USAGOLD Discussion - November 2005

CoBra(too)

(11/02/2005; 12:18:48 MDT - Msg ID: 137470)

Just another hedge fund collapse away from Armageddon?!

MK - has coined the phrase right after LTCM.

Well, here we are some years later and still no one "officially" accepts the folly of derivative bets - originally construed to diminish risk - but now the notional value is just that - notional. There is absulutely no value behind the mega hedging devices the major banks have substituted for real earnings. There is less than nothing behind the hedonic practice to (ac)count forward sales of real assets in terms of inflated financial assets.

The pendulum is now swinging back. - And the doors for fleeing the panic will prove too narrow.

Greenspan will retire as the Jeckyll and Hyde of modern economics. His credo was value and his deeds were the opposite. His legacy will lead to a total collapse of the economic and currency as I was priviledged to discuss with some of my better elders today.

Hree follows some thought on the stress we already see - and don't search me - as it was sent by a friend:

October 31, 2005
World Markets on Brink of Total Collapse as Hedge Fund System �Broken�, United States Coup-Forces Counter Israeli Nuclear Bomb Smuggling Ring

By: Sorcha Faal, and as reported to her Russian Subscribers

Russian Intelligence Analysts are reporting today that the World's Financial Markets are on the �brink� of total collapse due to the over $1 trillion (US) imminent failure of the World's, mostly controlled by Israel, Hedge Fund industry, and to which European Markets are now sounding warnings, and as we can read as reported by the Britain's Evening Standard News Service in their article titled "Gartmore warning sparks hedge fund fears" and which says:

"Fears of a financial fallout in the hedge fund industry were fuelled today by a warning from Gartmore, one of London's biggest fund groups, that 'something is broken' in European equity markets. The ominous statement - in a letter to investors from Gartmore managers Roger Guy and Guillaume Rambourg - comes as the firm calculated October has been its worst ever investment month."

This new European Union warning follows these past weeks total collapse of the Israeli-British-United States controlled Hedge Fund Operation named Refco, and to whose collapse is causing even more imminent failures, and as we can read as reported The Business Online News Service in their article titled "Refco debacle widens and now involves Austrian bank" and which says:

"Austrian bank BAWAG is set to file lawsuits against Refco, as the widening scandal involving the US futures trader has prompted a former Refco executive to co-operate with US authorities trying to get to the bottom of the affair.

Austrian regulators last week also launched an investigation into the Refco debacle and expect to release a first report in a fortnight on BAWAG's role in the accounting scandal. BAWAG is Austria's fourth-largest bank. It was listed as Refco's biggest creditor in papers filed by Refco in the US bankruptcy court this month. BAWAG is owed E350m ($424m, �238m) by Refco's former chief executive, Briton Phillip Bennett, as well as E75m by Refco itself."

To the first warnings of the total collapse of the World Markets came with the United States arrest of Phillip Bennett, and as we can read as reported by Britain's Guardian Unlimited News Service in their article titled "World's hedge funds face crisis as Refco suspends trading" and which says, "A crisis in the world's hedge fund industry was in prospect last night after one of the world's largest derivatives brokers was forced to freeze trades potentially worth billions of pounds.

The move by Refco, which acts for many leading speculative investors both on Wall Street and in the City, followed the discovery of accounts irregularities at the firm earlier this week and the issue of fraud charges against its former chief executive Phillip Bennett. Mr. Bennett has been charged with defrauding investors by using a hedge fund to hide $430m (�250m) of debts owed to the firm. A British banker who has lived in the US since 1978, Mr. Bennett has been released on bail of $50m secured on a house in New Jersey, a Park Avenue penthouse apartment, $5m in cash and funds raised by six co-signers of the bail bond.

The implications of the 15-day trading moratorium on the company's Refco Capital Markets subsidiary may be felt across the world financial system, depending upon the size of the funds caught up inside Refco and the types of institutions which are unable to remove their money from the operation."

Combining with the collapse of the World Hedge Fund Markets is the drastically rising inflation rates in the United States due to the combined stresses of their war spending, repeated natural disasters that have caused to date losses this year over $500 billion (US) and the unstoppable rise in fuel costs, and which are at an over 50 year high and are seeing the worlds major investors fleeing the US Capital Markets, and as we can read as reported by the AME Middle East Financial and Economy News Service in their article titled "4.7% US inflation: buy gold, sell US treasury bonds!" and which says:

"Last week the US posted its highest monthly figure for energy price inflation in almost 50 years. Annual US headline inflation is now 4.7%, the highest for 14 years, so US Treasury bond holders are losing money in real terms.

Let us look at those inflation figures a moment. The September rise in US inflation of 1.2% was the biggest rise in 25 years; the annual inflation figure of 4.7% the worst since 1991; and the 12% surge in energy inflation was the highest since 1957. Economists drew comfort that inflation outside the energy sector was still very low. But are these guys not able to spot a trend when it is staring them in the face? Inflation is up, and it is up very substantially."

To the Americans being able to see what is �staring them in the face� though it is almost too insane to believe the truths behind their machinations, and as reported by our Russian Economists the scheme operates like this:

The American workers do not enjoy state pensions but instead put portions of their wages into what are called 401K retirement plans. To date the total of these 401k retirement investments are over $5 trillion (US) and which are utilized for the protection of the United States collapsing markets while their richest citizens and corporations withdrawal their savings. American corporations under their laws also contribute towards these 401K plans, but to which they have not paid and when their debt to these plans become insurmountable they are then in turn allowed to declare their portions bankrupt, and as we can read as reported by the New York Times News Service in their article titled "The End of Pensions" and which says:

"Earlier this month, Miller and Delphi gave in to the pressure and sought protection under the bankruptcy code - the largest such filing ever in the auto industry. It followed by a few weeks the Chapter 11 filings of Delta Air Lines and Northwest Airlines, whose pension promises to workers exceeded the assets in their pension funds by an estimated $16 billion. The three filings have blown the lid off America's latest, if long-simmering, financial debacle. It is not hedge funds or the real-estate bubble - it is the pension system, both public and private. And it is broken."

As incredible as it is to believe, it is nonetheless true that the American people themselves are not allowed to withdrawal their 401K savings, even under their total collapse of worth, at the same time that their corporations are not required by their laws to even pay their promised share.

