thing except that I won't get to put one of those bumper stickers on that says: "happy spending the kids� inheritance" or some such�(smile) But we seem to be twins in endeavour. In my case, I started buying gold the other side of the bottom last century (smile), after I started learning a little. Those were the early GATA years and my learning curve was almost inspired. But at some point when one realizes that gold is THE focus by TPTB but is understood in inverse proportion to the whole rest of the financial community, that one starts to see (perhaps) WAY down the road and know that the people that run things from behind are not going to roll over with honour and dignity. It may not look like it to most, but I see these events as "kicking and screaming" as the world tries to find a way around the fiscal empire of the United States. This helped me in my decision to invest (yes invest) in silver as the probable early play. And of course, Butler was an inspiration. And I am grateful. As far as that goes.

Silver, not gold has performed for me better than any inflation hedge paper out there as a savings vehicle. Gold has been terrible for Canadians, and mediocre (just short of terrible) for Americans,,,,if one factors in the dollar decline on the Forex. Ignoring the incalculable REAL inflation and just going by Forex figures. In terms of year 2000 dollars, gold is a little over $300 per ounce- some $50 off its all time lows in terms of value in year 2000 dollars.

So we are still in the accumulation phase of this bull market, which (IMO) is barely started. Also (IMO) we will know that this is a real bull market in the yellow 1) when the dealers start to have problems obtaining stock, and 2) pundits start watching the COMEX for signs of default. That is probably some years away. I may be wrong but I do not believe any of this can be said for silver.

So like you I guard the metal and pay the bills (including debt) with the fiat. And I still accumulate�We are after all STILL beating the "rush to the sale"

But unlike Kilo:

My situation does not lend itself to speculating in metal as you describe. I note that not only are many metalbugs being discouraged by the paper shenanigans and the affect on the spot price, but also the metal shortages (gold and silver in my area) have affected local dealers in my area substantially. Two have left the business.

Consider that as a trend that may continue, imo.
In conclusion, I consider that what I do is both investment banking AND hoarding.

FWIW.

And best regards to you both,

G.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Boilermaker (3/4/05; 07:44:13MT - usagold.com msg#: 129849)
Wake Up Gandy, The Hounds are Loose!!
===
WOWSERS -- just sleep-in a LITTLE bit and "WHO let the dogs out ?"
The GOLD chart is LOOKING GOOD !
Something smells fishy around here -- Sir Smeagol !!!
but it is a "Nice" end to the week.
<;-)

http://urbansurvival.com/week.htmsnip:

You might think, if you just dropped in on planet Earth from somewhere else in the galaxy, that there were really three big stories on Thursday: Martha's freedom, Michael's trial, and the wild chimpanzees of Kern County.� But, of course, you'd be wrong. That's just pabulum for the masses of non-thinkers.

The real story today is about grease - and specifically the banking industry's attempts to make declaring bankruptcy event harder for average Americans while preserving the loopholes for the fat cats.

Watching the discussions and vote on C-SPAN 2 Thursday, while nursing my gout attack, I learned that most bankruptcies are caused by medical problems and that banks have enough grease and horsepower to roll over the democrats who suggested limiting maximum interest charges to 30%.� The attempt to leave senior citizens with a homestead exemption of $150,000 (so an elderly person would still have a place to live following a major medical crisis) was also thrown out.


Goldilox -

George Ure has also noticed the rumblings about bankruptcy "reform". Check out his site for references to his sources. Isn't it interesting that major business news sevices ignore a story like this in favor of junk news?

See MSG# 129845 on the eliminating of the military hardship exemption.

http://urbansurvival.com/week.htmsnip:

"DALLAS--(BUSINESS WIRE)--March 3, 2005--A study published by a research foundation in Dubai has endorsed the Gold Anti-Trust Action Committee's findings that Western central and commercial banks have rigged the gold market but have much less gold than they claim to have and so are vulnerable to rising demand for gold. The study recommends that the oil-producing countries of the Middle East diversify their ever-depreciating U.S. dollar holdings into gold.

The study, "The Role of Gold in the Unified Gulf Cooperation Council Currency," was written by Eckart Woertz, vice president of CFC Securities in Dubai, for the Gulf Research Center. It quotes the work of GATA's consultants, including Frank Veneroso, and predicts that the gold price suppression scheme of the Western banks will fail just as their similar scheme of the 1960s, the so-called London Gold Pool, failed when the drain on Western gold reserves became too great. Once the scheme fails, the study says, "it will be highly difficult and expensive to accumulate a gold reserve. This is especially true for central banks that have low gold reserves like those in the Gulf Cooperation Council countries."

Goldilox-

It brings up a most interesting question once again. If CB's are selling gold, just who are the buyers?

Hopefully, everyone who has enough foresight to read this forum!

Maybe I misunderstood your comment, but how do you conclude that silver has done better than gold ? I suppose alot depends on when you entered the respective markets, but since the 1999 era, the two have gained by very similar percentages. Silver seemed to lag gold in the respect that it played a game of "catch-up" later, after gold had already made some nice moves. If one were to have entered silver late rather than gold early, I guess that would equal a perceived "better performance" on the side of silver. Back to the "timing is everything" adage. I think when all is said and done though, the drop in the dollar (DX) has nearly negated any "rise" in the metals. But "breaking even" is always preferable to sitting on paper and losing your shirt. The somewhat steady and predictable dollar to gold correlation these past few years is what has made the spike and dip swaps I spoke of possible.

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=10@ Gandalf

Did someone steal the ESF's flashlight? It looks like they just fell off a cliff.

But of course, as everyone knows, they discount all trading action six months ahead.

ROTFL!

Very good. You've made the correct presumptions and assumptions.

As you rightly stated, the Swiss sales come to an end in about three weeks.

The EMU-member sales have been more spotty in nature, and one might think the occassion of sales could put a blight on price for the week, but given the nature of their design and intentions, I wouldn't expect sales from that quarter to bring worries to the gold price, most especially from a euro price perspective.

And besides, the physical component of the gold market is so very small, on any given day you can be almost assured that the price is being driven directly by events in the derivative and unallocated components. CB sales have an effect only insofar as the paper-playing pricesetters might choose to dance to that faint gold drumbeat instead of to their own brass ensemble, but that is certainly not their style.

And finally, if you check the charts, both the dollar price and euro price were solid during last week's larger-than-average CB sales out of Swiss+euroland. I think something else must be setting off canamami's POG radar regarding the past few days.

R.

This may explain a few things: CNN, Drudgereport and Yahoo News are all carrying a story about how we should "expect" gas prices nationwide (US) to jump 24-25 cents a gallon in the next few days. Fellow Americans, go top off now and save a few bucks. Then bend over and get ready.

I'm pretty sure this is a result of the POO's recent wings above 50/barrel and its refusal to come down, and OPEC's announcement of new banding. Can you say Peak Oil? I betcha can... Loved the stupid govt. spin, that these new prices will spur new exploration and thus, cause prices to come down...I don't see it happening. Was a story in the Austin American Statesman yesterday about some old widow in Houston staring out her window at a wildcatter doing new exploration on an old 1930's oil site near downtown. :P Reeks of desperation, doesn't it?

BEAUTIFUL "waterfalls" are BACK !
Are you taking notes Lady Whitewaterwoman ?
<;-)

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

@ Whitewaterwoman,

Yesterday I posted a tidbit I saw on CNBC. Gasoline wholesale jumped a nickle in the morning, even though crude prices were flat for the day.

When we first noticed pump prices in the $2.50 range, wholesale gas was about a buck and a quarter. Now it is at $1.45 pushing $1.50.

I totally concur with you. We are about to get "hosed" at the pumps! Fill up today and keep your tank topped off!

Do I hear three Washingtons/gal by the summer driving season? I shudder at the thought of filling an 8MPG Hummer.

Fortunately, my motorcycle still fills up for less than a crisp Hamilton, but probably not for long.

http://www.forexrate.co.uk/news/index.php?itemid=482(excerpts)
04 March 2005 -- Since a clearly unhappy President of the Banque de France, the French Central Bank, announced it would be selling around 500 tonnes of gold over the next 5 years, we have seen only these sales of gold from France:

- September - 0.6 of a tonne.
- October - 7.5 tonnes.
- November - 23.2 tonnes
- Nothing since then

Indeed, the question now comes to the fore, will France sell any more of its gold under this agreement?

With the poor performance of France in abiding by its E.U. commitments, the French had to do something about its public deficits, even if it was a token gesture. So the seemingly grand gesture of selling some gold to make the gesture to this cause was found to be a convenient political expedient. The tiny contribution this would have made, to fill the gaping wound of the French deficits, made the reality of these sales and their purpose, underwhelmingly inadequate.

Previously M. Noyer said: -
"The central bank will wait until gold prices are 'appropriate' before agreeing the sale." In addition, he added, "The bank will certainly take into account the price. If we feel the timing is not appropriate, then we will wait". With the sales beginning shortly after this and climbing one would have thought they would by now have been the main source of "Official" supply, but they stopped abruptly, just before the gold price surged in the last days of 2004.

Change of Political climate

Maybe the French government has already rescinded this decision, or permitted the Central Bank to do so? Since the decision was made the political climate has changed with the departure of the 7th Finance Minister, since the present government was formed in France. Now we await the words of the 9th Finance Minister M. Thierry. With the departure of Minister Sarkosky, the pressure on the Banque de France to sell gold left with him.

-- Switzerland announced that once it had completed their sales of 1300 tonnes they would sell no more.
-- Germany announced that it would sell 600 tonnes [+ 20% of their reserves of gold], but then backed off when push came to shove, postponing their sales until after the first year of the agreement, because "gold was an effective counter to swings in the $".
-- Italy bluntly stated it would not be selling gold.
-- This left France stating, as we said above.

We must conclude therefore, that Europe per se, is a rapidly declining seller of "Official" gold.

The U.S.A. has made their feelings known as being against I.M.F. sales too.

So who of the big gold holders wants to sell their gold?

Those left who want to sell gold could find themselves, very alone. With the prospects for the $ looking so poor, such sales also smack of incompetence.

Where is the Transparency intended in these agreements?

-- Right now there is silence, on the matter of buying gold for reserves, by Central Banks [we presume mainly for fear of sending the price of gold skyrocketing].

-- There is silence on the matter of selling gold before the event [Possibly for fear of sending the gold price down on the news].

-- There is a lack of clarity on the intentions of the Central Banks on why they are selling gold and if they really will continue to sell gold [Apart from the unprofessional statement that it is to get a return on the paper currencies they will replace the gold with].

This contradicts one of the underlying reasons for the agreement...

The 2004 Central Bank Gold Agreement [which began on the 27th of September] is as follows.

In the interest of clarifying their intentions with respect to their gold holdings, the undersigned institutions [15 CBs] make the following statement:

1. Gold will remain an important element of global monetary reserves.

2. The gold sales already decided and to be decided by the undersigned institutions will be achieved through a concerted programme of sales over a period of five years, starting on 27 September 2004, just after the end of the previous agreement. Annual sales will not exceed 500 tons and total sales over this period will not exceed 2,500 tons.

3. Over this period, the signatories to this agreement have agreed that the total amount of their gold leasings and the total amount of their use of gold futures and options will not exceed the amounts prevailing at the date of the signature of the previous agreement.

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

A good overview for anyone arriving late to the events at hand.

R.

http://www.thestreet.com/funds/gregggreenberg/10211675.html3/4/2005 (TheStreet.com) -- Investors truly bent on spreading the risk in their portfolio by including precious metals need to realize that all that glitters is not gold. There are also opportunities to diversify -- and profit -- by holding other precious metals, namely, silver and platinum.

"Gold may be the most familiar and most liquid of all the precious metals," says Mark Albarian, CEO of precious metals dealer Goldline.com. "But investors should not ignore silver and platinum, especially now that they are trading at a fraction of their all-time highs."

One reason investors often stick to the yellow-brick road when it comes to precious metals is that they feel intimidated venturing outside the highly publicized gold markets. But that fear is unfounded, says Albarian.

"The same process for buying gold coins and bars applies to silver and platinum, so first-time players in these markets need not be anxious," he says.

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

Yes, USAGOLD-Centennial handles gold, silver and platinum.

With one call you can have it all!

1-800-869-5115

R.

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

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

Friday Market Excerpts

(MarketWatch) -- Metals futures came off their best levels of the session Friday but still managed solid gains, inspired by February's growth in U.S. payrolls and expectations for continued increases in commodity prices.

"Gold surged right after the employment numbers, and that shows gold is defying the typical expectations," said Kevin Kerr of Kerr Trading International.

Bolstering the move in gold, the U.S. dollar sustained big losses against both the euro and the Japanese yen in foreign-exchange trading.

COMEX April gold futures closed at $435.10, up $4.30.

"I think we have moved into a new realm for gold as it finds its own way and charts a new path with investors," Kerr said. "I think now we are setting up to test $475 very soon."

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

Missed the post yesterday but since last Friday when the CRB cracked 300 we have had 5 consecutive up days, a couple significant spikes.

Todays' close at 309 and change defies the inflation gimmicks regurgitated by the PTB. When these prices filter through the various systems in a few months, 'Katie, BAR THE DOOR!'

Watch the $50+ oil mangle the trade numbers in a month or two, gonna be brutal. Finally, when real numbers start to hit, my guess is a month to 6 months, gold is going to fly. HUI had a STELLAR day, a GOLDEN day rising from 210 to 210, that ain't pocket change. The bewildered traders are starting to see the light. When the HUI, as a lagging indicator of inflation, trails the CRB and suddenly CLICK! on come the lights, gold and gold stocks will race ahead of the CRB and they will be the LEADER !!

This is really starting to look great. A little more firming, a little more conviction and we are out of here !

Slingshot...get that sword ready pal...it's almost time to separate the men from the rabbits!

Have a golden weekend.

Argentina didnt face a new bancruptcy law from the IMF.......they broke through the wall on a dare, and stiffed investors.
I wonder how THAT will play out as countries around the world watch the goalposts moved for Argentina.
Joe sixpack and I will have a tougher time escapeing debt.
Senate Democrat leader said about Greenspan: "I think he's one of the biggest political hacks we have in Washington"
Whatever =hack= means.......

I have a hard time believeing that a research group in dubai is going to educate oil shieks. I think oil shieks got thier education in the seventies. And made some deal with the -west- right before gold prices went into control.
The pattern I think we will/are seeing in the world economy.
Control prices (wages) down, then, when global wages

http://www.iran-daily.com/1383/2228/html/economy.htmFuel Rationing Not on Agenda
TEHRAN, March 4--Oil Minister Bijan Namdar-Zanganeh confirmed here on Friday that concerns about a possible gasoline shortage are virtually over, stressing that the issue of fuel rationing has been dropped from the government's agenda.

Earlier, the National Iranian Oil Products Distribution Company announced that the government is pressing for rationing fuel from September. .........Energy Commission stressed that the parliament would not allow the government to ration petrol.

Iran imports 21-23 million liters of gasoline per day, mainly from other Persian Gulf states.
- - -
India Assured of Pipeline Security
NEW DELHI, India, March 4--Iran declared Thursday that it would guarantee the supply of natural gas to India through the proposed pipeline over Pakistani territory...

The $4.5 billion, 2,775-km Iran-India gas pipeline, a quarter of which will pass through Pakistan, is expected to be completed by 2009 to meet the huge demand for gas in India.

Iranian Parliament Speaker Gholam Ali Haddad Adel said Islamabad would host the trilateral meeting in which officials from the three nations would provide firm commitments on the security and supply of gas through Pakistan.
- - -
Calls on South Korean Leaders
TOKYO, March 4-- Mohsen Aminzadeh, Iran's deputy foreign minister for Asia-Pacific affairs in Seoul on Thursday stressed the need to expand economic relations with South Korea...

...in separate meetings with South Korean Prime Minister Lee Hae-chan and Foreign Minister Ban Ki-moon, pointed to the significance of bilateral relations.

In his meeting with the premier, Aminzadeh expressed his belief that economic ties between the two countries should move towards active investments and joint ventures in the future to replace the present trade exchanges.

Lee Hae-chan described Iran and South Korea as two brotherly countries and stressed the right of all countries to gain access to nuclear technology for peaceful purposes.

In another meeting, South Korean Foreign Minister Ban Ki-moon stressed the need to promote cooperation in different areas particularly in energy sector.

He said his country regarded Iran's role in establishing stability and security in the Middle East as decisive.

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

Give special consideration to that final exerpted story regarding ties to South Korea, and think back to South Korea's comments last week that time was at hand to consider building reserves beyond the dollar -- if not actually selling existing dollar holdings outright.

Call it a political signal of resolve or "show of good faith" in light of negotiations in the formation of strategic new partnerships. Apparently there is little anticipated need for so many dollars when dealing with Iran.

A sign of the changing times.

R.

http://thesaurus.reference.com/search?q=hack@ $ Bill

Main Entry:��hack
Part of Speech:��noun
Definition:��drudge

Synonyms:��
drudge, greasy grind, grind, grub, grubber, grubstreet, hireling, lackey, machine, mercenary, old pro, plodder, potboiler, pro, servant, slave, workhorse

Source:��
Roget's New Millennium� Thesaurus, First Edition (v 1.1.1)
Copyright � 2005 by Lexico Publishing Group, LLC. All rights reserved.

-Goldilox

Reasonably definitive.We can probably guess what he really thinks of ole' AG.

http://stockcharts.com/def/servlet/SC.web?c=$HUI,uu[h,a]daoayiay[pb200!f][vc60][iut!Uh89,21!Lp88,21,3]⪯f=GNICE Friday action !
Monday will be GOLDEN.
<;-)

http://atimes.com/atimes/South_Asia/GC04Df06.htmlInteresting development...more chinese strategic moves on existing oil supply in US backyard...I thought the Bush clan was building the Pakistani port They are our friends right?!

From Friday noon (Forum standard time) to Sunday noon (Forum standard time).

Post what's on your mind.

http://www.financialsense.com/A Special two-hour interview with Frank Barbera of the Caruso Fund entitled "The Great Inflation", along with the regular markets report including Tim Wood, Paul Nolte. Bill Powers, and Dave Morgan.

Should be another great show! Grab your MP3 SW and brew a cup or two.

Not surprisingly, after this week's wholesale bump, the stations near me posted their price bumps yesterday. My favorite 24-hour "cheap gas" vendor took premium from $2.35 to $2.46 as soon as they got delivery Friday morning. Majors are running $2.55 and up.

As oil remains obstinately above $50/barrel, retail prices are feeling the pinch of higher costs for raw materials, delivery, etc.

I notice that he is referred to in a neighboring site, as a "SWISS BANKER".

Mr. Stern may have had Swiss citizenship, but he was Jewish and his widow is also Jewish.

The GAB

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050303/CALL03/TPNational/?query=McKennaPM, Bush aim to end the silence

But as leaders make plans to chat, McKenna blames U.S. for tensions...

-snip-

"Prime Minister Paul Martin and U.S. President George W. Bush are expecting to end their phone freeze in advance of a summit, even as Canada's new ambassador kicked off his tenure yesterday by saying the United States must share blame for Canada's refusal to join the ballistic missile defence shield.

Frank McKenna said festering trade disputes such as softwood lumber and the importation of Canadian cattle to the United States have poisoned the political climate.

"The temperature in Canada has been at a pretty high level because of these ongoing irritants," he told reporters at the Canadian embassy in Washington yesterday, just hours after arriving from Ottawa at his new post.

-end-

Another "poisoned political climate"..... see link.

-more-

http://www.theglobeandmail.com/servlet/story/RTGAM.20050302.wmckenn0302/BNStory/National/?query=McKenna

-the missile defense snub-

http://www.theglobeandmail.com/servlet/story/RTGAM.20050301.wrice0301/BNStory/International/?query=McKenna

Greenspin will continue with his no inflation crap no matter what oil does. Sooner or later the sheeple will see thru all of this nonsense and all hell will break loose. Adios US$ reserve currency.
Have a great weekend.

http://news.ft.com/cms/s/14d1fb9c-8da0-11d9-a4d2-00000e2511c8.html(FT) March 5 2005 -- Warren Buffett has warned that the US trade deficit risks creating a "sharecropper's society" as his letter to shareholders sounded an increasingly bearish tone about the value of the dollar.

Mr Buffett's bet against the dollar grew. Foreign exchange contracts � mostly short positions against the US dollar � nearly doubled over the year to $21.4bn...

Mr Buffett stepped up his warning about the US trade deficit and the need to finance it with foreign investment, devoting more than two full pages of the annual report to the topic.

"A country that is now aspiring to an "Ownership Society" will not find happiness in � and I'll use hyperbole here for emphasis � a "Sharecropper's Society," added Mr Buffett. "But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us."

Nevertheless, Berkshire's chairman and chief executive conceded he did not do his job very well last year in finding ways to profit from the unusual market conditions

"My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings to the many we already have. But I struck out," he said.

"Additionally, I found very few attractive securities to buy. Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position."

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

When market valuations make equities unattractive, and when the massive trade and budget deficit make bonds unattractive as well as cash being described as "not a happy position", as a smaller, more nimble investor it is time for you to choose gold and call it a day.

R.

http://www.bloomberg.com/apps/news?pid=10000103&sid=aQ8mMMCq4NIM&refer=usMarch 5 (Bloomberg) -- Berkshire Hathaway Inc., the investment and insurance company controlled by billionaire Warren Buffett, said fourth-quarter profit rose 40 percent on a $1.63 billion gain from betting against the U.S. dollar.

Buffett, 74, began betting against the dollar in 2002 on concern that widening U.S. trade and budget deficits would erode its value. As the dollar slumped 7.5 percent against major currencies, Buffett increased Berkshire's position in the fourth quarter to $21.4 billion of foreign currency forward contracts, or agreements to purchase an asset at a future date.

``The evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come,'' Buffett said in his annual letter to shareholders today.

Berkshire's forward contracts rose from $20 billion on Sept. 30 and were spread among 12 denominations that Buffett declined to identify. He has called the purchases a ``long-term'' position.

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

How do you protect yourself from weakening paper and possible counterparty default if your hedging instrument is simply a variation of that same paper that has you worried to begin with? Or looking at it another way, if the dollar is suffering due to overextension, is it so hard to see how the hedges themselves can begin to suffer also from overextension? Think about it.

Choose physical gold as your anti-paper long-term wealth position.

R.

Someone posted a history lesson recently. Rome recieved its food in increasing amounts from distant lands. At one point, they were dealing with hunger because of this. The present global economy, will all the benefits of unlimited debt, can help those without gold. However, as we build this -tree- of global economy, all of us are moving more and more way out on a limb. As the millenium bug worries showed us, very few folks are ready to withstand disruption in the giant system. And it gets more and more centralized every day.
That mormon idea to have years worth of food handy might not seem like such a bad idea if/when the bird flu moves to humans like they expect. I am hoping we have a large number of years and advances in vaccines. However, one freind and I are taking steps just because the World Health Org people seem spooked.
Not "seem", they are.
So, why should I assume thier fears are unjustified?
On a lighter note, the supreme court in 1963 said "it is ok to teach -about- religion. Just cant -teach- religion in schools." I see by what my kids go through in Connecticut schools, that you cannot teach -about- without teaching religion. And, all manner of bias can and is inserted. It is impossible to expect teachers to not cover the subject without thier own 2 cents leaking out, also, the subject matter itself alone is at odds with the notion of -about-.
I hope to make the court reverse themselves on this.

From Sir Town Crier's posst - "My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings to the many we already have. But I struck out," [Buffet] said. "Additionally, I found very few attractive securities to buy. Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position."

-----

"sstruck out?" ...could this be an indicator of the 'end of the line' of profitable mega-(and maybe not-so-mega)mergers?... after all, surely there is a limit to how big a company can get, and how many companies can exist... profitably...

...and we agrees... sitting on 43 billion dollars "worth" of fading IOU's would not feel nice... sss...if he wanted to shake things up he might call Ssir MK and lock in an order for a couple thousand tons of It... (grin)... the resulting price spike would certainly make him some tidy 'earnings', eh? Jusst kidding!(cackle)

S.

"However, as we build this -tree- of global economy, all of us are moving more and more way out on a limb....very few folks are ready to withstand disruption in the giant
system. And it gets more and more centralized every day." - Sir Dollar Bill

And the tree is bigger and yet weaker than it has ever been, from the debt-fertilizer that has been applied to it... how many leaves and limbs will be losst from this 'tree' WHEN any storm blows, natural or otherwise?? Where is each of us in this 'tree' - leaf, branch, heart or root?

How capable is each of us of 'regenerating'?

In 'interessting times' it is good to have some of It, yess, but in the direst need, food and water are firsst, shelter next, along with having no debt... keep in mind it may be
hard even to trade It, or sell It for currency until things settle down - what will happen to the coin-dealers and metal markets in tumultuous times? And this Inter-net... with which one can live in almosst total isolation from other humans and yet run a business, communicate, chat, deal-make, buy, sell... and which depends on things out of your reach and control... were it to shut down, then you might find out how virtual it really is, O yess, precious.

Centralization has brought many wonders and conveniences...sss... it has also fastened chains around the necks of those that participate... by tilting the playing field and insidiously inducing the self-stripping of independence. There has never been a time in history when things have been so fantasstic (with emphasis on the root of that word - fantasy) and when the dream fades, much of what was built with it, on it, and by it will fade too. O, talk of the end of the Fiat Age is entertaining to discuss and we all have ssome notion of what it may be like... and each of us thinks we will make it through... but we thinks we shall be surprised at what we didn't anticipate... sss...we must all very honesstly ask ourselfs, "AM I READY"?

Could you, RIGHT NOW:

Afford to walk away from or lose your job?

Pay off ALL of your debts ?

Communicate without a cell-phone?

Unplug the computer and walk away from it along with every virtual someone or account you know or have by it? For how many weeks... or months... or years?

Not worry about food and water supplies (if ships, trucks and trains are idled)? Not have to go to the store? For how many weeks... or months... or years?

Operate independently of gas, oil or electricity supplies? For how many weeks... or months... or years?

Begin to plant and care for a garden?

Care for your family (and maybe a relative or two) in the midst of all of the above?

sss... better get to work on those 'no' answers... NOW.

S.

Smeagol (3/5/05; 15:32:25MT - usagold.com msg#: 129881)
Tree-ish thinking...

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

Begin to plant and care for a garden?

My, my, we have changed Ssir Ssmeagol. Wouldn't it be better to be thinking of digging a pool for the fisssssh ?!

C!

With talk of the CRB zooming by 3% this week, I did some calculations and, with a copper price of over $1.53/lb, the pre-1982 penny is now worth 1.016 cents. With a visit to the bank yesterday, I obtained 100 pennies, of which 22 were the old style. This is the same as reported on Christmas Eve (21%), so it looks like no-one is sorting pennies (yet !).

C!

Looking at my beer bottle (not my, errr, third one ....) I have just realized why so many people at the forum are drawn to the Negra Modelo. I mean, just look at it ! Gold foil, gold label, gold cap - what's not to like ?! Now where's my golden opener got to .........

http://www.theage.com.au/news/Business/Gold-output-sinks-to-nine-year-low-in-04s/2005/03/06/1110044240197.htmlMarch 6, 2005 -- Australia's gold output sank to a nine year low in 2004 following exceptional wet weather in Western Australia early in the year and a large number of plant closures.

A number of Western Australian operations closed during 2004 including Sons of Gwalia, Hannans South, Kundana, New Celebration and Bronzewing.

Sons of Gwalia Ltd went into receivership last year and its namesake operation near Leonora has exhausted ore supplies.

Hannans South, Kundana and New Celebration were also older plants which ran out of ore.

Meanwhile Bronzewing owner View Resources has shelved the reopening of the mine because of high contractor rates and skilled labour shortages.

The downward trend in Australian gold output is a consequence of lower exploration spending and fewer new discoveries, Dr Close said. ... "It's five years since the last significant greenfields gold discovery was made in Australia."

Australia is now producing about 50 tonnes of gold a year below its peak production year of 1997.

It follows South Africa which produces about 345 tonnes, and leads the United States which produces around 259 tonnes and China with 212 tonnes.

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

When it comes to gold as a portfolio diversification, you can invest in a miner and gain exposure to a depleting ore body and all expenses involved in extending the date of corporate mothballs or merger to the same ultimate end; or you can invest in physical gold and gain an endless timeline to benefit from the same features of dwindling supply that are a woe to the mining shareholder.

R.

@ $ Bill

Don't worry too much about "what they teach", Bill. Those who get out of school without learning to think for themselves, but rather only learn to parrot the previous generation's "factoids" have missed the whole point of education, anyway.

Teach your kids and grandkids to listen closely and weigh the evidence for themselves and they will have the best "training" of all, no matter what the prejudices of their teachers - or their "preachers" for that matter.

Even Jesus purportedly said , "I only require two things. Walk humbly with your God and love your neighbor as yourself."

The rest is just "no longer important" if I believe him to be correct.

Your penny story is most interesting, imagine that collecting pennies as a 'profitable' business.

Is it lawful to hoard pennies? Would anyone care?

I'm trying to think of some bizarre legal loophole that would make this illegal, ie: hoarding the coin for the purpose of defacing it, ie: melting down?

I don't know. Talking to myself.

?

http://www.reuters.com/newsArticle.jhtml;jsessionid=YWPMFVF0A3YEYCRBAEZSFFA?type=businessNews&storyID=7817637What some companies are doing with their extra cash is almost criminal. How can a shareholder be bought out by the company using his money to buy him out? The company lets its stock price drop while increasing its cash. Then a reverse split of shares with a stock buy back.

Kind of like a privatization of the social security program. It used to be a person could survive off social security. Now it's social security plus another 10-20 % (working a walmart or savings). Then it will be SS will cover half your needs, then 30% of what one needs. If one doesn't use his "private retirement account" wisely it will be his fault. At 46, the government is telling me that I'm going to be privatized along with everyone else.

Well that's like the Army saying, hey we have a problem with too many higher ranking enlisted men. Those lifers who have made a career out of the Army (serving faithfully their country) are okay, but we have too many of them. So what we are going to do is make everyone privates and start the process over.

The new enlistee feels no pain, he has 20 years to move up and finish with a nice retirement. The Master Sergent with 18 years has 2 years to move up and finish with a "private" 1st class retirement.

Conclusion: Privitazation = Getting busted back to Private

http://www.theaustralian.news.com.au/common/story_page/0,5744,12461201%255E2703,00.html Back off or suffer oil shock: Tehran

The whole point of my exercise is to try to see where sorting pennies does become profitable. I started out by thinking that this would be an interesting test case for Gresham's Law, but as the values involved are so small, I think it unlikely that there will be much interest from private individuals. However, this may not be the case on an industrial basis at some stage - probably when the post-1982 pennies get to be worth close to their melt value. There were stories of coins from Europe which were "retired" from circulation with the advent of the Euro a few years ago. The metal of interest was nickel, as I recall, which was used as an additive in making steel. The coins were shipped to China. The melt-down process was pretty simple - the coins were just poured straight into the blast furnace !
C!

"My, my, we have changed Ssir Ssmeagol. Wouldn't it be better to be thinking of digging a pool for the fisssssh ?!"

Eh? Changed? No, we didn't mention the fissh pool - that's a given... isn't it? (grin)

S.

I read a commentary on President Bush's trip to Europe last week. Most of the text was OT for this forum, but there was an interesting point that caught my eye. With the multiple stern comments to Iran, Russia, Syria, you name it, it would appear that there has been a complete reversal of Teddy Roosevelt's famous policy of "Talk softly, but carry a big stick". With the President talking so loudly and stridently, and the stick looking rather stuck in Iraq, I fear that it is just a matter of time before we see some bluff-calling. As the article points out, Iran doesn't have to do anything overtly aggressive to cause problems, it just has to stop doing what it is currently doing. In a similar fashion, the dollar is under threat from all the world's CBs - they don't have to sell their reserves in order to put pressure on the dollar, just stop accumulating them.
C!

Yeah, I guess it is !
C!

I agree with you that my comment about silver doing better that gold may be somewhat difficult to measure. But given that I watch it in Canadian currency, it is even more difficult to see than were I doing this in USD. You are quite right about part of this is due to silver playing catch up, and in terms of value gold and silver are neck and neck as investments if one compares it in a certain way. In CAD gold has done nothing since 2003. I would have been better to buy Euros,,,, or stay in CAdollars during this period. That is the context. But that does not mean that silver has not risen in (any) real terms equal to and right along with gold. The volatility has allowed more opportunistic trading than has been the case with gold. But in real value terms -and I should have stated this earlier- the silver market has remained virtually the same as an investment in the LONG term. It has done virtually nothing in terms of value,,,,except walk up the bottom of the inflation channel.

Ted Butler's latest piece also says it. Ted is a wonderful pundit on the metal from the commodities point of view, but (and this is not a criticism, just observation) he does ignore inflation or currency problems by simply focusing on price�.over time. In his latest (for example) he mentions what I have stated in the above paragraph except he has only handled it from the cost side, not the price side. He said that the average cost of production due to inflation is about $7.25 per ounce. While he can assert this quite calmly, he does not relate that dollar shrink to value of PRICE on the short OR the long term. If he had been clear he would have had to recognize that the average cost of production statement of last Tuesday is virtually the same market condition that he was describing five years ago. That is why I say the market has virtually remained the same as it always has,,,except for much increased volatility. One apparently can have it both ways,,,,but to me, if costs go up, value goes down too - the reciprocal to balance things out.. And because it is a paper market and not subject to the same traditional fundamentals as a "real" market, one is hard pressed to find an interpretation to explain this volatility based on demand or anything else. Reality only rules from the uptick point of view (smile). The paper is the supply.

But there is a change in that recent silver market spot behavior regularly holds its ground better than gold,,,during leasing attacks even, But between those huge rallies it also tanks impressively back to or below the 200 dma. Now the miners suffer while we can accumulate silver at those traditional sub $5.00 prices of five years ago. It is the same price in terms of value. However, on the other hand, now the periods for spot prices being above the cost of production (due to volatility) are more investment friendly too. Silver makes bigger rallies and often resists paper attacks better than gold � even in CAD. Paper profits are up along with the volatility.

There is no $6 rule operant in silver as in gold,,,,and the market "gets away" from the commercials on a regular basis.

I hope I have made myself clear(er).

Regards,

G.

http://www.freep.com/realestate/renews/flip4n_20050304.htmlInvestors buy more of housing market by Mary Umberger
Chicago Tribune - March 4, 2005
My, my. NAR (National Association of Realtors) reported that 36% of 2004 home sales went to second home purchasers and investors leading one industry observer to comment: "If anything is a sign of a price bubble, that is it." Others noted that inflationary pressures surprised them. This old story has imminent denouement written all over it.

I just read your reply to Kilo and expert analysis. As often as would like to trade on information like that, I, like Belgium and others see too much risk in silver as a major percentage holding and too much risk trading options or futures or selling significant Ag or Au holdings into rallies. While many set aside trading funds for this very purpose as an adjunct to their core holdings. This is a good way to beat the system and add to the safe haven wealth- provided that there is lttle or no use of margin and one is skilled and experienced with adequate time and funds to commit IMO.
Also like Belgium, TC and others, I see a reason behind silver's wild child forays, the "volatility" that can defeat the commercials, is in part that it represents far less of a threat to the international banking community than silver. It's Another substantiation of gold's special identity for those looking for something not so ordinary.
Best regards!

Ahhh....yes, Sir Clink!...I think your comparison of Teddy R and W is very astute. Teddy R...now there was a President with a capital P.

Nice movement by gold and silver on Fri...there is life in the barbarous relic yet...

The dollar is practising being Humpty Dumpty...getting ready for the Big One...look out ESF!

"Humpty Dumpty Dollar"...perhaps Sir Smeagol (or others) could create a nice rhyme with that as a theme??


;-)

I'm not missing the boat again!

I was in my early adult life when silver began to get fazed out of common coin. If I had even dime & quarter (AT PAR!) that I had as a kid I wouldn't be buying it now at 4-6 times face waiting for it to extend to 10-20+ times face.