This most troubling of news comes also at a time when reports from the United States are also showing that the American Coup-Forces, led by their Presidents �avenger� against the perpetrators of the September 11, 2001 Terrorist Attacks, US Federal Prosecutor Patrick Fitzgerald, is continuing the dismantling of the vast Israeli Spying Operation in their country by reaching into the highest layers of the American government to target one of Israel's top US spies named Irving Libby, and who holds like many other top American Government Officials duel United States/Israeli citizenship, and as we can read as reported by the New York Times News Service in their article titled "Scooter Libby, the missing weapons and the coverup" and which says:

"The five-count indictment handed up on Friday against I. Lewis Libby Jr., accusing the vice president's chief of staff of lying to a grand jury in the Valerie Plame case, has left a lot of questions unanswered about which government official was responsible for outing a covert Central Intelligence Agency officer after her husband questioned one of the central justifications for the war in Iraq."

In the aftermath of the September 11, 2001 Terrorist Attacks US Federal Prosecutor Patrick Fitzgerald was the head of the United States most important Anti-Terrorist Organization comprising elements of the American CIA, FBI and Defense Departments, and ordered by the American President to �bring to justice� the �true� organizers of this attack, �both within and outside of the borders of the United States�, according to Russian Intelligence reports.

The most vital of the intelligence assets provided to Prosecutor Fitzgerald was the oversight of the American CIA's most important operation for protecting the Untied States from smuggled nuclear weapons, the CIA operation named "Brewster Jennings & Associates" and of which we can read, "Brewster Jennings & Associates was a front company set up by the CIA for Valerie Plame, an operative for the Agency whose identity was publicly disclosed in 2003.

Plame's status was revealed by Robert Novak (based on leaked information) in a 2003 column. In an interview on CNN, he said "Wilson's wife, the CIA employee, gave $1,000 to Gore and she listed herself as an employee of Brewster-Jennings & Associates. There is no such firm, I'm convinced." It later turned out that BJ&A did exist for all intents and purposes, listed on the Dun & Bradstreet database of company names.

Since NOCs (CIA agents under nonofficial cover) usually work at companies set up by the CIA itself as fronts, it has been speculated that other employees of BJ&A may also have been NOCs, doing work similar to Plame. If that were true, the damage done by leaking Plame's name would be vastly multiplied, as all the other NOCs would be compromised.

A spokeswoman for Dun & Bradstreet Inc., a New Jersey operator of commercial databases, said Brewster Jennings was first entered into its records on May 22, 1994, but wouldn't discuss the source of the filing. Its records list the company, at 101 Arch St., Boston, Massachusetts, as a "legal services office," which could mean a law firm, with annual sales of $60,000, one employee, and a chief executive identified as "Victor Brewster, Partner."

101 Arch St. is a multi-tenant, class A, high rise, 21-story, 389,000 square foot (36,000 m�) office building located in the Boston financial district that houses a number of law firms, though there was no visual indication of Brewster Jennings being centered there. "All it was a telephone and a post office box" a former intelligence official was quoted as saying, although the company was listed in an online database of law firms. Intended to infiltrate ties between groups involved in smuggling nuclear weapons, it was apparently named after the late Brewster Jennings, who served as president of a predecessor company to Exxon Mobil Corporation."

To the damage done to the United States most important intelligence asset for the protection of their Homeland against attack by smuggled nuclear weapons has caused those American Coup Forces still loyal to their President to issue the sternest warnings to their citizens that an attack upon them is imminent, and in an action unprecedented in their country have been sending to all of their citizens at no cost a DVD movie about what is going to happen, and can be obtained by them by going to the website LastBestChance.Org.

But, and as even this weeks recent events show once again, even with over two weeks warning of a catastrophic hurricane about to hit their country, the peoples living in the Hurricane ravaged Florida Region of the United States did nothing to heed their governments warnings, nor those of common sense. So, yet again, the spectacle of these strangest of people queuing for food, ice, water and fuel, in spite of the many warnings to prepare, once again shows their unwillingness to either believe, or even listen, to the warnings of their fates.

Not to true things are they able to hear anymore, even as their Nation enters what could very well be its final hours upon the world stage, and not to hearing the truth are they able to do, but only to the banning of truth from their eyes and ears are they now capable of. There truly must be no other people in this world today like these Americans, not even sympathy can they earn from the world anymore, only pity.

� October 31, 2005, EU and US all rights reserved.

mikal

(11/02/2005; 12:21:40 MDT - Msg ID: 137471)

China- yesterday and today

http://news.yahoo.com/s/ft/20051102/bs_ft/fto110220051359595473China Urged to Loosen Control of Renminbi By Mure Dickie in Beijing - 11/02/05 - Snippit:
"A leading Chinese economist and member of the central bank's monetary policy advisory committee has urged the government to allow greater movement in the renminbi's exchange rate...
During a recent trip to China, John Snow, US treasury secretary, downplayed publicly the issue but privately told Chinese leaders that Washington wanted another renminbi revaluation before a planned visit this month by George W. Bush, US president.
The Treasury must soon report on whether it judges China to be manipulating its currency, with a positive finding possibly raising pressure for punitive trade measures against Chinese exporters.
Prof Yu argues that the role in global imbalances played by the renminbi's level against the dollar has been "blown out of proportion". However, China's economic rise means that renminbi revaluation is theoretically inevitable in the long term in the absence of high inflation.
"You should not be afraid of revaluation," Prof Yu said. "Perhaps now it is time for us to allow the market to play a bigger role."
Analysts say that more substantial shifts in the renminbi could be deadly for some exporters, especially in labour-intensive sectors such as textiles, and could thus lead to job losses that might undermine social stability.
However, Prof Yu said the government should not support such businesses in the long term."
As China moves to open trade and a more "market-oriented" approach to management, various old bulwarks dissappear overnight, like a Berlin Wall in the wee hours of the morning.

David Linkley

(11/02/2005; 14:27:06 MDT - Msg ID: 137472)

Treasury fails

Several columns of late have focused on the growing problem of Treasury failures. It seems as though financial entities are shorting treasuries and when due can't deliver. Just another reason to own gold. The greedy bastards can't help themselves.

Cavan Man

(11/02/2005; 14:45:11 MDT - Msg ID: 137473)

@CB2

We are able to withdraw our 401K funds with 10% penalty and balance taxed as earned income FYI.

USAGOLD Daily Market Report

(11/02/2005; 15:03:04 MDT - Msg ID: 137474)

Page Update!

TownCrier

(11/02/2005; 15:23:23 MDT - Msg ID: 137475)

David Linkley, T-fails

The phenomena of Treasury fails is a fine example of how very out of kilter the present structure of the financial/monetary system has become. Ecomonic "navigation" has become nearly impossible as there is essentially only a murky "Milky Way" of derivatives on top of derivatives. There is presently no North Star, no Sun, no center of the Universe from which to get oneself oriented in time and space. All the more reason for timely introduction and implementation of a physical-based free gold market, perfectly suitable as an international economic frame of reference.

R.

TownCrier

(11/02/2005; 15:41:06 MDT - Msg ID: 137476)

Large crowd attends gold festival draw

http://www.kuwaittimes.net/business.asp?dismode=article&artid=100760221702 November 2005, KUWAIT: The ninth pre-final draw celebration of Ramadan Gold Shopping Festival 2005 was held on Saturday, Oct 29 at Kuwait Souk of� Kuwait Real Estate Co in Mubarakiya.

The celebration witnessed unexpected crowd; hundreds of Kuwaitis, Arabs, Indians, Pakistanis, etc residing in Kuwait attended...

Around 200 gold jewellery shops in all cities of Kuwait have participated in the festival offering to all gold lovers wide varieties of gold jewellery to satisfy all tastes of consumers - whether modern or classical, especially gold jewellery are adornments as well as important saving tools for one's future as gold does not lose its value by time....

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

Key point: "important saving tools for one's future as gold does not lose its value by time".

Some cultures have not been so completely mesmerized into financial limbo by the paperization of everything into a cult of numbers and a subsequent zeal for the growth of immaterial ones and zeros.

R.

(11/02/2005; 16:05:06 MDT - Msg ID: 137478)

TC and David Linkley: The Treasuries Shortage/The Contemplated Big Tax Increase on the Upper Middle Class

http://news.ft.com/cms/s/bef8c16e-4b46-11da-aadc-0000779e2340.htmlI can't quote you a source off the top of my head, but I remember reading somewhere that the Treasuries shortage is the result of some top bond traders (including Pimco) demanding delivery of their ten year notes. One wonders why some major player in the gold market hasn't attempted the same thing. I read an article yesterday where the Treasury has responded by deciding to enter the market with an all new function. It will act as Treasuries' "lender of last resort." At the moment, the Treasury bond desk is still on the drawing boards, but insiders believe it will become a reality.

What will they think of next?

_______________

On another matter, has anyone taken a look at the new tax bill that's been recommended by an "impartial" panel chaired by Ex-Senators Mack and Breaux at the behest of the White House? At first glance, and I haven't gotten all the facts yet, this looks like it could be the biggest single tax increase for the upper middle class in history. My first reaction is that, if enacted, a tax bill containing the provisions outlined could cause an economic collapse in the United States. Of course, they aren't looking at that. They're looking at ways they can cut the deficit -- not be reducing the size of the government, but by getting more out of all of us in taxes.

You think I"m kidding, don't you?

Just go to the link above and read. Somebody please tell me I'm wrong.

YGM

(11/02/2005; 16:23:32 MDT - Msg ID: 137479)

CB2....Sorcha Faal

Just another nom de plume nutcase appealing to the usual band of demented followers looking for conspiracies and the end of the world plus donations from the followers of world accessed pages of the web. If one read & believed all her/his articles you'd be left wondering for your own sanity IMHO.

Goldendome

(11/02/2005; 16:43:22 MDT - Msg ID: 137480)

MK's Tax matters

The mortgage interest deduction from income tax was first implemented as a way too encourage home ownership, way back when first instituted...Particularly for those first time buyers. The whole idea has morphed way out of original intent: If an extremely wealthy person desires buying an extremely expensive property, fine! But I see no reason to expect the tax code to subsidize in unlimited amount, what was never intended. Limiting the amount of mortgage deductability is fine by me. I believe it would also be adjusted to the area of the country involved.

The proposal might also eliminate or reduce significantly the deductability of state taxes. This would certainly adversely effect those from high state tax states. One thought there, is that this would focus more stern eyes towards the tax and spend policies in those same states, possibly leading to reforms.

I did not see it in the posted article but I thought there was a proposal for eliminating certain savings income amounts from taxation? What a concept in a country that now has negative savings rates and negative rates of interest! Nothing wrong IMO in encouraging savings while discouraging frivolic spending.

Finally, the Alternative minimum tax -- sounds like something REALLy needs done there soon, to adjust for inflation or get rid of the AMT. Again, a growing unintended consequence of something implemented years ago and left on it's own to run wild through the population as inflation has increased fictitious incomes.

spotlight

(11/02/2005; 16:44:49 MDT - Msg ID: 137481)

Is Greenspan a Keynesian?

Towncrier

The following is from a book entitled: Ideas Of The Great Economists.

The following from that book,is the view of the classical economists vs. Keynes' views.

"Since the steady growth of capital was responsible for material progress, anyone who should try to keep the rate of interest above or below the"natural" rate resulting from supply and demand would be laying profane hands on the economic holy of holies. He would be upsetting the delicate mechanism by which savings were attracted and by which the need of society for new capital was met. Yet, that was just what the innovators proposed. One of the instruments which money managers were now expected to use, for example, was to lower the rate for loans in order to encourage more use of credit during depressions, and to raise the rate during booms in order to discourage unhealthy expansion."

I believe the above describes what a Keynesian would do as Fed Chairman. Greenspan has followed it precisely. After lowering rates, arbitrarily, he is now raising rates as he warns of "froth" in the real estate market,and a rising price level.

I believe that if history,is correctly reported,it will have to list Greenspans' actions as Keynesian.

Opinions?

David Linkley

(11/02/2005; 17:00:55 MDT - Msg ID: 137482)

Re: MK - Treasury fails

The endless creation of money is both immoral and evil. The framers of the US Constitution warned us against using anything other than gold and silver as money because it would lead us to slavery and Ayn Rand warned us that to remove gold as money was to remove all objective standards for society to function. I believe we are now on a path of economic destruction which will lead to upheavals beyond the comprehension of most. Millions of us will protest the unjust laws, wars, and facism now pervasive. Civil war in the US following a collaspe is not out of the question. Thank god for the internet as millions of citizens are being educated to the realities of today and of the treasonous mainstream media. May we send the Federal Reserve and world bankers back under their rocks where they belong.

R Powell

(11/02/2005; 17:05:26 MDT - Msg ID: 137483)

Tax proposal

I found this in MK's article link....

"The first proposal, which the panel called a "simplified income tax", would reduce the number and scope of tax deductions, and reduce tax rates - in addition to a host of other measures to simplify the tax code."

I noted "and reduce tax rates". If some deductions are reduced or eliminated, taxpayers pay more as their adjusted gross income increases. But, if tax rates are also lowered, then we have a math problem to solve to determine if one's taxes have increased or not.