I'd like to strangle my father right now ! Why didn't someone in my family say, "..throw that dime in a pail and don't look at it for 20 years. Imagine a couple of 45 gallon drums full of silver junk coin ! Five digits...maybe six....who's good at the math?

I talked to my son, we did a little arithmetic. Suppose we fill a (small) 'pail' and it weighs 20 lbs. That's $31, right? In 20 years its not 4-6 times face but 10 times face, and the 'pail' is $300.

Now I have to ask myself, at what point in time does it become viable to cash out paper dollars at the bank for copper coins?

Maybe a mass advertisement in the newspaper for bulk copper coin (pre-1982) for two times face?

Hmmm?

Those Iranians are getting bold!

The oil/nuclear rhetoric is getting very, very bold.

Oil is not going down tomorrow.

hmmm... sseeing as a US copper-clad zinc penny weighs about half a gram less than the all-copper one (2.6 versus 3.1 on the trussty triple-beam), it is not hard to imagine that a ssorting device may be built to do this quickly and massively, in order to make it worth doing at a lower copper price - but you'd besst beat the Treasury to it! (cackle)

S.

Can you please post that piece by Doug Casey here concerning the Iranian petrochemical bourse and the alleged US plans to invade Iran? (Where have I heard this theme before?)

http://www.howestreet.com/mainartcl.php?ArticleId=1005&PHPSESSID=652dadc9538956f8dab39dcfb171597eA post at HoweStreet.com.

http://www.democracynow.org/article.pl?sid=05/03/04/1437206Bush to Increase Dissident Funding in Iran
The Los Angeles Times is reporting that the Bush administration is considering increasing it's funding of dissidents within Iran beginning with a new $3-million fund. A Senior White House official told the paper that now that Condoleezza Rice is Secretary of State "We can now be much more aggressive [about Iran] than we had been. The guys at the State Department were too afraid to try anything during the first term." But a State Department official asked, "Is the policy regime change? Everyone says it's not, including Condi. So what is it we're trying to do, and how are we going to do it without having a lot of blood on our hands?" One official who will have a big say on Iran policy is Elizabeth Cheney, the daughter of the vice president, who returned to the State Department this month to head so-called democracy promotion efforts. The United States is already spending more than $14 million a year to broadcast Persian-language radio and television programs into Iran, and the White House is seeking a sharp increase in that funding.

CM comment: Hope this isn't construed as "political". Cheyney's daughter is being paid to promote democracy--what a hoot for the taxpayers! Remember the axis of evil? Syria is floundering on the heels of the Lebanon bombing WHODONIT caper. Iran is in the crosshairs. NK will be dealt with last as they have the weapon of choice.

I sleep better on the knowledge and wisdom acquired vis a vis the golden discourse here than I do on the Cheney "Dad and Lass" team running our foreign policy in concert with that old time favorite, DR. Shame on the US electorate!

http://www.nytimes.com/2005/03/06/opinion/06sun4.html?thSnip:

"...
The mint distributed more than 1.2 billion of those nickels, and they have nearly all been retired. But even in the early 1960's, you could still find a buffalo nickel in your change from time to time. It was always an occasion to stop and look closely. This was a coin that worked in a purely iconographic fashion. It had a visual economy that is still moving. In the face of that Indian and the somber mass of that bison, you can visualize the tragic undertone of American history. To come upon a buffalo nickel - one of the old ones - in your pocket was to come upon a work of art.
..."

Sundeck: ...for the sentimental "coinies" among you...

:-)

Hello mikal,

Thanks for the complement I think your points bring us full circle back to the beginning of the original discussion about profiting in this market. However,I would never recommend anyone play the paper game in order to win paper. But please, DO go after the metal. Those who play the paper game perpetuate the sham, and as you point out it really is hard to win against a system organized to resist just that. COMEX must fail in order for gold and silver to fly. This is almost becoming like a religion with some of us. (smile)

COMEX will fail when new players enter this market and go after the metal. The present players, be they commercials or spec longs, are all part of the problem when there is not the intent to take delivery. It would seem that more severe shortages are needed to start this process.

The reality is that the purpose of the futures market in gold and silver is to regulate price. That is the only purpose of interest to the system.

Which leaves me with a lot of metal that gradually gets more valuable � at a better rate than a bond or GIC � but is too rare or "valuable" to be liquidated for any currency. (I shouldn't complain so much but silver or gold is not like owning a Chippendale candle table either � which would also be foolish to sell.)

The bull market will actually begin when silver reaches around $25 per in USD. That takes out the inflation for the past twenty years. THEN and only then can the price be said to rise in real terms. The difference between present spot price and $25 per is what the scoundrels owe BACK to the market. IMO anyway. A bull market that starts this much in the hole is not a bull market until it at least reaches a fair starting price at surface levels.

Regards,

G.

Great thoughts from a successful investor and lucrative, popular poster of many years. Judging from the responses, or lack of ;), to your messages and replies, very many look forward to seeing your's and your brother Rhody's work at various sites.
As you've explored many trading markets and collectible marketplaces alone and with your brother(and spouse), that experience comes across in your open, honest communication style.

One thing I have not gotten my head around is how Comex can fail, (if it does and that appears very possible through default) but not be reincarnated somewhere else with some of the same principals staffing the new locale in a different city or country. More and more candidates for the top job, price police do seem to sprout up lately?
Re: Ag asset devaluation via inflation. Your comments make me MORE certain that a Au/Ag bull market started several years ago since your $25 Ag "theft compensation" price must now be taken into consideration in my personal computation of Ag "sell zone"- it actually will move my Ag inflection point beyond what was supply/demand based only.

Just want to mention that if another Comex equivalent were to take over from where it left off,(as seems necessary) I believe it would (it will)have a vastly changed market to oversee and operate in. A different attitude towards gold and silver, especially gold, towards derivatives and traditional financial instruments- bonds, securities, notes, indemnities, etc., towards "savings" vs spending, towards national currencies, towards commodities and capital vs financial or hedonic investments.

HUMPTY DOLLAR

Humpty Dollar sat on the St. Wall,
Few people thought that Humpty could fall,
But tumble he will to widespread appal...
Financial mayhem from New York to Nepal!

For many a year Humpty Dollar cajoled,
Bankers and dealers in countries untold,
With promise on promise in tried and true mould−
The bigger his girth the more dollars he sold:
"In God we trust and we shall be bold.
Look! It's printed in ink for all to behold!"
...But the people forgot what the ancients foretold:
"Leaving the "l" out of "God" begets paper from gold."

All lust after debt, promissory papers beget,
So that an opening credit, becomes a large deficit.
And while many still doubt, I am willing to bet,
It will all end unseemly in a "Wall St. omelette"!

;-)

Sundeck

http://p088.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=11738.topic

This is most certainly a gauntlet slapped hard across the face and thrown down. I worry lots about N. Korea with its long range nuclear missile capability and nutty leadership. Think what such a mixture would do to the Middle East.

Israel can not and will not allow such a thing. We, IMHO, should not. All of this may explain oil in the mid-fifties with the spring shoulder season upon us.

Perhaps something can be worked out. Iran needs nuclear power like they need some more sand.

Chilling sequence of events, though--Iran builds deeper, hardened nuclear research bunkers--we (USA) build a nuclear capable bunker-buster. Diplomatic rhetoric grows sharper and more shrill.

Owning gold smells sweeter all the time!
Buongiorno!

Guess who is one of the new directors
of combined Goldcorp and Wheaton River?
No less than Antonio Madero:
member of the international advisory
board of J>P.Morgan Chase; global
counselor of the Conference Board;
executive committee on University
Resources at Harvard University; David
Rockefeller Centre for Latin American
Studies; Harvard member of the
Trilateral Commission and a director of
Alfa Grupo Financiero SCOTIABANK inverlat.

What else is new? At least in this
country you can get some information on
such activities whereas in most other
countries these cards are kept very close
to the chest.

Relax and enjoy as this show is unfolding.OvS

......"COMEX will fail when new players enter this market and go after the metal."

I think you hit THAT nail square on the head. While Butler and others seem to pussy-foot around the issue of taking actual physical delivery, nothing short of that will really have much affect on market valuations to the upside as far as where they "should be" at present.

Doing a quick calculation using CPI numbers from 1975 to 2005, factoring in "official" inflation to yearly averages of the two metals, we should be at levels of approx. $584 for gold and $14.83 for silver to reach a "break even point" over the last 30 years in simple dollar terms. Then of course we have to figure in exchange rate differences (DX drop in the dollar), opportunity costs (lost interest), taxes, and any other related expenses of holding the metals for those 30 years, considerations I think most "investors" fail to take into account beyond dollar value "gains". Too often we look at just the "dollar value" and fail to understand the full impact of other factors on our investment decisions. As a simple exercise to understand these "other" effects, just add 40% to the above figures to represent the drop in the DX these past few years which puts us at $20+ for silver (as you pointed put) and $700+ for gold respectively. You would have to go back and do a full spread on the DX from 1975 to 2005 to be more accurate, but this gives us an idea of just how cheap the metals are at the moment comparing time value and other factors since 1975. This is assuming, too, that the "CPI" figures are anywhere near accurate. ;)

TPTB obviously have a stake in keeping all eyes on the dollar and the appearence of "gains" that may or may not actually exist. Surprisingly, few investors take the time or seem to have the understanding that it takes to put all of the numbers to paper. Doing so would likely be a very rude awakening to many.

May you be blessed with health, wealth and happiness and have a Golden Day!!

The Iranian bluster about the EU is media food for the local market. Note that they dont mention that Israel has planned on and expects to attack Iran.
the mullahs will cooperate with some agreement till they get a decent air defence system up and running.
Is iran going to blame the EU for an israel attack? Isnt Japan and china the countries with oil deals with iran?
I actually know some people that are Iranian and live in Tehran. It is almost shocking how western they are. The problem with that country, as you know, is having religious guys as rulers is always a disaster.
You might think that muslims hold some record for worst men produced by a so called religion. If so, that just shows how limited your knowledge of history is on the topic of bad religious men.

OvS (3/7/05; 07:58:26MT - usagold.com msg#: 129914)
How the elite is running the show.
===
Would you classify Mr. Antonio Madero (one of the new directors of the combined Goldcorp and Wheaton River company) as a "FOX in the HENHOUSE" ?

http://urbansurvival.com/week.htmsnip:

Large and persisting current account deficits produce an entirely different result. As time passes, and as claims against us grow, we own less and less of what we produce. In effect, the rest of the world enjoys an ever-growing royalty on American output. Here, we are like a family that consistently overspends its income. As time passes, the family finds that it is working more and more for the "finance company" and less for itself.

Should we continue to run current account deficits comparable to those now prevailing, the net ownership of the U.S. by other countries and their citizens a decade from now will amount to roughly $11 trillion. And, if foreign investors were to earn only 5% on that net holding, we would need to send a net of $.55 trillion of goods and services abroad every year merely to service the U.S. investments then held by foreigners. At that date, a decade out, our GDP would probably total about $18 trillion (assuming low inflation, which is far from a sure thing). Therefore, our U.S. "family" would then be delivering 3% of its annual output to the rest of the world simply as tribute for the overindulgences of the past. In this case, unlike that involving budget deficits, the sons would truly pay for the sins of their fathers.

This annual royalty paid the world � which would not disappear unless the U.S. massively underconsumed and began to run consistent and large trade surpluses � would undoubtedly produce significant political unrest in the U.S. Americans would still be living very well, indeed better than now because of the growth in our economy. But they would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an "Ownership Society" will not find happiness in � and I'll use hyperbole here for emphasis � a "Sharecropper's Society." But that's precisely where our trade policies, supported by Republicans and Democrats alike, are taking us.

-Goldilox

George Ure at Urbansurvival.com snips a lrage part of Buffett's Q report - an explanation of why he sits on near 50% FOREIGN holdings of his $43B cash, and why he sees no good company outlets for this cash.

The full report is available at Berkshirehathaway.com.

If AG could communicate his economic ldeas as well as Warren, Humphrey Hawkins testimony might actually mke sense.

Anyway, it's a good read from someone who "puts his money where his mouth is".

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=10DOWNWARD turn at noonish NY time !
<;-)

Thank you again for the compliments. I really feel they are undeserved as I am (thank goodness) still learning about the area as are most of us here. (smile)

I don't really know how COMEX would fail but I suspect that once those new specs I mentioned enter the market and we see those huge daily gains happen and percentage of the market taking delivery doubling tripling and more, then what COMEX does in reaction will determine its demise. I suspect that management will curtail the taking of delivery in some way. Rhody thinks that the cabal probably only controls today 10 million ounces, unencumbered ounces of registered metal - given their now and again delivery problems, and this will worsen when the other holders of the remaining 30 odd million ounces (or whatever the figure is when this blows up) decide to hold on to their metal until MUCH higher prices. One thing happens for sure: the default probability goes way up, when one sells naked short in this environment, yes?

Consider if someone is obligated to deliver 3 million ounces in real metal,,, for $15 that were sold short and skinny. The seller has to deliver or the buyer can declare a default. First the seller looks for metal at $15. But most of the registered metal is held by stronger hands and the seller may have to buy metal at $30 per. Now the seller is looking at bankruptcy instead of virtually free money off the money tree. The buyer may now be in a position to take the whole market down in flames, if he holds out for the metal. For sure the management (or worse) will be trying to talk him out of declaring a default. Maybe they will ask him to wait a year or so? Threats will likely be made. But I don't think at this point a default even needs to be declared. The news will be out and the damage will be done because it will be clear that the paper is not backed by metal.

It may be that kind of situation.

Or�.

Now the management may feel it prudent curtail delivery to the point that people will realize that, in effect, the silver is not available. What consternation in the ranks of the paper players! Both longs and shorts are to be denied just because some irresponsible "newbies" actually treat this market as a silver market. The irony will be appreciated by a few of us, yes? I do not know how long a futures market can operate if the commodity is more or less unavailable. What we have now is already a degree of this. You see?

Or,�

I think COMEX will stop trading paper, if there is a huge risk of a default being declared. Again that means that there is effectively no available silver left. The excuses will be interesting to hear for doing this. What TPTB will do next is a whole new world to be discovered. Now there is no price regulating market to keep prices low.
Or,�

We will find out in the end an interesting thing: how little of an actual commodity it takes to underpin a futures market.

Do you see the pattern? These scenarios are over-simplifications of what might happen. For sure the rules of procedure and delivery will change and everything will slow. How this ends is anyone's guess. But it will ripple out and affect all the other futures markets too. World-wide.

And the likelihood that people will switch to buying gold instead of paper will also be high. That blows up gold. Etc. Etc. Etc.

Maybe?

Let me be very clear about my humble opinion of futures markets,,,,and this scenario especially goes for "sensitive commodities". When a system is in crisis, the softest regulatory gloves go on right along with the blinkers and muzzles. This brings us to the present situation in the US where the CFTC looks the other way as rampant market rigging takes place. That is the reality in the US right now for gold and silver and other commodities of sensitive nature ( � energy anyone?). That this happens in a modern democratic country with ethical standards that are supposedly institutionalized within a constitution, where the rule of law has been proudly respected and a benefit to the people is actually a fortunate accident of history! What then could one predict to be the form of a futures market controling out of the Peoples Republic of China?

Let us play a bit of what if,�

This is an important question, because it is highly likely that a culture such as the modern PRC one may inherit the position of the present United States. In retrospect the accident of history at that juncture that led the world to this end would seem to be crueller perhaps.

I suspect that the Chinese form of a market would actually start off being "pragmatically managed",,,,whereas the US one had to "evolve" to that state. The Chinese form of the managed economy would quickly go down hill from there � likely because it would be following a bastardized form of capitalism without an ethical framework �without having the same degree of worry about political fall-out from an electorate, and where corruption has firmly institutionalized/acculturated for centuries. The distance between the two ways (the US and the PRC) of managing economic activity may be quite similar at the beginning. But the PRC would START where the US had finished. The present US situation is more a measure of devolution of a system in crisis. I try to keep this in mind when I read rants about Washington and the Fed. I am also Canadian as you know, and hopefully an objective one.

And unlike the PRC, the US public has the right of scrutiny and complaint.

The electorate is not comprehending the dangers ahead. The United States may well suffer much of the pain as if they have lost a war, when its dollar finds its true value, and yet the people have little comprehension of anything amiss. The US is about to lose its status as world leader,,,, amidst (causing) a GLOBAL down-turn and there will be no explanation that will, in the face of a lot of disingenuous propaganda over the years, sit well with the electorate. When a government in Washington looks at what is ahead, rigging small markets in gold and silver (that are smaller than some corporations [sic] in dollar standards), is perhaps not seen to be a big thing. For much of the rest of the world, including foreign central banks who are still taking on US debt, the rigging and loss of central bank gold (and silver?) is a cheap price compared to imploding economies and open warfare. Similarly not a big thing.

It is all a matter of perspective.

I do not know what you mean by your statement:
"Re: Ag asset devaluation via inflation. Your comments make me MORE certain that a Au/Ag bull market started several years ago since your $25 Ag "theft compensation" price must now be taken into consideration in my personal computation of Ag "sell zone"- it actually will move my Ag inflection point beyond what was supply/demand based only".

Best regards, but nowthe other world beckons.

G.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1GO YELLOW !

Try as they might, they can't stop it because it really is "in demand"!

http://ap.tbo.com/ap/breaking/MGB0NV3U06E.html"The idea is to put more emphasis on the growth orientation," Schroeder told a news conference after talks with Chirac.

"We want to make the whole thing a bit more flexible," Chirac said, adding that the pact had been "interpreted too strictly" in the past.

Germany and France have broken the deficit limits of the so-called Stability Pact in each of the last three years.

---if deficit is your intention, then naturally, gold is not money---

Old habits die hard, but I thought I should nonetheless take this opportunity to help clear out some dead wood.

During Greenspan's February testimonies before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs, I noticed a few people referring to this as Humphrey-Hawkins testimony. Strictly speaking, that is no longer valid.

As I'm sure you know, I will say this for the benefit of anyone new to these studies. It used to be referred to as H-H for the two sponsors of the Full Employment and Balanced Growth Act of 1978 which mandated this semiannual (Febrary and July) testimony of the Fed chairman in conjunction with publication of the official semiannual 'Monetary Policy Report to Congress' by the Federal Reserve.

That era officially came to an end in 2000 as a result of the Federal Reports Elimination and Sunset Act of 1995. That Act scheduled a termination of the legal requirements for this particular testimony after 1999.

However, in its 86th Annual Report (1999) the Federal Reserve clearly came out in favor of continued testimony. Members of the Board agreed that "the semiannual reports and associated Congressional hearings had been quite useful and should be continued. They had given the Committee an effective means to explain its policies and communicate its views on a variety of issues and had enhanced its accountability to the public and the Congress."

Subsequently, the Congress reinstated requirements for the Fed to provide reports and testimony, and thus "Humphrey-Hawkins" is dead, and ever since February 2001, the semiannual 'Monetary Policy Report' has been submitted to Congress under authority of section 2B of the Federal Reserve Act.

So the next time you find yourself at a cocktail party, say in the wake of the next July testimony, you may want to take special care not to refer to "Humphrey-Hawkins" out of old habit, but rather show everyone that you are on top of your game -- refer to it instead as the Fed's semiannual Monetary Policy Report testimony. Your audience will likely deem you to be a more credible up-to-date source of financial information, and may subsequently hold any of your comments about gold in higher regard, should the conversation eventually go there.

R.

"We want to make the whole thing a bit more flexible," Chirac said, adding that the pact had been "interpreted too strictly" in the past.

WASHINGTON, March 7 (Reuters) - Current crude oil prices are "unrealistically high" and do not reflect any physical shortages in world markets, Adel al-Jubeir, a foreign affairs adviser to Saudi Crown Prince Abdullah, said on Monday.
Al-Jubeir told a news briefing on Saudi security measures that "we don't see shortage in the physical supply of crude oil." He added that global markets are "fairly stretched out" due to shipping pressures to meet rising demand in China, India and the United States.
"We will make our oil available" to customers, said Al-Jubeir. Current prices are "unrealistically high," he added.
.........There is just no making sense of a country saying thier limited resources are priced "unrealistically high".
Which is why I am driven to the conspiracy thinking that we are in the midst of a transition to a new financial model that all major players are aware of and on board for.

Also, I was thinking recently of how much of a miracle, or from another perspective, how impossibly unlikely that you could find human evolution allowing for a reserve currency and have a real try for an organized united states of earth global allowances financial model being constructed.
It is just impossible !
Human nature should not have allowed this.
The course of history seems controlled in some ways if you can find the key -goal- of god in this whole fog of human mess and look at history past and recent and see how it plays into and towards that -goal-.
If god is into lessening the suffering here by using a globalist organization with the blood of fiat, we really dont stand a shot at seeing collapse any time soon despite even bird flu comeing through and culling the human herd.
So, I am postponeing -despite lack of evidence- my chicken little assessment of the chances of this mad attempt to construct a new financial/political global model.
It may last quite some time.
So, I guess my new take is........financial model stays, collapse wont happen, we will look organized when the Jedi or Romulans arrive for tea, and in place of collapse of the one world financial/political blessing/beast, the bird flu will -merely- lower our numbers (drastically?), while leaving our global fiat still intact.
Hopefully, whatever occurs, local economy will have a shot at revival. Local economy meaning, local food production being a supportable occupation. And, well, I guess the walmart megacorp world will always survive, so who knows about future manufactureing on local levels.
Perhaps art and creative local production of household items will be a future manufactureing option.

"We want to make the whole thing a bit more flexible," Chirac said, adding that the pact had been "interpreted too strictly" in the past.

Thie is "The Tale of Tub" once again. Ridiculous leaders for a ridiculous age.

"Rules are like piecrusts, made to be broken"

"You can't make an omelette without breaking eggs"

"You have to go along, to get along."

"Let us be flexible!"

Etc. Ad Nauseam. Amazing how people - leaders and sheeple both believe that words can alter the law of Cause and Effect. This is just more example of the mental sickness of our time: trying to cheat Reality.

Somehow, we can make 2 + 2 = 5. Somehow!

The GAB

Often, there is nothing like a little contradiction to bring a smile or two.

I will offer an excerpt of discussion from a Federal Open Market Committee discussion that makes for an amusing contrast with the Fed's following assertion in the 1999 Annual Report (as indicated in my previous post) that the Congressional hearings have provided "an effective means" for the Fed to "explain its policies and communicate its views on a variety of issues" to the Congress and to the public.

Flashback, FOMC meeting, September 1997:

MR. MOSKOW (President, Federal Reserve Bank of Chicago):
I agree with your recommendation, Mr. Chairman. I do think that the probability is higher that we will have to move in November than I thought it was, say, four or so weeks ago.

I agree with President McDonough that it is very important for us to alert the American people to our thinking.

I know this is a delicate matter because we are waiting for data to come in during the next several weeks before we know for sure what the probabilities are going to be. But I do think it is important that you lay the groundwork for any move that you anticipate the Committee would want to make in the future.

CHAIRMAN GREENSPAN:
I thought I was doing that in the July Humphrey-Hawkins testimony. It turned out that instead of the bond market falling by up to a point or so, as I thought it would after that testimony, it went in the other direction. The market's response depends on what it wants to hear. One of the things I have learned is that sending a message is very difficult unless it is absolutely unequivocal because people hear what they want to hear. It is a tricky matter.


Bottom line: Classic. Always remember this when you are trying to get a point across -- it may save you a fair degree of undue frustration when you find yourself failing in the effort. "People hear what they want to hear".

R.

"I worry lots about N. Korea with its long range nuclear missile capability and nutty leadership. Think what such a mixture would do to the Middle East."

You can add to your stock of worry by thinking about a lot of OTHER nutty leaderships, religious and political, that have plenty of bombs with which to wipe out humanity in one afternoon. N. Korea is not interested in starting any war. Others are.

******

On another matter: Can the impossible go on forever?

I fondly ask. But Patience to prevent that murmur
Soon replies:

Nah! The whole rotten edifice is coming down. Just you wait, Alan Greenspan, just you wait!

The GAB

No, not the fox in the hen-house.
Let me take the words out of your
mouth: "Go and fetch Saruman, since
you have become his footman, Grima
Wormtongue!" said Gandalf. Page 564.
The Lord of the Rings. Houghton
Mifflin Co.
Quote courtesy of son #2.

We read you "loud and clear" !
<;-)

It doesn't require "conspiracy thinking" to see things the way you do in your opening remarks (msg#: 129927) regarding a transition. This is politics as usual -- the way things have been done for years. Officials are frequently put to task to say things that don't square with reality's undercurrents, all in an effort to prevent a stampede. Then one morning people find themselves all waking up to a whole new dawn and they simply deal with it after the fact -- too late for any cause to go stampeding into or out of any particular market. This paradigm of brave denial prior to contradictory action is almost always how currency devaluations are handled, which only serves to emphasize why a person should seek to have his portfolio in good order presently rather than waiting for some official spokesman to come out and ring a definitive bell.

R.

http://deseretnews.com/dn/view/0,1249,600116810,00.htmlPossibility exists says Treasury Secretary

(AP) March 7, 2005 WASHINGTON -- Treasury Secretary John Snow on Sunday would not rule out the idea of Irish singer Bono making the short list of potential candidates to lead the World Bank even though an American is expected to get the job.

"He's somebody I admire. He does a lot of good in this world of economic development," Snow said.

"Most people know him as a rock star. He's in a way a rock star of the development world, too. He understands the give-and-take of development. He's a very pragmatic, effective and idealistic person," Snow said.

Snow is part of the Bush administration team working on finding a successor to James Wolfensohn, who is stepping down as head of the development bank on June 1.

Asked whether the Irish singer would make the short list of candidates that Snow is preparing for President Bush, the secretary said: "I am not going to review here all the candidates that are on the list. But I will attest to my admiration for Bono."

...Another candidate who has surfaced is Carly Fiorina, the recently ousted chief executive of Hewlett-Packard Co.

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

In the event that U2 finds themselves short-staffed, I wonder who Adam, Larry, and The Edge will have on their own short list for lead singers. Kissinger? Gilbert Gottfried? Fran Drescher? TownCrier?

R.

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

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

Monday Market Excerpts

Gold and silver ended mixed in sideways trade as the dollar sought direction on Monday.

Funds have been shifting out of the dollar and buying hard assets as U.S. stocks and bonds struggle. Commodities, especially metals, have benefited from the rotation away from paper assets, which started last year.

COMEX April gold ended up 70 cents at $435.80. Earlier in the day, the gold contract had been as soft as $433.30. At the time, traders blamed the weakness on a stronger U.S. dollar. All in all, however, several traders referred to the session as uneventful.

...Person suggested the area around $430 to $429 may be viewed as a buying opportunity in gold. "I think the market will probably, for the next two weeks, stay in a trading range between $430 and possibly as high as $445," he said.

He looks for consolidation since there is little in the way of major scheduled news events until the next meeting of the Federal Open Market Committee. He said he is personally bullish on gold on the idea that the FOMC may be "behind the eight-ball" on raising rates, thus inflation could perk up, thus helping gold.

"If anything that develops that threatens the advancing equity markets, then gold is going to be an attractive area for people to be putting their money as a safety net," he said.

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

@ $ Bill,

To their credit, CNBC played their interview with Matt Simmons and portrayed it as a dialog bewteen Jubeir and Simmons.

As I seldom give them much credit, I thought it a fair presentation for a change.

http://www.futuresource.com/news/story.jsp?i=i4542281532306030656NEW YORK (Dow Jones)--Giant U.S. government deficits, geopolitical uncertainty, sturdy global physical demand matched by only glacial increases in mine supply suggest many stars are aligned for gold to shine over the longer term, analysts say.

But there are cautions that a robust pullback could well be seen in the nearer term that may offer those friendly toward the market the best buying opportunity seen in months.

Once a potentially steep pullback in the gold price has been seen, however, an aggressive rebound is deemed likely that could target a charge to the $500 an ounce level and beyond over the longer run.

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

Most of the analysts cited, even Bill O'Neill who says gold "still has a lot going for it and any $5-$6 setback would be a good buying opportunity," continue to portray the world from a "same-as-it-ever-was-and-thus-so-shall-it-ever-be" perspective in which rumblings over the politically sticky issue of U.S. deficits is completely ignored with respect to implications toward the single most dramatic one-off event that could affect the price of gold -- that is, a shift toward deemphasis upon international reserve status for the U.S. dollar. Even the very slimmest possibility of this begs for inclusion of gold in a person's portfolio and yet the analysts breathe not a word of it. Mustn't spook the herd. You are given only enough info to inspire you to maybe dabble in gold in a very small, non-stampeding way.

Ultimately, and fortunately, the choice rests with you to position yourself as you deem is warranted by the world as you see it through your own widely opened eyes.

R.

http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2005-03-07T194554Z_01_CHA771085_RTRUKOC_0_VENEZUELA-IRAN.xmlSnip:

"...
By Pascal Fletcher

CARACAS, Venezuela (Reuters) - The presidents of Iran and Venezuela, two major oil producers pushing to maintain high prices and at odds with U.S. global policies, meet this week for talks that could stoke tensions with Washington.
...
Stoking fears that the multibillion dollar Venezuelan-U.S. energy marriage may be at risk, Chavez has sought alternative oil partners by recently signing supply and investment deals with Russia, China, Brazil and India.
..."

Sundeck: Birds of a feather flock together? Iran creating contracts left, right and centre seems to be the strategy by which they are attempting to protect themselves. They already have energy contracts with China and India, two growing future "energy gluttons"; and with Russia to provide "nuclear counterweight" to the US.

It is not too difficult to see why Iran might want to start their own petroleum exchange to service this growing alternative network of energy supply and demand. After being mooted some time ago, there appears to be very little information available on the Iran Petroleum Exchange...probably for very good reason.

Also, people will remember that Iran repatriated its gold reserves several years ago - protecting its assets and making itself indespensible...two strategies for survival.

:-)

I must admit to feeling dismayed when reading Messages 129913(Buongiorno!)and 129917(Dollar Bill. Both posters show an ability to read & write comprehensively so there is no excuse for their one sided,racist comments.

Please tell us all why the Iranians should not have their own nuclear programme? "This is most certainly a gauntlet slapped hard across the face and thrown down" - -says Buongiorno!

The WORLD knows that Israel has enough Nuclear Weapons to disintegrate the whole of the Middle East Plus Chemical & Germ Weapons- -Yet NO inspection is allowed -NOR mention even of the fact that these weapons even exist! Frankly the safest position for Iran would be to have a weapon of their own --I hope they get one! They say they want it for peaceful energy reasons --maybe they do.

I'm sick of hearing the pious nonsense from some redneck posters that passes for discussion here. Dollar Bills is most specific -- He must have bandages on his eyes & hands over his ears to not see & appreciate what his own GANG of Administrators are doing! Yes Israel is waiting & have said they will attack Iran. But they will only do it with the co-operation of the USA administration. They are after all the paid for pit bulls!

North Korea on the other hand is disregarded as an immediate threat --even though they openly clain to be nuclear armed. Seems a bit cowardly to me to go after the weakest country on a pretext --oops I forgot NK has NO OIL.

All this coming & ongoing turmoil is going to badly disrupt the planet. Markets will be affected & Gold & Silver should have their day in the sun.However I will not be happy that it happened because of the open & hostile aggression of an out of control Super Power.It is something that still may be stopable if enough decent humans stood up to be counted.

@ Ned. Sword is sharpened. Modelo Argentino 1909.
@ Clink. When you run out of beer there is always, Moon Shine.
@ Smeagol. Am I Ready? Your questions are very valid but you must asked this, How much disruption in your life can you withstand. If one uses Triage in deciding what wonders and conveniences will be retained you will find as time expands the most basic items will prevail. Like a soldier who crosses the desert with full dress for battle.All will be discarded except what he deems necessary for survival.
Slingshot-------------<>

All REDNECKS are not racist!
Slingshot--------------<>

At least to me. I'm Indo-European just like Iranians. My fear stems from a knowledge of the religious beliefs of those currently in power....over there, not here. Without getting into specifics as this is not the weekend and I'm not trying to offend (weekend or not)....there are a few issues to be concerned about.

Sir Pritcho, did you happen to read the link provided to the Iranian ministers threatening comments?
The link provider was worried, and I saw reasons for not worrying. A real threat from the Iranian minister would have been to mention Israels threats. He didnt even really take the US to task. He was trying to scare the EU into...........what?
THe comments from the Minister to me looked like some nonsensical bluster that had elements thrown in there for a few reasons. One, to act tough when in the later comments, he was saying that they would be signers, and signers couldnt wouldnt develop weapons. However, despite his saying that, Iran has lied and that is why the EU is giving them a hard time. Well, perhaps the EU is giving them a hard time because they believe the Israelis will do what they say and they dont want that to be the future. So, instead of the worry of the link provider, I saw bluster that was front loaded into the ministers comments that could only be for the home audience because no one in the west is impressed with him threatening the EU.
Isreal is its own pit bull. They would not attack Iran for the US. THey would do it for themselves. And WILL I believe.
I object to all nations that are controlled by religion.
It always leads to ugly bad ourcomes.
Hmmm, Israel is a country ruled by the religion now aint it!
I think you might have read my post too fast, or I wrote it to cryptically, but, I do appreciate that you read it !
We probably arent too far apart in views actually.

The political leaders jump on their soap boxes stating what they are going to do. Bomb this and invade that. While the Bankers of the world shiver in their boots as to the outcome of such an act. Then there is us. Trying to scrape a few ounces of gold to prepare for the future if any.

People do stupid things. (Comcast Commercial)

Who Who, Who Who Who.
Got Alan Greenspan? Your ready to go!
Who Who, Who Who Who.

Slingshot----------;0)

Ssir Slingshot, you are right...sss...we certainly doesn't hope it comes to that tight a pass. The nice thing about It, is that one can spare a tiny space and yet carry much value.
-----
and fwiw, a ssobering thought... count ten seconds:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
This is the time it takes for the fireball of a one megaton yield nuclear air burst to reach maximum diameter - 5700 feet... 1.7 km.

...yess... people do VERY sstupid things...

S.

You will feel only a slight sunburn effect with a fifty megaton hydrogen bomb, seven miles out from ground zero.
Slingshot--------<>

Tell me fellow Ladies and Knights. ARE YOU READY TO RUMBLE!
309.37 CRB
$434 Gold
$7.39 Silver
$53.70 Oil
10.936 Stock Market

Very High CRB in awhile.
Gold holding its own.
Silver? Wishing it was at $5.00.
Oil creeping its way up.
Stock Market.How much more can be pumped into it and if the volume continues as oil creeps higher? I say not much more.
Slingshot--------<>

there, Ssir Slingshot... the newspaper you might be reading during your 50 MT sunbathing session, ignites at 7 miles in the 1 MT sscenario... O, and make ssure your lawn chair is sstrapped down, precious!

s.

...or at least jingle ssome... count us in, Ssir Slingshot!

S.

Consider that IRAN gets the bomb and it is not the bomb per say but an instrument to use as polital pressure. Paridy with Israel. Not with Isreal's distruction as its primary function but leverage on a grander scale as to disrupt the financial markets. A bargaining chip to level the playing field with the superpowers. Influence the shift from dollars to euros for oil and with the dying of the Saudi oil fields'shift from fiat to gold. With Al Quida an all other arab factions the shift is to destroy the West and Isreal is secondary.
Slingshot-------------<>

I Think I stand Corrected
Too much info.
Slingshot-------------;0)

Sir Pritcho, I know open forum time is over, but I dont want you upset and I think I spotted the trigger. It was "so called". Because there is a devil, men take a stand for god, and that, as it was designed to do, being caused by the troublemaker, leads to trouble. What are we to do? We cant change the ground rules here, but it still annoys us that we cant live in heaven here, and when those claiming to represent god, get into politics, they think they are meant to lead the rest of us into thier strictness, and never in history has the common man liked that or had a good result from that. Hey, the devil has to have his avenues, and one of them, is that.

You have to admit my suggestion is viable. Even if it slides between the folds of the accepted dogma.
I know you are reading this. Type Something.
We do not bite.
Slingshot-------------<>

@ Pritcho, et al.