I also noted that some business investments would be 100% immediately deductable (as opposed to amortized over many years) and I noted that capital gains would be taxed at 15%. Presently they are taxed in two different categories, long term or short term. 15% for all capital gains would be a tax decrease.

As is often the case, changes in the process to determine one's adjusted gross income will either increase or decrease this number (from which one's tax is figured). I'd be in favor of most any change which would simplify this as long as the rate of taxation (which is applied to that adjusted gross number) is also changed so that the end result is the same or less tax owed. This end result may also vary within the proposed four tax brackets.

Simplify? Yes please! But the end result should not increase. Perhaps the only way to control the expansion of government is to handcuff it with severe financial restraints. Government spending as compared with private industry, in comparision to benefits returned from said spending, is almost always very inefficient. But hey, what do I know? After all, I still believe deficit spending should be controled (not totally prohibited at the federal level but certainly allowed only in times of REAL emergencies and then only with extreme trepidation). Real emergencies don't include almost everything the government currently spends its money on, certainly not the current Crusade in the Middle East. King Richard vs. Saladin was the 3rd Crusade. Saladin won that one and Richard was kidnapped on his way back to Normandy. His release nearly bankrupted Britian. Basically, Richard spent very little time in England and may have been one of her worst kings, despite all the Robin Hood movies that portray him otherwise. I see that I'm way off topic here so I'll end!
rich

Cavan Man

(11/02/2005; 18:10:26 MDT - Msg ID: 137484)

@MK

It's a huge tax increase. They need to feed the beast. Larger mortgages even at historically low interest rates are a perceived boon to the itemeizer and a negative for (tax) revenue enhancement. The "product" of the commission reminds me of similar instances in history where the "government" du jour made the wrong decision for (perhaps) the right reason. 'Tis all a continuance of the "March of Folly" that began sometime after man began walking on two feet. I continue to be amazed by the hero worship practiced by the unwitting electorate in regards to their elected proxies. All the more reason to own gold in the hand and be in business for ones OWN self. "Captain thy own ship and know that if thee founder upon the rocks, verily thyself was master of the moment!"
A quote by..CM

Ned

(11/02/2005; 18:20:41 MDT - Msg ID: 137485)

Timbervision (and TC, MK, Ray and all)

Back to the recession/depression deflationary collpase as depicted by Mr. Prector. I highly recommend his book which I misquoted recently. The correct title is "Conquer the Crash: You can survive and Prosper in a Deflationary Depression"

Here's his look at Real Estate during a "deflationary depression":

"The worst thing about real estate is its lack of liquidity.....In a depression buyers just go away. The dramatic tumble in interest rates has spurred a record number of home sales....People around the country are nearly unanimous in thinking that this is their last great opportunity to buy a house. Naturally, it is the opposite, Its your last chance to sell"

Here's what the good man has to say about gold:

"Precious metals are likely one day to be the most important asset class to own. ...Currencies today are utter fictions, but few realize it. Sometime during this century, people will question the validity of the fiat money system. The 1970's may prove to be a warm up in a world battle for real money. Governments may exercise their powers to fiat the fiat paper money system afloat, defending their currencies with various schemes and legal restrictions, but in the end, gold will win."

Just for FUN, lets try that again....

....IN THE END, GOLD WILL WIN !!!!!

And one more time just for laughs and giggles....

....IN THE END, GOLD WILL WIN !!!!

(page 206, chaper 22 "Should you Invest in Precious Metals", paragraphs 1 & 2)

....and many said Prector was a gold bear !!!

David Linkley

(11/02/2005; 19:23:06 MDT - Msg ID: 137486)

Re: Tax increases

We all discuss taxes, interest rates, oil, economic philosophy etc. while dancing around the central issue. Our leaders are destroying our money at an accelerating pace. There is no political will to limit mortgage deductions or vote in huge tax increases at this time. Bush is done. He is a lame duck with a 37% approval rating and under attack for the Iraq war rationalizations. Nothing will get done to move the budget in a positive direction until the rest of the world shuts off our credit line. At that point a crises will emerge and everything will be on the table. These trial balloons now being floated are to test the mood of the country. My guess is the Greenspan Fed has broken ranks with the Bush Administration based on continued rate hikes and recent speeches warning of the deficits. We have alot more to be concerned about than trial balloons.

Flaccus

(11/02/2005; 19:30:41 MDT - Msg ID: 137487)

Trial baloons. . .

David Linkley. Brilliant and thougtful post.

The problem with trial baloons is that gone unchallenged, they become the law of the land.

mikal

(11/02/2005; 19:32:17 MDT - Msg ID: 137488)

@Ned

Thanks for the excerpts and "in the end, gold will win."
But confide in me, when has gold LOST?
Now that the internet is actualizing voices against currency ills, gold is bringing up the rear in spite of ridicule and pervasive ignorance. But I would not expect the masses to embrace a complete replacement of paper money with gold in a world where $billions exchange hands and cross borders in just minutes each day. Devaluation and lowered living standards are cyclic realities as sure as the seasons
and the migration of birds. As long as the masses remain in ignorance of natural law and human rights, war and exploitation through inflation and forced privilige will require sacrificing normalcy and stability for unmanageable, unbridled distortions and bubbles.

mikal

(11/02/2005; 20:35:25 MDT - Msg ID: 137489)

Spendthrifts and savers

http://www.gold-eagle.com/editorials_05/baltin110205.htmlFiat Currency - Aubie Baltin CFP, CTA, CFA, Phd (retired) - November 2, 2005
Shows how modern global currencies have devalued, most more than the US $, in the context of inflationary central banking vs national bank commodity currency issued at the rate of GDP. Illustrates the futility of tax increases and deficit spending. Finds similarities between named major hyperinflationary episodes in small nations and large and with lesser but still serious currency devaluations.

Goldendome

(11/02/2005; 23:14:47 MDT - Msg ID: 137490)

This just in from the Rotters Newswire!

The president has just signed executive order # 10,710. This order, mandates a loaded shotgun at the door of each American home. This in order to shoot down any possible terrorist birds entering the country, that might possibly carry the dreaded Avian Flu!

"I can not underestimate the danger that faces America," intoned the President as he signed the order. "We must all be on highest alert. Our enemies will never cease in their attempts to infect America, and neither will we."

Topaz

(11/02/2005; 23:48:38 MDT - Msg ID: 137491)

Gold, Bonds etc.

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=LOW
The last thing we need here is an Oil Green Day. IMO,Buck is already dragging the chain to the tune of 3 points, so we'd be looking at at least DX 92 to start with.

Bond is bound for 5.5% and the only amazing thing is how long it's taking to get there ...auguring poorly for any sort of melt-down retracement.

Gyro Gear-Loose is gonna have his hands full well before the changeover methinks. I-<8-0

Gandalf the White

(11/03/2005; 00:06:28 MDT - Msg ID: 137492)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$$$$$$ THE "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$

Entries as of Thursday 11/3/05 at just about 00:01 Denver time !!!

OFFICIAL ENTRY LISTINGS

Listed in order of decreasing values !
----

$$$$ $496.5 $$$$ mikal (10/28/05; 06:33:00MT - usagold.com msg#: 137328)

$$$ FRN492.1 $$$ Smeagol (10/28/05; 19:11:15MT - usagold.com msg#: 137354)

$$$$ $490.0 $$$$ Caradoc (10/29/05; 06:29:11MT - usagold.com msg#: 137358)

$$$$ $488.5 $$$$ Sundeck (10/27/05; 22:16:35MT - usagold.com msg#: 137325)

$$$$ $482.9 $$$$ osa104c (10/28/05; 22:18:13MT - usagold.com msg#: 137356)

$$$$ $480.0 $$$$ Liberty Head (10/30/05; 13:11:14MT - usagold.com msg#: 137397)

$$$$ $478.6 $$$$ Goldilox (10/27/05; 23:36:31MT - usagold.com msg#: 137326)

$$$$ $474.4 $$$$ NEMO me impune lacessit (10/31/05; 10:04:59MT - usagold.com msg#: 137406)

$$$$ $473.7 $$$$ pilgrims_gold (10/31/05; 08:25:19MT - usagold.com msg#: 137404)

$$$$ $472.5 $$$$ Henri (10/31/05; 11:24:56MT - usagold.com msg#: 137410)

$$$$ $470.0 $$$$ jenika (11/1/05; 07:14:53MT - usagold.com msg#: 137433)

$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $426.5 $$$$ Topaz (10/28/05; 00:13:49MT - usagold.com msg#: 137327)

===
ONLY SIXTY (60) hours to enter before Entry DEADLINE !
Time to start getting the WINNING number choosen.
LOTS of "room" to enter!
<;-)

mas

(11/03/2005; 03:43:32 MDT - Msg ID: 137493)

MK, on your tax issue.

Here's a clip from the Privateer from two weeks ago.

Yet Another "Plan":
The President's tax panel has been busy. They are also discussing capping the US mortgage interest
deductions at $US 350,000 (so that any amount of a mortgage above this sum cannot be used as a tax
write-off) or limiting interest write-offs to 25 percent of income or adding a tax credit for mortgage
interest so that all taxpayers would receive the same deduction. Whether the final outcome is Plan 1 (as
already outlined) or Plan 2 as seen here, the economic end result is that the US Treasury will gain an
increase in tax revenues. That is, of course, the real political purpose behind the tax plan(s). The purpose
is to give the appearance that the much vaunted cut in US taxes that President Bush has tried to ride to
fame upon will still stand. And it will. But coming up unseen from behind are the changes to US
mortgages. Once put in place, these will have the effect of INCREASING taxes. It is being done this
way so that the President doesn't have to eat his words like his father did. Remember's Bush senior's:
"Read my lips - NO NEW TAXES"? Bush junior is not doing that, he's merely lowering tax write-offs.

Goldilox

(11/03/2005; 04:45:49 MDT - Msg ID: 137494)

Bushista Tax Plan

@ mas,

But, of course, the WH strategists are hoping to slip this by all but the "crazies" like you and me who are still posting at 3:30AM.

Since the readjusted write-offs will only apply to principle residences, it will mean that more folks should incorporate and "rent" from their own RE trust to maintain their tax advantages. More work for the accountants and tax attorneys.

The best way to survive government "by the corporations" is to become one.

Not to worry. I just answered a company email a few moments ago, so my boss and customers know I am "crazy", as well.

My therapist just smiles and cashes the check.

Goldilox

(11/03/2005; 04:57:25 MDT - Msg ID: 137495)

Major Web Bot hit

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

I can't tell you how many people have written to me this morning literally "freaked out" by the story this morning that use the precise phrase "restrictions on travel" which the web bot forecasts from www.halfpasthuman.com have been talking about for months.

First, the story: CNN is now reporting that "Sustained person-to-person spread of the bird flu or any other super-influenza strain anywhere in the world could prompt the United States to implement travel restrictions or other steps to block a brewing pandemic, say federal plans released Wednesday."

-Goldilox

Entertainment purposes only - Web Bots are not yet "science". Check the URL for a reminder of how long this "emotive value" has been hammering the results.

Demosthenes

(11/03/2005; 08:55:18 MDT - Msg ID: 137496)

Ron Paul to Greenspan

"Can you say anything favorable about Gold today?"

Laughter.

And then time expires.

Lothar of the Hill People

(11/03/2005; 09:45:56 MDT - Msg ID: 137497)

$$$ 476.0 $$$$

The homing bat has returned to Lothar bringing news of a golden contest. In these times, only the promise of a silver or golden reward has the power to lure Lothar out of the serenity and safety of the hidden cavern home of the Hill people.

Lothar reveals that the promise of gold to him is to provide an unencumbered inheritance to Lothar's children and children's children, even unto the third and fourth generation, without the interference of the dark powers thru their agents in the guise of governments and authorities.

Go in peace and prosperity.

I am Lothar of the Hill people.

Gandalf the White

(11/03/2005; 09:56:52 MDT - Msg ID: 137498)

THANK YOU, Sir Lothar of the Hill People

IMHO, Thou hast hit the nail on the head !
<;-)

Demosthenes

(11/03/2005; 10:01:25 MDT - Msg ID: 137499)

more Paul/Greenspan

I was only able to partially catch this question/answer, but essentially Ron Paul asked Greenspan if gold is worthless why are we still hloding it.

Greenspan's reply essentially says that 1)in times of SEVERE crisis, gold has been the only way to settle accounts and 2)we HAVE considered ditching the gold supply, at least once during the Ford administration.

If anybody else was paying closer attention, please correct me.

Henri

(11/03/2005; 10:18:52 MDT - Msg ID: 137500)

Ned Msg 135473 and thereabouts

You asked, why follow Black Blade's advice when you can use the bank's money to buy gold and real estate?