It's usually not the real "religious" folks that need to be feared, but more often highly political types who try to hide behind pseudo-religious justifications. . . and this applies to both sides of the conflicts.

Most often, they give themselves away when they insist that "GOD" told them to hurt someone else or that someone else's differences were hurting them.

Truly religious folks usually express themselves in a manner that reveres a spiritual way of life well above political turmoil and damnation of another's social customs. Those that need to tear others down usually have a more covert political agenda.

Lots of variety exists within these halls of intellectual exchange. Most of us are not trying to enlighten our compatriots to anything but the financial mess we see unfolding before us. If some leaders want to destroy the world to support their status quo power structures, the best we can do is buffer ourselves from their carnage - physically and fiscally.

Many here believe gold ownership to be one of the tenants of a rational program of self-protection.

Well said.
Slingshot-----<>

http://www.jsmineset.com/snip:

By Himangshu Watts NEW DELHI (Reuters) - Energy-hungry India clinched a deal on Saturday to operate a Venezuelan oilfield and import the output as Asia's third largest consumer and the world's No.5 oil exporter vowed to strengthen ties, officials said.

Venezuelan President Hugo Chavez said in New Delhi Petroleos de Venezuela and ONGC Videsh, the overseas subsidiary of India's state-run exploration firm, had signed an agreement to jointly explore and produce oil in Venezuela.

"We have already chosen a specific field where we will start drilling. This oil will come to India," Chavez told reporters.

The two countries signed an agreement to cooperate in the oil sector, paving the way for Oil and Natural Gas Corp. and gas transmission firm GAIL India Ltd to bid for exploration blocks in Venezuela, officials said.

-Goldilox

From Sinclair's mineset - strong evidence that Venezuela, like Iran, is looking to diverify its oil customer base. Will the US "Oil Admin" use these moves to justify a "tougher" stance toward oil-rich nations' policies?

I don't believe that oil customer diversifications are very good supporting evidence for the Saudi oil Minister's remark that "Oil should stabilize between $40 and $50 this year." Sounds too much like an attempt at market pacification to me.

http://www.iii.co.uk/news/?type=afxnews&articleid=5230247⊂ject=economic∾tion=articleHONG KONG (AFX) - The extent to which Indian and Chinese banks are cutting their exposure to the ailing US dollar was revealed in data from the Bank for International Settlements...

The Asian central and commercial banks covered in the BIS data held only 67 pct of their deposits in dollars as of September 2004, down from 81 pct in the third quarter of 2001...

...in India, dollar holdings fell from 68 pct to 43 pct during the three-year period.

Chinese banks have reduced their dollar share from 83 pct to 68 pct....

...Middle Eastern central banks had cut deposits held in dollars from 75 pct to 61.5 pct...

Only cash and other short-term monetary instruments are counted, not longer term investments such as Treasury bonds.

...BIS points out that dollar-denominated deposits have risen in absolute termsm.

The waning enthusiasm for dollar assets comes at a time when the US needs to attract 2 bln usd of capital a day to cover its current account deficit.

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

The fact that this initial shift has already happened is of primary importance. With the ball already rolling, network externalities will tend to accelerate the process.

As the eurosystem will not want to inherit trade-crippling currency strength from significant portfolio adjustments in the final phases, it is only logical that rising gold value within reserve holdings will be the politically preferred avenue.

R.

http://www.busrep.co.za/index.php?fArticleId=2438120&fSectionId=601&fSetId=304(Business Report) March 8, 2005 --

Harmony Gold yesterday halted operations at its Harmony 2 shaft in the Free State after four miners died in an accident.

...one of five miners had been rescued after being trapped due to an underground earthquake, but the other four had died.

"Harmony will undertake a full and complete investigation into the seismic event and has stopped the operation until safety can be assured for its employees," a statement said.

^----(From url)----^

Bottom line: When you remember to factor in production costs of this sort, gold is way way underpriced any way you measure it.

R.

http://www.bloomberg.com/apps/news?pid=email_us&refer=columnist_wasik&sid=asCLz50ouR14
Snippit:

March 7 (Bloomberg) -- The flat tax is already here and it's not pretty. It's called the Alternative Minimum Tax (AMT), a levy that's been around since the 1960s that may clobber up to 44 million U.S. taxpayers by 2010. What's particularly onerous about this ``Scrooge'' tax is that it targets families with children in some of the most expensive states, who lose deductions like personal exemptions and local tax write-offs and pay a higher federal tax when they are subject to the AMT.

As President George W. Bush and his Advisory Panel on Federal Tax Reform probably now realize, true tax reform isn't possible without changing or scrapping the alternative tax. Originally designed to ensure that the ultra-wealthy don't escape federal taxation, the tax socks millions of middle- and upper-middle-income taxpayers, who pay just one of two flat rates if they are subject to it: 26 percent or 28 percent, depending on a complex series of calculations.

If you live in high-tax states like California, New York or New Jersey, the AMT is nipping at your heels, if you aren't paying it already. These are the bluest of blue states if you are paying the AMT.


Black Blade: With tax time upon us - get your house in order and plan ahead. Get outta debt and stay outta debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

This is tangential to your report, which I read earlier today, tried in vain to locate any report of EQ activity that might have triggered this event. I have been regularly following the USGS site, tracking earthquake patterns around the globe. Interestingly, there was NO seismic activity reported in South Africa in the last week, although seismic activity was blamed for the deaths.

I certainly don't have any answers as to why EQ activity is on the increase, but it is rising so fast that the USGS event news misses even some of the most severe, like the 7.1 Banda Sea event last week.

I read another report this morning that seismosolgists in the Pacific NW are watching the EQ clustering off the Oregon coast to see if a new mountain range is forming on the Ocean floor.

In addition to all the threats of geopolitical disruptions, there seem to be a lot of solar, geologic and climatic risks that are exhibiting increased activity.

The sheer volumes of changes going on around us suggest many reasons for tending to personal protection from the reactions and effects.

The choice for financial protections seems to come down to global finance "ponzi schemes" or individual gold and silver ownership. I must choose the latter, as the evidence suggests that the global finance geniuses are more concerned with protecting their institutions than individuals.

As has been so often encouraged here, shun debt, prepare for "surprises" and keep your house in order. This is not an admonition of doom, but an inspiration to a better lifestyle.

http://earthquake.usgs.gov/recenteqsww/Maps/ortho/270_90.htmlHave noticed recently the virtual real-time updates coming out of Denver compared to the 4 or 5 hr lag that was evident thru Jan ...even AFTER the Boxing Day event.
It appears USGS are certainly keeping a keener eye on things lately.

http://quake.wr.usgs.gov/@Topaz,

The event logs are an excellent source of data. What I noticed is that their "news" blurbs can't keep up with all the signficant quakes, especially when greater than 7's are getting passed up.

We're at 391 measurable quakes in CA this week. Small ones, but more numerous than I've noticed before. Most weeks have registered 200 to 300.

Also of note is the frequency of 4 and aboves in the Pacific Ocean from Ore to BC.

There is a lot of data available there for anyone who enjoys the hunt!

I am not conducting a very scientific study - in case anyone might be concerned by my observations (my disclaimer).

Calipari has become a national hero in Italy (EU). (As he should be).

So what really happened while all the politico's cover it all up. Something's up, big time! Why? And why all the covering, Belgian would say it's noise, but it sure is loud!!!

She's slowly building pressure..... Divert attention to Syria and Iran, (BS!).

Someone is in trouble, big time and it's going to get worse fast.

Got Mas/Gold?

The Sgrena (Calipari) case is producing a lot of noise...and more echos later on ! It is another serious blow to what remains of the Trans-Atlantic relations (EU-US)($-�)...becoming much more relevant after saturday's speech of Hassan Rowhari (Tehran Times - Political desk - "Confidence Building").
Teheran, on its turn now, wishes to know who is with them or not with them. I am afraid that the EU will be forced to choice camp, soon. Oil in dollars or euro !?
Add a Bolton to the UN and the choice seems to become more "pertinent" by the day.
If the �-$ exch. rate goes through 1,34 (heading for 1,40)and oil goes beyond $60...the golden euro (euro-gold) should start manifest itself. This will certainly affect IRs (rise) with possibly devastating consequences, whatever the cary trades or swaps may be or not.
Order in the house for ever, has never been guaranteed !

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/March_IO_2005.htm
Druid: Now if this guy is just getting a clue, just how lucky we are at this fine forum to be possibly quite a few steps(years) ahead of the pack.

@968, I think the bond market is the mechanism being utilized to try and engineer an orderly devaluation of the dollar and appreciation of the Euro. The problem here is that this "financial engineering" in the financial world is colliding with the physical limitations(scarcity) of the real world and in the end the tinkering with the laws of supply and demand will come to an abrupt end and usher in a different reality to those not properly prepared.

@Clink, you're correct good Sir concerning your response to my comments about governments mobilizing armies to "protect" oil and not bonds. To my way of seeing and perceving the good view, bonds are a means to end in the acquisition of real wealth whether that wealth takes the form of natural resources or your servitude.

"Amazing how people - leaders and sheeple both believe that words can alter the law of Cause and Effect."
--------
Yes, a world of Harry Potters.

http://quotes.ino.com/chart/?s=NYBOT_DXY0You want to get those FED boys a barrel to ride in today? ;-)
Its a bit bumpy on the way down for the buck, but gold needs another push, too! Break out that roo meat for a late session charge!

Havin' fun,
Rimh

Yep, the markets react 6 months in advance!

Today's release of demand numbers for heating oil and crude sent LS Crude up near it's previous top of $55 a barrel.

Forty dollar oil is going the way of the ten cent cigar!

CNBC reports an Openheimer analyst saying oil is experiencing a "bubble", and expects pricing to climb to between $60 and $70, before returning to more "normal" pricing. Ya' think? Lt Sweet was $10 in 1998.

Today CNBC trotted out another Saudi to denigrate Matt Simmons as someone who "doesn't know the business." Yeah, I believe that!

Now there're blaming oil "speculation" for hindering the "DOW March to 11000"

Bubble bubble, toil and trouble!

http://www.metimes.com/articles/normal.php?StoryID=20050307-071308-6960rsnip:

CAIRO�--� Always a nation of gold buyers, Egyptians are suddenly finding it difficult to buy jewelry, what with rising world gold prices and the latest government decision to impose a five percent sales tax on manufactured gold items.

The Economic Committee at the People's Assembly recently announced that one of the amendments to the sales tax law stipulates that gold traders pay a 5 percent tax on the final gold item instead of the current 2 percent. The move is expected to double the 150 million Egyptian Pounds in taxes collected from gold last year by the Sales Tax Authority.

Local gold traders said the latest amendment will put an end to the gold industry in Egypt, as people would not be able to afford the tax increase.

They called for a 10 percent sales tax on the gold item's added value instead of on the piece as a whole. The added value, or masna'iya, is the cost of the production process that varies depending on the final quality of the item.

"It seems that the state is trying to destroy the gold market in Egypt, said George Mallak, a gold manufacturer in Cairo's downtown. "The whole business has gone down since the devaluation of the pound and the increase in world gold prices and traders cannot afford these unfair taxes."


-Goldilox

Governments who can't stop the flow of money into gold will develop other means of collecting from that flow - over and over again.

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

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=The ratio (DX v PoG) is currently at 360 which indicates Gold is strengthening in ALL currencies. This ratio topped out at 365 during the last runup and fell below 350 during the downturn.
Double down day for Buck today looks ominous ;-(

Nice work with the Roo meat! Caught 'em by surprise!

http://www.nasdaq.com/asp/quotes_news.asp?cpath=20050308\ACQDJON200503081101DOWJONESDJONLINE000458.htm&selected=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.nasdaq.com/asp/gmWorldNews.asp&headlHEADLINE --- ECB's Wellink: High Liquidity Warrants Rate Hike

FRANKFURT -(Dow Jones)- The European Central Bank will have to tighten interest rates at some point due to excess liquidity in the market, ECB Governing Council member Nout Wellink told German newspaper Financial Times Deutschland.

"There will come a moment when we will have to take action," he said.

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

I can imagine that the ECB will want gold to rise even faster at such time so as to garner demand and thus insulate the euro from unwanted (a political concern) appreciation pressures of the market's rogues gallery of profit seekers and speculators.

R.

http://www.signonsandiego.com/news/business/20050308-0708-china-currencytrading.html(AP) March 8, 2005, BEIJING -- China will reportedly allow limited trading of foreign currencies -- such as U.S. dollars for euros -- beginning in May....

China now only allows trading of its own currency -- the yuan -- against the U.S. dollar, euro, Hong Kong dollar and Japanese yen, and only for foreign trade purposes.

Under the planned expansion, eight foreign currency pairs will be allowed to be traded domestically, the China Foreign Exchange Trade System said.

The changes will help banks with their foreign exchange investment and hedging needs as well as "easing appreciation pressure on the yuan," the CFETS said.

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

To be traded are the following pairs:

dollar-euro
dollar-Australian dollar
dollar-British pound
dollar-yen
dollar-Canadian dollar
dollar-Swiss franc
dollar-HongKong dollar
euro-yen

Looks like they finally found a use for all those dollars. When you have so many of them that you can't possible spend them on real items, you might as well use them as tokens for trading on a forex market.

R.

http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=3541663NEW YORK, March 8 (Reuters) - Gold futures rose to their highest since Jan. 3 on Tuesday, mimicking a surge in the euro to its loftiest in nine weeks as investors rotated out of the dollar into precious and base metals.

The euro rose to $1.3347/51 from $1.3211/14 at Monday's close, making dollar-priced gold more affordable to European investors.

^-----(From url)----^

How many people have been letting their sentiment on gold (and by corollary, the dollar) be driven merely by the rise and ebb of prices within the trading range? Ignore these superficial ripples and focus on the tide -- it's coming in.

Maybe try to catch a good wave if you can. Call USAGOLD-Centennial for wallet-friendly prices on all gold coins and bullion.

R.

Wholesale gasoline prices have added another $0.10 in the last two days, moving from $1.45 on Friday to $1.55, moving along with heating oil and Lt Sweet Crude.

Watch the pump prices go ballistic, as wholesale has jumped 10% in three trading days.

If retail keeps pace, pump prices should gain about $0.20-$0.25 from March 1 by the end of the week.

I think we're on a pace for $3 a gallon by the summer driving season.

"There is no inflation. There is no inflation."

http://www.ecb.int/press/pdf/wfs/2005/fs050304en.pdfGold and gold receivables : minus 68 million
Foreign currency position : minus 0.3 billion

The ECB's net foreign currency position exceeds their gold position by only 23,5%.

http://www.coasttocoastam.com/shows/2005/03/08.htmlGeorge Noory is having a guest on named Andre Eggelletion, who wrote a book about the Federal Reserve called "Thieves at the Temple," the cover of which features stacks of gold bars. Makes me think he's not a fan of the Greenspan bunch. I'm not familiar with him at all, so this is no endorsement, but it sounds like an interesting listen, and I'm looking forward to it after work.

Good day for gold. Take care all.

-DoubleEagle

To the moon Alice!!!!! Gold and the price of Oil reflect the fall of the Dollar. People buying gold to protect their wealth and Oil producing countries wanting more and more dollars for a barrel of oil. What a dynamic duo! FOA where are you? White Hills

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=10Things are LOOKING GOOD !
US$ WATERFALL chart (with a few ROCKS at the bottom of the fall) is back !
The DOGS did well today in NY, as the BOOKIES are starting to SEE THE GOLDEN LIGHT !
<;-\)

http://www.mineweb.net/sections/whats_new/421861.htmMaybe not so precious just yet but....

Teck Cominco Market Research Manager Andy Roebuck suggested Sunday that significant "hidden stocks" of zinc may have disappeared....and only seven weeks of zinc stocks remain as of last month.

Looks to me like the commodity market games extend to more than just silver and gold. Keep it cheap as you can as long as you can, right up to the end.....then just before the word gets out.....switch sides.

Hmmmm.....seems hard for the little guy to win at this game....unless he ownes some "hidden stocks."

http://www.bis.org/speeches/sp050218.htmSpeech to the South African Reserve Bank on 18 February 2005 by Robert D Sleeper, Head of the BIS Banking Department. The views expressed are those of the author and do not necessarily reflect the views of the BIS.

SNIPS :

"We at the BIS hold a considerable amount of gold and in recent years have benefited considerably on a valuation basis from the rise in the price of gold."

"Let us return now to the issue of marking to market. The running loss or profit is not the end of the story. Whenever the exchange rate changes, so does the market value of the reserves in terms of the value of the liabilities used to fund those reserves. Traditionally central banks have not marked their reserves to market, thereby not making obvious these changes in market value. There is a school of thought that would argue that, because central banks are required to act in the public interest and not seek to maximise profits, they should not be required to mark to market. The problem with this argument is that, in seeking to act in the public interest, central banks can end up in situations where they lose a lot of money. Whether one likes it or not, foreign exchange intervention is risky. Whenever you sell the rand and buy the dollar - unless you have a need for dollars to buy something - you are taking a risk. This holds whether you are in the private sector or whether you are a central bank. If a central bank intervenes heavily to keep its currency down, it builds up a big foreign exchange position. And if its currency ultimately goes up anyway, not only might it have a negative carry on its foreign exchange reserves, it will also have a revaluation loss."

"Furthermore, I should add that those central banks holding gold will enjoy its mark to market benefits at times when the dollar goes down. As I mentioned earlier, these are the benefits gold has to offer as an instrument of diversification."
----------------------------------------------------------------------------------------------------------------------
FOA revisited ! Of course, this is WHY the ECB values gold on a MTM basis !!!!!
Interesting that this speech in given by a BIS member in a country with a lot in ground gold reserves. Is it a signal ?

Was this a slip of the tongue : "-unless you have a need for dollars to buy something-" ???

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

March 8 (Reuters) -- Gold rose to its loftiest futures price of 2005 in New York as the dollar fell on Tuesday, while silver -- behaving like a base metal -- gained almost 2 percent on the back of a surge in copper prices.

Mimicking a jump in the euro to a similar nine-week high, COMEX April gold closed up $5.30 at $441.10.

Hedge funds have been active in the metal markets in recent weeks. These large speculators often look for quick profits, and by shifting money from market to market they have contributed to price volatility.

Gold dealers said gold benefited from fears of higher euro interest rates, which took the shine off the dollar. European Central Bank Governing Council member Nout Wellink said excess money supply in the bloc was creating midterm inflation pressures. Quoted in the Financial Times Deutschland, he said "the time will come when we will have to take steps."

"It followed the euro almost precisely and it was a knee-jerk reaction to the comments by Wellink that the ECB may raise rates," said Leonard Kaplan, president of Prospector Asset Management.

In December gold neared $500 an ounce for the first time in 16 years, during a record-breaking rise in the euro.

Elsewhere, according to a DowJones MarketWatch report, Kevin Kerr of Kerr Trading International said that gold "needs to unpeg itself from the dollar exclusively and move higher based strictly on demand. Until we see that, we are going to continue to witness the volatility of recent months based on what the greenback does," Kerr said.

Eventually, he believes gold will break out, moving first toward the $475 mark and then on to $500 or close to it by year-end.

----(see url for 24-hr newswire, market quotes)----

http://biz.yahoo.com/ap/050308/wall_street_22.htmlSnip:

"Because of the lack of other news, oil becomes the big news," said Brian Bruce, director of global investments at PanAgora Asset Management Inc. in Boston. "In aggregate, there's generally been more good news than bad news. But with nothing else going on today, you're seeing oil put a damper on everybody's enthusiasm."

End snip.

That's the only news? Nothing else is going on today? War, deficits, Iran, Russia taking out Chechen leader Aslan Maskhadov (confirmed by Chechens), which may or may not add stability in the region, both GOLD and SILVER making strong gains, dollar falling off a cliff, rampant inflation, <.... add your own reason for a negative day ....> - plenty of reasons, but not good enough for the spin.

But you already know all that.

...312.65.....WOW!

**** There's no inflation,,,,there's no inflation...there's no inflation.

When Bob said, "...unless you have a need for dollars to buy something...", it was in the same general vein of meaning as you'll find alluded to in my post #129974 today in which I said,

"Looks like [China] finally found a use for all those dollars. When you have so many of them that you can't possible spend them on real items, you might as well use them as tokens for trading on a forex market."

The implication is that dollars within reserves have been held largely as a nominal (bookkeeping) utility without regard to their ability to be collectively employed bidding on goods. And with an eye to that element, a central banker, a politician, and a citizen alike will wince at the acknowledgement that as they sit nominal and unbiddable, neither are these dollars in and of themselves inherently an item of WEALTH.

Due to the scale to which the system has swollen, these dollars have become a liability, especially now that mark-to-market has become the international banking sector's standard model for "best management practices".

Speaking of MTM, the Eurosystem's next quarterly revaluation is a shade over three weeks away, and the BIS itself on this date (March 31st) will tie a bow on its own entire fiscal year. As stated, they will like to see gold higher at the time.

R.

http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P
The Stockcharts P&F chart for gold shows another blip upward, now at $440.10.

Welcome sight!

The GAB

http://quotes.ino.com/chart/?s=NYBOT_CRY0&v=d12
If this keeps up a while longer - say two more weeks - there will be a completely mad rush out of dollars and into commodities, as everyone sees what is going on! The rise is truly ballistic. Will it persist?

The official fixers (Working Group on Financial Markets) otherwise known as the PPT (Plunge Protection Team) can and have held down specific items such as silver and gold, and have intervened to goose the stock exchanges, but the world of Commodities is vast and worldwide, and in my opinion, they will be helpless if there is a general rush to buy STUFF with depreciating dollars.

This ballistic rise obeys causes laid down for years now and cannot, in my opinion, be aborted. The fundamentals are in place and will now exert their influence.

Two weeks of this, and it's "Waterloo" for the Dollar.

The GAB

http://www.mint.ca/en/collectors_corner/circulation/technical_specs_1.htm?cookie%5Ftest=1Date: 1908 to 1920
Composition: 95.5% copper, 3% tin, 1.5% zinc
Weight (g): 5.67
Diametre (mm): 25.4
Thickness (mm): n/a

Date: 1920 to 1941
Composition: 95.5% copper, 3% tin, 1.5% zinc
Weight (g): 3.24
Diametre (mm): 19.05
Thickness (mm): 1.65

Date: 1942 to 1977
Composition: 98% copper, 0.5% tin, 1.5% zinc
Weight (g): 3.24
Diametre (mm): 19.05
Thickness (mm): 1.65

Date: 1978 to 1979
Composition: 98% copper, 1.75% tin, 0.25% zinc
Weight (g): 3.24
Diametre (mm): 19.05
Thickness (mm): 1.52

Date: 1980 to 1981
Composition: 98% copper, 1.75% tin, 0.25% zinc Weight (g): 2.8
Diametre (mm): 19
Thickness (mm): 1.45

Date: 1982 to 1996
Composition: 98% copper, 1.75% tin, 0.25% zinc Weight (g): 2.5
Diametre (mm): 19.1
Thickness (mm): 1.45

Date: 1997 to 1999
Composition: 98.4% zinc, 1.6% copper plating
Weight (g): 2.25
Diametre (mm): 19.05
Thickness (mm): 1.45

Date: 2000 to date
Composition: 94% steel, 1.5% nickel, 4.5% copper plating or copper plated zinc
Weight (g): 2.35
Diametre (mm): 19.05
Thickness (mm): 1.45



Canucks can save 'coppers' until 1996!

Mamma-Mia! This old racist was just opening a bottle of redneck beer--and waiting for the foam to subside. Doesn't look like it's gonna, though.

If you read the speach by the Iranian official that I referred to in me post, it WAS kinda like a slap in the face--some just seems to like that more than others, I guess. And ain't it just like a lib to disagree, but not say why. Just go and call a man names like racist and redneck....what is this old world a-coming to?

And the very point of my post was just to say that I preferred dealing with non-nuclear nuts in Iran, rather than nuclear nuts in N. Korea. Just like a redneck, I guess.

But if you really "Want to buy the world a nuke", why stop with Iran? How about Cuba? Or Albania? You can have an election about letting EVERYONE develop their very own nuke, but I shall vote against it. Because I think it is easier to deal with folks who want to kill us if they do not have such arms. It is in our own self interest, as we racists like to say. (I know, libs get their panties all in a knot when I try to look out for myself--that must be against their nature.) Maybe we should call up the UN--Hmmmm...Seems like there WAS something in the paper about a nuclear non-proliferation treaty....

Perhaps this ol' redneck DID enjoy too much fine Italian wine....gonna go git me s'more, though!
Chin-chin....ting! (Y'all)
Buongiorno!

http://www.booktv.org/feature/index.asp?segid=5478≻hedID=335@ Boungiorno, et al

While I was watching the C-SPAN Book report last night on Dr. Helen Caldicott's latest release, she made an interesting comment about nuclear technology. It seems that most of the countries who have it want to stop proliferation with them as the haves and others as the have nots. They're willing to bomb new reactors into meltdown so that the surrounding resources are polluted for millenia, but backing off from their 3-minute Mutually Assured Destruction policies is still only a dream for the targeted billions.

With Israel stockpiling over 400 Nukes (from CIA estimates), but still refusing to even admit to them or enter into any non-pro agreements, it is not surprising that its neighbors want to achieve some sort of parity, so they can claim "deterence" as well.

Many theorists have suggested that a major difference can be found in the history of the superpowers only using nukes as "deterence", but after lobbing thousands of DU shells in Iraq, one can also make a convincing argument that the coalition is already waging nuclear war. Estimates of the amounts of DU used are in the hundreds of tons from Iraq I, with little known data from Kosovo and Iraq II - huge multiples more than the amount dropped on Japan. The nuclear waste we were so concerned about in the 1980's has found a new distribution method in today's battlefields.

The currently serving coalition troops are virtually guaranteed of returning home poisoned by radiation generated cancers, with accompanying major birth defects to their progeny. For those who survive, there's a multi-generation price to pay for GI bill "benefits".

I'm not one to suggest that anyone having the power to fatally poison the planet with the push of a button is a good thing, but I often shudder when I think of all that power in the hands of folks who pray every day for Armeggedon to hurry up and get here. One must suspect that their wish to hasten Messianic return tempts them too often for comfort.

Oh, by the way, I am not a tree-hugger with no nuclear knowledge. I worked on the engineering team at GE Nuclear designing reactor reload cores during the era of the Brown's Ferry accident. As the Doc Watson song goes. "Lawd, Lawd, we got them Brown's Ferry Blues".

At this point, I see the various nuclear threats as another reason to shun debt, prepare for "surprises", and hoard shiney for those rainy days when world leaders demonstrate their human frailties and desire to "play God".

Sir Goldi: Do you have knowledge as to how Israel is to have aquired some 400 Nukes? Gifted? Does Iran have the type of enriching apparatus that we wish to deny Iran?

Just an observation: To be taken seriously today--in order to be heard--a country must have nukes. Otherwise, just a puppy on the leash!


Nice steady presure being applied to the upside in the "Precious" lately...slow, but steady.

Should be: Does Israel have the technology that we wish to deny Iran?

A nuclear bomb, set off on a deserted ship in the atlantic, would send an electomagnetic pulse that would send our digital age back to........well, might as well be stone age. Chances are decent that Israel wont do that. Since religious men with political power dont think that the devil talks into thier ear........chances are, bad ideas will be viewed as -sent from god-. That is on my list of reasons to own gold, but it is down the list a bit.

http://www.globalsecurity.org/wmd/world/israel/dimona.htm@ Goldendome,

Just finished a really good book my Dad sent me by Michael Oren, a historian from Jerusalem University. Having read a number of other good historical war treatises this year, I would put his right up there with the best of them.

He apologizes for his Isreali bias, but in actuality, the book seems pretty unbiased, and recreates the decisions and time tables of the war quite well.

In it, he outlines Israel's concern for the safety of their Dimona reactor even back in 1967.

In 1986, Mordechai Vanunu was convicted of releasing photos of Israel's weapons manufacture and spent 18 years in prison for his whistle blowing efforts (see URL for history).

Though I am not confident of the actual number of weapons available in their stockpile, it has been public knowledge that they are building them for 20 years, even though they still refuse to participate in any international nuclear treaties.

Goldi: Thanks for the information and the link. --G-Dome

@ $ Bill,

Though you are technically correct, I don't think your scenario is precise. The electromagnetic pulse from an ocean surface detonation would cause some electrical cicuit failures, but only within a specified circumference. There is a ;imited range of effect, but I don't know all the particulars. EMP weapons experts suggest that the detonation needs to be in the upper atmosphere to effect the widest area (thus concern about space weaponry).

As to a single detonation effecting the entire power and communications grid, it is an exaggeration. The redundancies in those systems would require a large number of wide-spread events to knock them out entirely, but their localized fragility has been demonstrated more recently by some of the NE power blackouts.

A series of events that could knock them out permanently would unfortunately deliver many more serious effects than loss of communication, like the loss of anyone to communicate with.

Compare this to the dollar faction's IMF, who wants TO SELL their gold ! What a contrast.

http://vulcan.wr.usgs.gov/Volcanoes/MSH/Eruption04/Monitoring/plume_in_the_evening_8march05.htmlMt StHelens puts on a show ...though NW Indians speak of Mt Rainier with far more reverence I recall.

@ TC and 968,

I don't disagree with anything you said in Msg #129988, but I began to notice a couple years ago that China was not the least bit shy about using many of those excess dollars to purchase the needs of their burgeoning economy. . . everything from technology and heavy equipment to oil and mineral "reserves".

While everyone else plays the "carry trade" game, they have been busy buying technolgies, commodities, and access rights to future resources.

GM has touted their early access to Chinese markets, but it is probably short-sighted not to believe that the Chinese will replace as many western suppliers as they can with home grown manufacture. After all, the Asian markets grew up by reverse engineering, and they would much rather supply their own markets when possible.

I guess my point in the last post was that the Trade Deficit is "burnt toast", no matter how much manipulation we see in the US dollar.

George Norry's radio program let a lot of cats out of the bag last night. Expect a few new buyers today. -Caradoc

USD to Oil = 55. USD to Euro 1.32++, Gold to USD 440++, Gold to Euro = 330.3.
All we have to do now is raise the USD to Oil price which inturn raises the exchange rate, so the Euro to Oil price stays constant. The Euro/Gold price will move accordingly.
It's really getting interesting.

Hello Chris,

I quote Robert D. Sleeper : "Furthermore, I should add that those central banks holding gold will enjoy its mark to market benefits at times when the dollar goes down. As I mentioned earlier, these are the benefits gold has to offer as an instrument of diversification."

What's GATA's point of view on this subject ? If CB's have sold that much gold (as GATA claims 10 to 15000 tonnes), what's the whole meaning of this speech ?
Why does a BIS-member gives this speech like this in country with very, very much in ground goldreserves AND in a country with a privately owned Central Bank ?
Why does Sleeper asks WHY the South African Reserve Bank doesn't use the MTM valuation for its goldreserves ? Does he want to warn them for a coming dollar default ?

Can GATA give an explanation why the IMF wants to sell its goldreserves and why its European counterpart the BIS considers its goldreserves as the nec plus ultra ?

Thanks in advance.

http://www.bis.org/speeches/sp050218.htmYOU DISCOVERED THE ABSOLUTE JEWEL IN GOLD'S CROWN !!! R.D. Sleeper (BIS.org).

FREEGOLD on its way !

Sleeper?D(e)Sleeper?RD'somewhere else known as research and development. Are you serious?

Biographical note: Robert Sleeper

Robert D Sleeper, Head of Banking Department

Robert D Sleeper joined the Bank for International Settlements in 1998 and became Head of the Banking Department in February 1999.

Prior to joining the BIS, Mr Sleeper spent seventeen years with Chase Manhattan Bank, NA. From 1981 to 1993 he held senior treasury posts in London, Asia, and Latin America, before being appointed to the post of International Treasury Executive. Between 1996 and 1998, he was Managing Director of Chase Manhattan's Foreign Exchange Hedge Unit.

From 1975 to 1981, Mr Sleeper was Foreign Exchange Manager at the Federal Reserve Bank of New York. Prior to this he was an economics professor at Baruch College in New York City.

Born in Worcester, Massachusetts in 1940, Mr Sleeper was educated at Williams College in the USA and Oxford University in the United Kingdom.

He is married with four children.

http://www.bis.org/speeches/sp050218.htm"...because most of these reserves are invested in US dollar assets, the large fall in the dollar has significantly reduced the value of that investment when measured in local currency terms. ...... Even if we allow that one�half of that loss offsets earlier revaluation gains from the dollar's exceptional appreciation, we still come up with a very high number with the potential for much greater losses should the dollar fall a lot further. Of course, a recovery in the dollar would immediately reduce these losses. Furthermore, I should add that those central banks holding gold will enjoy its mark to market benefits at times when the dollar goes down. As I mentioned earlier, these are the benefits gold has to offer as an instrument of diversification."

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

Along the lines of questioning by 968, another good one is to ponder why Sleeper suggests the dollar falling "a lot further" when describing one potential future, whereas when he describes the other possible direction he downplays it, "Of course, a recovery in the dollar..." as if it were surely the lesser probability and then he swiftly offers ideas for the golden solution.

In fact, he mentions gold on several occasions throughout his speech in a very favorable light. A few key excerpts:


"On the asset side, central banks are usually heavily restricted in the instruments they can hold. ... As a result, for Type�1 central banks, most of the assets on the balance sheet are government securities. The remaining items might be gold and foreign exchange reserves, but in some countries these are held by the finance ministry, ie the government, instead."

"for Type�2 central banks the proportion of government securities on the balance sheet�- if any at all�- is restricted, and instead the bulk of assets is in the form of foreign exchange reserves and gold. I will discuss the implications of holding gold and foreign exchange reserves a little later on in this speech."

"...from a portfolio diversification standpoint, holding gold has proven to be an excellent investment. We at the BIS hold a considerable amount of gold and in recent years have benefited considerably on a valuation basis from the rise in the price of gold."

"I shall discuss the issue of whether or not central banks should mark their reserves to market a little later on."

"Traditionally central banks have not marked their reserves to market, thereby not making obvious these changes in market value. ... If a central bank intervenes heavily to keep its currency down, it builds up a big foreign exchange position. And if its currency ultimately goes up anyway, not only might it have a negative carry on its foreign exchange reserves, it will also have a revaluation loss. ... The resulting move in the exchange rate may be so great that it takes years to return to its average rate of purchase or sale. Meanwhile the cost of funding the position becomes so great and the likelihood of the exchange rate falling to its old level so small that a decision is made to liquidate gradually at a loss."

"...Even if we allow that one�half of that loss offsets earlier revaluation gains from the dollar's exceptional appreciation, we still come up with a very high number with the potential for much greater losses should the dollar fall a lot further. Of course, a recovery in the dollar would immediately reduce these losses. Furthermore, I should add that those central banks holding gold will enjoy its mark to market benefits at times when the dollar goes down. As I mentioned earlier, these are the benefits gold has to offer as an instrument of diversification."

"Mark to market accounting has the advantage of bringing this issue to the surface sooner rather than later. I note that the Reserve Bank has recently adopted fair value accounting in terms of IAS 39�- with the only exception I understand being the treatment of gold reserves. I would be interested to know to what extent the considerations I just outlined were relevant to that decision. I also note that many of the largest reserve holders have not yet gone down this track for various reasons including, in some cases, because they may not hold enough capital to withstand the short-term volatility."


Repeating my comment of yesteray, the BIS is among the trend-setting institutions with mark-to-market employed as best management practice, and has been doing so since 2003. The current fiscal year of the BIS hits the tape on March 31. As its gold is priced in the books in SDRs, it is reasonable to see that the BIS can favor gold's rise across the board, not merely in terms of higher dollar prices.

This is a case where the BIS is truly taking the IMF to school.

R.

http://www.neftegaz.ru/english/lenta/show.php?id=54430Don't be late to this party, everyone! The Russians know what's good (only gold and silver)!

snip:

The Central Bank of Russia announced that gold or hard currency reserves soared 7.7 per cent to a record $134.15 billion in January-February 2005.

Reserves at the end of 2004 stood at $124.5 billion, up $47.4 billion since the end of 2003.

Reserves rose sharply in the final months of 2004 in response to higher revenues from oil exports, efforts by the bank to contain the appreciation of the ruble and a pick-up in incoming capital flows.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10The US$ Chart is NOT looking good !
GO YELLOW
<;-)

What we do not know, is the composition of those reserves.

Russia announces an increase in reserves of 7.7% to $134.15 billion US equivalent - but not how much is gold and how much is PAPER.

We do not know if they are accumulating gold; maybe yes, maybe no.

The GAB

Yes, you are correct, but as was noted the last time they made this sort of announcement, they put gold first in the title. They have also read and confirmed the work of GATA as correct, so my assumption is that their "accumulation" is mostly of the precious kind.

regards,
Rimh

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=10YESTERDAY Mr. Sinclair said --

"Here we are with the USDX closing in on .8150 which is now the line of demarcation rather than .8000. Today's low was .8182 with a close of .8193.

That was not much of a lift off its low. A bearish head and shoulders once again formed and completed on the 18 minute (chart), probably making the chart of the US dollar the one with the greatest number of completed bearish head and shoulders in trading history.

It actually puts Enron to shame in its bearishness. The measured move price objective now on the downside from this completed bearish 18 minute head and shoulders is .8050. Please keep in mind that the line of demarcation is around .8150 and not .8000 as before.

A break below .8150 should cook .8000 and give us first $455-$460 for April delivery gold. After that, $480 is calling as is $529."
===

Thanks, Jim !
LET the BATTLE at 0.8150 continue !
The GOLDHEARTS know who will win -- RIGHT Sir Slingshot ?
<;-)

http://www.bloomberg.com/apps/news?pid=email_us&refer=latin_america&sid=a6h0BfPJTF9g
Snippit:

March 9 (Bloomberg) -- Gold prices traded near a 10-week high as hedge funds bought the bullion on anticipation the euro would extend gains against the dollar, increasing the appeal of the precious metal as an alternative to U.S. assets.

A ``decent amount of fund buying'' is supporting gold prices, after an overnight gain, Fred Okuda, chief gold trader at Sumitomo Corp., said in a telephone interview from Tokyo. Gold may extend gains should the price breach $441, where buy stops, or orders to buy at certain levels, may be placed, Sumitomo's Okuda said. ``We are going to see another $3 to $4 upward moves because traders who are short are feeling uncomfortable now,'' he said.


Black Blade: Side note - China announced they were diversifying out of the US dollar overnight. The trap snaps shut!

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

(DowJones) (MarketWatch) -- Continued weakness in the U.S. dollar, strong energy prices and technical factors teamed up to send gold the highest prices since December, traders and analysts reported.

April gold settled up $1.80 at $442.90. It peaked at $443.50, its strongest level since Dec. 29.

"A weaker tone in the dollar brought another wave of buying to the gold and silver market," said Dave Meger, senior metals analyst with Alaron Trading. As the metals were closing, the euro was around $1.3412, well up from $1.3344 late Tuesday.

"Another thing that has the market's attention, and rightfully so, is crude," said Meger. Crude oil traded as high as $55.65, just two cents shy of the all-time high of $55.67 hit in October. This supports precious metals due to potential inflation, explained Meger. "As one goes, the other goes," he explained.

"Gold has been the quintessential inflationary hedge. That's the major tie between commodity prices and gold, or in this case, crude oil prices and gold.

Economic events that potentially could influence the dollar, and thus precious metals, during the next couple of days include weekly jobless claims and the budget statement on Thursday, followed by international trade data on Friday. Also, Federal Reserve Chairman Alan Greenspan will be making public appearances Thursday night and Friday morning.

Elsewhere, according to MarketWatch, overnight, Merrill Lynch forecast the price of gold reaching $450 an ounce by May, reflecting in part jewelry-related demand coming from India in time for the nation's traditional wedding season.

----(see url for 24-hr newswire, market quotes)----

TownCrier -- since calling the Forum's attention back on February 8th to the likely low (which indeed proved to be the low) on the dollar chart as being "a particularly opportune entry or expansion point", this current snapshot shows where we now are one month later.

In dollar terms, we are $30 higher, a gain of 7.2 percent, and lest anyone think that gold has nothing concurrently to offer the eurozone, the EUR7 climb during this same period represents a nearly 2.2 percent gain.

That is to say, as the dollar is losing strength against the euro, gold is capturing all of that value, and then some!

R.

And what lovely charts they be too.

- Black Blade

We often hear advisors warning us to diversify out of the dollar and into other assets, such as hard currencies. The Swiss franc is often given as an example of a hard currency. Can someone please define what a "Hard Currency" is?

I have always been confused by the terminology, "hard currency", as all currencies, I believe, are fiat created, none are exchangeable for the true hard asset--gold, and all are inflatable by the sponsoring governments at an indeterminate rate. So--what makes one currency hard and another not? Is it simply the current rate of monetary inflation visa vie other currencies, or whether one is currently stronger in relation to others? What?

CRB (not just crude) making bonds and stocks worry about inflation? When the CRB hits 338 it will be at an all-time high. Its within hailing distance now! What if it cracks 340 with force rather than retract?

Lots of pipeline PPI inflation heading toward retailers and consumers. Can the CPI hedonical manipulation machine adjust it away? Will workers stand by and see food and engery prices rise without table pounding for wage hikes? When Greenspan says inflation without following it with the standard delimiters - muted, contained, restrained, etc. bonds could take a hit.

No evidence from Congress that they have any plans to restrain the budget or trade deficits. Things still look for gold.

Do you have a link to that announcement by China? That's huge if its true!

A hard currency is any wampum that stands up to the acid test of politics, pressure groups and public apathy.

Gold can be counted among the so-called "hard currencies", but the term is usually used in reference to the standard suite of prominent developed national currencies that are readily convertible on foreign exchange markets (for gold or other "hard currencies") and are therefore generally acceptible as means of payment beside one's own national currency and therefore seen in use among reserve assets. They also are the ones most frequently used as the target currency whenever a weak-currency nation establishes a currency peg.

To put a wrap on it, the ready CONVERTIBILITY upon foreign exchange markets is the key to which currencies are called "hard" or not.

R.

I assume you are referring to China diversifying outta the dollar. It was in fact just on CNBC in a segment with Steve Lieseman. I will have to look around for a link, but the story now is that China's central bank (The People's Bank of China) will diversify out of the dollar (or yuan-dollar peg) to a "basket" of global currencies. This will likely mean that $600 billion will be cut loose to acquire other currencies including the Euro, pound Sterling, and Yen - and of course Gold. "Interesting Times"

- Black Blade

http://www.financialsense.com/Market/wrapup.htm
Interesting market Wrapup from hartman tonight (see link). Everything from Currencies, Interest Rates, Gold and Silver to Oil.

- Black Blade

Bloomberg and other outlets have been carrying stories lately quoting high ranking Chinese officials saying that the peg of renminbi (yuan) to dollar would not be removed soon to a basket of currencies, but that that was the final objective after "gradual, phased-in widening" of the permitted trading range of the current US$ peg.

http://www.bloomberg.com/apps/news?pid=10000081&sid=a5YstZuIIqso&refer=australia
Snippit:

March 9 (Bloomberg) -- Gold prices in New York rose for a fourth straight session as a decline in the value of the dollar boosted the precious metal's appeal as an alternative investment to U.S. stocks.

``The dollar will have a significant impact on what gold will do,'' said Daniel Vaught, an analyst at A.G. Edwards & Sons Inc. in St. Louis. ``If the dollar weakens, gold will move up.''


`Competing Asset'

``Higher yields make more people want to invest'' in U.S. Treasuries, a ``competing asset'' to gold, said Leonard Kaplan, president of Prospector Asset Management, a money-management company in Evanston, Illinois.

``Higher interest rates are negative for gold as it increases the attractiveness of alternative investments,'' Vaught of A.G. Edwards said. ``It also raises the opportunity costs of owning gold.''


Black Blade: Competing asset? No so - when we had double-digit interest rates Gold and Silver soared to all time record levels. We could only wish to be as lucky again. Yet higher interest rates would spur precious metals much higher. meanwhile Gold is well supported as "real rates" remain negative.

http://moneycentral.msn.com/content/P108402.asp
Snippit:

Today's tales of rampant real-estate speculation sound just like what we heard at the peak of the tech bubble. And we all know what happened when that bubble burst.

About two years ago, I began writing on my Web site about the lunacy in the financing of housing, something I called the "housing hot potato." The evolution of this has allowed folks to use their homes as ATMs to live beyond their means. Now, as always happens near the end of bubbles, madness (in real estate) is on display nearly everywhere.


Black Blade: Interesting commentary by Bill Fleckenstein. Much similar to what I have stated in the past here and elsewhere.

I caught my bank double posting an ATM withdrawal this week. I wonder how people will feel when they figure out they've double-mortgaged their homes.

Zero Mostel isn't around any longer to sing about

"Funny Thing Happened on My Way to the ATM!"

or as Firesign Theater once said in one of their radio skits,

"I'm plowed to be an owned man!"

http://www.falkland-malvinas.com/Detalle.asp?NUM=5216Prime Minister Wen Jiabao is quoted in this artical about the exchange rate.

Sirs Mikal& TC : I appreciate your enlightenments!

Whatever is before us we can take solace in our preparation.
This battle is going to get ugly. The outcome, predetermined by those who thought they could get something for nothing.
We will prevail!
Slingshot------------<>

http://groups.yahoo.com/group/gata/message/2917968 asks, in effect, why should central bankers start making nice comments about gold?

Probably because gold's virtues are now overwhelmingly
obvious even to the proletariat, some of whom have begun
to question the wisdom of working like slaves in exchange
for a paper currency whose value is diminishing by the
minute. (See the link above.)

All around the world people who are paying attention
are searching for an alternative to the dollar.
Foremost among these may be central bankers, the
biggest holders of dollars. Their appeals to the
United States for some restraint on dollar creation
have been turned away contemptuously, leaving
everyone in the most cutthroat game of musical
chairs.

In regular musical chairs, there's only one less
chair than there are dancers. But in the financial
world's game of musical chairs right now, there
are many dancers but there really is only one chair,
a golden one.

Most gold sales lately haven't consisted of gold
reaching the market but rather have been the conversion
of gold leases -- representing gold long ago sold into
the market -- into sales, gold being written off by central banks at below-market prices to rescue the big financial institutions that went short gold at the encouragement of central banks to enter the gold carry trade. Presumably most of these institutions outside the
United States now have been bailed out. Hence, perhaps,
the drying up of central bank gold sales -- note particularly the Bundesbank's decision to stop selling
gold. After all, why keep squandering the national
patrimony to buy the Americans a little more time for
their overconsumption?

I can't offer any good explanation for South
Africa's idiotic collaboration with the gold carry
trade. By any rational standard South Africa is
in every position to become one of the richest
countries -- enormous natural resources, a modern
infrastructure, a more or less democratic
government with rule of law and private enterprise,
and the ability, with a little help, to educate and
elevate its vast and formerly oppressed underclass.
Instead South Africa's government insists on
continued subservience to dollar and IMF imperialism,
and thus insists on keeping South Africans in a
cruelly disease-ridden poverty.

Maybe South Africa's central bankers contemplate
a comfortable retirement in Mayfair rather than
Soweto. I can't think of another explanation. As
the old couplet goes:

"Treason doth never prosper. What's the reason?
Why, when it prospers, none dare call it treason."

http://groups.yahoo.com/group/gata/message/2922Latest GATA dispatch....


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

gata-subscribe@yahoogroups.com

http://www.institutionaladvisors.com/images/Cartoon-Caveat-Venditor.jpg
Somehow this reminded me of the troubles at ABX, AU, Ashanti (now absorbed) and other overhedged producers (see link).

- Black Blade

Coney Island couldn't be a better ride!

Thanks for your answer, but I still have a couple of questions :

a\ you say :"In regular musical chairs, there's only one less chair than there are dancers. But in the financial
world's game of musical chairs right now, there
are many dancers but there really is only one chair,
a golden one."
Can you elaborate this, please ? Do you mean a gold standard again, or a euro reserve system with a freegold market (MTM), or .... ?
b\if the BIS (ECB-system) sees gold in the way Sleeper describes it, WHY would the European Central Banks have sold their gold WITHOUT a higher cause (and by higher cause I don not mean only to bail out short positions of financial institutions) ?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=After several weeks of Market normalcy, the PaperGold Monster Truck is AGAIN being deployed to wrestle 'ol Buck northward.

http://www.enercast.com/index.php?cont=8923Major snip:

NEW YORK - Chinese oil demand will grow by 33 percent more than previously forecast this year, as the expected drop in demand for fuel to run power generators hasn't materialized, the statistics arm of the U.S. Department of Energy said Tuesday. Most forecasters have expected Chinese oil demand growth to slow significantly this year from last year's searing pace, as new power plants are built and demand for diesel fuel to run generators falls off. But the power shortages are proving trickier to fix than expected, which will keep demand high and markets tight. "People have been anticipating that the demand for burning diesel fuel for power would slow down," said Erik Kreil, the analyst responsible for the Energy Information Administration's China forecast. "So far, the data keeps saying, 'No, it's not slowing down.'" The EIA on Tuesday revised its forecast for 2005 growth in Chinese oil demand to 800,000 barrels a day, down from last year's pace of 1 million barrels a day but up from the 600,000 barrels a day in growth the agency forecast last month. That strong demand, combined with a more pessimistic outlook for growth in oil production outside the Organization of Petroleum Exporting Countries, will keep oil markets tight and subject to price spikes through 2006, Kreil said. The EIA, in its monthly Short Term Energy Outlook, boosted its forecast for oil prices, saying it sees benchmark U.S. prices in the mid- to high-$40s through 2006. "A lot of that is because Chinese demand is still strong," Kreil said. "As long as demand doesn't fall by 1 million barrels a day, this market's not going to loosen up." The EIA sees oil demand growing by about 2 million barrels a day in 2005 and 2006, much faster than non-OPEC oil supply. On Tuesday, the EIA cut its forecast for 2005 growth in non-OPEC supply to 600,000 barrels a day, down from a forecast of 900,000 barrels a day last month. The agency sees non-OPEC supply growing by 1 million barrels a day in 2006, down from 1.5 million barrels a day in its last forecast. "It is emphasized that oil prices are likely to be sensitive to any incremental supply tightness that appears during periods of peak demand worldwide," the EIA said in the release. "Imbalances (real or perceived) in light product markets could cause light crude oil prices (such as West Texas Intermediate) to increase to well above $50 per barrel, as has recently occurred." Oil prices rose to past $55 a barrel Tuesday in New York. China's power-supply problem is the result of broad difficulties with the reliability of the electricity grid, not just a lack of power plants, Kreil said. Bottlenecks and lack of access to the grid are keeping demand for on-site generators high. The EIA thinks that demand will eventually be satisfied, but has pushed back the date. The agency sees Chinese oil demand growth slowing to 500,000 barrels a day next year, still a significant increase. "The more we find out about it, the more it becomes apparent there won't be a sudden sharp slowdown to where it was," Kreil said of Chinese demand. The EIA now sees the Chinese consuming 7.4 million barrels a day of oil in the third quarter and 7.6 million barrels a day in the fourth, up 200,000 barrels a day in each case. The agency also bumped up its first and second quarter forecasts for Chinese demand by 100,000 barrels a day. The agency raised its forecast for 2005 world oil demand by 200,000 barrels a day, to 84.7 million barrels a day, mainly on the strength of the growth in China. The EIA tinkered with its outlook for U.S. oil demand, trimming it in the first quarter and raising it for the rest of the year, with consumption seen averaging 21 million barrels a day in the second half. The agency sees U.S. demand averaging 20.84 million barrels a day this year, up 10,000 barrels a day from its previous forecast.

********************

One more marker along the Trail.

Caradoc

http://www.usagold.com/gold/special/victoria.htmlGreat prices and generous volume incentives to help you build your own reserve base.

The only way you'll beat this deal... is with a stick!

Order online, or phone for the very best deals, 8:30am - 6:00pm Denver time.

USAGOLD-Centennial, toll free: 1-800-869-5115

R.

Stated like a true New England patriot!

Hi, 968. With that analogy I meant that in an
ordinary game of musical chairs there is a
close balance between dancers and chairs,
but in the cutthroat game that now faces central
banks, big international financial institutions,
and individuals, the ratio between good options
and players is very high -- in the end, with
competitive devaluations becoming international
policy, everyone who wants to preserve his
wealth may be going for gold. No, I didn't mean
a gold standard; I meant exchange of depreciating
dollars for simple possession of real metal to
preserve value. The Harris Capital Management
newsletter remarked the other night that oil
has become the alternative currency. As oil
supplies get tighter, there may be more of a
shift to gold, whose supplies are tighter still.

As for the contrast between that BIS official's
seemingly favorable comments about gold,
on one hand, and, on the other hand, the gold
sales and leasing by BIS-member banks, it would
seem that the national policies of some BIS
members may be changing.

In the past they were willing to sell or lease
the gold necessary to support the dollar as
the single international reserve currency.
Maybe American exploitation of that system,
having become the most parasitic imperialism,
has changed some minds.

I don't know; just a guess. But the rest of
the world should have figured out long before
today that, to undertake international trade,
it doesn't have to pay the Americans what is
effectively a confiscatory tax. The dollar
standard now is estimated to be sending about
80 percent of the world's savings to the
United States to be used for, among other
things, free sexual enhancement drugs for
elderly Americans while so many children
around the world lack basic vaccinations.

The deputy director of the Russian central
bank, Igor Mozhaiskov, remarked about this
disgraceful irony in his speech to the London
Bullion Market Association last summer. The
LBMA suppressed the speech but the idea
is getting out. The dollar system is parasitic
and in no one's interest but the interest of
Americans -- or those Americans without shame.

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

March Buyers' Group

Queen Victoria Sovereigns and Incentives!

Shop online or phone the trading desk.
Call today, save today!
1-800-869-5115

http://business.iafrica.com/news/423395.htm(iafrica) 10 Mar 2005 -- Spot gold on Thursday touched a fresh 2005 high of $442.65 a troy ounce on Thursday...

Japanese "diversification"

The latest increase in the price of gold was sparked by Japanese Prime Minister Junichiro Koizumi mentioning the word "diversification" in the context of foreign exchange reserves, London-based analysts for Barclays Capital wrote on Thursday.

"Our FX strategy team note that these comments need to be taken in the context of ongoing discussion from Liberal Democratic Party officials about diversification, that have previously even included some suggestions about gold," Barclays Capital added.

However, given that Japan has $821-billion in foreign reserves, and the overwhelming majority held in US dollars, then clearly the comments have the potential to push the US dollar lower...

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

Diversification. You should be ahead of the curve on this one. Call USAGOLD-Centennial for consultation on a diversification strategy that's right for you.

R.

Well spoken; GATA is "America's team" IMHO. That Brady kid is just too republican!

If you recall, previoius Japanese dalliances with respect to gold were always a reaction to tough trade talks - times when the United States was pressuring Japan to lower trade barriers and allow its currency to float (presumably higher). The Koizumi comment this time around did not come as a reaction to trade talks and should not be interpreted as a negotiating ploy. This is an important departure that top market analysts will not take casually. These comments register genuine concern about the nature of Japan's reserves and their VALUE, and carry with them long-term implications for the dollar. Koizumi pointedly remarked (in what appears to have been an unguarded moment) that "it's necessary to diversify the investment destinations" of reserves "while considering what's profitable and what's stable." If that is not a well-aimed arrow at the heart of the dollar, then I don't know what is.

Steve Barrow at London Bear-Stearns captured what I believe to be the main point: "The market will believe Koizumi. This is an issue that's not going to go away. That's going to undermine the dollar.''
In taking this all into consideration, we should not forget the comments last week from South Korea that it might diversify its $200 billion in reserves. South Korea, the third largest holder of dollars in Asia, is in a better position to act on its concern in that its holdings are substantially less than China or Japan. That may be where the dam breaks first, though none of us know what is going on behind the curtain in Asia. In this context, the Koizumi comments may simply be what has bubbled to the surface from a much more intense and pro-active strategy than anyone anticipated until his slip of the tongue.

If and when the euro breaks the $1.40 barrier, we will be in a whole new ballgame. It has been my belief for quite some time now that the G-7 was attempting to manage the dollar's devaluation within a band over the past few years and that the strategy had been successful. Gold has been part of that managed relationship. This explains why analysis of the euro's prospects has also been an analysis of gold's. Now, if the Koizumi slip-up reveals the reality in Tokyo, speculators could blow the strategy out of the water and we could see the beginnings of a run on the dollar. One is left with the mental image of major currency players crowding at the door with Warren Buffett already standing on the other side saying "I told you so."

Barclay's forex department immediately translated the Koizumi comments as a positive for gold. Why? Because Japan has smallish gold reserves for a major world player and the country most in need of a gold diversification. IMF sales in this context become a very small threat to the overall market. As the biggest holders of dollars, Japan, China and South Korea would position themselves as the most likely market for that gold. The problem is that the United States contributed the lion's share of that gold to the IMF and under the circumstances it would take something more than diplomatic niceties to get the United States to part with it. Anyone who thinks that the UN/IMF/World Bank milieu is still strictly joined to the U.S. Treasury Department's hip doesn't understand the Bush administrations view of these organizations.

So the economic war heats up. Those who own the gold ultimately will make the rules. Not only that, they will survive the "battle for survival" as the post World War II/Cold War raprochement draws its final breaths.
________________

Victoria sovereigns

While I have your attention, I would like to mention our offer of Victoria British sovereigns in uncirculated condition. These are a wonderful addition to any portfolio - large or small. This has particular appeal for those capable of purchasing nice sized increments in that you can find a few pieces here and there in uncirculated condition if you really want to, but it is extremely difficult to purchase in quantity.

We do not expect the 1000 pieces offered to last long.

WASHINGTON, March 10 (Reuters) - U.S. Treasury Secretary John Snow on Thursday repeated his support for a strong dollar and said the United States remained the safest place for world investors to put their money.

"The U.S. remains the best, safest, most secure place to invest in the world. That is reflected in the fact that we are the leading reserve currency by far," Snow told a Bloomberg Radio interview.

"We continue to reaffirm, and always will, the strong dollar. It is clearly in the nation's interest," he said.

> If a strong dollar is your policy pal, I've got news
> for you. Its been a abysmal failure!

To MK's view of the nature of the creature. I'm all the way with you ...

Best cb2

PS: WC finals between Bode and Benny are heating up. Almost wish Bode will come up front.

The timing on TreasSec Snow's comments makes me think they are a direct reaction to Koizumi's and an attempt to calm the forex markets. I would not be surprised to see more of the same from the Bush administration before the week is up. Don't forget tomorrow we get the January trade deficit number. A number over the expected $57 billion could roil the markets even more. A number over $60 billion. . . .and who knows what will happen. Also, keep in mind gold has had a penchant for dramatic Friday permormances of late.

While few were looking the national debt went to $7.746 trillion (3/8/05) -- an addition of $376 billion since fiscal year end (9/30/04). It looks like an $8 trillion national debt by the end of the federal government's fiscal year is a lock since we seem to be plunging into debt as a nation at the rate of about $75 billion per month! At that rate we will add $900 billion to the national debt in a single fiscal year.

It's JUST PAPER !
everyone --- GET YELLOW (the REAL STUFF)
<;-)

That goes with

1. "Who cares about the national debt. We just owe it to ourselves anyway."

And

2. "Deficits don't matter."

With respect to number one, now we owe it to everybody -- in the trillions and still counting.

As for number two, they only "matter" to the taxpayer saddled with paying it, if he or she were only to stop and think about it.

Funny thing about AG bringing up that nettlesome problem - the one about how much of tax revenues go to pay interest on the national debt, and how that might affect future SS payments (not to speak of interest rate policy). Some think of AG as being in the wizard category and he does have this nasty habit of talking the money fundamentals involved - even if he's hamstrung as to what might be done about it. A real Jeremiah that Alan Greenspan. And he seems to have decided to speak his mind as he moves toward his final months as Fed chairman. Those who did not like his "realist" pronouncements of late might find themselves with their hands full as we move forward and AG gets closer to retirement. I get this impression might do his best Howard Cosell imitation and "Tell it like it is." I'm still thinking about that poignant exchange with Congressman Paul that CNBC saw fit to cut out of its coverage. When it is all said and done, that will be the exchange that sticks - that and the concerns made public while the various Congressman ticked off their questions without even really listening to the answers.

Just kind of freewheeling here at the forum today. Hope you all don't mind.

http://www.fromthewilderness.com/free/ww3/031005_globalcorp.shtml#0Mike Ruppert has been trying to warn the world about Peak Oil for several years. Now it is upon us. He has some sobering words about this situation. His comments do reflect a huge increase in the price of gold in the near future, so I believe they are relavent here.

The U.S. debt went - - -

Past $1 trillion in 1981

Past $2 trillion in 1986

Past $3 trillion in 1990

Past $4 trillion 1993

Past $5 trillion in 1996

Past $6 trillion in 2002

Past $7 trillion in 2004

Past $8 trillion in 2005 (Probable)

Years are U.S. government fiscal year ending 9/30

http://edition.cnn.com/2005/BUSINESS/03/10/asia.stox.reut/index.htmlSINGAPORE (Reuters) -- Asian shares fell on Thursday as hints of inflation in the world's largest economy stoked worries...

The dollar briefly touched a two-month low against the euro after Japanese Prime Minister Junichiro Koizumi told parliament foreign exchange reserves should be diversified.

In Asia, oil retreated from near-record levels, while gold prices hit a 10-week high above $442 an ounce.

U.S. Treasury prices slid, pushing benchmark yields to seven-month highs...

Analysts said Japan's bond prices fell in a knee-jerk reaction but then recovered...

With U.S. trade data due on Friday, concerns about the U.S. current account deficit and the willingness of foreigners to continue funding it were putting pressure on the dollar.

"I believe diversification is necessary," Koizumi said. "At the same time, we need to consider what is profitable and what is safe, and make a comprehensive decision."

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

MK already touched on much of this in his commentary. The groundwork is in place for a relentless march higher in gold demand and its price. The bottom line everywhere in the world is that currencies (and bonds) can in fact depreciate and devalue (and default) much faster than real interest rates (yields) can compensate over time in troubled economic waters.

Choose gold for a form of savings built to last!

R.

Received this by e-mail from client and friend, DA. In my earlier reference to AG as Jeremiah - I was using it in the colloquial sense as a prophet of doom. That promped DA to look up the story of Jeremiah which is appended and provides some food for thought. Any exhibition of prescience on my part is purely accidental.

______

From DA:

Mike, I learn so much reading economic info when people use examples like you did, when I don't understand the relationship between the two, so I look them up and it almost always parallels an important message from history. I find it very interesting. Sure I would post it because you used an excellent "Cassandra" type comparison. Although, AG is not nearly so noble as Jeremiah, as it were. Nice to know you are so prescient!!!

The Prophet Jeremiah and Jerusalem (6th century BCE)

"The prophet Jeremiah was active in Jerusalem during the tragic period of the city's destruction by the Babylonians, which occurred over several stages. Jeremiah prophesied during the reigns of various kings: beginning in the thirteenth year of the reign of Josiah (626 BCE), and then Jehoahaz, Jehoiakim, Jehoiachin, Zedekiah, and during the brief rule of Gedaliah ben Ahikam, whose assassination in ca. 585 BCE marked the final end of the remaining Jewish community in Judah and Jerusalem and symbolized the conclusion of the First Temple period.

Jeremiah prophesied an ineluctable, unavertible disaster. He launched his prophetic mission in his native village of Anathoth, but was rejected by the villagers. Jeremiah castigated the people bitterly for forsaking God and the Torah and turning to idolatry. With a sense of the inevitability of a terrible punishment, he felt disgusted with his life. Gradually he became the leading exponent of the approach which called for surrender to Babylonian might and not attempting a rebellion against its awesome strength under the auspices of Egypt. This was considered a defeatist stance and as such was rejected both by the people and by the various kings during whose reigns Jeremiah uttered his prophecies. He himself rejected the idea that Jerusalem and the Temple had an almost magical inviolability. Viewed as a
traitor, Jeremiah was declared an outlaw during the reign of Zedekiah and placed in detention until the destruction of the city by Nebuchadnezzar. He saw the shattering of the last hope for the survivors of the carnage: the murder of Gedaliah, whom the Babylonians had appointed to rule over Judah. Although Jeremiah was saliently a prophet of apocalypse, he emphasized the temporary nature of the destruction and the consolation to be found in the certainty of the nation's return to its land.

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

(DowJones) (Reuters) -- Gold was the only member of the precious-metals futures complex that managed a gain on Thursday, but the rise was modest. A stronger euro helped, as did fund buying of the yellow metal, contacts said. April gold finished up 50 cents to $443.40.

April gold had traded down to $440.70 overnight. A couple of traders cited liquidation and profit-taking pressure, particularly as the euro gave back some of its recent gains. They also noted fund buying occurred when the metal was rising during the second half of the day. "When the euro pushed below $1.34, the metals had fallen away. But they held on, and in fact gold attracted some pretty strong fund buying and closed up," said one contact. This fund buying emerged when the futures had fallen back around the $440 market, he added.

Traders will be monitoring several economic events overnight and early Friday to see whether they impact the U.S. dollar, which in turn often dictates the direction of gold. The Treasury issued its February budget statement after the precious metals had closed. Federal Reserve Chairman Alan Greenspan is to speak before the Council on Foreign Relations in New York Thursday night and via satellite to an independent banking conference in San Antonio Friday morning. Also, the January trade report is due out Friday at 8:30 a.m. ET, with economists expecting the deficit to be around $56.5 billion, compared to $56.4 billion in December.

"We are expecting gold to keep on climbing," said Sprott Securities analyst Jed Richardson.

Gold's other supportive driver was the recent surge in oil prices, which was generating more speculative interest in commodities overall, Richardson added. "Oil is the one commodity that everyone focuses on, and when it goes, you see the rest follow suit," he said. "After oil and gold recently took a breather, everybody is getting a chance to get back into the game, and I think we'll see a push higher because there are a lot more players this go-round."

COMEX brokers looked for gold futures to top $445 soon, followed by $450 and possibly even the $475 level after that.

In early December, gold hit 16-year highs near $460 an ounce.

----(see url for 24-hr newswire, market quotes)-----

Gas at $2.02 a gal. for 87 octane.
Cracker Barrel cheese $4.37 a 10 oz. brick.
Bell pepper, 98 cents each
Banannas 59 cents a pound.
O.K. you know where I am going. Have to eat, right? Looking down the road to Christmas I wonder what the consumer will do after they run the gaunlet of summer pricing.

Gold is a very bad investment. YEAH RIGHT! Tell that to those on a fixed income.
Slingshot--------------<>

Numbers on the national debt are very interesting, the first trillion spent (but not earned) took 205 years (if we start in 1776). Then, 5, 3, 3, 6,(oops), 2, and 1 year!!! Would anyone like to try and extend the series for future spending? (I saw one projection that had compressed a TT deficit spending into about a month a few years down the road.)

Math and/or logic majors?
(I gotta get me more fine Italian wine, perhaps a golden grigio!)
Buongiorno!

For effect, gold is
second, plutonium third,
mass ignorance first.

S.

http://quotes.ino.com/chart/?s=NYBOT_CRY0&v=d1Absolutely amazing.....unbelieveable!

Check the 30 day, has there been a down day in the last 30?

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

Remember now that is only the "official debt" and does not include the "off the books" account which is in excess of $47 Trillion! Last night I saw an interview with former Treasury Secretary Paul O'Neill, who now is "persona non grata" at the White House after being fired and making public a Treasury Dept. audit of total government debt. Yes, $6 or $8 Trillion in debt is ugly but when the real number exceeds $47 Trillion of debt that must be serviced the picture is downright horrid!!!

- Black Blade

On a side note, a friend Chris LeDoux died yesterday. Those of you who are Western Music and National Rodeo fans would probably recognize the name. I will be out this weekend to attend a memorial at his ranch. He was a rare friend indeed.

By Michael Kosares
Centennial Precious Metals, Denver
www.USAGold.com
Thursday, March 10, 2005

Previous Japanese dalliances with gold were always
a reaction to tough trade talks -- times when the
United States was pressuring Japan to lower trade
barriers and allow its currency to float (presumably
higher). This week's comment by Prime Minister
Koizumi did NOT come as a reaction to trade talks
and should not be interpreted as a negotiating ploy.

This is an important departure that top market
analysts will not take casually. These comments
register genuine concern about the nature of Japan's
reserves and their VALUE, and carry long-term
implications for the dollar.

Koizumi pointedly remarked (in what appears to have
been an unguarded moment) that "it's necessary to
diversify the investment destinations" of reserves
"while considering what's profitable and what's stable."

If that is not an arrow well-aimed at the heart of the
dollar, then I don't know what is.

Steve Barrow at London Bear-Stearns captured what I
believe to be the main point: "The market will believe
Koizumi. This is an issue that's not going to go away.
That's going to undermine the dollar."


In taking this all into consideration, we should not
forget the comments last week from South Korea that
it might diversify its $200 billion in reserves. South
Korea, the third- largest holder of dollars in Asia, is
in a better position to act on its concern in that its
holdings are substantially less than China or Japan.
That may be where the dam breaks first, though none
of us knows what is going on behind the curtain in
Asia. In this context, Koizumi's comments may
simply be what has bubbled to the surface from a
much more intense and active strategy than anyone
anticipated until his slip of the tongue.

If and when the euro breaks the $1.40 barrier we will
be in a whole new ballgame. It has been my belief for
quite some time now that the G-7 were attempting to
manage the dollar's devaluation within a band over the
past few years and that the strategy had been
successful. Gold has been part of that managed
relationship. This explains why analysis of the euro's
prospects has also been an analysis of gold's.

Now if the Koizumi slip-up reveals the reality in Tokyo,
speculators could blow the strategy out of the water
and we could see the beginning of a run on the dollar.

One is left with the mental image of major currency
players crowding at the door with Warren Buffett
already standing on the other side saying, "I told you
so."

Barclay's foreign exchange department immediately
translated the Koizumi comments as a positive for gold.
Why? Because Japan has small gold reserves for a major
world player and is the country most in need of a gold
diversification. International Monetary Fund sales in this
context become a very small threat to the overall market.

As the biggest holders of dollars, Japan, China, and
South Korea would position themselves as the most likely
market for that gold. The problem is that the United States
contributed most of that gold to the IMF and under the
circumstances it would take something more than
diplomatic niceties to get the United States to part with
it. Anyone who thinks that the United Nations/IMF/World
Bank milieu is still joined to the U.S. Treasury
Department's hip doesn't understand the Bush
administration's view of these organizations.

So the economic war heats up. Those who own the gold
ultimately will make the rules. Not only that -- they will
survive the "battle for survival" as the post-World War
II/Cold War rapprochement draws its final breaths.

He surely earned the right to see Cowboy heaven!..He'll be in good company on the other side,,,Sad news indeed, I followed his PRCA days and some of his music...Glad you were friends and sorry he's gone, hard time for all his kids and wife...YGM

http://cbs.marketwatch.com/news/story.asp?guid=%7BFB461EDF%2D7A42%2D41CE%2D84FD%2D7BBD0CC47CC9%7D&siteid=mktw&dist=
Snippit:

The growth in debt was led by the household sector, which took on $1.02 trillion, or 11 percent, more debt in 2004. Home mortgage debt increased $885 billion, or 13.3 percent, in 2004, the fastest growth since 1987.


Black Blade: Fastest pace eh? I have stated a number of times in the past here that the "Twin Deficits" were clearly unsustainable. Add to that negative "real rates" and the volatile mix is indisputable evidence that you should have some hard asset protection or "portfolio insurance". Just check out the Treasury here at USAGOLD - just gotta sneak past the Castle Guards... or click on the link above.