I do not have any real issues with folks who take advantage of the lending spree the banks are on. After all, the days when it was other peoples savings that are being lent out are long gone. Since banks are now able to bundle lendings they have made at no risk and sell them to govt sponsored entities whose investors assume "real" risk, the financial balancing act has become a three ring circus with a ringmaster that is a master illusionist.

Great business if you have the stomach for it.

For my own part, I was following Black Blade's advice before he even spoke it. We live well below our means and do not use credit anymore, period. The closest we come is use of debit cards.

When tax time comes around, the "standard tax deduction" in lieu of itemization is a gift. A de facto govt subsidy far in excess of our real expenses. We turn this directly into hard assets each year. So I guess you could say we are using the govt's money rather than a bank's money (but isn't it all the same)to buy some of our precious each year. The difference is that we don't have to pay them back, ever.

Time will come when precious will not be able to be "purchased" with script...only exchanged for unencumbered assets of real value. We will not be able to exchange worthless paper, or even worse, debt notes that can not be reconciled for real assets. Whoever sold that concept to the general public should get the salesman of the millenium award. The 'legal tender' laws currently make this possible but the front end of the deal was the banning of any contract denominated in gold. It is only a matter of time before the back door is closed as well.

All assets acquired with encumbered funds are subject to forfeiture in the reconciliation of consolidated debt. So, if the value of the house purchased with borrowed funds falls below the amount owed, the bank can reposess the real asset and seek further redress for the remaining difference.

In the most extreme scenarios, ants like me will be swept into the maelstrom with the grasshoppers (debtors) under the assumption that if you have anything in your name you must owe someone for it ...probably the govt. It will be up to each individual to show clear title, but the wait for the opportunity to do so will exceed the time necessary for the govt to auction your property to the best bidding foreign entity trying to recoup their investment in America.

While I do not believe that scenario, I can envision mortgage lenders calling in a "margin" for the difference assuming that the payments can still be maintained.

The intent of a bank is to facilitate the generation of weath in terms of real assets (development) using the savings of a local populace. Once the assets are created, the intent is to secure them from the owners and place them among the bank assets. In lieu of this they are willing to accept the future value of the asset over time in payments (interest + principle). When payments cannot be made, the bank reverts to plan A.

How many avenues of generating the inflation necessary to maintain the illusion of prosperity remain? Helicopter script is an interesting concept and to some extent, I consider my standard tax deduction to be of this genre. The govt subsidy to the mortgage buyers is another example. So I guess it can be said that helicopter script is already flying.

I understand that foreign entities are allowed to purchase these mortgage notes as well as our sovereign debt. Whose idea was it to allow foreign entities to purchase our sovereign debt? Was it to keep those 1970's Toyota dollars from coming home to roost and fanning the inlationary fires at home? We US taxpayers must have paid for those toyotas a thousand times over by now. Are any of them still around? Why are we still paying for them? Are we getting a decent return on our investment?

So many questions...no real answers.

So, Ned, I guess I don't have a problem with people buying into the circus. As long as there is still a crowd waiting at the entrance to get in, it will probably be 'a good show'. As long as people come to the circus the financier will not call in the note that is obviuosly in default.

Demosthenes

(11/03/2005; 10:20:27 MDT - Msg ID: 137501)

correction

Not if gold is worthless, if paper money works so well.

Hate being home sick, I have too much time to devote to this.

Goldilox

(11/03/2005; 10:34:56 MDT - Msg ID: 137502)

Inflation Tame

CNBC is screaming that tame inlation is the reason for the SM holding at the high end of it's five-year channel. Big deal.

Thanks to the spin-doctored BLS numbers that ignore food, energy, RE, nad medical costs, inflation is considered tame. That "might" be true for anyone whose total cost of living is buying gadgets from foreign manufacturers, but not for the hundreds of what the BLS calls "underutilized workers" - those who are not even counted in the unemployment rolls because they are receiving any unemployment compensation.

On top of that, the vast majority of new jobs aren't even real hirings, but figments of the hedonists' computer "population modeling", and many of the rest are people taking second an third jobs to balance their home budgets.

Oh, and wages? While the Wall Street mega-millionaires experience enormous increases in compensation, how many regular folks have to experience wage cut or loss in order to balance the numbers back to the claimed 1% compensation rises?

Goldilox

(11/03/2005; 10:39:51 MDT - Msg ID: 137503)

My turn for a correction

"are receiving any unemployment compensation"

SB "aren't . . ."

USAGOLD / Centennial Precious Metals, Inc.

(11/03/2005; 10:56:46 MDT - Msg ID: 137504)

What you need to know before you buy your first ounce of gold...

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

Q. What makes USAGOLD / Centennial Precious Metals different from its competitors in terms of its interaction with clients?

MK. Our business philosophy allows us to take a more laid-back approach. We don't employ a room full of brokers spinning the phones day and night. We don't have multi-million dollar advertising expenses dictating what kind of advice we give clients. This is all by choice. I decided long ago that I didn't want the headaches that go with managing a large number of brokers and the support staff and facilities required. At the same time, we get hundreds of requests each month for introductory information packets. We do not make cold calls. We do not work mailing lists. We do not call people at all hours of the day or night. We do not use marketing and sales gimmicks -- leaders, bait and switch, and the rest of it. We primarily work with clients who have discovered us, like what they see, and want to form a long term relationship with a reputable and reliable gold firm.

Q. Does the "laid-back approach" limit your business?

MK. Yes and no. In the short run, "yes." In the long run, "no." We probably lose a few prospects to the aggressive companies which use hard-sell tactics but we will not be changing our client-friendly approach. We know that not every prospective investor is going to become a client of USAGOLD / Centennial. However, we know that the client who chooses us is likely to be the type of client we are accustomed to doing business with. We work with a large number of professional people and business owners -- active, retired and semi-retired. In fact, we work with clientele that span the economic spectrum and all walks of life. Getting back to how our approach sets us apart from our competitors, we get quite a few disgruntled high net worth clients who come to us after being run through the mill by some of the boiler-room operations I've referred to earlier. They are usually grateful that they found us.

Q. And finally, is there anything else you would like to share with us?

MK. Fundamentally, we believe that we are here to serve the client. Anyone who has done business with us will vouch for the courteous and professional service he or she has received. Our staff is carefully chosen and it shows. We get referrals on nearly a daily basis and are kept busy with strong repeat business. I would also like to call attention to the solid informational services offered at this website. We believe that any of our clients or visitors will find USAGOLD head and shoulders above anything else out there. I would encourage anyone attending this site to have a look around. We also make available a very handy introductory information packet for prospective clients. Above and beyond that, the most important thing is the way we treat our clientele. From first inquiry through order fulfillment, we want to make the gold investing experience as pleasant and rewarding as possible. We have a large and satisfied clientele and that's the way we want to keep it.