Thanks, it was a bit of a shock to hear it on the radio this morning. I met Chris at the "Invasion Bar and Restaurant" in Kaycee, Wyoming with mutual friends a few years ago when he performed with Garth Brooks. He was always accessable and did not let his "celebrity" go to his head. He passed away after losing his battle with liver cancer last night. I saw him a couple of weeks ago and he seemed fine, even though I was not aware of his illness - just the kind of guy he was to not bother others with his own problems. It just goes to show ya that life is often just too short.

- Black Blade

http://money.cnn.com/2005/03/09/pf/bankruptcy_bill/index.htm
Snippit:

NEW YORK (CNN/Money) � If you were thinking about filing for bankruptcy to clear your debts, you might think twice ... or act twice as quickly. A bankruptcy reform bill, up for a vote in the Senate today and expected to become law, will make filing for bankruptcy more difficult. And it will give creditors more recourse in some instances.

Black Blade: We knew that this was coming. As always, get outta debt and stay outta debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities. This could become very necessary before you know it.

http://biz.yahoo.com/ap/050310/greenspan_14.html
Snippit:

WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan said Thursday that future budget deficits pose a bigger risk to the economy than record trade imbalances and the country's extremely low savings rate. In a wide-ranging speech, Greenspan said he believed the United States' flexible economy would be able to deal with current concerns over trade and savings. "The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our fiscal deficit," Greenspan said in prepared remarks to the Council on Foreign Relations in New York.

Black Blade: Cheeta speaks!

@BB

I've posted on this subject a few times this week.

The main tenants are:

1) stricter requirements to select full bankruptcy vs. "chapter 13" - debt reorganization . . . even child support and unemployment can be attached.

2) eliminated homestead protection - disallowed home equity from protection, originally set at $150K for seniors, but amended out.

3) No cap on interest rates (30% was originaly written into the bill, but amended out) - allowing credit card companies to "adjust" rates to any "penalty" number they like for any one who misses a payment.

4) eliminated the proposed exemptions for the elderly and active duty service families suffering hardships as a result of deployment - both were proposed, but amended out.

Unless one has a set up an asset protection trust, bankruptcy is gonna be a very difficult option. Of course, if the asset protection trust is in place, no bankruptcy is needed, as the individual doesn't own any "assets" to attach.

One author I read suggested that sending credit cards and authorizing mortgages for unqualified people was akin to sending whiskey samples in the mail to aloholics. Accordingly, the Bankruptcy bill is no better "protection" for the individual than the bill to send class action suits to Federal courts - just in time to protect Big Pharma from the rash of litigation they face after releasing their latest slew of unsafe drugs.

We can see that TPTB are scrambling to "protect" banks and corporations prior to TSHTF. The FEDs are building protection schemes for a 1929-type event, but certainly not to protect the populace. The institutions will come first, and the best the individual can hope for is that some protections "trickle down".

This is another reason to take "financial protection" personally - shun debt, prepare for "surprises" and stash water, food, and shiney for "rainy days". Oh, and if your net worth is high 6 figures or more, you might wanna evaluate asset protection trusts (like family partnerships) with an attorney as well.

Sometimes the best protection against greedy corporations is to become one!

http://www.mytelus.com/news/article.do?pageID=cp_business_home&articleID=161637158.3 Billion 1.1 Bil of the all time record

@ MK and Black Blade--Does your understanding of the $47 TT figure involve "unfunded mandates", which might imply future obligations--or money already spent that is just not on the books? Perhaps some of both.

Either way, it is just stunning in magnitude. The ONLY way I see to make ends meet is to really crank up the printing presses--especially if we are met with more redemptions from the international set. Could those wheels already be in motion....

Idea for contest? The day we " officially" hit the 8 TT number....(Call it the "Enjoy yourself, it's later than you think contest.")
Buongiorno!

Thanks to all for your vigilance. Markets seem wiggy as of late. Oder?

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10Wow, the DX opened with a wild ride! Looks like ARCA action. Try to stay on this baby for 8 seconds! YEE HAA!

CNBC is hopefully touting the $55 level as a double top in LT Sweet, wanting desperately to find a lower support level.

KMart emerges from bankruptcy to run from $20 to $118, demonstrating heavy consumer reliance on discounters.

All this while gold reaches for the triple-4s.

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

March Buyers' Group

Queen Victoria Sovereigns and Volume Incentives!


Shop online or phone the trading desk.
Call today, save today!
1-800-869-5115

http://www.irna.ir/?SAB=OK&LANG=EN&PART=_NEWS&TYPE=HE&id=20050311184647Rome, March 11, IRNA -- Iran and Italy signed an economic cooperation protocol worth three billion euros here Thursday night, based on which the Italian government is urged to provide Tehran with industrial machinery upon request, in return for Iranian oil.

The Italian state news agency adds, "Iran is expanding the range
of its economic transactions with Italy..."

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

Hey... why did the headline put it as 3 billion EURO rather than 4 billion DOLLARs? Was this mere translation, or was it the bottom line?

Whatever the actual reality may be, if it is natural enough to speak this way, it is only a matter of time before actions make it so. How long can the dollar retain reserve status if it loses ground in denomination of international contracts?

R.

Beautiful coins!

Just a little note on the "fineness" of .917.

This is the classic "fine gold" used in the minting of England's coins and it is 22 carat gold.

22/24=.91666....= .917

FYI

The GAB

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh61574_2005-03-11_08-29-08_sp344615_newsmlSINGAPORE, March 11 (Reuters) - One of the hottest topics in world markets is whether Asian central banks will diversify their huge currency reserves, a move that could hit the dollar hard.

The head of India's central bank, which has the sixth biggest reserve stockpile in the world, on Friday said the central bank was discussing the issue of reserve diversification.

This came a day after Japan stoked speculation it could sell dollars when its prime minister spoke of diversification as being necessary. Last month, South Korea made similar remarks.

WHY THEY'VE GROWN

Asian central banks have intervened heavily in the past year and a half to restrain their currencies, fearing that currency strength could choke off the exports that power their growth. Others, notably China, have a fixed peg that obliges them to accumulate dollars when their balance of payments is in surplus.

HAS DIVERSIFICATION TAKEN PLACE?

Asian central banks do not give currency breakdowns of reserves.

..."Yes it is being discussed," Reserve Bank of India governor Yaga Venugopal Reddy told reporters on Friday, after being asked whether the central bank was talking about diversification. "We are always discussing. It's a continuous process."

Reddy added: "It is an ongoing debate with all central banks and you cannot expect a central bank governor to say anything further on this."

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

The last word on this rightly goes to Reddy: "you cannot expect a central bank governor to say anything further on this."

Folks at home... choose gold. It is a sturdy shelter for savings when the dollar house loses its structural integrity and its old supporting pillars begin to fail. As Reddy said, they're not going to post flyers and ring the bell on this one to make headlines. It will happen as you sleep.

R.

MOST of the ESF Boyz are injured by that HUGE WHIPLASH between 0800 and 0900 NY time !!!
The evening shift Boyz have been called in to replace them, BUT some are afraid to report.
The BATTLE at 0.8150 did not last too long as Sir Slingshot's Goldheart "TRAPS" showed them that "This is NOT Kansas, Toto !"
AND 0.8000 is not too far away to soon see.
LOVING it !
<;-)
PS: are you taking NOTES, Lady Whitewaterwoman ?

Yes, Gandalf, I'm trying to follow along...but where do y'all get all those exotic charts from? Is there a good free site that has extensive charts? Mucho thanks!

@ TC,

How interesting to see the CBs fall in like a chorus line of monkeys. The first one seems to have lifted his hands from his ears, while the second has finally uncovered his mouth. Has the third one opened his eyes, as well?

This has to be the most gold bullish series of "official" announcements in a LONG LONG time!

and INSTRUCTIONS and DEFINITIONS also !!!
Have fun, Lady Waverider !
<;-)

from WSJ online
"The bill also has an important but little-noticed provision that is designed to prevent systemic financial crises by letting creditors close out their derivative contracts with companies that have filed for bankruptcy.
The law would reduce risks by allowing swaps and other financial contracts to be unravelled quickly and easily, without the approval of slow-moving bankruptcy courts."

Anyone care to comment on the implications of this to, say, ABX or JPM or FNM?
bowing
goldenpeace

@ LWW,

So many charts are posted here at the forum that I have bookmarked the most relevant ones whenever the astute posters link them. Over some time hanging out here, I have a nice collection of useful charts.

Of course, the archives of daily forum retain all of those posts for collection and llnking if you have the time and presdisposition to peruse the past.

@ Goldenpeace

Wow, I totally missed that item when I listed the "most interesting features".

Muchas gracias for your post!

I forgot that you do not have a MAGIC Staff !
Please try ---
http://tfc-charts.w2d.com/
<;-)

US's Snow-Blame slow growth abroad for trade gap
Fri Mar 11, 2005 12:24 PM ET
SAN ANTONIO, Texas , March 11 (Reuters) - The widening U.S. trade deficit with other
countries is the result of slow economic growth among major trading partners, U.S. Treasury
Secretary John Snow said on Friday.

> Snow job continues on with his ridiculous statements.
> Actually blaming others for our trade deficits!
> What an idiot. Doesn't he realize that high crude
> prices and manufacturing outsourcing
> are to blame? A service economy doesn't "export" by
> defintion. In the 1950's this country was an industrial > and technological powerhouse! Once we were called the
> worlds breadbasket too!
> Now we import more foodstuffs than export and our plant
> and equipment is called the "rust" belt. What have these
> idiots done? They have unbalanced a once great economic
> engine!
> Are he and the pumpsters he supports really that dumb?
> Lets hope for better leadership, but until and as such
> time as we see sanity return, hold some gold.

Off topic, but FYI, Jim McCanney is talking about Velikovsky's theories resurfacing in current astronomical conferences on his weekly "Science Hour".

If you are interested, scroll down his fact-filled, but not very well organized, web site and find the link to his March 10 show archive.

Jim likens "theory creep" to the family dog tip-toeing into the living room while no one is watching and finally annexing the couch.

Funny how much this resembles the "cries in the wilderness" about twin deficits and foreign obligations that seem to be creeping into "mainstream" financial analysis.

No acknowledgment is given to Russell, Shultz, MK, Puplava, et al, as the current shills prefer to claim kudos for their "epiphanies".

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1$460 next STATION, on the way to $480 !!
<;-)

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=10@ Gandy,

I bet more than a shift change was required at 8:30 in the FOREX. I smell a serious wardrobe malfunction!

As Cramer likes to say, "pigs get slaughtered!"

Meanwhile, Gold marches onward toward the mountain top.

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=GToday's action will see ANOTHER little GREEN "X" atop the RED number THREE (for MARCH) and the stack of BLACK "X"s of the latest "COLUMN" !
ONWARD and UPWARD !
<;-)

http://www.jmccanneyscience.com/Waltz-timers is overtaking this old musician.

Here is McCanney's URL. His archive is in REAL format (.rm).

http://stockcharts.com/def/servlet/SC.web?c=$HUI,uu[h,a]daoayiay[pb200!f][vc60][iut!Uh89,21!Lp88,21,3]⪯f=GThe Gold "BUGS" Index "Slow and FULL Sto's" show that this run has a LONG WAY TO GO !
TO THE MOON, Alice !
--
Note to Lady Whitewaterwoman -- Lots of help here at:
http://stockcharts.com
<;-)

Thanks, Gandalf!

Yep, Goldilox, it looks like someone's shoes are getting holes in them from tap-dancing way too long and too hard...and you have to wonder what the floor looks like, too. ;)

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

The benchmark ten year bond is yielding above 4.5 today, reflecting the "diversification" announcements by CBs. Traders are also "diversifying".

In the last month, the five year bond yield has passed the month ago level of the ten as each has increased better than 10% in just weeks.

Also of concern to bond junkies is the convergence of rates, as the "spread" decreases.

Rising interest rates reflect waning interest in holding US Treasury debt instruments. The "globalists" are losing some of their foreign funding.

Add the cost of money to the other rising costs we have been witnessing, but "there is no inflation, there is no inflation."

Shun debt and prepare for "surprises" - stash food, water, and shiney.

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7880176MIAMI (Reuters) - Hungarian Holocaust survivors and the U.S. government have reached a $25.5 million settlement in a lawsuit over a trainload of gold, artwork and other property seized by the U.S. Army near the end of World War II...

The suit was believed to be the first lawsuit against the United States over property stolen by the Nazis.

The train was seized by the U.S. Army in Austria in 1945 and the suit said the army falsely classified it as unidentifiable and enemy property, thus avoiding having to return the goods to their rightful owners.

The 24 boxcars, which became known as the "Gold Train," were packed with gold, jewelry, art, clothing, Oriental rugs and other household goods and religious articles then valued at between $50 million and $200 million. They could be worth 10 times as much now.

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

Items with estimated value then up to $200 million possibly worth ten times more today -- $2 billion -- but without documentation a settlement of $25.5 million is locked. One way or another that's some pretty shrewd bargaining, seemingly.

Packed with gold, jewelry, art, clothing, Oriental rugs... why didn't they call it the "Rug Train"? That alone tells you something about the special status of gold.

R.

I don't think that "unfunded mandates" are included as they are a future expenditure. It was a figure obtained by the Treasury Dept. audit that Paul O'Neill let go public after he was fired. I am sure that the figure has moved higher since then with ongoing government expenditures, the recent Tsunami disaster, and the continuing Iraq and Afghanistan conflicts among other events.

- Black Blade

From 1900 to 1988 the congressional salary remained steady and averaged just $81,802.80 in inflation adjusted dollars. However, since that time, it has ballooned by over $65,000. That increase alone is 50 percent higher than the current median household income of $42,148. It's little wonder members of Congress are out of touch with average Americans! And this week they refused to increase the federal minimum wage which has not been raised since 1996!

Vote them all out! Let THEM eat cake!

I hear what you say, but there is also the question, "Do you want someone of only median abilities as your representative ?"

Personally, I would prefer to see their salaries at such a level that there is real competition for the job from people who are not party hacks. But what is probably more scary is the percentage of them who couldn't care less about the money because they are independently wealthy. I seem to remember that it is Rep. Huffington who holds the record as having spent around $40M of his own money to, err, obtain his seat. Yikes !
C!

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

(MarketWatch) -- Gold futures registered fresh gains Friday, moving up as data showed a yawning U.S. trade deficit and as metals traders took heed of Federal Reserve chief Alan Greenspan's latest warning about the nation's budget deficit.

The precious metal's allure as an inflationary hedge was fully evident as the April gold contract closed at $446.80, up $3.40, after reaching an intraday high of $448.

Helping set the tone for the metals market, the Commerce Department reported that the U.S. trade deficit came in at a wider-than-expected $58.3 billion in January, the second-worst deficit on record. And late Thursday, Greenspan told a New York audience that budgetary red ink is the most worrisome of the deficits confronting Washington policymakers.

"The 'Three D's' -- dollar, debt and deficits -- continue to provide strong support for gold," said market analyst Peter Grandich.

All three of these factors are "clearly heading in a direction that can only positively impact gold's short-to-intermediate direction," he said.

James Moore of TheBullionDesk.com echoed this sentiment, saying gold looks headed "quite quickly" toward $450 an ounce and beyond that, last year's high in the $457 range.

Pointing to the U.S. trade data, Moore said the January report "does little to suggest the dollar will recover in the next three to six months."

Ironically, Friday's gains in gold came without the benefit of a weaker U.S. currency, which firmed in foreign-exchange dealings.

For the week, gold added 2.7 percent. The April gold contract thus has rallied 7.8 percent from its early-February low of $414.30 an ounce.

---(see url for 24-hr newswire, market quotes)----

HEADLINES

Stocks Fall on Inflation Worries -- San Francisco Chronicle

US Treasuries slide, driven by inflation fears -- UBS Warburg

Dollar drops on growing trade deficit -- SILive, New York

NY gold ends at 2005 high as trade data hit dollar -- Reuters

Gold is UP in all currencies as of this afternoon.

It's been a long, long time since we saw such a condition.

Perhaps it heralds a new awareness of the imporance of OWNING PHYSICAL GOLD around the world.

In parallel, no news on the horizon which might alter this condition substantially over the long term.

Have a good weekend, all!

The GAB

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh75035_2005-03-11_20-05-29_n11535198_newsmlNEW YORK, March 11 (Reuters) - Trading of COMEX division gold, silver, copper and aluminum futures on the New York Mercantile Exchange's ACCESS electronic platform was delayed for a half hour on Friday afternoon due to a systems problem.

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

A "systems" problem. See, that's the problem. By their nature, some assets, such as digital/paper gold futures contracts are inherently no better than the market-system that trades them.

I'm reminded of the week following the collapse of the World Trade Center. COMEX metals futures along with all of Wall Street was shuttered for the following week. Meanwhile, the market in physical gold continued unimpeded all around the world.

What's the actual "street value" of a futures contract when you're standing at the end of a pier negotiating with a sailboat captain for passage over the way?

Time and again you'll find a gold coin to be the more versatile and robust asset in side by side comparisons.

R.

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=a3YrE.Bqvp6cAsian Central Banks Play Chicken with the Dollar
Caroline Baum - March 11, 2005
One gets the impression Caroline is almost playing along with them- as she casually writes about the circumstances of US deficits, dollar and creditors, she concludes that Central banks should steathily, slowly diversify out of dollars. But her arguments are noncommital and occasionally hypothetical, which is unnecessary in a columnists opinion piece, versus a straight-up news story. Ms Baum should explore the world of free-lance journalism and/or smaller and independent newspapers.

OPEC's muscle may be dwindling:

The Organization of Petroleum Exporting Countries may be at a crossroads when meeting in Isfahan next week.

The first OPEC meeting in Iran for 35 years may be a turning point in the cartel's history. OPEC is now producing at full capacity, and spare capacity is almost nil. Yet the IMF is urging OPEC memeber states to double spare capacity for the sake of world economic stability. The Isfahan meeting may mark the end of cheap oil. The first 100 dollar barrel option was sold on Tuesday.

Houston's Dan Norcini comes up with a fine heads-up on the trade deficit. This month's trade deficit was not good. Next month's will be a whopper:

Nice call on that trade deficit Jesse- that detective work you did with the China news was right on target.

Did you guys notice the price that was used for the average January Oil Import Price was $35.35? That was the lowest price since July 2004 when it was $33.28. The previous month's release for December 2004, came in at $36.63/bbl. I realize that they are talking about the price of spot crude oil and not the futures market but no matter how you dice it, the price of crude in January 2005 was above that of December 2004. I wonder how what they did to lower it? There must be some sort of statistical adjustment they are using.

Either way, imagine what the trade deficit number would have been if they had used a higher and more accurate number. Especially consider what it might be when we get the February and March data with crude back over $50/bbl.

-END-

MIDAS

Appendix

In late from Dan:
Bill and Jesse; The more I look at the trade figures the more baffled I become.

Here are the tables for crude oil - take a look at the last column - that is the average price of crude oil for the month. I keep wondering how in the world they managed to come up with a lower average price for January than December when everything I look at shows me a higher overall price for crude the month of January based on the charts. If anything, the January chart looks like the average should be closer to the November figures..... It's anyone's guess as to how they do this...

July 408,626 14,177,570 318,789 10,284 10,610,712 33.28
August 430,232 16,080,613 331,185 10,683 12,043,670 36.37
September 388,526 14,971,323 303,605 10,120 11,421,201 37.62
October 411,620 17,686,358 315,811 10,187 13,197,932 41.79
November 434,953 17,672,558 326,477 10,883 13,434,691 41.15
December 413,409 15,465,106 321,056 10,357 11,760,015 36.63
2005
Jan- 416,368 15,226,958 322,803 10,413 11,410,258 35.35

I said to the wife, "one day the commodities markets will witness a swarm, like a swarm of bees that takes place without a signal..."

The wife interrupted, "But bees do have a signal for them to swarm - it's when there's a new queen bee and the old queen doesn't manage to kill it in time..."

So I went on, "Hmmm, very interesting to the swarming bees analogy - there IS a signal given by the old queen bee's not killing the new queen in time, and that signal, in the case of commodities today, is the price of oil in dollars. The runaway price of oil in dollars is the NEW QUEEN BEE, and it means a swarm towards commodities which follow the lead of oil..."

This is not in the text-books. But sounds rather Belgian-like to me...

FWIW

The GAB

Think about MEDICINES which some member of your family may rely on absolutely.

If and when things get really nasty, there may be a shortage of critically necessary medicines due to the "war effort".

I have stocked up on a year's supply of those medicines which are absolutely indispensable on a daily basis.

I do NOT pay too much attention to "expiration dates", as I view them as primarily a means to ensure future sales by the pharmaceutical companies, as stocks in the market age and have to be discarded, although still perfectly usable.

For Heaven's sake, even bottled water has a "Use by" date stamped on it! Check out Aspirin and I think you'll find the same thing.

Besides, when things get nasty, a gold or silver coin may work wonders in obtaining the needed medicine...

The GAB

with everything going the way it is...we may be "buying the dips" of medicines and gasoline, among other things!

S.

Asian Foreign Exchange Reserves: A $2.46 Trillion Question

From Reuters
Friday, March 11, 2005

http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?
duid=mtfh61574_2005-03-11_08-29-08_sp344615_newsml

SINGAPORE -- One of the hottest topics in world markets is whether
Asian central banks will diversify their huge currency reserves, a
move that could hit the dollar hard.

The head of India's central bank, which has the sixth biggest
reserve stockpile in the world, on Friday said the central bank was
discussing the issue of reserve diversification.

This came a day after Japan stoked speculation it could sell dollars
when its prime minister spoke of diversification as being necessary.
Last month South Korea made similar remarks.

Following are some of the positions from Asian financial authorities
and key facts about Asian reserves.

Asian reserve totals:

-- Asia has more than $2.46 trillion in foreign reserves.

-- That has risen 23 percent in a little over a year after reserves
first topped $2 trillion in February 2004.

-- Japan and China have nearly $1.5 trillion between them.

-- Taiwan, South Korea, India, Hong Kong, and Singapore have
reserves ranging from nearly $115 billion to nearly $250 billion.

....Why they've grown....

Asian central banks have intervened heavily in the past year and a
half to restrain their currencies, fearing that currency strength
could choke off the exports that power their growth.

Some track the dollar informally to ensure competitiveness. Others,
notably China, have a fixed peg that obliges them to accumulate
dollars when their balance of payments is in surplus.

....Has diversification taken place?....

-- Asian central banks do not give currency breakdowns of reserves.

-- U.S. data suggest Asian countries have diversified to some
extent. Their combined holdings of U.S. Treasury securities rose
more slowly in 2004 than the rise in total reserves.

-- Latest IMF data gives central bank breakdowns through 2003 and
shows little change from 2002.

-- The share of dollars held by all central banks was 63.8 percent
versus 63.5 percent in 2002. For developing countries it was 59.3
percent versus 59.8 percent.

-- The dollar's share has declined a few percentage points from 2000
but is broadly higher from a decade earlier.

-- The Bank for International Settlements said this month Asian
banks have cut the proportion of dollar bank deposits in those
countries that report currency breakdowns to the BIS.

-- Dollar deposits were 67 percent of the total in Q3 2004 versus 81
percent three years earlier. Some of these deposits may be central
bank cash, though the BIS does not have data on this.

"I believe diversification is necessary," Japanese Prime Minister
Junichiro Koizumi said Thursday when asked in a parliamentary
committee about the risks of having reserves too concentrated in one
currency.

A Ministry of Finance official told Reuters: "We have no plan to
change the composition of currency holdings in the foreign reserves
and we are not thinking about switching dollar reserves to euro
holdings."

The State Administration of Foreign Exchange, China's foreign
exchange regulator, in December denied that China was cutting U.S.
dollar assets held in its foreign exchange reserves, saying it would
not make changes based on short-term market moves.

"As foreign exchange reserves increase, (the Bank of Korea) will
expand its investment into non-government papers, which carry
relatively high yields, and diversify the currencies in which it
invests," a spokesman for the Korean central bank was quoted as
saying last month in a report to parliament.

The Bank of Korea later said this did not mean the central bank
would sell dollars, and other central banks also weighed in.
Taiwan's central bank said it had not been selling dollars.

"Yes it is being discussed," Reserve Bank of India governor Yaga
Venugopal Reddy told reporters on Friday, after being asked whether
the central bank was talking about diversification. "We are always
discussing. It's a continuous process."

Reddy added: "It is an ongoing debate with all central banks and you
cannot expect a central bank governor to say anything further on
this."

"We have been reducing our investments in dollar bonds but investing
more in euro and Asian bonds. And we will keep doing so," Olarn
Chaiprawat, adviser to Thailand Finance Minister Somkid
Jatusripitak, told Reuters in January.

Thailand now had half its foreign reserves in U.S. dollar bonds,
with the rest in European and Asian bonds, he said.

Previously, about 80 percent of the foreign reserves were kept in
dollar-denominated bonds and the rest in European and Asian bonds,
Olarn added.

The list is getting pretty long....IMHO the almighty buck sits on the razors edge...Doesn't have to go either way, just slice thru the middle and you'd have half the buying power, half the debt and twice as much export potential...
Everything happens by plans made long ago in the nefarious world of Bankers...Who's to say a fifty cent dollar wasn't forseen long ago while the printing presses were heading to the recycling scrap yards from overuse...Canada gets Brass Loonies and Nickle Brass Twonies to make us feel like we actually hold the Coin of the realm...'Fools Gold' and so transparent a symbol of money as to make you laugh...Someday those who shunned Gold will cry...YGM

First France and now UK and Germany are offering 50 years euro-bonds ! Especially for those who wish to diversify !!Immediately CNBC suggested that the US will think about (again !?) re-issuing USTB-30 years.
Kudlow assured the (his) viewers that the "oil-bubble" will be bursted...soon ! Howhooowwww.

The 50 yrs euro-bonds were ridiculed because of the low IR of 4,5%. But bonds (debt) are not about the IRs they are carrying ...but about credibility, stability of the currency in purchasing power and exchange rate !!!

This ongoing $-� business, relates to gold's future as has been suggested ad nauseum, overhere.

In the UK, Tony (and G. Brownie) are increasingly expressing their compassion for African debt and suffering, through high profile media hype ! In case one would not have understoof why Sleeper (BIS) chose South Africa for his "MTM of Gold" - speech !!!

Japan will soon have to decide if it wishes to keep going the US-way or face Chinese competition (rivalry) without the US' engagement burdens. They also "diversify" now...just in case.

Fannie Mae's debt to equity reached 43 ! That is 43 times more debt than equity !? Holy cow.
Don't worry for one second...more than enough dollardigit-confetti will come on stream and "nothing" will default !!!
The US stock/bond/housing markets WILL SHALL NOT CRASH...as long as more...sufficient... dollarunits are provided ! And remain assured it will be taken care of. This is part of the "structural" support of the dollar, whilst the political support for the dollar's "reserve"-function has already been condemned by the non dollar, clustering, global factions. Japan has a huge problem !

It recently struck me that one reason for the US "housing bubble" might be to protect US citizens versus the foreign holders of dollar reserves. Those US citizens who own a house or have been buying one for at least a few years (the majority?), with the assistance of their local bank, will preserve the "value" of their investment (because they are inside the bubble), while those foreigners who hold "dollar securities" (ha!...should be called "dollar insecurities") are losing household purchasing power at about 20% per annum because they are outside the bubble.

What can "dollar insecurity" holders buy with their depreciating dollars that will hold value? Commodities (including gold), real estate (even the real estate in Soweto has appreciated 35% in the last year!!) and that is about it.

Hence, the housing bubble in the US has a purpose....to protect the locals as much as possible versus the foreign lenders who are going to get burnt big-time...

Will work...so long as the housing bubble does not deflate....

Opinions??

:-)

@Arctic Fox #130106

Is it true? $100 per barrel of oil!

......EVER!

Central Bank of South Korea, "...we are going to diversify out of our dollar reserves...."


Central Bank of Japan, "......no, WE are going to diversify out of our dollar reserves....."

Central Bank of India, "......NO, WE ARE GOING to diversify out of OUR dollar reserves...."


Hmmmmm?

I saw that mentioned a couple days ago. Not sure how far out, but the first 3-digit price tag was sold.

Hey! The guy is doing what we are thinking. Further confirmation of the peaking of oil, a bomb or 3 in Iran and "one spilled drop of oil" in Saudi and you easily have $100 oil.

Professional traders and Wall Street (are these mutally inclusive?) are probably laughing there behinds off but 'he who laughs last laughs best....'

Noon Friday through Noon Sunday.

Post at will!

http://www.usagold.com/cpmforum/tools/guideandsignup.htmlFor those new to the Forum:

We open the forum to political discussion between noon Friday and noon Sunday. The basic rules and prohibitions having to do with respectful, civil discourse remain in force.

Please see link.

Thank you.

CNBC really has been pulling out the "plugs" lately, Kudlow and Co. came out and said what? Belgian you are right again, just noise.
Then I switched over to "fox", what a joke - let's bomb Iran next. What kind of vitamins do the they take? Oh and heck let's drag the UN back into this one as well.
Looks like the "slam" on the dollar is coming in real fast now. Losing the focus and support from previous "allies".

Sorry we just cant handle this any more. Got gold?

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

Thought I'd share whats happening in my little part of the world.
I rang a coin shop in Brisbane He didnt have a thing to sell me.
I was also talking to a gentleman who sells gold up in Gympie and he told me krugerands were getting hard to get. Maybe he was right......
I also get emails each day on the gold price etc and notice that the buy/sell price is $81 difference. Thats called the premium right? What I would like to know is has the premium gone up/how much over the years? How do I find that out?
Is the premium a supply and demand issue? ie 10 years ago was the premium generally 7% where now its 15%?
Thoughts?

Jenika,
I've experienced something like that for the past year or so here in Austin, Texas. The coin shops are chronically low on bullion coins. In particular, 10-oz silver bars are hard to come by--the day they come in, they're snapped up.

Two days ago, I had to do something hard. I've got a new business I'm growing (media), and I had some overdue bills, so I had to sell 4 1-oz Kruggerands. Took then into my favorite coin shop on Thursday. They were packing up to go to a coin show, and planning to be closed the next day, BUT were more than happy to buy my Krugs and wrote me a check on the spot. They made a phone call, found out they could sell them for $440 each (which seemed low to me) and paid me $438 each.

On another note, it's been my strong feeling for the last few months, about Iran, that the rest of the world DOES NOT want us going in there, and since they can't stop us militarily they're going to stop our little rampage through the ME by stopping us financially. There are many ways to wage war...

Owning and reading good books, is better than owning gold or silver.

The books one has read are part of one's identity, and that remains through good times and bad. Dame Fortune is a fickle lady and what we have today may disappear tomorrow; our identity remains. We take with us, through our lives, the good books we have read and they enrich us permanently.

Therefore, I am making copies of some of the books that have provided enjoyment for me through the many years of my life, and I am giving a copy of each of these books to my grandchildren. They will not have to stumble on these books by chance; they will be available to them as they grow older, to provide them, if they choose to read, with the same pleasure which they gave to me, their grandfather.

The list so far:

The Art of Living � Epictetus, as interpreted by Sharon Lebell
The Philobiblon of Richard De Bury. A medieval English bishop's love affair with books.
The Arts � Hendrik Willem Van Loon. A Dutch historian's exploration of Art in the world's history.
The Wandering Scholars � Helen Waddell. The Middle Ages come to life in the poetry of its wandering clerics.
Slaves by Choice � Estienne de la Boetie. Why most people opt for slavery.
Stories from Herodotus � Glanville Downey. Some stories from the great age of Greece.
Propaganda � Eddie Bernays. How and why we are where we are today. (At least, the efficient reason.)
The Story of Mankind � Hendrick Willem Van Loon. A tolerant Dutchman's view of the periods of greatness and folly of mankind.
A Chinese Childhood � Chiang Lee. A glimpse of life in the ancient civilization of China, just before it was overthrown by the Revolution of 1912.

Coming up:

Economics in One Lesson � Henry Hazlitt. A primer in economics.
Aesop's Fables. Never out of date. Aesop was thrown off a cliff by the Delphians for telling them what they did not want to hear. (He was black, and we see a modern version in "Uncle Remus")
Dialogues � Lucian of Samosata. An acquaintance with the dalliances of the deities of Hellenism.
The Golden Fleece � Robert Graves. A beautiful story in beautiful prose.
Homer's Daughter � Robert Graves. Another timeless story in lovely English prose.
The Ephesian Lovers. "The world will always welcome lovers!"
The Golden Ass, by Lucius Apuleius. Sin, its consequences and redemption by the Mother Goddess in the age of Hellenism.
The Making of Europe � Christopher Dawson. One book indispensable for understanding our civilization.

Along with gold and silver, we must transmit values and a sense of history to our descendants. Without them, the metals are of little consequence.

The GAB

Stockmarket, bonds, housing...are where they are...simply because of the easy availability of dollardigits. If all those dollars were not put at the financial industry's disposal...there would never have been any bubbles.

The easy dollars will NOT be taken away...on the contrary. At the first sign(s) of de-bubbling...more dollardigits will be created out of nothing...up until "PRICE-HYPER-INFLATION" manifests itself. The corrections that this price-inflation will certainly bring...are NOT going to be of a catastrophic/cataclysmic proportions. Stockmarket might dip and recover...bonds might get a knock from temporary little IR spike(s)...houseprices will become reasonable. Paychecks will adjust to price-inflation as well. So, I don't understand the reasons for the alarmist hoarding of basic nescessities like food, water, medication etc...!? The dollar is ... "ONLY" ... going to lose its "reserve" function !!! American savers are going to be bailed out with the price-rises of their tangibles in possession. All debt will become much lighter and might boost US-internal activity...INTERNAL !!! US internal economic activity will have renewed pricing power.

The main point on this forum, is to understand WHY goldmetal in possession is going to "outrun" the coming price-inflations !!! This will happen because of the dollar's loss of reserve-status, wich is a global business.

Debt has always been "inflated" away. The present debt-levels cannot and will not default and the erasing inflation will this time have a heavy consequence...the loss of dollar-reserve-status. Even with a firm dollar-devaluation, the US will certainly remain on its feet...but loose a lot of global prestige and power. That's not a cataclysmic drama for a young dynamic continent !

When the dollar loses its reserve-status...it also will lose its anti-thesis relation with gold ! That's what it is all about, overhere. Now F. van Eeden even goes as far as stating that there is no dollar-gold antithesis. Very confusing, no.
The last 25 years of dollar Tsunami were devastating for gold's function. The incredible dollar-power has ridiculed gold. The dollar became what it is today, because of the succesfull ridiculization of gold. This fundamental doesn't seem to sink in, thanks to the gigantic "intimidation" power that the dollar has achieved.

http://www.milliondollarbabies.com/Frames3.htmAnd the 'Sheeple never knew what hit them or saw it coming...YGM

You minimize the significance of the loss of reserve status around the world, for the US peso.

It is huge and will devastate all mankind, both in and out of the US.

1. Loss of reserve status for the dollar means that the whole world has lost the No. 1 customer for its exports. That means, a collapse of industrial activity around the world and of the employment it generates, and with it comes political upheaval.

2. Loss of reserve status for the US menas that $600 BILLION per annum of merchandise and services coming into the US, dries up. This absence of goods and services imported from the rest of the world, is going to make the US a vastly poorer nation in real terms. The money machine may go on printing, but there will be $600 billion US(primarily of consumption goods)less coming into the US for that money to buy. There will be money in abundance, but - much, much less to buy. Very ugly situation which will, in my opinion, lead to nothing less than a violent Revolution.

3. Supposing the loss of reserve status is gradual - I cannot say how possible or likely this is - like a gradual loss of pregnancy? - then the ordeal might be stretched out, but the final effect will be the same, at its conclusion. The great pain will just be prolonged during a hypothetical loss of reserve status. I believe we are in the first stages of loss of reserve status. Whether it will be gradual or abrupt, I cannot predict.

Sincerely,

The GAB

http://www.gold-eagle.com/editorials_04/petrov102804.htmlDoes China in it's whirlwind Dollar spending spree on Resources around the globe see Hyperinflation or drastic devaluation in the cards for the Dollar?...You be the judge...If they do then they are a couple stages ahead of the rest of the planet in preparation...YGM

Belgian:

For an intuition on how events will move, please see my post on "Bees, Oil and Commodities" of yesterday.