R Powell

(11/03/2005; 11:09:51 MDT - Msg ID: 137505)

Mining company consolidation

http://www.smh.com.au/news/business/barrick-makes-12b-lunge-for-gold-crown/2005/11/01/1130823206116.html Maybe old news here, but here's the link for anyone who missed it.

White Hills

(11/03/2005; 11:42:01 MDT - Msg ID: 137506)

Demosthenes

GreenSPIN also said that Globalization means continued inflation. Buy Gold! White Hills

Topaz

(11/03/2005; 12:31:39 MDT - Msg ID: 137507)

Date Stamp

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s
Mark today, and particularly the next Hour as when $Hegemony came face to face with stark reality!

(11/03/2005; 12:39:14 MDT - Msg ID: 137508)

Paris Riots

http://news.bbc.co.uk/1/hi/world/europe/4404362.stmFlashback to 1968? DeGaulle? Did we chat with Jacques Reuff on line at this forum? Questions... Questions...

Goldilox

(11/03/2005; 13:14:59 MDT - Msg ID: 137509)

Real Estate Margin calls

@Henri,

A lot of folks don't believe that these margin calls wouldn't happen for holders of fixed rate loans, but I already experienced one in 1995, when corrections in Silicon Valley RE (after one of their 30% rises) caused me to drop below the 80/20 LTV requirement for the loan on a house I bought in 1991.

I was faced with refinancing or sending $2000 cash to make up the extra equity. Either way, I was out of pocket about the same amount.

As RE prices are about 5X what they were then, and owner margins are much thinner, I can easily conceive of margin calls for $10-15K arriving in some folks' mailboxes if we see even a 10% price "correction" in some of the hotter markets.

Ouch!

Goldilox

(11/03/2005; 13:17:15 MDT - Msg ID: 137510)

RE Margin calls

Sadly, the only real protection from this event is Big Ben's "helicoptor money" and greater inflation.

mikal

(11/03/2005; 13:24:59 MDT - Msg ID: 137511)

Russia gold

http://www.itar-tass.com/eng/level2.html?NewsID=2590456&PageNum=0Russia's Gold Stock Rises To Record High Level - Itar-Tass

TownCrier

(11/03/2005; 13:52:41 MDT - Msg ID: 137512)

Excerpts from Greenspan's testimony Q&A

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh03978_2005-11-03_19-11-50_n0341459_newsmlFederal Reserve Chairman Alan Greenspan's testimony to the congressional Joint Economic Committee.

ON THE CURRENT ACCOUNT DEFICIT

"The big puzzle for everybody is how is it possible for the United States to have a current account deficit of more than 6 percent of GDP. It's one of the major puzzles.

"The reason why I believe it exists is it is a market phenomenon which is reflecting globalization -- it can't go on indefinitely as I've indicated previously.

"At some point globalization will slow down, but we're in a period where it's been undergoing an extraordinary expansion and has had effects we have yet to fully understand."

"Indeed, one of the problems that we have run into, which was a great surprise to us, is how apparently the globalization forces -- what we would have expected in June of 2004 when we started our tightening of monetary policy -- impacted on longer-term rates. It didn't. And it didn't because of these extraordinary forces which we're just now beginning to understand."

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

I really don't know whether to laugh or cry at this silly obfuscation. Greenspan is making out as though he doesn't understand the very nature of the present international monetary system's prevailing reserve structure, and is casually passing of a very obvious effect under a vague mantle that refers to here as "globalization".

Give me a break. Is the situation now so desperately dire as to ward off any and all plain talk about the status of U.S. bonds within int'l central bank reserves???

R.

TownCrier

(11/03/2005; 14:00:01 MDT - Msg ID: 137513)

Greenspan, continued...

"...'excess savings pressures' have more than offset the expectational concerns that rising supplies of U.S. Treasury debt have out there. I think that's going to change."

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

Although still shrouded in what I would call 'insider code', in this comment chairman Greenspan is at least getting closer to what needed to be said with respect to the previously posted topic.

R.

TownCrier

(11/03/2005; 14:48:00 MDT - Msg ID: 137514)

Increase your weight in gold

http://www.financialstandard.com.au/index.php?id=675103 Nov 2005 -- Research house van Eyk suggests investors increase their allocation to gold while market conditions remain attractive for the precious nugget.
�
According to van Eyk's investment strategist Nigel Douglas, the prospects for gold have improved given renewed US inflation concerns and demand/supply issues.
�
"While it has just reached US$470 per ounce, it still looks underpriced relative to some other major commodities, like oil, on a longer term basis," he said.
�
Hence in van Eyk's investment outlook report published this month, they have recommended that investors increase their gold exposure by reducing their allocation to cash in their alternatives portfolio.

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

Short and sweet.

R.

David Linkley

(11/03/2005; 14:57:35 MDT - Msg ID: 137515)

Uh oh!

Greenspan railing against deficts today, oil up over $2.00, the CRB up over $4.00, gold down $2.70, and the dollar rocketing up. My gut tells me tommorrow's employment numbers might be a little soft. The desperation continues to build as the rest of the world and surprise the ECU race one another to devalue their currencies vs. the dollar. Japan is the worst offender by far and yet despite all of these efforts, the dollar could free fall at any time. Don't be fooled by all of these short-term games, the smart money contines to accumulate gold and other hard assets on weakness knowing what lies just ahead. The ability of our corrupt, incompetent and jelly spined leaders to continue the facade of economic well being is coming to a close in 2006 & 2007. Please protect yourselves from the coming storm, gold is still very, very, cheap insurance.

USAGOLD Daily Market Report

(11/03/2005; 15:44:44 MDT - Msg ID: 137516)

Page Update!

TownCrier

(11/03/2005; 15:53:59 MDT - Msg ID: 137517)

The Short View: Shedding light on the role of gold

http://news.ft.com/cms/s/140bf062-4c83-11da-89df-0000779e2340.html(FT) November 3 2005
by Philip Coggan

Gold, its supporters claim, is an effective hedge against inflation. The problem for their case is the record of the last 25 years which leaves bullion still trading at a little over half its peak level. However, new research by the US group H C Wainwright & Co attempts to add lustre to the case for gold...

Wainwright analysed the effectiveness of various commodities as a leading indicator with the US Treasury bond market. It found that platinum, silver and gold all led the bond market by between 12 and 15 months; when those commodities rose, bond prices would subsequently fall (and yields accordingly rise)....