The GAB

As a fellow lover of books and a greying Liberal Arts type, I am struck with the eclectic nature of your list and its distance from the mainstream. I haven't read most of the list, yet the titles pique the interest. I may clip your list and take it the bookstore this afternoon.

I applaud the idea of giving each grandchild a core library which has served you over the years, and hope to someday emulate it. It is perhaps the greatest gift! I was commenting the other day to a friend that we have drifted from educating our young to training them. This failure lies at the heart of what ails not only America, but much of the rest of the world. Most of the world's universities are no longer interested in exposing our young to the Great Thinkers, but rather - Soviet-style - to dangerous politically correct agendum. They will make proper voters and industrious worker bees, but not very good stewards of the Republic and keepers of the Western philosophical tradition. I can see that you are attempting to fill the gap.

Im have no pretense of understanding world economics in any depth but let me ask you this...Why did the world not come to a grinding halt when NZ, Oz and Canada's Fiat become worth 45% less on the world stage?...Thru these many years they and 'Many' other Nations with currency crises carried on w/ biz as usual...Would not the Exporting nations such as China, India, Japan and all the rest w/ cheap labour just lower costs of their exports to the US consuming Giant?...Personaly I see two things as a given, The West will never stop consuming goods and the Emerging Giants like India and China will not stop consuming Natural Resources as they and their Billions of populace move into the 21 century at breakneck speed...The USA gave the rest of the world most of the technologies they have, the example of what prosperity is, and will probably lead the way in future advancements that change the world and the way we live in future...Yes there will be tough times and more than a little suffering along the way, but sometimes the setbacks and wake up calls lead to new paths of endeavour and renewed energy among those who lead and set the standards...YGM

...The correlation between movements in the CRB index and movements in both the US CPI (doctored as it is) and, far more important, the correlation between movements in the CRB and Treasury bond yields. Here is what is said regarding this - "Besides the strong positive correlation, the CRB Futures Index has often been a leading indicator of interest rate yields."

Remember, the CRB index has only taken off in the last three weeks after having been "range bound" for well over a year. While we have certainly seen some renewed strength in the $US Gold price over those same three weeks, and renewed weakness in the $US index and the prices of longer-term Treasury debt over that same period, these movements are as yet lagging WAY behind the comparative upside explosion on the CRB. ... That and more Bill Buckler has to say ...

That may not be the end of it, as denial of the real state of the economy is permeating all of society; inside and outside of the US.

A really sad state of affairs as it prolongs the inviability of a doomed monetabary system based on nothing more than hedonic measures, ratios and promises by third parties, who (un-)luckily don't even grasp their future responsibilities.

... And even now we refer to nominal Dollars, Yen or Euro, which has absolutely nothing to do with any kind of real value...the spin goes on.

cb2

PS -MK - Well deserved Skiing WC goes to Bode Miller, who took the "one Ski" championship from Daron ... Well done US Boys - and girls BTW - seeing Sarah Shleper from Vail winning her first slalom.

PPS: @GAB - Guess you're not the "red eyed" one ...

Yes, I certainly wish to hold some naivety in my mind...keeps me young.
Your intuition already guessed it...the "ongoing" transition is indeed still happening gradually. When those difficult moments, during the transition, pop up...you will certainly witness a sudden and frentic creativity from all parties. Crisises are challenges !!! Evidence that I'm not minimizing what will come upon us all. But don't bent to the other extreme of total gloom and doom. Putting one's internal house in order can be done without a ground zero (tabula rasa) event.

The global economical flows have already gradually been changing...since the last 3 decades !!! Look closely at the dollar's history of those past 3 decades !!! What a roller coaster ride it already had. The planet didn't implode...on the contrary...it flourished more broadly, globally !
An old man ($) still has the possibilities of living a fascinating rest of life, these days.

The dollar...its reserve status... is NOT the alpha and omega. The UK did not sink to the bottom of the Northsea channel after the colonial empire desintegrated. Italy (Roman Empire) still exists and is part of Euroland now without having gone through a dark abyss. Hiroshima wasn't the end of Japan. Look at East Germany, the Balkans, Spain, Portugal, Greece...etc ! I see growth and increasing stability.

What if...when the dollar loses reserve function...the world rushes to the US to invest, develop and participate in renewed stability and growth !? Regime changers can be changed also, no.
Sure, there will be hot soups to swallow...but I'm too optimistic of nature to see global or US Armageddon. Things can change for the good, extremely fast (in relative terms).

The problem with the gloom and doom projections (obscessions), is that no due attention is being given to the gold changes ! A sudden $-price-rise of gold (explosive or not) is certainly not going to save the dollar from the loss of its reserve status, nor is it going to knock the US entirely flat down. Didn't happen in 1933 or in 1971 !

The Euro Freegold Concept and your library full of wisdom might become a wonderfull combination for you and your grand-children. Life becomes heaven proportionate to one's economic (materialistic) freedom, stability and peace.
Sure there are bees (and hornets). I don't adhere to the scenario of a possible global total collapse. There are luckyly many different forces at work wich will result in a new found equilibrum. More harmonious than you ever dared to hope for.

The oil-problem will get a solution (many different soluitions) without the desastrous destruction of the US or any other part of the planet. Yes, there will be fights, as usual of course. There will always be reasons to have a fight. And always the dust has settled.

Yes, the dollar will float in a different way...SO WILL GOLD ! When gold will be generally re-instated as pure "wealth" in the Western hemishere...not "that" much will have fundamentally changed in our global economic activities. What's the difference between the names euro and dollar ? No differences in name...only in "the gold" association with the confetties.

Do agree with some of my BBZZZBZZZZZZZ...GAB !?

I usually like to help the under-
dog but this time I'm on the side
of our top dog: Belgian.
GAB, after reading Belgian for so
many days and months I find it
preposterous of you to call one of
his messages naive. If anything,
he has always been consistent and
patient to inform us smaller breeds
of the consequences of our govern-
ment's doings.
Y2K angst IS a bit far out and we
have read of thousands of cases,
where people lost thousands of dollars
hording and spoiling food.
Of course, Black Blade's refraining
chorus is mostly fear of running out
of his Mexican sounding brew--so you
better hord it while you can afford it.
There is one case I do agree with you.
Buy food that lasts as an investment.
There is a Swiss cheese and a Spanish
wine that stay good for over a 100yrs.
At an Aldi's in a city near me you can
buy a can of pink salmon for 99 cents,
whereas in New York City it will cost
you 5 dollars. It is good for at least
two years.
Your dictum: read sound books and pass
them on is right on the spot.
Keep on thinking and posting. As long
as we don't agree, I have something to
write about... :-) OvS

http://www.commondreams.org/news2005/0311-06.htmsnip:

WASHINGTON -- March 11 -- House Democratic Leader Nancy Pelosi released the following statement today on the announcements of the largest one-month budget deficit in U.S. history and the second-largest trade deficit in history:

"The Bush Administration continues to set records of dubious distinction. With the highest one-month budget deficit and the second highest trade deficit ever, President Bush's place among the most fiscally irresponsible leaders in our history is secure . . .

"The President does not even recognize the seriousness of these problems. According to the nonpartisan Congressional Budget Office, the Bush budget will increase the deficit by $1.6 trillion over the next 10 years. When will the President admit that his policies are failing, and get serious about reducing these deficits?"

-Goldilox

While members of the "drunken sailor" Congress all point fingers at the other side of the political table to assign blame for profligate spending, it seems no one has the courage (except Ron Paul and a very small cadre of reps) to actually VOTE against reckless fiscal policies. More than anything, the undoing of the US $ will come as a result of everyone scrambling to protect their personal assets while "watching" the system implode.

We here at the forum, are of course, guilty as charged, as TPTB push an "economic recovery" agenda on us that appears focused specifically on enriching their corporate "sponsors" at the cost of abandoning the American middle class.

One of my questions to Biblical Armeggedon believers has always been. "Just where does the US fit in all this 'prophesy'"? Maybe it just doesn't, as we might be reduced to a third-rate nation faster than we could have believed.

Japan attacked Pearl Harbor as a response to losing its oil import flows in 1941. The US seems determined to preempt that likelihood in the ME, with other nations beginning to weigh the consequences of complete US domination in the oil patch.

It only took a couple decades of war in the 20th Century to reduce the UK from the unchallenged master of the economic world to a Japan-style puppet of US hegemony. While the rest of Europe throws off their NATO shackles, the Brits are confused whether to join them or continue under the protective US "umbrella", a fence straddling act of timidity that will probably cost them an opportunity for greater leadership in the EU.

In one sense, the NeoCons may be right. WW-III (the resource war) is here, and they're not waiting around for the rest of us to recognize it. Whether their strategy of "snatch and grab it a'fore it gets away" rapidly increases the war drums or empowers their Reagan-style "negotiate from power" stance remains to be written into the history books, if the survivors are not reduced to caves and bonfires again.

As BB is fond of remarking, "It's getting interesting!"

(snip from msg#: 130134)"Look closely at the dollar's history of those past 3 decades !!! What a roller coaster ride it already had. The planet didn't implode...on the contrary...it flourished more broadly, globally !"

...and this flourishing was accomplished at who's expense, by what? ssspending several futures worth of value that has yet to be paid for, and by who? If debts are not honesstly paid, somebody hurtss, somewhere, that had given the fruits of labor and sweat of their brow for what turns out they will never see... this is justifiable??

"An old man ($) still has the possibilities of living a fascinating rest of life, these days."

And then the encumbered estate goes to...his heirs? Us? Yes... it will be fasscinating all right.

S.

Devastation. Upheaval. Violent revolution. Great pain.

These are the things you said mankind will have if the dollar loses reserve status. You indicated that that loss of status basically translates into the world losing its No. 1 shopper, equivocating this into a net reduction of $600 billion in trade activity.

I hope I don't sound naive if I suggest that a corresponding skyrocket of gold's REAL market value (as a more natural condition and consequence of global portfolio realignments) will put far more purchasing power into the billions of hands of the world's average gold-holding "third worlders" than the purchasing power represented in the dollar-toting hands of the 300 million Americans now responsible for that $600 billion in one-way trade activity that you deem so useful in keeping armegeddon at bay.

I also hope I don't sound incredibly naive if I question how much of America's $600 billion net import activity arrives as a pure (net) gift to the world economy. Arguably, the world's exporting economies are paying a large associated cost in sacrificing their own current purchasing power as they instead instill the dollar with artificially high purchasing power through its special asymmetric reserve-status market dynamic. However, had the currencies been allowed to adjust in exchange rate with each other through a more symmetrical forex dynamic based on supply and settlement demand (rather than aforementioned asymmetrical reserve-holding demand), you might actually observe much of the current value in trade continue to occur. The only difference would be the destinations to which the goods accrue -- that is, spread out to many places other than American shores.

Thus, I hope I'm not seeming doubly naive if I suggest that between the rising real value of gold on one hand, and the relative increases in national currencies as they cease sacrificing exchange value into the dollar on the other hand, together the 6 billion inhabitants of the world outide America will find a market amonst themselves if needs be, and will find a way to muddle through without devastation, upheaval, violent revolution, and great pain. In a post-reserve, post-devaluation environment America might find a great demand for the export of its newly-cheap engineering services and industrial know-how as much of the gold-holding residents of the third world wake up with new-found purchasing power and decide it's time to upgrade their infrastructure with highways, bridges, hydroelectric dams and grids, wastewater treatment systems, etc., etc...

Again, I HOPE I'm not being naive.

R.

...we understands, among other things, that Another was (well?) connected in some way with... sss... central banking... and central banks control and move governments, don't they, precious? In particular, these ssnips from the Archives give us pause [our own very sskeptical thinking is in square brackets]:

ANOTHER Thu Oct 09 1997 19:00:
"The banks must sell all the gold they have to keep the system together. And once it is all sold and the financial markets implode the nations will use "whatever force is necessary" to pull the gold back in! [from where, and back in to where? Is that how the grand sysstem works - ssell It until It is gone, then plunder It again and begin a new cycle?] That action in and of itself would show the true value of gold money!" [as would defending that gold money by "whatever force is necessary".]

ANOTHER Sun Oct 19 1997 09:42:
..."You should not think they are dumb! Invest in gold mines, will you? Notice how quick the Australian CB hinted at taking "gold in the ground" if needed. This was said after their sale! The nature of the coming crisis will make the taking [plundering] of investor property a piece of cake. You see, because gold is a commodity, you will be compensated [you mean tossed a dry fissh-bone?] at the commodity price of return + a fair profit, of course."... [our physical gold, force-exchanged for a 'fair' amount of the next new evanescent currency, which will likely be devalued after the gold-plunder? yess...of course...thanks, friend.]

ANOTHER Tue Dec16 1997 07:07:
"In the same way that all oil in the middle east ( and most other major producing countries ) is nationally owned for the good of all [definition, please], gold in the ground will be deemed a "currency reserve" for the good of all [definition, please!].

During this time all other metals ( and paper investments ) will fail to hold value. Access to oil and gold will be next in line of importance behind food." [the oil-access is now being paid much attention]

ANOTHER Sat Oct 25 1997 10:24:
... "The big buyers [just who are they, really?] fully well expect gold to stop all trading as the governments enact DRACONIAN MEASURES [like martial law and executive orders? Btw, the emphasis is his] to deal with a worldwide currency problem. [let's ssee, didn't the 1933 American gold THEFT need only a national crisis to precipitate it?] The public in general will ask for these measures [what does "the public" know about this? certainly not enough to determine the right course... esspecially in the heat of the moment! Ssounds like a made-to-order excuse to us] and to that effect, all paper connected to bullion will become "fair game"! [we thought the paper would become worthless; the metal itself in the people's hands will remain untouched?]

ANOTHER Sun Nov 23 1997 11:35
"Carl, The world has changed and the gold market has changed with it. We are going back in time much further than many will accept. A time when men, such as I, will take what is yours! [by 'calling in' (plundering) our gold?] If you hold your value in a public way, it will be taxed or taken for the good of all [definition, please!!]. Such are the ways of extream times!"

ANOTHER Sat Jan 17 1998 23:19:
"REPLY
Date: Sat Jan 17 1998 22:40
A.Goose ( Gold for oil... ) ID#20137:

There are many [such as him, did he not say so above?] who would take [plunder] your gold. Read my long post of tonight and place your life in that time. You will feel the threat against your holdings. If [or do you really mean 'when'?] it is taken it will be for the good of all. [definition, please!!!]. Perhaps it is not bad [at least not if you work for a central bank, eh, precious?]. In all things, good life is more important." [nice philosophy - just whose good life begins by plundering honesstly earned gold-wealth, we wonders]

---
Let's ssee...in the end game It hits who-knows-how-many-whatevers per ounce... amid the chaos, paper gold becomes worthless and mines are nationalized 'for the good of all', whatever that is, as Another says. You won't be able to take gold out of any 'deep storage' vault (read: Earth) without paying a very high plunder...er, tax - after all, what is a mine but a vault with an extremely tough theft prevention sysstem?

Does anyone expect there won't be ANY attempt to cause the forced exchange of physical gold for currency or digits, or 'give'it up to be pooled, as some kind of 'national resource' for 'the good of all', in those times? We would be very surprised id not. It is a matter of record that governments tend to forbid citizens from holding or using gold in 'extreme times'... we knows what governments do with 'national resources'... and we knows of no central government or central bank, NOT ONE, EVER, that has continued to work for 'the good of all' except themselves and their clients. Yess, gold will help those who have It in the coming days, IF they are allowed to FREELY trade It (or convert It to currency).

S

The global web of integrating economies is a "debt-driven-political-system" ! The dollar part of this economic system enjoyed the unique privilege of producing the most debt (highest significant level) of all. At reckoning time, it seems quite logic that the greatest benefitor of the system (US) pays back the most. Not the kind of conservative "pay-back", you and I have to do. No,...the biggest benefitor of the dollar-system will have to cut off a lot of "privileges". The dollar will have to rework completely its established management and relearn to behave responsible.

The kind of debt that we are talking about is a non repayable debt. These debtbergs are infla-melted away.
When you don't see gold's coming function into this coming gigantic maneuver (transition), one gets stuck in a black whole. A debt-driven-political economy is of all times and revolving from low to high and backwards.
It is absolutely naive to keep believing in those classic clich�s of "market-driven" economies !!! That's where I lost the bulk of my naivety.

Do you really think that it is the general public that is making or breaking the stockmarket...the bondmarket...the currencies exchange rates...the interest rates !? No Sir...definitely NO. Ask the Hunt brothers...

Markets have ALWAYS been controlled to a very large extend. Does the general public has any say on the changes of monetary volumes ? Dream on...fantazise the public's input/impact as far as you wish. The herds never act on themselves and even when stampeding...they are "guided".

But when the classic, established, different "guidances" land into discordance...disagreement...its time for something "new". For the time being, I keep calling it Freegold. The dollar-cowboy's aides, decided not to support their leader ($) anymore and want to drive the herd to rich yellow pastures. I don't care if it is or isn't with good or bad intentions...I like the whole idea. And I have that very strong...stronger... feeling, that I'm certainly not the first one to discover that good brand new idea and also that there are quite some Giants out there that have already agreed on the concept. Please reread the Sleeper BIS speech and let the whole background of it, sink in.

WHY is it that the brand new "MTM" concept of gold doesn't speak to """anyone""" we know in our little gold arena !?
With the exception of that great workhorse on this forum, Sir Towncrier.
Which (former) loyal dollar-supporter has silently (stealthly) introduced this concept...and WHY !? If we hadn't ever heard from A/FOA, we wouldn't even know that the invisible hand named, MTM-concept, even existed. Yes, we all remain rather very naive and...complacent. Do we really, really ...*know*...the "real" goldmarket !? We can't even come up with any satisfactory explanation for the infamous $6 rule ! We all keep speculating daily about gold and its market like chicken without a head. We never ask simple questions...we simple continue to make statements as if we ourselves are in charge of the markets..."markets" that only exist in our personal fantasies ! That's the reason why we keep "PLAYING" those markets...as the organizers wish us to do so.

The new gold-concept is needed to take away a substantial dosis of unproductive financial playing (of all sorts)...that has become a useless monster. The interventionists are trapped in their own manufactured mega financial industry. Cfr, the recent statements from all over Asia, about the dollar-reserve...A reserve that is NOT a reserve...but a trap. Experienced hunters do fall occasionaly victim of their own traps...in French, le trompeur tromp� ! The guiding manipulators need help and will get it from freegold...free priced gold encouraged in a physical goldmarket...associated with a gold-friendly numeraire not objecting to a free floating goldprice. Then we can all start playing again and restart respecting some basic rules and laws.

If one considers this thought as utopic...one has to come up with an alternative scenario for the coming future. I don't see/read/hear such realistic scenarios, other than black whole doom pictures. Gold and especially freegold should be associated with fresh healthy optimism and absolutely NOT with a general atmosphere of negative black doom.

Note that I have been investing, speculating and even gambling (succesfully by the way) for almost 3 decades now. There must be some good reason that I turned gold-oriented !? Think, I have gathered sufficient solid arguments for supposing of having it right. I now fully realise of having been extremely naive for a long period of time, whilst having participated in investing, speculating, gambling. With the above I'm not suggesting to throw away all the financial children with the mases of bathwater.
I do see how the critical ideas in Euroland evolve about derivatives and hedge funds...unproductive, nefast financial gambling. Time for a new, rocksolid, yellow basis to rebuild on. Not "that" far away imvho. Our system(s) must survive !

What next; the messages of doom pervading this discourse and the contrarian society writ large have seemed to me over the kind years to be thorough mental masturbation. Yes, eventually we are all doomed individually or collectively in this life. In this sense, I agree with Keynes; in the long run we're all dead. All this incessant blathering about ANOTHER is over the top--like an Al Pacino movie. It's not about if the glass is half empty or half full. It's what's in the glass that counts! Make mine a very HAPPY golden tonic (cheers all). CM

Ligten up my friend and go for some sushi. Have a Guinness (for strength) while you're at it. Life is wonderful. Believe it!

http://www.atimes.com/atimes/Global_Economy/GC12Dj01.html2 articles in one...

alright... we haven't mentioned Another in a long while... and after all, what he said played a big part here in the beginning... SO, with our lasst Post, we are done with the 'gloom and doom' for our part. We says this, however - to ignore negatives jusst because it is uncomfortable is to censor part of the picture. Freegold is not yet, and no one guarantees that it will be... but we watch, and prepare and hope for the best for the good of ALL. Better, yess? (grin)

S.

I feel that everyone would gain a lot of worldly knowledge if they read the following:-

Zorba the Greek by Nikos Kazantzakis.

Cannery Row by John Steinbeck.

Main Street and Babbit by Sinclair Lewis.

The Zurich Axioms by Max Gunther.

http://story.news.yahoo.com/news?tmpl=story&ncid=749&e=1&u=/ap/20050312/ap_on_bi_ge/algeria_opec
SNIP:

"ALGIERS, Algeria - OPEC has reached its production limit, and trying to stretch output by one million barrels per day isn't likely to lower oil prices, Algeria's minister for energy and mines said."

DryWasher Comments:

What the above linked story is telling us is that we are at, or very near, peak oil NOW.

This is no surprise for those of us who have been listening to Sir Black Blade and reading up on Peak Oil.

Thank you Sir GAB, Sir Belgian, and all, for the great discussion today.

For what it is worth my own view of the future is much more in line with that of Sir GAB's but, in my opinion, the major cause for alarm is the end of cheap energy (Peak Oil) rather than the loss of reserve status for the Dollar.

I fear that the combination of peak oil AND the impact of the dollar on the world financial system will be the Perfect Storm that Sir GAB describes in his post # 130128.

I sure hope I am wrong.

DryWasher.

Well, Sir Belgian, I commend you on your positive attitude, which is such a wonderful and valuable thing to have; it stems from your character. The character of the philosopher is always an undisclosed element in all philosophies.

If there is nothing much we can do about what is coming - it's going to arrive "irregardless" of what we think or do - we might as well look upon the future with hope and assurance that the world and ourselves will muddle through and come out none the worse for wear on the other side of the incoming crisis. So, I commend you for a positive outlook. Can't do any harm at all!

We are agreed that it is very convenient to acquire a goodly stash of precious metal, gold and/or silver, as suits each one. On that we are agreed and that is an important expression of values that bonds those at this Forum.

I do not wish to prolong debate on the consequences of the US dollar losing reserve status, but I do think that that event, which it appears must necessarily take place sooner or later, is going to have an effect of a magnitude that cannot be compared with the consequences of the mere devaluation of Australian, New Zealand and Canadian currencies. Not even the devaluation of the British pound and its bowing out as a reserve currency (50's or 60's?) can be compared to the effect of the dollar's losing reserve currency status.

This is beccause the US has become excessively central to world economic activity: much too much activity is centered on selling for dollars, as if receiving dollars was effective payment.

When this is changed, there is something healthy that takes place: people are no longer sending "stuff" to the US, to be paid in dollars because the dollar is no longer a reserve currency. When those exporters stop sending "stuff" to the US in exchange for essentially NOTHING, they do their countries a service. That is healthy. It is unhealthy to sell for "nothing"!

But, we must remember that doing this healthy thing is going to hurt a great many people! A great many people are going to see their jobs evaporate and they will not understand why they are not earning money any more. This is going to cause a political upheaval around the world that will come hand in hand with stopping an activity which was not really and actually benefitting the exporting nations. But try to explain that to the man that has lost his job! There will be tens of millions of them!

Sure, there will be great opportunities for investment in the US - if you want to invest in a country full of extremely angry people, who cannot buy the things they used to buy, because they are not coming into the country any more, where inflation is running at a breakneck pace, and yet with more money, there are not more things to buy.

And where there are a lot of angry people, you don't want to have it known that you own gold or silver. You want to have it, certainly, but be very careful where you live and how you use your gold or silver.

Gold will undoubtedly preserve the wealth of those wise ones who accumulate gold or silver; but remember that at the same time, there are going to be tens of millions who did not participate in this protective action of buying gold - mainly because they were ignorant. Very, very few men are willing to accept their responsibility for the consequences of their stupidity or ignorance, and so there will be anger directed at those who have managed to preserve some wealth, and the politicians thrive on anger.

I'm so sorry to be so negative, but I'm calling it the way I see it. I hope I am wrong and if any reader disagrees with me, I happily accept his disagreement and more power to him or her. Can't do any harm to be less negative about future events - we can't read the future after all.

Think Italian: Eat some pasta with pesto, drink some wine, say something nice to a pretty woman. Life is good.

Goodnight to all! Bats must go out and about on a Saturday night.

The GAB

I am not against holding gold but i think many of the posters have for years predicted some imminent collapse of the system.But i find the actions of many men far wiser than me to the contrary.If the sytem was about to collapse,would Warren Buffet hold cash or for that matter any paper?Would John Embry not be 100 percent in physical.Would Jim Sinclair be saying the gold shares will do this and that?Wouldnt Bill Gates sell microsoft now?Having read this site since around 9/11,we have seen,only God/natural events(catastrophes) can bring it down.I walk around,noticing the higher and higher oil prices,but people seem unaffected by it.I hear about all this debt,but hear no one bemoaning it.We have watched 'so far, the usd come back to earth,which means if you live outside usa any gains were modest to date.How do i know?I bought silver at 4.50 to 5 us and sold over 8 us in canada.My gains were pathetic after assay fees.In fact i would have been better holding euros.A lot of this diversification will flow into euros the new super currency.People mock it,but the usd was always junk and that didnt stop it.If gold goes to 500,will it buy more at the time or less?If it buys less,all gold will do is slow your demise.So inflation is coming'so people have debt,yes the usd is coming down.But if people never panic the demise wont come.Real estate may not come down,because people believe in it.Will the dow ever crash?Maybe the lower dollar makes stocks go higher to offset.

Without a major trigger the sytem will go on and Greenspan will be seen as the man who gaves us what we wanted.The american dream we could never afford all on debt(other peoples money).After all i dont have the problem the banks do,and the govts do..let them solve it.

Had to buy a new kettle yesterday,$85A for an australian built, top of the range job..looks very nice.
In the afternoon, went to a very large hardware shop, as I walked in, by the doors, were stacked, 20 wide by six high, boxes of 750W 12Vdc/240V ac generators....$98!!!!!!!!
couldn't believe it..made in, well you guessed it, China...
Goodbye local manufacturing.

http://www.rigzone.com/news/article.asp?a_id=21008

Snippit:


OPEC is out of spare production, while China is projected to increase its oil demand by 25% in 2005. If this scenario is correct, the current pause in the oil rally may be temporary.


Black Blade: "Interesting Times" indeed! Yesterday the Algerian Energy and Mines minister said that OPEC was out of spare capacity. Since OPEC supplies 40% of the global oil supply we are going to see "crunch time" very soon. That also means to get your financial house in order. Get outta debt and stay outta debt, stash enough emergency cash for several months' expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities.

http://www.theage.com.au/news/Business/Asian-banks-offload-their-greenbacks/2005/03/11/1110417685655.html?oneclick=true
Snippit:

The US dollar's status as the world's main reserve currency is under threat as Asian banks back away from the superpower's ballooning twin deficits. Over the past three years, central banks in the region have been scaling back their holdings of US dollars amid jitters about the United States' ever-expanding current account and budget deficits, which collectively soaked up at least $US1000 billion ($A1265 billion) of foreign currency last year.

A report by the Bank for International Settlements has estimated that the share of deposits held in US currency by Asian banks dropped to 67 per cent in the September quarter of 2004, from about 81 per cent of total deposits three years earlier. The figures suggest that a dramatic but not widely publicised regional shift away from the US dollar is under way.


Black Blade: China, India, and Japan have been shifting from dollars and recently South Korea and Taiwan have made similar rumblings - although Taiwan is likely to want very tight relations with the US for obvious reasons. It has been long rumored that China's central bank has been quietly accumulating Gold on the open market and transfers from foreign bank sales. They have been buyers through intermediaries during the BOE auctions and supposedly are the major buyer in the Swiss Gold sales (along with Middle Eastern interests). China has also been buying Gold mine production from well known miners such as South Africa's Harmony Gold Mines. It has also been said that other Asian central banks are Gold buyers which is quite interesting as it is the Western central bank community that has made public statements that would like to sell their Gold reserves (out of desperation mostly). Of course the world's wealth is being transferred to the east. So why not Gold too? At least there Gold would get the respect that is long overdue.

George, the axe and the cherry tree

By Chris Shaw
Feral Metallurgist

Oil energy (gasoline and diesel) can be likened to the fruit of a cherry tree that bears but once in our tiny lifetimes.

Imagine such a tree laden down with fruit, springing from the rocks of this planet. The tree is the history of all living things. The cherries contain a little of the energy gathered from the sun over billions of years.

Although they are crammed with concentrated "goodness", those cherries are finite in number. They represent only a little of the sunlight that ancient creatures garnered for themselves. They retain only a fraction of the immense geological energy that went into their final creation.

None of this mattered to the ancient tree as it dreamed in the warmth of the sun. It thought it had all the time in the world.

One day, some chimps discovered the first low-hanging fruit. Some cherries hung so low that the crude could be seen bubbling from the ground. Casting around, the chimps discovered that by standing upon a few cherries, many, many more could be reached. In the good ol� days it was possible to gather a hundred cherries merely by standing on ONE.

It wasn't long before everyone was eating cherries. Those chimps were well and truly hooked.

No-one noticed that it was the cherries themselves that were the ONLY possible means of reaching the rest. It was the fat chimps who saw the problem first. They had plenty of time to observe and think about it, having long ago given up the unpleasant task of gathering their own cherries.

Pretty soon, so much fruit was being used for platform duty, cherries for eating were starting to be in short supply. The fat chimps decided to keep their discovery to themselves until they had figured out a plan for their personal survival.

Fortunately for them, a natural leader emerged. George, Chimp of Chimps. Being relieved of the tedium of critical thinking, his cherry-soaked mind cut straight through the bull, to the heart of the matter. Fingering His axe, he said what everyone feared in their hearts....

"It will be necessary to cut down the Tree of Life itself in order to consume the last of it's fruit".
The rest, as they say, will be history.


Black Blade: Found this amusing analogy on a weblog run by the Tasmanian Times. Yes, we either have or will soon reach "peak-oil" production. Recent comments by OPEC oil ministers stated that some members have peaked and Saudi's Ghawar oil field has also "peaked". Game Over

http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=13314
Production levels leave little room to cope with output disruptions

Snippit:

OPEC does not have the oil production capacity to enable it to lift supply quotas at next week's meeting in Iran, Algeria's energy minister, Chakib Khelil, said on Thursday.


Black Blade: A rehash of Drywasher's post yesterday. OPEC oil production has peaked. Several members have declining oil production - Oman, Indonesia, UAE, Kuwait, Iraq, and Saudi. I hope to complete an essay about the "Death of Ghawar" - Saudi's main oil field. The decline of Ghawar is the end of increasing saudi oil production. The Saudis are already in panic mode as they double the rig count and diversify their economic base into areas outside of oil. Some do not understand the urgency of the US to have a stable Middle East and are in a rush to explore in areas such as Alaska National Wildlife Refuge (ANWR) and the Rocky Mountains. Indeed, there truly are "Interesting Times".

http://www.timesonline.co.uk/article/0,,2089-1522978,00.htmlSnip:
The inner cabinet of Ariel Sharon, the Israeli prime minister, gave "initial authorisation" for an attack at a private meeting last month on his ranch in the Negev desert.

Israeli forces have used a mock-up of Iran's Natanz uranium enrichment plant in the desert to practise destroying it. Their tactics include raids by Israel's elite Shaldag (Kingfisher) commando unit and airstrikes by F-15 jets from 69 Squadron, using bunker-busting bombs to penetrate underground facilities.
*************************

More uncertainty, instability...

Caradoc

After all the repetitive analysises, a future picture must be painted. Dollar detoriation...peak oil...unemployment...recession...depression...wars >>> BUT WHAT LIES BEHIND ALL THIS !? Or better, what is growing under this dark carpet ? Yes, a lot is indeed "business as usual", but some things do really change. An example :
More than a decade, Eurolanders lived with the "ecu". This ecu (european currency unit) was the precursor of the present euro. This ecu was growing under the carpet of business as usual. THE SAME IS HAPPENING WITH GOLD !!!

Euroland is already anticipating (in legislation) the coming times of more "expensive" oil with programs that focus on reproduceable forms of energy (bio-oils). The hysterical focus on peak oil is a "maneuver" as to induce...speed up...some very fundamental changes, silently building whilst cyclic business as usual proceeds.
Energy resources are to become * MUCH MORE PRECIOUS * in the nearby future. We are NOT running out of energy (and resources) and to fall in a black whole with game over on it ! Complete nonsense !

Yes, the realities are forcing us NOW to stop (slow down)wasting our available wealth...AND START APPRECIATING AND USING ...AND TRADING...IT AS "WEALTH" ! That is the real message underneath the dark clouds. Less savage plunder...waste...robbing ! A new era of renewed VALUATIONS is on the horizon. Savings, profits and reserves shall be re-defined, valued as real value.

Currencies (fiat money) will NOT be included in this general building trend of "re-valuation". Then there must be an alternative for storing one's wealth gained (merited) with economic activity. That alternative will be GOLD, again !

No recession or depression will alter this growing tendency.
The "reserve" content of the dollar will die out. Because this reserve aspect is representing nothing anymore. The economic planet will certainly NOT implode when "reserve" is no more associated with an artificial dollardigit. Even the wealth aspect of oil in earth is finite. But the capacity (inventivity) of producing energy/resource alternatives is a wealth creator. That same wealth needs an historical reliable tangible wherein it can consolidate.

Yes, we have intensely been living in a dollar-centric world. Does that automatically mean that beyond the dollar there is ...nothing... anymore !?
Do you really think that 6 billion people just sit and wait for the dollar-demise and commit suicide afterwards !?
What did Argentina do after its collapse...? They took some real "wealth" in their vaults !!! Strange reaction, no.

How long did it take to produce "the bom" in Los Alamos ?
When there is a real crisis (not a statistical one)...those crisises are solved ASAP ! All the noise we hear (and produce) is time-consuming spin with a purpose,...right mas !

But if one does NOT wish-want to see that things are changing...one sticks to the analytical mantras and hopes that everything stays as it is/was. Are we "seeing" gold-changes !? According to Cavan Man...w're NOT. So, Cavan Man allow me to ask then...what exactly is it that "you" see on the horizon ? Thanks for letting us know.

Striking Iran and destroying the nuclear plants is not (yet) a regime change. The consequences of any military action on Iran will be a tightier unspoken coalation forming between oil-owners (oil states). This will certainly result in (much) higher oilprices on wich the different (global) oil-consumers will react differently.

Maybe they are simply waiting for this (Iran strike) to happen as to speed up the execution of what they respectively already had on mind.
L'agent provocateur, the US$, of course knows the consequences of such military actions and must surely already have an agenda for the aftermath. The dollar doesn't care anymore that it will be dropped faster and more massive. A very good reason to print more of the same and put the fire on general price-inflation. Hey...maybe much higher oilprices are "wanted" by a majority...for opposite reasons of course !!! Dollar-hyper-inflation, means that the dollar is still used...initially. The traditional military logic of the dollar keeps counting on the old reflexes...that the planet will cry for "help uncle", once more !? Imvho, a big mistake...miscalculation..., this time. The fast emerging "productive" parts of the globe have now much more to lose than the stagnant dollar-block.

WHY should the world continue to accept and support the dollar, when the dollar's unilateral actions cause so much troubles !!!??? Loss in worth of dollar reserves and rising oilprices !

It was impossible to democratize the ME during the past 35 years. Will it work in the next 35 years ? No !

Why don't we offer peacefully (pay) equal value for the remaining ME oil instead of causing a lot of havoc and misery in trying to "control" it...get it dollar cheap !?
How do we have to rhyme this with the "story" of peak oil ?
The occupation of Irak hasn't brought any oil-relief up until present. Why aggravate the situation today with Iran and purposely produce more oil-retaliations...uncertainty and hatred !? Is there any senseble logic behind this ?
Anyone ?

Belgian #130156 et al.,

It is puzzling and a little dismaying to me that the US (and its allies UK and Australia, in particular, and probably Israel as well) appear so hell-bent on trying to "reform" the ME so counterproductively.

In the context of Iraq and the ME, there is a deafening silence in places like Washington, Canberra and London with respect to "OIL" .... the words "oil", "war" and "Iraq" are never to be mentioned in the same speech or discussion or press-release. Yet aside from the war in Iraq the world is abuzz with the issue of "Peak Oil", OPEC capacity, increasing world demand and rising oil prices.

Are we to imagine that the Washington Administration, consisting largely of Oil Men and Women, are blissfully unaware of the importance of energy and where it comes from and that they truly are conducting their campaigns in the ME to bring about democratic freedom for all those oppressed peoples? My, my...such high ideals at a time when so much leadership and attention is required elsewhere on the energy front.

Any half thoughtful person with nothing more than an introduction to science and the concept of "energy" at the high school level would see what the major issues are confronting industrialised societies like the US, UK and Australia. Look around you out the window of the plane as you fly down into Los Angeles, Sydney or London at the lights and the cars and the action and turmoil and ask yourself what makes it all work...

You are right, Belgian, we are not out of oil or coal or "energy" yet, and many years will go by before we have consumed the last barrel of oil, but we do know that the peak is probably in at a time when the demand for oil is rising faster than ever before. There is unfolding a wild but muted scrabble for available supply... That scrabble adopts various forms according to the perceived urgency of the players; their individual requirements and the means at their disposal. Some will just be happy to buy it, others will try to barter it, others again will go searching for it, and still others will try to steal it. Still others again will see the long-term futility of the game and decide early to diversify their energy needs away from oil so as not to have to compete in a hard-fought contest - nuclear, solar in several forms, hydro, wind, tidal, sea wave, geothermal, biofuel. This latter group of players will likely also have the resolve to change consumer practices to become energy-efficient and to inculcate their communities with energy consciousness; proving that a change in attitudes to energy usage does not have to compromise quality-of-life.

Now, this is what I find dismaying about the American approach. Here we have a country which prides itself (not entirely unrealistically) on being a technological leader, a haven of enterprise, possessed of entrepreneurial "can-do" spirit and with an over-riding need for change second to none and what are they doing? They have opted to delay the inevitable. Instead of setting the country on a mission towards "energy salvation", they have decided to try to corner the oil market and keep "shooting-up" while there is still oil in the ground to be had. Cultural intransigence is deified with the words "the American lifestyle is not negotiable"... Such is the quality of the leadership with which we are presently beset. Why not some words like: "before the decade is out" and "put America on the path to energy diversity and return it safely to Earth on a path of future energy-consciesness and prosperity", or some such...

No. Instead of grasping the nettle and going for "energy salvation" now, they have embarked upon a strategy that, as you point out, Belgian, has not resulted in energy security in the ME and instead is likely to be utterly counterproductive both in terms of long-term access to untapped oil reserves and in the decayed attitude towards America of a large proportion of the World's population. And all just to delay the inevitable...

Other views?

:-)

http://www.tankerworld.com/Web?ActionRequestName=Homepage&siteName=tankerworld&mainTarget=Home&menuTarget=site/tankerworld/content/Home/Body/Repository/Home&fileRoot=site/tankerworld/content&relativePath=site/tankerworld/content/Home/Body/Repository/News/MainStory/OPEC/OPECsMuscleDwindling_100305
Snippit:

The Organization of Petroleum Exporting Countries may be at a crossroads when meeting in Isfahan next week. The first OPEC meeting in Iran for 35 years may be a turning point in the cartel's history. OPEC is now producing at full capacity, and spare capacity is almost nil. Yet the IMF is urging OPEC memeber states to double spare capacity for the sake of world economic stability. The Isfahan meeting may mark the end of cheap oil. The first 100 dollar barrel option was sold on Tuesday.

Venezuela's President Hugo Chavez said Wednesday that the world must prepare itself for the end of cheap oil. He said that the price corridor OPEC once used as a strategy guide was a thing of the past. "There is no way we can come back to the USD 22-28 price band," Chavez said.


Black Blade: It is more a matter of "cheap oil" or "cheap energy" rather than "running out of oil". That seems to be the most difficult aspect of the Peak Oil conversation for most people to grasp. We will not "run out of oil" but we will cross the line where demand for economically viable oil exceeds supply and the ability to produce. That point may very well be upon us or very near. OPEC has "peaked" and has been producing Flat Out for months. The upcoming meeting on the 16th may result in raising production quotas - however, that will be meaningless as OPEC is producing about 600,000 bbl/day (flat out) above the current quota. Saudi recently announced that they will double the size of the drill rig count to exploit smaller reservoirs - the "elephant" Ghawar oil field is dying. Hydrocarbon Man is about to enter uncharted territory.

In my wanderings over the net I came across this little snippit

"Iraq has the 2nd largest easily accessible hydro-carbon reserves in the world and with the proper capital investment could have easily and fairly quickly become the largest exporter of hydro-carbons. Had Iraq chosen to keep these larger exports priced in EUROS that would have created quite a problem for the world hegemony of the US Dollar. With something like $55 trillion US dollars floating around in the world, a $100 billion or a $200 billion or a $300 billion expenditure on the Iraq war is nothing, compared to what would have happened to those $55 trillion dollars had the US not invaded. The war has nothing to do with a LACK of hydro-carbons but quite the opposite, TOO MUCH oil out there and if countries had a choice between buying oil in Dollars, Euros, some other currency or even bartering for oil that would put an end to US dollar hegemony and that's what the whole game is about. When you look at US policy and actions they've undertaken in the last few years it's apparent the US is doing everything in it's power to prevent oil from entering the market not the other way around. The Sudan, Nigeria, encircling Russia, Iraq, actions against Iran all are targeted to keeping hydro-carbons from ENTERING the marketplace. Spending a few hundred billion to ensure your $55 trillion or more maintains some value is nothing."

An interesting take on things don't you think?

It kind of throws a spanner in the peak oil theory to say the least and when you see
Stories like the link below where an american businessman invents a product that
Increases the fuel efficiency of ANY internal combustion engine by up to 50% yet
no-one will touch it with a barge pole it kinda makes you wonder�
http://www.nexusmagazine.com/articles/Firestorm.html

As is always the case with confusing data and ideas it must always come down to
The old roman question of who benefits?

Who benefits from high oil prices in dollars?

Meanwhile the next opec meeting is to be held in iran on march 16th
Will they announce the basket of currencies for trading in oil ? ie the euro
Because don't forget we are only 3 months away from the opening of the Iranian
Petroleum exchange and they have indicated they will trade oil in euros
as the comments from the Russian, Korean, Chinese, and Japanese central banks
About dollar diversification were not put out for public consumption for no reason

Interesting times..

Belgian

"The occupation of Irak hasn't brought any oil-relief up until present. Why aggravate the situation today with Iran and purposely produce more oil-retaliations...uncertainty and hatred!? Is there any senseble logic behind this? Anyone?"

You cannot have a war on terror without bad guys nor can you have a war on drugs without pot smokers and lots of them. Make nuclear self protection or anything for that matter illegal, and you create demand and thus more PROFIT stamping out bad guys. You need bad guys otherwise what's the sense. What a dangerous game to play internationally in so called modern times.

As well one may overlook the lucre gained from financing both sides of this war even if it's not apparent. Who financed the Russians for almost a century or the Germans after the first world war.

In the end, it's a transfer of wealth scheme know so well to so few. It's about oil but not totally. There are many levels at play including dollar hegemony in this grand chess match where many if not most moves are known well in advance.

The stage is set for part trois.

http://www.etherzone.com/2005/henr031005.shtml Social Security reform and triple deficit reduction debates notwithstanding, accounting and debt records clearly show a deliberate, systematic plundering with full awareness of the consequences, IMO.
BLOWBACK... DON'T LET THE CROOKS OFF THE HOOK
Ed Henry - March 10, 2005

CNBC has been talking about the "oil bubble" this week, stopping just short of comparing it to the internet bubble of the last decade.

At the same time, XOM, the Cisco of oil production, has overtaken GE as the largest publicly capitalized company, with its stock rising 60% in the last year. Aramco was also spotlighted all week as bigger than XOM, but privately held.

Jack Welch once made a statement that signaled the "transformation" of the internet boom: "GE is not going to trust its supply chain to a kid in San Francisco wearing nose rings."

What that signaled to internet entrepeneurs was the end of independent internet startups and the beginning of internal corporate internet development. When the brick and mortar companies couldn't garner the technical talent they needed at the price they were willing to pay, they went looking in India and China, adding internet engineers to the jab-jacking list.

"Peak oil", "oil boom", and "end of cheap energy", are all, very likely, similar signals that the hydrocarbon economic cycle is being refashioned to meet the needs of the power brokers who deliver oil to the industrialised states.

I guess the trick is to figure out the clues these "signals" indicate.

Maybe it's just about time to bring the Tesla technology out of the Area 51 labs and into the commercial arena under the auspices of "military contracts", so that control is not lost.

That could usher in an era of transition from oil dependency that would probably drop oil prices to at least previous levels once the appropriate "windfall profits" have been cornered to fund future "police actions".

TPTB are not stupid, although they are certainly not altruistic, either. If they are losing the reserve currency battle, they are likely waging a few "alternative" struggles to endure their domination post-transition.

http://www.vialls.com/wecontrolamerica/peakoil.htmlI'd be interested in your take on this article as you work in the Oil Patch and have alot higher level knowledge of Drilling than I...(worked rigs many years ago myself and built/reclaimed alot of leases)...Not sure of veracity of this authors info....YGM

http://www.gulfnews.com/Articles/BusinessNF.asp?ArticleID=155972
Snippit:

The era of cheap oil is gone forever, a Kuwaiti official said. "Prices will never [again] go under the $40 per barrel mark," Hani Hussain, Kuwait Petroleum Corp's chief executive, told Gulf News in an interview yesterday.


Black Blade: Agreed! I don't know about $40/bbl, but a new floor price appears to have been set. It takes sustained higher priced energy to get producers interested in exploration and production in high cost fields and regions.

My first reaction is to say "what a load�". Amazing what some ignorant nonscientists can come up with when armed with a speck of fact. The article begins with reference to the deep drilling project on the Kola Peninsula drilled to a depth of 40,230 feet. Another project nearby on Siljan, Sweden in a cooperative arrangement between the Swedish government and Dr. Thomas Gold (a physicist from Cornell), was also a deep drill project. The Kola project fell apart when drill bits and steel melted as the drilling progressed through the geothermal gradient. No oil was found � although some traces of platinum were. Essentially the same thing happened at Siljan. Another similar deep drilling project was planned and may have been completed in Germany. These projects were academic in nature with the possible exception of the Siljan project. Thomas Gold has been a proponent of deep abiogenic hydrocarbons noting that liquid methane may exist on extraterrestrial bodies. Of course at depths where the geothermal gradient is encountered it is highly unlikely any useable hydrocarbons will be found. If it were possible, any such hydrocarbons would be extremely costly and therefore uneconomic.


From the article: "Campbell is just the tip of a giant iceberg of academic Peak Oil 'experts' who suddenly appeared en-masse to give you this frightening news, right after President Saddam Hussein suddenly started trading his oil in Euros rather than in US Dollars, a devastating switch with the easy capacity to destroy the US Dollar in less than five years if it was left unchallenged and unchecked."

Colin Campbell and many others including Matt Simmons, Walter Youngquist, Jean Laherr�re, etc. have been around discussing global "peak oil" issues long before Saddam thought about "Euros for Oil". The "Peak Oil" issue came about as a result of work done by M. King Hubbert, Chief Consultant (General Geology), Exploration and Production Research Division, Shell Development Company, in 1956.

All in all, it is an amusing article with little fact and a lot of wild far-flung conspiracies. Probably worth the laugh. The section describing how American producers do not use an "under-reamer" is most amusing as well since we use them on every well. The author also has an amusing take on geology as well as fluid dynamics in rock. I might also point out that Saudi produces about 4 million bbl oil/day more that Russia and not the other way around. Anyway, the errors and misstatements had me in stitches. Haven't had that much fun since discussing the age of the earth with some Christian Fundamentalists.

- Black Blade

http://www.vialls.com/
I have to admit that is quite some site. I see a lotta "interesting" articles. ;-)

- Black Blade

sss... with all the tricksy behind the scenes action, maybe...

eddiebhoy (3/13/05; 08:09:24MT - usagold.com msg#: 130159)ssnip:

"The war has nothing to do with a LACK of hydro-carbons but quite the opposite, TOO MUCH oil out there and if countries had a choice between buying oil in Dollars, Euros, some other currency or even bartering for oil that would put an end to US dollar hegemony and that's what the whole game is about."

Are you suggessting, precious... or, is it possible, that there is an orchesstrated plan, that only dollar-denominated Oil is 'peaking' and that Oil priced, ssay, in euros would turn out to be cheaper? As if a 'premium' is being assigned to dollar-pricing because of the rissk involved with it, as part of dollar-rejection? Or is Oil peaking in all currencies?

S.

Seems like the confuser and the web has given a soapbox to every nutcase and lonely soul w/ noone to listen to them IMHO...Jeff Rense site seems to be the unloading point for most of the farther flung dung...YGM

The seeds that have been sown in the pretext of spreading freedom and democracy ....will reverberate as ripples in an ocean .........We are in an ocean ....a sea of peoples ...international in scope..........
We will reap ...........perhaps not according to our expectation .........


If we do not like what we reap we should evaluate what we are sowing.............

Our representatives are sewing in a way so that we REAP A WHIRLWIND.........who will stop this madness?......

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

http://www.financialexpress.com/fe_full_story.php?content_id=85174Central Bank Intervention Keeps Gold Prices Lower: GATA
Financial Express - March 13, 2005

Yellow ----- TO THE MOON, Alice
<;-)

For discovering and finding the story in
India's Financial Express about GATA's
report on the disparity between the CRB
Index and gold prices. Very gratifying
to GATA that its press release expenses
sometimes pay off and that we're not
always shooting our limited resources
off into the void!

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

Meant "discovering and posting,"
not "discovering and finding."

Ghawar Is Dying

GEOLOGY AND PRODUCTION

Ghawar is Saudi Arabia's largest oil field that was discovered in 1948 and currently produces about 5 million bod under peripheral water drive. Ghawar is a north trending anticlinal structure draped over an en echelon basement horst that stretches 174 miles in length and 16 miles wide to encompass 1.3 million acres. The northern end splays into two anticlinal structures with a low in between. Estimates put cumulative oil production at roughly 55 billion bbl. This one oil field accounts for more than half of Saudi's oil production.

The producing reservoir at Ghawar is the ~280� thick late Jurassic Arab-D limestone at about 6,000�-7,000� below surface. The quality of the reservoir improves upward from organic-rich lime mudstones to porous skeletal oolitic grainstones. Fracture density increases with depth resulting in greater permeability in the mudstones. The hydrocarbon content was formed in the organic-rich mudstones laid down in intershelf basins. The reservoir is capped by thick sequences of anhydrite. The field is essentially "perfect" in terms of permeability and porosity (exceeding 30%). Since 1965 the field has been enhanced with seawater injection. The current rate runs about 7 million barrels/day.

Ghawar also produces about 2 bcf/day of associated natural gas and has the potential to kick out 5.2 bcf/day of non-associated NatGas from the deeper stacked dolomitized mudstone and shale Paleozoic sections at depths between 10,000�-14,000�, with sweet gas in a mix of eolian, fluvial, and lacustrine clastics at depths between 10,000� and 12,000�.


PRODUCTION CONCERNS

Matt Simmons, CEO of Simmons and Company International in Houston, warns that there is reason to be concerned about the supply of Middle East oil. He says, "We've basically created a global energy plan built on a house of sand", and there's no plan B if their production actually starts to decline, just like the U.S. did and like the North Sea is doing". "Saudi Arabia's last giant field, Shaybah, was discovered in 1967, and what we have in Saudi Arabia is a handful of fields all too old for a world that assumes oil is everywhere you want to find it in the Middle East. It's the last Great Myth: Oil is everyplace".

The production triangle in the Middle East is really confined to an area encompassing Kirkuk at the north in Iraq to about 20-30 miles from the Iranian border to the south at the bottom of the UAE and across back north to Kirkuk. That is roughly a 1,000 mile by 450 mile by 800 mile triangle area. Every major oil find in the Middle East is found within the triangle, or the "golden triangle of energy" according to Simmons. Few commercial fields have been found outside the "triangle". Most every field outside the triangle is in production decline.


GHAWAR

The Ghawar field is thought to have about 120 billion bbl � the Saudis keep this information close to the vest so data is rather thin and hard to come by. However, since there is typically between 35% and 45% of recoverable oil in a typical carbonate reservoir we can assume that the upper end of that range will give up about 54 billion bbl of easily recoverable oil. Since roughly 55 billion bbl of oil have been produced from Ghawar we can further assume that production may have "peaked" or be very near "peak production".

To recover more oil than is currently economically viable, the Saudis will have no choice but to expose their tipping point into "peak production" with more costly artificial lift measures and exponentially more wells. We will see this coming when Saudi Arabia significantly ramps up drilling efforts. Ghawar field has produced about 60-65% of all Saudi's oil. When Ghawar goes into decline � we will have reached global "peak oil" production. So far extensive water injection has been useful but now water infiltration has occurred and is invading the produced oil as well, signaling that the producing wells are producing less and less oil and more water � a decline in oil production.

Most vertical oil wells have been shut down and are being used for water maintenance and water injection. All new wells are extensions of horizontal multi-lateral wells. What we really have now is a thinning oil column being chased by a rising water column. Eventually these wells will be producing more water rather than oil.

Saudi recently announced that it would double the number of active drilling rigs to 74 in order to increase production and at the same time called upon the United States to draw oil from the Strategic Petroleum Reserve (SPR). When Saudi recently announced a production increase it was largely an increase in low quality sour heavy crude.


CONCLUSION

We may have effectively hit the wall in global "peak oil" production. The oil produced to date from Ghawar exceeds the best estimates in a best-case scenario for the typical carbonate reservoir model. Without "transparency" through third party audits we will never know how much "cheap oil" can be produced. The Saudi's best response to date has been � "trust us". Despite claims of having no problem and the ability to continue producing sufficient oil from Ghawar, the Saudis have asked the United States to draw oil from the Strategic Petroleum Reserve and recently announced plans to double the size of the drilling rig fleet. The best conclusion available is that Ghawar is dying.

- Black Blade

Goldi: CNBC comparing a supposed "Oil Bubble" with the past internet bubble? What a laugh!

We know that contrary to the internet bubble where companies were priced by hype and by fraud, the oil companies are real producers of wealth! And what wealth! Some of the earnings forecast for oil companies are said to be huge! The main thing investors there have to worry about is the government stepping in as back twenty five years ago and attempting to apply some "excess profits" tax to oil. With forward projections for continuing high oil prices, the outlook is favorable for these stocks--even now, many are still sporting lowly price earnings ratios.

The oil market and company earnings are in sharp contrast to the internet companies of the Nasdork blow-off of a few years ago, that for the most part, had no earnings, very little business, and sported P/E ratios to infinity, as zero divided by a number still produces zero.

It is interesting that most market hype ignores natural resource companies, favoring instead, financial paper instruments that are printed en-mass, or manufactured goods, again, created en-mass by the lowest cost producer? They seem to be losing track of one of the traditional tenets of investing: That what is scarce and demanded, generally, goes up in price; and that which is plentiful and easily duplicated, generally, falls in price.

Cheers! G-dome

The last time the US government implimented the "windfall profits tax", domestic oil production fell off a cliff and refiners cut runs. We ended up with long gasoline lines and fist fights at the pump. Today in Kali it would turn to "pump rage" with shootings at the pump. Funny thing is that Bill Gates can charge ungodly sums for a small plastic disk and the government calls it "new economy" progress, but a natural resource company makes decent profits after years of hard work and pain it's called "gouging". Go figure.

- Black Blade

http://www.financialsense.com/editorials/powers/2004/1104.html
Thank you Sir Black Blade.

For those of you seeking additional confirmation or information, a Google Search on "Ghawar Is Dying" turns up 1270 hits, including the above linked worthwhile article from Jim Puplava's Financial Sense Online, predicting $80 oil by November 2006.

I wonder why this is not making headlines in the mainstream press? (Sarcasm)

DryWasher

http://www.bloomberg.com/apps/news?pid=10000081&sid=aRX5KmYQPAC8&refer=australiaMarch 14 (Bloomberg) -- Gold may rise for the fifth week in six on speculation Asian central banks will diversify currency reserves, trimming demand for the dollar and boosting the metal's allure as an investment option, a Bloomberg survey showed.

Twenty-two of 34 traders, investors and analysts surveyed from Sydney to New York on March 10 and March 11 advised buying gold...

"Increasingly, gold is acting as a real alternative to other asset classes," said Ron Cameron, an analyst at brokerage Ord Minnett Ltd. in Sydney.

"No Asian central bank or other international investor has to sell a single dollar," said Adrian Day, who manages $86 million at Annapolis, Maryland-based Global Strategic Management Inc. "All it takes for the dollar to decline is that fewer new dollars are purchased. And that is going to be the reality," which is bullish for gold, Day said.

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

Media is slowly but surely putting forth increasingly positive sentiments toward gold investment. A very good sign. But to be sure, for the most part the collective consciousness of western investors finds the very thought of gold ownership still wallowing away in relative obscurity. Bargain basement prices are still to be had for all those with the acumen to see the trail ahead and take early action.

Call USAGOLD-Centennial this very week for consultation on a diversification strategy that's right for you.

R.

@ Eddiebhoy

Your snipet said, "...if countries had a choice between buying oil in Dollars, Euros, some other currency or even bartering for oil that would put an end to US dollar hegemony and that's what the whole game is about."

I agree and I feel that those who believe in peak oil are the ones helping the push to obtain the $100/bbl oil. High oil prices means high food prices. One ounce of gold for a MRE (meal ready-to-eat)? And high food prices mean world upset. People act funny when they're hungry. World upset means TPTB may try establishing a one world leader to quench the problem. Oh boy, hope your spiritual house is in order.

http://groups.yahoo.com/group/gata/message/2936Latest GATA dispatch....


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Thanks Sir Black Blade for that concise little summary of the Saudi oil issue and of Gharwar in particular...

What do you consider is the probability that there exists another super-field of Gharwar dimensions somewhere in the world as yet undiscovered? ...and how certain is the geology of oil formation and containment in this regards?

Thanks in advance.....

http://www.altpr.org/modules.php?op=modload&name=News&file=article&sid=331&mode=threadℴ=0&thold=0The best and most sensible review I've read yet...YGM

The current oil price is a directly linked consequence of a depreciating US $ -and not much else.Bear with me here.

We ALL know that the US $ has fallen in value by 30% plus over the past 3 yrs. So the current ask for oil @55 US(app)
minus 30% = oil @ "only" US$38 per barrel.

THEN put $38 into 1980 dollars (allowing for inflation) and the "REAL" price of oil is a "steal" @US16.42!

Yup -the big BOYS are stealing - -I hope they get burned!

* Check the link at the top for an inflation calculator.

I would think that another oil field the size of Ghawar is very unlikely. The "low hanging fruit" has already been found. In fact no new "giant" oil fields have been discovered since the Canterell Field in Mexico in 1976.

If any new significant discoveries were to be found I would look for geologic environments similar to Ghawar. However, some large discoveries in different geologic environments have been produced. The Ames structure in the Arbuckle oil field for example is a small field producing oil from a meteorite impact site that fractured igneous rock providing a good reservoir. Another possible large site is a new discovery in central Utah that may be developed by Wolverine oil and Gas. This is apparently a series of vertical en echelon structures that will have to be developed with horizontal drilling. The size is as yet unknown.

- Black Blade

http://www.bls.gov/U.S. Department of Labor ---Bureau of Labor Statistics

...and also Town Crier,and Belgian, and all of you that posst links, for the cornucopia of good reading... no amount of information is ever enough for us!

S.

http://www.atimes.com/atimes/Central_Asia/GA20Ag01.htmlHere's another for you...Ukraine Oil & Politics etc...Another addition to the complexities of Oil's secret subterfuges...YGM

http://www.marketwatch.com/news/story.asp?guid=%7B8EFA20EF%2DC6E9%2D46EF%2DA1B3%2DB57091817C18%7D&siteid=mktw&dist=CRB running and Gold missing the boat...

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh19761_2005-03-14_07-36-41_pek328844_newsmlBEIJING, March 14 (Reuters) - China could spring a surprise on markets in deciding when and how it reforms the yuan, Premier Wen Jiabao said on Monday in comments seen as a warning to speculators trying to profit from a rise in the currency.

"Our goal has been to let market supply and demand determine the exchange rate," Wen told a news briefing at the close of the annual session of parliament.

"We are carrying out such work now, and as for the timing and what measures will be adopted, this could be unexpected."

In his annual report at the start of parliament earlier this month, Wen pledged to push ahead with currency reforms but gave no indication what form the changes would take.

...China has long said it does not want to give speculators a chance to profit from any move...

"Frankly speaking, many of the people who have been strongly urging the revaluation of the renminbi haven't given much thought to the problems that would arise from there."

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

Exactly as I tried to express earlier in the week -- it is fair to expect the growth of subtle signs beforehand (as we've indeed been seeing), but don't expect an official to ring a bell upon the hour of change. (Let Nixon's August 15, 1971 example be your guide.)

You will simply wake up one morning to a new world; and you will either be already prepared for it, or not.

Call USAGOLD-Centennial this week and be among the prepared.

R.

I read how Mexico may remonetize silver through the issue of non-face value silver coins.

The US allows the use of gold clauses in contracts.

American goldbugs should lobby to have have gold coins minted in a manner and at a face value (or no face value), to give effect to the right to use gold clauses.

In jurisdictions where gold clauses are still illegal, goldbugs should lobby to have the laws outlawing them repealed.

If Mexico makes silver coins legal, perhaps the other NAFTA countries should follow suit, in the interests of comity and trade with Mexico.

What's the difference between the workings of gold clauses as conpared to the workings of the assortment of bullion banking products such as gold loans, gold swaps, gold forwards (futures) and gold options that are already in play and arguably a source of much consternation among gold investors? (e.g. cf. the stance on hedging)

When you boil it all down, it seems to me that HSP is, more or less, taking a scenic route toward the "reinvention" of a mixed bag of bullion and banking which will ultimately drift toward more derivative implementations. Where do I have it wrong?

R.

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

March Buyers' Group

Queen Victoria Sovereigns and Incentives!


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http://www.ecb.int/press/key/date/2005/html/sp050314.en.htmlIntroductory statement by Mr Jean-Claude Trichet, President of the European Central Bank, Brussels, 14 March 2005

SNIPS :
"Turning to price developments, the evolution of oil prices and increases in indirect taxes and administered prices have had a significant impact on consumer price inflation in the course of last year. For 2004 as a whole, annual HICP inflation was 2.1%. More recently, the annual inflation rate declined quite substantially, falling to 1.9% in January from 2.4% in December, largely a result of base effects from developments in indirect taxes and administered prices in some countries. Eurostat's flash estimate of annual HICP inflation in February was 2.0%.

In the coming months, annual inflation rates are likely to fluctuate around 2%. Looking further ahead, there is still little evidence that stronger underlying domestic inflationary pressures are building up in the euro area. Wage increases have remained moderate over recent quarters and this trend should continue in the context of moderate economic growth. Accordingly, the ECB staff projections put average annual HICP inflation between 1.6% and 2.2% in 2005 and between 1.0% and 2.2% in 2006, broadly unchanged from the Eurosystem staff projections published in December. This is consistent with forecasts recently released by international and private sector organisations."

"I would now like to make a few remarks on fiscal policies. While some progress on fiscal consolidation and the correction of excessive deficits is envisaged in euro area countries� updated stability programmes, further consolidation in a number of countries is needed.

With respect to the Stability and Growth Pact, discussions now need to be brought to a convincing conclusion with an outcome that safeguards fiscal discipline. The fiscal framework enshrined in the Treaty and in the Stability and Growth Pact is a cornerstone of Economic and Monetary Union, crucial for the economic rationale and the overall cohesion of EMU.

As the Committee on Economic and Monetary Affairs of the European Parliament knows, since the beginning of these discussions the ECB has made its views clear. Improvements in the implementation of the Stability and Growth Pact, and in particular its preventive arm, would be welcome. But the corrective arm should not be weakened. The credibility of the excessive deficit procedure as a means to deter and correct excessive deficits needs to be fully preserved. This is necessary in order to anchor expectations of fiscal discipline, which is fundamental not only for macroeconomic stability and cohesion in the euro area but also for enhancing confidence and fostering growth prospects in all Member States.
------------------------------------------------------------------------------------------------------------------------
Jean-Claude wants to make sure that the � merits its credibility as future reserve currency ("...enhancing confidence...") with his remarks on the Stability and Growth Pact.
If the evolution of oil prices has a significant impact on consumer price inflation in the euro area, what kind of impact will it have in the dollar area ?

Gold clauses were made illegal in the 1930's by Roosevelt. They were made legal again in, I believe, 1977, due to the efforts of Jesse Helms. Then, the law was modifed in 1996 (to benefit an insurance company which had been ordered to pay commercial office building rent in gold), but returned to the 1977 state in 1997. See the Troestel cases, where the legislative history is set out.

Basically, parties are allowed to contract to require payment in gold money. So, if you want to protect yourself against inflation by including a gold clause in a contract, you can do so. Up to now, the clauses have been relevant mainly with respect to the renewal of old, long-term commercial real estate leases.

The point being: One is allowed to contract to require the use of gold as legally enforceable money (as opposed to a contract respecting gold or gold derivatives a propos gold as a commodity purchased with non-gold currency).

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=7894445NEW YORK, March 14 (Reuters) - U.S. gold futures stumbled lower Monday morning as traders pocketed profits from last week's rally to 2005 highs, spurred by a firmer dollar, but the market stabilized at lower levels, dealers said.

"There is some profit taking in here," said a metals floor broker. "With the euro being down, I thought we'd be down a lot more, but it seems like the market held up a bit and now we're trading back up."

Friday's close at $446.80 was gold's highest settlement since Dec. 28, with the market rising after poor U.S. trade data for January. The trade gap widened to $58.3 billion in the first month of 2005 -- the second highest monthly total ever.

...many market sources felt the metal's uptrend was intact due to a poor dollar outlook.

With no significant U.S. data Monday, the market was bracing for a U.S. capital flows report on Tuesday and Wednesday's current account data for a read on sentiment toward the dollar.

^----(From url)----^

Question: After today's "profits" are "taken" on the COMEX contracts, how are they going to be handled into a future that expects the dollar to weaken further?

Could very well be that some are selling futures at leverage as a merely short-term cashflow utility while buying metal at the same time as a longer-term foundation of savings.

R.

In the long term (10-15 years), gold will relentlessly rise and commodity prices shall soar as Asian consumers bid for already scarce resources.

However, in the intermediate term (6 months to 1 year), the weight of contrary evidences indicate a counter trend rally for the dollar:

* Newsweek has made the fall of dollar its cover story. It is usually accepted that cover stories of Newsweek and Times mark the end of a trend. This is a big event.
http://www.msnbc.msn.com/id/3032542/site/newsweek/

* Officials of countries that are normally accepted to be in the dollar block have spoken about reserve diversification.

* Two very rich people, Bill Gates and Warren Buffett, who will not reveal their market positions, under normal circumstances (or perhaps reveal them under only legal obligations), have been freely speaking about the demise of the dollar and their short position in the market.

*This year, there are tax advantages for US corporations that bring their capital back.

These are opinions of a contrarian, use with caution!

It is as you say -- one is ALLOWED to. But the question remains -- SHOULD one?

Again, I put forth the question seeking an effective comparison between the gold clause mechanism that you've suggested and the fallout experience we've had with a very similar yet roundly despised practice of hedging as done by miners.

Is it possible that a person could rationalize a positive view of the former while maintaining a negative view of the latter?

To bring this into tighter focus, a swift examination of the hedging operation might be helpful, especially as seen from the buyer's side rather than the miner's side.

When a miner has entered into his various hedging or funding agreements to sell gold forward or be party to a gold loan, on the other side of the equation we effectively have a party who has deferred his own demand for gold (and thus taken pressure off of the spot market(!)) in favor of a future delivery or gold flow.

As more and more potential spot deals are thus deferred by confident expectations of future gold flow performance within this big family of gold clause contracts, the phenomenon takes shape in the market as a depreciation of the spot value of the golden "currency" amidst a price inflation overall.

As the economic cycle plays out, eventually this expansionary phase gives way to a contractionary phase, at which time legislators are ever at-the-ready to re-write the rules to end the pain of those who can't pay gold contracts in a contractionary environment. Thus the gold clause overall works only to ill effect -- to devalue gold in the expansionary boom, and to leave you with only empty expectations during the contractionary crisis.

The better schematic, arguably, is to leave gold out of the capricious contract (monetary) environment and let it's effective supply be that of physical ounces alone as done by a market that finally understands that only SPOT transactions are good as gold, whereas a gold-clause or gold derivative contract is just another variant of a capriciously fiat IOU. Such is the distinction to be made, in the minds of investors and savers, between property (real wealth) and mere promises.

Build your financial house on a firm foundation -- build it upon physical gold, not "future" gold.

R.

Of course, gold clauses can be made illegal, but so can private gold ownership (as you Americans so well know). Political and legal risk can wipe out anything, including the benefits of physical gold in hand.

FWIW, it is less likely that gold clauses would be made illegal now, simply because there are so few extant- mainly long-term real estate leases where the lease was originally entered into before the Depression. There are perhaps some old railway bonds, etc, which perhaps could trigger a gold clause.

And in that regard, the best anyone can hope to do is keep their eyes and ears open, and to watch carefully where they're stepping. The further point that I tried to make was that within this context of shifting legalities (and more especially of shifting enforcement), as a society we would do well not to set ourselves up for a fall. Property rights being important as they are to the structure of our civil society, it is hard to imagine the government coming soon for your art or coin collection. It is also hard to imagine government specifically striking down your right to write a private contract in any way you and your counterparty see fit to do it. However, as experience shows, it is very reasonable to expect a day may come when government admits that it has no real ability to provide for the ENFORCEMENT of any such non-spot gold contracts that you may be party to.

Therefore, although it would remain legally acceptible in the eyes of society to generate futuristic (i.e., non-spot) gold-clause contracts, it might not be prudent to encourage it and the subsequent exposure to nonperformance risks inherent. Similar to the way we technically allow yet generally discourage children from playing with fire.

R.

If ...."In the long term (10-15 years), gold will relentlessly rise and commodity prices shall soar as Asian consumers bid for already scarce resources."


Then why...."However, in the intermediate term (6 months to 1 year), the weight of contrary evidences indicate a counter trend rally for the dollar:"

You have brought up something that I fail to see. Many people, articles, essays and analysis suggest that an intermediate dollar rally is under way. Knowing the 'commodity price' outcome why?????

It's like knowing that 'peak oil' is nearby while betting on the dollar. Why?

TIA

http://www.channelnewsasia.com/stories/afp_world_business/view/137347/1/.htmlBRUSSELS : The European Central Bank waded into tense political talks over eurozone budget rules, signalling it was ready to use interest rates to counter any undue slacking and reassure financial markets.

ECB chief Jean-Claude Trichet warned that markets could react against marked easing of the deficit rules by pushing up interest rates or selling the euro.

His comments to the economic and monetary affairs committee of the European Parliament about ministerial talks aimed at redrafting or re-interpreting the Stability and Growth Pact were notably blunt.

He declared: "I think that the credibility of the ECB might play a role in convincing markets that they can trust us whatever happens in the realm of the Stability and Growth Pact".

Trichet, referring to ECB monetary policy, said that "we see the current level of rates as appropriate", adding: "Everybody knows that if we would need an increase of rates we would do that without hesitation."

In a reference to the ECB and its statutory duty to ensure price stability, he said: "Our life will be totally different if the result (of ministerial talks to redraft the pact) is a good result or if it is a bad result.

"Our responsibility will be exerted in a different environment," he said.

^------(From url)-----^

Among the messages being sent, one that should be received loud and clear by the finance ministers is that they have the alternatives of strong commitment to the budgetary resposibilities of the Stability and Growth Pact, in which case they can borrow money at low interest rates on the capital markets when occassionally needed, or else they can abandon commitment to budget austerity and thereby drive everyone -- including themselves -- into higher interest rates for all funding sought on capital markets.

This should not be seen as being a sort of inter-agency turf-war threat insofar as Trichet is merely making a statement of economic principle as applies for an openly traded currency on the world stage. Telling it like it is.

R.

I appreciate the points you make. I agree in that I also doubt that physical gold would be seized again, or that the US courts would uphold such a seizure (as long as there are Republican judges). Since gold is no longer the legal anchor of the currency system, the compelling state interest which would be invoked to justify the seizure of gold no longer exists.

Of course, there exists the added protections accorded to collectible coins.

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

March 14 (DowJones) (MarketWatch) (Reuters) -- COMEX gold futures dropped over $5 from Friday's closing levels on fund profit-taking and bullion bank selling spurred by the turn higher seen in the U.S. dollar relative to the euro and other major currencies.

The most active April contract settled $5.20 lower at $441.60.

Most of the price slide occurred right at the open after spot gold dropped overnight in Asia and Europe as potential buyers scurried toward the sidelines and speculators took profits on purchases made last week at lower levels.

Still, many analysts felt gold's up-trend remained intact, as any short-term pullback would prompt buying close to the $440 area.

Tim Evans, analyst at IFR Markets, said that although gold surged nicely last week, the market faced stiff resistance at the Dec. 29 high of $449.

"This suggests we may see a period of consolidation or technical correction now rather than a clean run for the $460.50 (16-1/2-year) peak of Dec. 2," he said in a report.

"Without some fundamental news to cut off the rise, though, gold could just be in the middle of a run comparable to the September-December run," he said. "It may be technically overbought for a very good reason -- it is trending sharply higher."

"We continue to be believers in gold, noting its unusual resilience during a period of economic strength," said Citigroup/Smith Barney in a research note.

"Gold's ability to generate headway in euro and yen terms, however, remains a critical credibility test," Citigroup added.

Metals traders got ready for what will be another busy week of U.S. economic reports, starting on Tuesday. Of particular interest will be January's capital flows, providing a glimpse of whether foreign central banks are maintaining a steady pace of buying in the U.S. Treasurys market.

Any signs that they aren't keeping pace could spell fresh weakness in the dollar, which in turn would work to gold's advantage since foreign buyers are able to increase their purchases of the precious metal as the value of the greenback depreciates.

The capital flows data will be reported on Tuesday at 9 a.m. Eastern time. Also likely to draw scrutiny in the metals pits will be Wednesday's release of the U.S. current accounts deficit for the fourth quarter of 2004.

----(see url for 24-hr economic newswire)----

In the past week, the �/$ exchange rate rised above the significant 1,40 resistance. Today the dollar managed to push it back under 1,34. The POO initially did what Kudlow dreamed of...went down almost 2% during the day...and...then it suddenly is happening again : The POO rushes back and is now above $55.

As I observed many times before...oil doesn't want the dollar to strengthen !!!
Oil wants a NEW "world standard" !!!
Wednesday oil gathers in the Isfahan outpost of evil.

http://news.goldseek.com/EuroCapital/1110574501.php

I have to guess that the guy must have an exxagerated sense of humor; otherwise it would seem a bit twisted as in Fiat money is debt in itself, and so it follows if you add more of the same and multiply it may become credit a'la minus multiplied by minus becomes plus ...

... and BTW, Belgian, Isfahan is beautiful and historic town. Also has one the largest and most beautiful bazaars in the orient -(bought a huge chiseled copper urn, which holds my logs for the fireplace). You see, there's something else to keep you warm next to oil ):>)

cb2

PS: @MK - Good to see an US Boy winning the alpine skiing World Cup. It's all about competition. Monetary Reserve status being next up for competition...?

First Iclandic billionare: Power,
money, that is just the road to
respect.
From the current issue of Forbes.

Hello you old traveller....Any recommended Arabic or Persian destinations where an old Infidel can still go and not get his throat cut?....My feet are gettin itchy and China seems appealing for a journey later this year...YGM

http://www.dejkam.com/iran/isfahan/Looks like a place to behold before it's radioactive...
Probably have to wear a beard w/ suntan and Jalava nowadays to escape unwelcome attention...YGM

http://www.washtimes.com/commentary/20050313-091432-7939r.htm$55 oil won't last
By Lawrence Kudlow


SNIPS:

When I put a $55 barrel of oil on the table and look at it from all angles, there's no way to justify the current price. As a free-market disciple, I am compelled to accept the market verdict: $55 a barrel. But that doesn't mean it will last.

Hedge funds are rumored to have used low interest rates to leverage and borrow to buy oil market contracts. Big oil companies may also be speculating on higher future oil prices, with or without leveraged borrowing. Perhaps tanker companies also have slowed deliveries as they wait for still higher prices.

Meanwhile, small investors thinking about jumping on the gravy train of higher oil prices should beware. Bubbles happen. And a major oil bubble could be on the verge of bursting.

Lawrence Kudlow is host of CNBC's "Kudlow & Company" and is a nationally syndicated columnist.


>>>>
Mr Kudlow, the same actions (low interest rates, borrowing to buy, hedge funds, etc) that you say have lead to speculation and unjustified bubbles in the oil and commodity markets, have done the same thing to other markets namely stocks, bonds, and housing. But not bubble there huh? Besides, do you really expect foreign interests who own oil resources to accept the same price as the US dollar plumments? Are you really that dumb? Maybe dumb enough to be the next FED President.

http://www.washtimes.com/commentary/20050313-091432-7939r.htm

Way to go, Bode! Born in America. Trained in Austria. Tough combo to beat. Snowing in Denver as this is written. Good snow at the Colorado resorts, we are told, in case any of our readers are looking for something interesting to do this coming weekend.

As for the reserve currency situation, what do you think would happen to the European economy if the top trading nations in the world INCLUDING THE UNITED STATES were to suddenly shift 10% of their reserves into the euro? To Europe, given the checkered history of nations obsessed with worldwide currency domination, I would pass along the following snippet of hard won American brand wisdom:

Be careful what you wish for.

As it is, some in Europe express great dislike for the dollar devaluation policy even though good things have already come of it. And I believe it will get even better for Europe under the strong euro regime than it already has been. Consider, if you will, the possibility of the high structural unemployment rate in Europe actually coming down as foreign capital is invested in industrial and service infrastructure. The effects will be lasting.

For the long run, as this saga unfolds. . . .

I will hold my Carlin and Cortez trends and raise you one untapped Alaska.

I remember meeting an Austrian gentleman some years back who told me quite pointedly that the next South Africa existed in a place called Nevada. One of these days, we'll all go back to gold as the primary reserve asset (as Mundell has asserted) simply because one nation state really cannot rely upon another to manage its currency well enough to insure dependable, long-term reserve value. At least not now. Governments will become buyers. When we return to gold, in my view, America will be better for it because of our untapped gold reserves. The currencies will forcibly be better managed in order to gain the competitive edge, and I can't see how that would be bad for the world's financial markets.

In other words, I agree with you!

But socialists whether they spend the day in North America, Europe or Asia have never been lovers of competition, so to hope for them to sponsor a system which encourages bringing out the best in us may be more than we can hope for. Too much risk in that, they would say. Way too much risk. But, hey, sometimes Austria wins the World Cup, sometimes Italy, sometimes Switzerland, France or Sweden - and sometimes America.

And somehow the sport survives despite passing the Cup around.

http://www.washtimes.com/commentary/20050313-091432-7939r.htmEssentially his oil assessment as turned around to look at dollars:

When I put $55 in cash on the table and look at it from all angles, there's no way to justify the current value.

Under Presidents Nixon, Ford, Carter, Reagan, Bush, Clinton, and Bush, a most bizarre international monetary policy combination absorbed ever more trade dollars into exporting-dominated production centers that least needed it.

Dollars are certainly flowing today, and at irrational levels.

Central banks have acquired it without regard to balanced macroeconomic justifications, thus propping up its value ever more artificially over time as the reserve holdings (and imbalances) have grown.

At the margin, the continuing acceptance of the dollar reserve structure by these countries undoubtedly supports the dollar value...


OK, you get the point. When one begins to see where the dollar, at its core, does not provide a basis for rational measurements of value through a price expression upon other more internationally fundamental assets (such as oil or gold), then one also begins to understand that it is not valid for someone like Kudlow to proclaim that the dollar price of oil is too high or not rational.

Central bankers often worry about wage inflation within their monetary jurisdiction because they understand the degree to which wage levels and general inflation of wage levels act to establish the value of the national currency. But as oil is arguably the most fundamental starting point for much of modern economic activity, it is even more true that central bankers must look to the price of oil to get an idea of what their currency is worth -- NOT the other way around. That is, Kudlow is off base to hold in his mind the notion of a dollar in order to figure out what price oil should be. To be sure, it is oil that sets the value of the dollar.

R.

The Caf� and GATA have developed quite the information network around the world. On that note I am passing on what I am hearing from a solid source. None of this can go in the verified camp, so it all must be treated as RUMOR until we receive proper verification:

*Russia is preparing for possible war and its actions on the dollar indicate just that; they are going to back Syria, Iran. China will back Iran.

*Russia has made deals on oil and gas projects and opened its minerals to trading. This should show soon in response to china raw materials buying.

*Russia has also abandoned efforts to tie the rouble's movement closely to the dollar and switched to shadowing both the euro and the US currency. This is the first step to war. Other countries operating de facto dollar pegs will follow suit. With 81 per cent of Russia's oil exports currently sold to Europe, the move means that Russia will eventually denominate its oil in euros.

*Remember Russia is the world's second-largest oil exporter, behind Saudi Arabia.

*Asia is following Russia, or should I say leading, and is about to dump dollars in sizeable chunks; they believe that the U.S. dollar is no longer seen as a stable currency and it appears that Malaysia will be the first major Asian economy to dump the dollar. China has already calculated when they will optimize the dumping of the dollar to provide the greatest strength to a newly un-pegged Yuan. Both events will occur very close together and it will be planned to do the most damage to the US.

As you know Bush had a record budget deficit forecast of $427 billion for this fiscal year. All this has other investors turning to the euro and when Asian central banks turn; the dollar's problem will worsen. Dumping dollars will result in stronger Asian currencies and by un pegging the Chinese currency from the dollar will most certainly trigger the wholesale dismemberment of America's middle class. These developments, when they happen, will be the financial equivalent of a nuclear first strike. When Asians pull the plug, U.S. rates will skyrocket this will be followed by Russia, Germany and maybe France. The Mexican Paso will have more value than the US dollar."

* Halliburton is all over Alaska and probing mining companies there.

*There will be eventual cutoff of oil to the U.S once a attack on Beshar occurs. The situation in the US will be worse than 1973.

* The US is going to war and Syria and Iran will be hit. Field commanders have the authority and a green light to go any time.

*Iran has had nuclear weapons since 1991.

*"I'm told in a specific time frame, 36 months or less, the central banks will be completely diversified in currencies and out of the U.S dollar. Be advised they are buyers gold. When I learned this I was astounded by it."

*"I believe our troops to north of Iraq are all in danger. They will have to have a draft. There is no question about it as they are short people despite U.S officials/congress comments. I have the stats and I know this for a fact that they can not go longer with out doing a draft. They are well over 100,000 short of personnel which was said directly to me; massive preparation like that of WW2 would have to take effect immediately."

-END-

Just food for thought for you. Take it or leave it. Time will tell on all counts.

Neither Russia nor China will actively oppose a US strike in the ME, for various reasons.

Russia basically backs US policy, even though it annoys them. They will benefit from destroyed ME infrastructure (huge value to their oil reserves), and the free hand in Chechnya, et al.

All I can say: Pray for the abandoned Taiwanese. Too bad they did not acquire their own Bomb, as did Israel.

Both Russia and China can and will be cut in on the spoils.

The use of Canamami's gold clause in long term, stream of payment contracts, appears one of the valid uses of gold as a hedge. Locking in an ounce amount, that relates to the sales price and contractual payment amounts in a seller financed real estate deal, would help assure preservation of seller purchasing power over the payment life of the contract, no?

Gold clauses in contracts during the Gold Standard days, when an ounce of gold was $20.67 for 130 or 140 years-- one would think, was a straight forward easily understood deal.

Today? How would it work? With legal tender laws in this country, I'm not sure payment could be demanded in gold, even if it were written into a contract. You can bet that the issue could be fought about in court, with plenty of issues for either side to argue.

With a fluctuating dollar value relative to a gold ounce for example, could the gold equivalent in dollars be demanded every month? Possibly-- but who does the figuring every month? And, will both parties agree?

If someone has a method for an easily applied contractual gold clause in today's environment (without tying up a bunch of cash in the futures market for an extended period of time) I'd like to hear it. We never know when someone will desire us to play the banker on some expensive piece of real estate that is out of bounds for conventional financing, and as we will continue to say into the future: "the dollar isn't what it used to be."

Look up the Troestel cases. Concerning a commercial building in Des Moines. Some of the decisions can be found on the US federal courts website.

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

Peak Oil Around The Corner

Simmons and others believe that "peak oil" may soon be upon us. In his new book "Beyond Oil" geologist Kenneth S. Deffeyes believes that we may hit peak oil as soon as this November or early next year. Peak oil is reached when 50% of known supplies have been used up. From that point forward supplies begin to decline. The geologists believe that "peak oil" will arrive in this decade. Deffeyes believes it happens this year. We will know that it has arrived only though hindsight. What we do know is that there have been no major oil discoveries in the last 30 years. The last big discoveries were in Alaska in the late 60's and the North Sea in the early 70's. Both of these discoveries are now in decline.

Black Blade: A good run down on the energy market and soaring energy costs.

http://www.marketwatch.com/news/print_story.asp?print=1&guid={8EFA20EF-C6E9-46EF-A1B3-B57091817C18}&siteid=mktw
Snippit:

Dan Norcini documented on LeMetropole Caf� that all previous times the CRB index has been at this level, gold was around $600. The Privateer observes that if the CRB and gold had kept pace since the latter's $456 peak on Dec. 3, gold would now be $510.90. Apparently the gold shares are right to detect something troubling about the performance of the metal.

The pro-gold community generally agrees as to what it is: covert selling by central banks. In an important development for this group, the March issue of Jefferson Financial's Gold Newsletter carries an essay by Frank Veneroso. Veneroso, who led revolutionary analytical developments in the gold world in the early '90s, addresses the World Gold Council market prepared by the consultants Gold Field Mineral Services (GFMS). He has said little on this subject for several years. Now, in a powerfully argued piece, he declares the GFMS estimates "so removed from historical trends and current market trends that they have become ludicrous." Further, accepting the view that the gold market is managed, Veneroso gives cautious approval to the contention favored by the LeMetropole site that the "manager" is in retreat. This is the point which gold shares currently do not accept.

An elegant and exhaustive discussion of the immediate empirical evidence for this view was published this weekend in the new issue of James Turk's Freemarket Gold & Money Report. Turk concludes: "Central banks have created a wonderful opportunity ... All they have managed to do is to make gold ... very undervalued." He adds a long-term technical argument for gold shares.


Black Blade: Interesting article by Brimelow. Personally I think that it is increasingly difficult for bullion banks to maintain much control over price and supply.

After a jaunty rise to $445 or so, gold has settled at $440 and change this evening...

Is that the best the cartel can do? Rather a poor showing, IMO.

Where are the whacks of yesteryear? Where the slams down $15, $20, $30 bucks?

Signs of exhaustion? The Cartel gentlemen are NOT convincing in their efforts. This goes on tomorrow, and gold will be on its way UP.

The GAB

http://www.fff.org/freedom/fd0303a.asp
Canamami: Couldn't find any Troestel cases. But did find a short and interesting history of the establishment of legal tender laws and the elimination of the Gold clauses.

If ever there was example of judiciary corruption-hand in hand with the power structure- this would be it. Grasping at any circular flimsy straw argument, so as to amass power to the federal government, by over-turning the strict limits well placed by the founders of the constitution, protecting the citizens from governmental theft. Despicable actions!

http://www.businessday.co.za/articles/companies.aspx?ID=BD4A28033LONDON -- Graham Birch, who manages the �419m Merrill Lynch World Mining Trust, expects middle-class Chinese consumers to buy gold in coming years, helping commodity investors make money from China's economic growth.

...affluent Chinese buyers would acquire gold as a store of value and as jewellery. "They are going to have to import gold," he said.

"It is quite sensitive to disposable incomes."

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

Depending how you decide to slice it, one of the pieces of the "disposable income" pie is savings. Therefore, among those who are more comfortable with tangible rather than promissory savings, it is only natural that exchange rates for gold would be sensitive to a nation's "disposable income" as further reflected in its propensity to acquire real savings.

In other words, those who think gold's exchange rate (price) can perform well only during bad times have figured it just half right.

R.

http://www.ca8.uscourts.gov/tmp/982999.htmlHere is one decision.

U.S. 8th Circuit Court of Appeals
ANNE C. TROSTEL v AMERICAN LIFE &



United States Court of Appeals


for the eighth circuit

___________


No. 95-3666
___________


-------------------------------------------------------
Anne C. Trostel; Harry A. *
Holman, Jr.; H. L. Van *
Metre; Charles H. Van *
Metre; Dorothy Hurley; *
Terrance M. Hurley, *
Cmdr.; Carol Sabey, Mrs.; *
*
Plaintiffs - *
Appellants *
*
Norwest Bank Fort **Appeal from the United
Collins, N.A. * States District Court for
* the Southern District of
Trustee - * Iowa.
Appellant *
***
v. *
*
American Life & Casualty ***
Insurance Company;
Defendant -
Appellee
Hawkeye Bank of Des
Moines
Movant
-------------------------------------------------------
___________


Submitted: November 18, 1997
Filed: January 15, 1998
___________


Before BOWMAN, BEAM, and MURPHY, Circuit Judges.

-1-

___________


MURPHY, Circuit Judge.


This case involving a gold clause in a real estate lease comes before us on remand from the Supreme Court for further consideration in light of Congressional action subsequent to our decision of August 14, 1996. Trostel v. American Life & Cas. Ins. Co. , 92 F.3d 736 (8th Cir. 1996), vacated , 117 S.Ct. 939 (1997). We were asked to consider the impact of a statutory amendment which went into effect on September 30, 1996, but before oral argument Congress acted again to eliminate the language added in 1996. The parties have now briefed and argued their conflicting views about the possible impact of these legislative changes on this litigation.


The real estate lease covers a commercial building in downtown Des Moines, Iowa. It was originally entered into in 1917 to run for ninety nine years. The annual rent for the final forty five years was set at $18,000, and the lessor was given the option to demand payment in gold coin as a protection against future inflation. See Trostel , 92 F.3d at 738. During the lease period public policy changed in regard to gold. Congress declared in 1933 that gold clauses were against public policy and were therefore dischargeable dollar for dollar in United States currency. Joint Resolution of June 5, 1933, 48 Stat. 112, 113 (1933) (formerly codified at 31 U.S.C. � 463) (codified as amended at 31 U.S.C. � 5118(d)(2)). More than forty years later the policy changed once more. On October 28, 1977, Congress amended the underlying statute to make gold clauses enforceable again if they were part of an obligation issued after October 27, 1977. Act of October 28, 1977, Pub. L. No. 95-147, � 4(c), 91 Stat. 1227, 1229 (codified as amended at 31 U.S.C. � 5118(d)(2)).


The lease was ultimately assigned in 1990 to American Life and Casualty Insurance Company (American Life), and in 1993 the lessors demanded payment of the rental obligation in gold coin. American Life refused, and the lessors sought a declaratory judgment to enforce their demand. The district court granted summary judgment to American Life. We reversed after determining that the gold clause was enforceable under the 1977 statutory amendment because in the 1990 assignment American Life had assumed all obligations of the original lease. Trostel , 92 F.3d at 740-41.


Shortly thereafter Congress amended the underlying statute by adding a provision to the otherwise unrelated Economic Growth and Regulatory Paperwork Reduction Act of 1996. With the new amendment the statute read in pertinent part:


An obligation issued containing a gold clause or governed by a gold clause is discharged on payment (dollar for dollar) in United States coin or currency that is legal tender at the time of payment. This paragraph does not apply to an obligation issued after October 27, 1977. This paragraph shall apply to any obligation issued on or before October 27, 1977, notwithstanding any assignment or novation of such obligation after October 27, 1977, unless all parties to the assignment or novation specifically agree to include a gold clause in the new agreement.


31 U.S.C. � 5118(d)(2) (1996 amendment highlighted). 1


The Supreme Court then granted certiorari and remanded the case to this court "for further consideration in light of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, P.L. No. 104-208, Sec. 2609." 117 S.Ct. 939 (1997). A briefing schedule was established, stayed at request of both sides to permit discussions of possible settlement, and then reinstated with modified dates. Before oral argument could be heard, Congress acted again. This time it eliminated the provision it had added to the gold clause statute in 1996. Public Law 105-61, � 641. The legislation, signed into law on October 10, 1997, stated that:


[s]ection 5118(d)(2) of title 31 United States Code, is amended by striking "This paragraph shall" and all that follows through the end of the paragraph.


Oral argument was then postponed to permit additional briefing on the implications of the new legislative action. 2


The parties disagree as to the significance of the amendments. American Life asserts that the gold clause in the lease cannot be enforced because the 1996 amendment was written to be retroactive and the parties did not "specifically agree" to include the gold clause in the 1990 assignment. It therefore is only obligated to pay the lease amount of $18,000 per year on the building. It says the 1997 amendment has no effect here because it is not retroactive, citing Landgraf v. U.S.I. Film Products , 114 S.Ct. 1483 (1994). The lessors argue that the gold clause in this lease continues to have effect under either statute. They contend that the 1997 amendment is retroactive, making the 1996 amendment now irrelevant. They also say that even if the 1996 amendment applies to this lease, the gold clause is enforceable because American Life explicitly agreed in the assignment to be bound by "all of the terms and conditions" of the 1917 lease, and one of the terms of that lease was the gold clause.


American Life argues that the resolution of this case is a simple matter of applying the Landgraf holding which requires a clear expression of Congressional intent before a statute will be given retroactive effect. It is unable to cite a case, however, where the presumption was employed in a situation similar to the one here. 3 The 1996 amendment says that it "shall apply to any obligation issued on or before October 27, 1977 . . .," thus indicating on its face a retroactive intent. See Landgraf , 114 S.Ct. 1483. The 1997 enactment simply states that the prior amendment is stricken. It does not use the type of language normally associated with retroactive effect. See id. Its apparent intent, however, is to eliminate the effect of the previous year's enactment, and to apply it in that way here would not implicate the policy interests underlying the presumption against retroactivity. This policy "has consistently been explained by reference to the unfairness of imposing new burdens on persons after the fact." Id. at 1500. As to the parties in this case, the interests of "fair notice, reasonable reliance and settled expectations," id. at 1499, would weigh in favor of interpreting the 1997 amendment to return the law to its former state as it existed in 1990 at the time of the assignment to American Life.


The sequence of the legislative amendments and the involvement of these parties in that process are part of the full context of this case. 4 Each amendment reflected a desire to influence its outcome, and each was passed as a small item in an otherwise unrelated statute. 5 The 1997 amendment provided for the elimination of the entire 1996 amendment, and there is nothing to suggest that the language was carefully crafted to prevent its application here. If a requirement of explicit statutory language commanding retroactivity is necessary for the 1997 amendment to have an effect on this case, however, then we must consider the effect of the 1996 amendment as controlling. The 1996 amendment required that a gold clause be specifically agreed to in order to be effective. The 1990 Warranty Assignment and Assumption agreement which controlled the assignment of the lease to American Life contains a reference to the original lease and provides that the assignor transfers the leasehold interest and that American Life, the assignee:


hereby accepts, assumes and agrees to be bound by all of the terms and conditions to be kept, observed, and performed by the lessee in said lease, as amended above described, from and after August 1, 1990. . . .


We previously held that this assignment amounted to a novation. This meant that the gold clause was enforceable under the 1977 statute since under Iowa law the 1990 novation amounted to a new obligation issued after the key statutory date. See Klipp v. Iowa Grain Indemnity Fund Board , 502 N.W.2d 9, 11 (Iowa 1993); Eitzen's Estate v. Lauman , 3 N.W.2d 546, 549-50 (Iowa 1942). Under the 1996 amendment a gold clause is not enforceable "notwithstanding any assignment or novation" of a contract including such a clause unless the parties "specifically agree to include a gold clause in the new agreement." 31 U.S.C. � 5118(d)(2). The substituted contract must therefore demonstrate explicit intent to include a gold clause in the new obligation or it is not enforceable.


The substituted contract in this case satisfies the 1996 statutory requirement because it specifically included each clause of the original contract as a new term. American Life expressly assumed " all of the terms and conditions" (emphasis added) of the 1917 contract, and the gold clause in that contract was enforceable under the statute as it existed at the time of the 1990 assignment and as amended in 1996. Under Iowa law an assignment is a contract subject to the traditional rules of construction and where unambiguous, its words will be interpreted according to their common meaning. Broyles v. Iowa Dep't of Soc. Services , 305 N.W.2d 718, 721-22 (Iowa 1981) (citing 6A C.J.S. Assignments � 2 (1975); Kinney v. Capitol- Strauss, Inc. , 207 N.W.2d 574, 576-77 (Iowa 1973)). The terms of this assignment reveal the parties' intent to agree to include all original lease clauses, including the gold clause, in the new agreement created in 1990, thus satisfying the requirements of the 1996 amendment.


American Life claims that even if it specifically agreed to include the gold clause, the lessors did not. The statutory requirement is not satisfied unless "all parties" to the contract have agreed. American Life argues the lessors did not even realize that they could demand payment under the gold clause until 1991. The original lessor agreed in 1917 to all future assignments of the lease, however, and thus there was no need for them to agree to the gold clause contemporaneously with the 1990 novation. The statute only requires that all parties specifically agree to include a gold clause, not that all parties contemporaneously agree to include the clause. The original lessor specifically agreed to all clauses in the 1917 lease, including the gold clause, as well as to all future assignments, and lessors are the successors in interest. This is sufficient to satisfy the specific agreement requirement.


After reviewing the pertinent legislation subsequent to our earlier decision and the arguments raised by the parties, we conclude that the gold clause in this lease is enforceable and we reinstate our prior decision. Accordingly, we remand the case to the district court for further proceedings consistent with this opinion and Trostel v. American Life & Cas. Ins. Co. , 92 F.3d 736 (8th Cir. 1996). 6 A true copy.


Attest:


CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT


FOOTNOTES


--------------
[1]

The amendment also provided that it would not apply to gold clause obligations finally adjudicated before its passage.


--------------
[2]

The parties have sought permission to file post- argument briefs addressing retroactivity issues, and their motions are granted.


--------------
[3]

The statutory background in Landgraf was strikingly different from the one here. The statutory provisions at issue there were part of fundamental changes in civil rights law and resulted from a lengthy deliberative process. See id. at 1491, 1493. After Congress considered and rejected a version of the Civil Rights Act which had express retroactive language, it ultimately enacted a statute with none. See id. at 1491-92.


--------------
[4]

Initiatives by the parties in respect to the legislation were discussed at oral argument.


--------------
[5]

The 1997 repeal was a small part of a voluminous act entitled "Treasury, Postal Service and General Government Appropriations, 1998."


--------------
[6]

This resolution makes it unnecessary to consider the lessors' arguments that the 1996 amendment is beyond the power of Congress under the Commerce Clause or that the lease is commercially impracticable or voidable because of a failure of a fundamental condition.

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=LOWThe dilemma with both Gold and Oil is that neither is a "commodity" per-se.
Gold has been, at least for the past 4 years, a currency ...whilst Oil has been, well ...underwriting the Dollar.
Larry may be correct in trumpeting a lower Oil price as it runs both with Bonds and DX. We are due for a Bond strengthen so it's quite plausable to expect Oil to drop.

The REAL interest now imo, is Gold casting off it's Currency Shackle ... and rest assured, a definitive move IS on the Cards!

http://www.ecb.int/press/pdf/wfs/2005/fs050311en.pdf1. Gold and gold receivables : minus 89 million due to the selling of gold by two Eurosystem Member Banks (125,071 billion).
2. Net foreign currency position : minus 0,2 billion euros(154,4 billion).

The ECB's net foreign currency position exceeds their gold position by only 23,45 %.

Around 9:00 this morning the Treasury Dept. reported an increse in foreign buying of Treasuries. This quickly lifted the dollar from down to up which also quickly reversed gold + silver from nice gains to a net negative number on the day, so far.

It's still all about the dollar. Anyone been waiting for a chance to go long coffee? I've had three cups so far this morning and will add more...both physical in the cup + leveraged. Also thinking that both silver + gold have more upside to go on this move. Just one poor boy's opinion.
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=10What does it tell you, IF one MUST put out these PROMO's to get the US$ in an "UP MODE" ?
<;-)

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1<;-(

If they settle that's an admission of guilt and thus everyone with a provable interest in Gold would have also been affected and should be able to follow suit? No?....I doubt if this will get Blanchard any money, but one can hope...YGM



From Bloomberg News Service
The Globe and Mail, Toronto
Tuesday, March 15, 2005

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/200503
15/RTICKER15-5/TPBusiness/International

A judge ordered Barrick Gold Corp. and J.P. Morgan
Chase & Co. to try to settle a 2-year-old lawsuit filed
by coin dealer Blanchard & Co. to avoid a 10-day trial
scheduled to start in July.

Blanchard accused the miner and the banker of illegally
profiting from the manipulation of gold prices.

Judge Helen Berrigan in New Orleans scheduled a
meeting to negotiate a settlement with the companies
March 30.

"The court feels that the record has developed sufficiently
to allow for meaningful settlement discussions," Judge
Berrigan said in a ruling posted yesterday on the court's
Web site.

Blanchard sued Toronto-based Barrick and New York-based
Morgan, accusing them of taking part in an antitrust scheme
to suppress the price of gold and making more than $2
billion (U.S.) in profits from the decline through a hedging
program.

ABX fell 31 cents (Canadian) to $30.75. JPM (NYSE) rose
34 cents (U.S.) to $36.45.

Ive been watchin oil price & dow/nas correlation lately and it appears to me, subjest to change now that i think i see/saw something.
When oils goes down, so do the markets, and vis-versa
AND
it also appears TO ME, that we had a crossover late last week or are very close to one, where it now takes higher and higher oil prices, just to keep the markets flat.

Am i seeing things correctly?
OR
way, WAY off base here

comments/thoughts would be welcome
TIA

Why? Well, I do not know for sure. If I believe that magazine cover stories are reliable contrary indicators, then, obviously, I do not believe that this is the working of a free market. Market makers (or call it organisers of this show business if you like), like to shake the greatest number of investors out of the main trend. Possibly, it is profitable. Now let me speculate further:

* They are 3 to 4 years late into the trend. Why wait for so long? Dollar bear market started years ago.

* They give the correct information (that is; current account deficit, advantages of reserve currency status etc) at the wrong time (before a counter-trend rally) so that correct information becomes discredited in the eyes of the people.

* Superficial reading of the newspapers would suggest that Gates and Buffett were the greatest bears of this market. They have a following. If they reverse their positions, people will be shaken.

* There are tax advantages for those US corporations that bring their money back into the US this year. Now, Microsoft is a large multinational company with worldwide earnings. If Microsoft decides to use the tax advantage law, will it be interpreted as Gates closing his short position?

* They are defending the 80 region in the US Dollar Index.

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh53768_2005-03-15_16-50-05_wat002799_newsmlWASHINGTON, March 15 (Reuters) - U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday it was extremely difficult to forecast future movements in the dollar exchange rate.

Greenspan told members of the Senate Special Committee on Aging that it would not be advisable for senior citizens to look to foreign currency accounts as a vehicle for saving because of this uncertainty.

"We at the Federal Reserve have expended an extraordinarily large amount of resources to try to forecast the path of the dollar in foreign exchange markets," said Greenspan.

"What we've determined is that this is an exceptionally difficult thing to do and, as I like to put it, we have been no more successful than the odds we get in tossing a coin."

Greenspan said Americans needed to save more...

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

Save more. Ok. So if even among experts it is a toss of a coin whether they're right about the dollar getting stronger or weaker relative to foreign currency accounts, it seems therefore that it is almost nearly just as unadvisable to be heavily weighted toward dollars as Greenspan suggests it is not advisable to have foreign currency. (The lean toward dollars in a theoretical 50/50 (coin toss) situation, of course, is caused by the lag of price adjustments in dollar terms on internally generated items, such as haircuts, which you could still have access to for awhile even if your cointoss came up wrong and you were stuck holding weakening dollars.

Save yourself the international guessing game and choose gold. It is not rolling out of Mother Nature's grip any faster than new national currencies around the world are rolling out of the presses or being diditally replicated on computer screens.

Choose the security of a tangible financial house, not a paper-debt house.

R.

http://www.scoop.co.nz/stories/SC0503/S00049.htmSnips:

"...
The Endless Supply of Oil and Other Fairy Tales
Tuesday, 15 March 2005, 4:31 pm
Opinion: Powerless New Zealand
15 March 2005, Wellington
The Endless Supply of Oil and Other Fairy Tales

...

In 2004 the total world discovery of oil was 7Gb (a total of 3 months or so supply on the world market). 2Gb were in deep-water finds and the cost of exploration alone (not including development and production) exceeded the current net present value of the oil discovered. The world consumed 30Billion+ barrels of oil in 2004.
..."

Sundeck: Not a bad satirical read... Yep...we definitely need that neo-Ghawar (and a neo-biosphere)...or else some fancy soft-shoe-shuffling in the Ministeries of (Alternative) Energy in the industrialised world...could be a way of solving unemployment problems and health problems (obesity) simultaneously: cycling and pulling rickshaws is great exercise.

At what $US price will oil decouple from the $US? How sudden will this be? (Note that we are seeing rumblings/positionings for pricings in Euros.) Other commodities that are in high demand (metals in particular) are undergoing major $US price increases, but few (if any) of those are confronting supply constraints as fundamental as for oil. Nevertheless, as oil decouples, the dollar is likely to descend very rapidly, making it difficult to write enduring contracts in terms of $US for just about anything.

In particular, will gold decouple in unison with oil and the other commodities, or sooner in an early rush to safety?

Will private enterprise come surging to the rescue as the prices of alternative energy becomes comparable with, or less expensive than, the price of oil? Just how is this transition going to unfold? Who will be the winners and losers, livers and diers...

Will ostriches keep looking for salvation beneath Arabian sands...?


Don't miss the next exciting episode...

;-)

With the overnight market in fed funds trading this morning at 2.625 percent, above the FOMC target, the Fed's trading desk did the predictible exercise of its duties. In open market operations the Desk added $9.5 billion to the reserves of the nation's banking system through overnight repos at 2.62 percent.

The next FOMC policy meeting, to discuss the suitability of the currency 2.5% target, will occur next Tuesday, March 22nd.

R.

@YGM #130229 from your post:
"...
"The court feels that the record has developed sufficiently
to allow for meaningful settlement discussions," Judge
Berrigan said in a ruling posted yesterday on the court's
Web site.
..."

Sundeck: Settlement out of court? ...with suppression of further comment from either party? Now wouldn't that be a nice way of obscuring the deeper (storage?) issues? But then, if there are issues of National Importance at stake here, then that might be the only prudent way to go...no? How "independent" is the US judiciary? ...and is this issue just "too big" to be dealt with in the open?

(I can see how I could easily become nothing more than a rabid conspiracist!...even with my strong scientific background...)

;-)