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

Actually, regarding the opening 25-year remarks, the key realization to walk away with is that gold at today's price level is a remarkable bargain.

R.

Ned

(11/03/2005; 16:20:13 MDT - Msg ID: 137518)

@ Topaz

I saw your message from a few hours ago. Forgive me Sir but I see a "Date Stamp" of USDX flattening at 90.4. Is this your magic message? Is it do or die for the US$?

I try to follow your messages and frankly I cannot determine if you are a gold bear or a bull. Your guess in Gandalf's ongoing contest at $426 has me baffled. From your guess am I and others to conclude your posts as bearish?

Please help me understand your (gold) position. Is the DX about to break out (up) and gold down as per your $426 guess?

Thanks.

spotlight

(11/03/2005; 16:20:27 MDT - Msg ID: 137519)

Fed bond portfolio

Towncrier
Before speculating on why the long term bonds have not reacted to the deficits, why hasn't the question been asked of Greenspan, "How much has the Fed's portfolio increased over the last 12 months?" Perhaps the answer to that question could make it easier to go on to other questions.

David Linkley

(11/03/2005; 16:34:24 MDT - Msg ID: 137520)

The great CON continues.

Productivity increases of over 4% reported today in spite of the 2 recent hurricanes. Let me see, layoffs up and capex spending down, geez that surely adds up to higher productivity nembers. Greenspan continues ever more the charlatan as he nears his exit from the stage. Bernanke has no shot, Uncle Al is leaving him a pile of debt, a nearly worthless currency and a beyond clueless President. The official insinuation is that if productivity is rising inflation is negated. Bernanke and Bush as the $hit hits the fan in 2006. Hope you all have gold.

TownCrier

(11/03/2005; 16:52:08 MDT - Msg ID: 137521)

spotlight, if this is a follow-up to my previous...

I think the direct question with greater bearing would be in regard to the aggregate portfolios (asset side of balance sheet) of the world's *other* central banks.

How they are structured 'today' versus where they would prefer to be 'tomorrow' based on latest principles of best practice would speak volumes toward explaining today's current account imbalance and projecting the future value trends of key assets in the time ahead.

R.

TownCrier

(11/03/2005; 17:19:32 MDT - Msg ID: 137522)

In other words

Another way of saying 'best practice' is 'state of the art'. Maybe that may mean more to some visitors who aren't familiar with 'best practices' -- especially those reserve accounting practices ushered in under the tenure of one Mr. Wim Duisenberg at the newly launched ECB.

R.

CoBra(too)

(11/03/2005; 17:29:19 MDT - Msg ID: 137523)

BLS - Forget the "L" - p.ease

With all the delusional BS the BLS and every other official and streamlined economic spokesperson of the current admin is spewing out. At least Alan Greenspan is now finally and seemingly confused by his own cryptic utterances. Dr. Kurt Richeb�cher will have his own take on the man's legacy soon.

Thanks to TC's "translation" and Ron Paul's unanswered questions the real touchdown can't be forever "rolled" forward.
The time of reckoning has moved close.
Well, that's not what I intended to post, though it is probably more pertinent than the ABX/PDG merger thoughts I have to offer.

Still - here it is:

Mega hedger ABX, not only getting away with stating their hedge book is only 6.5 Moz - excluding Pascua Lama - including - double the shorts...- is making a "hostile" bid for another mega hedger - Placer Doom. A company, which has openly refuted hedging back in 1999 - and subsequently had to admit to adding to their toxic hedges.

My take, before going into any further explanations would be that some very interested party's are consolidating their shorts in order to prevent any kind of short squeeze; The last thing the PPT, and that again is an official name, only dubbed Plunge Protection Team, will want to have.

OK, now only Anglo/Ashanti is left in the hedging department; That seems a minor problem, as the real Bully Banks have secured a no margin call environment.

In the final end the shareholders of these co's will be left with worthless shells as the real asset - gold - is and was already pre-sold and JPMC will cover ... only JPMC!

... And that's another dirty secret to blow sky high - most probable after the fact!

cb2

Goldilox

(11/03/2005; 17:59:19 MDT - Msg ID: 137524)

Not a Market for Investors and a Tough Market for Traders

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

To those of you are enjoying this short term rally, congratulations. With an appropriate level of risk to my wealth, so am I. Yes, in some instances I held my nose and bought. The logical turn of events would be for the rally to carry the indices to new 52-week highs. This would be sufficient to put the stock market in positive newspaper headlines and TV news one more time this year. This will serve to keep John Q. Public's monthly allocation flowing into his 401K stock market mutual fund account blindly, while corporate executives continue to sell out equity stakes in their companies. This is all occurring in the backdrop of all-time trading volumes resulting in a multitude of hedge funds all trying (mostly in vain) to squeeze a few pennies out of stocks moving from hand to hand like a shell game on a New York City sidewalk. In the mean time, many of the public continue to fancy themselves as modern day Rockefellers or Buffetts � savvy investors, all as their hard earned savings plow blindly into their 401K plan and E-Trade accounts. Bou-ya, Jim! Yet the stock market has gone virtually nowhere in almost 2 years.

-Goldilox

"Home. home on the [trading] range . . ."

Goldilox

(11/03/2005; 18:12:22 MDT - Msg ID: 137525)

ABIDE IN GOLD

http://www.financialsense.com/fsu/editorials/vaughn/2005/1103.htmlsnip:

Ever heard of the word "abide?"

Really an interesting word. What does it mean? Now first of all do not get concerned that we are crossing the realm of the spiritual here. While the word "abide" has definite & specific meanings in Christian circles the concept of the word can still be applied to other things which is what we shall do.

ABIDE: To withstand; to continue to be sure or firm; to endure; to sustain; to submit to; to bear patiently; to tolerate; to dwell or sojourn.

Kind of reminds me of the mental discipline we have to apply for those of us who believe in the financial virtues of gold. I was listening to CNBC on TV a little bit this morning and couldn't help but notice their response to the gold price. Here is a financial product that has risen from the low 250s an ounce to very close to 500 dollars an ounce.

So, is there any one among the mainstream financial community yet paying attention or providing serious commentary as to these facts? No, not really. Instead, we hear a few words of ridicule claiming gold as the stupidest investment & that is about all. But hang in there because a little ways down & we will show you how gold is gaining respect & attention among real investors & folks in general who have a serious desire to make real money. But let's get back to our "word" of the week.

What does it mean to "abide?"

One meaning is "to withstand." And that is what we do if we believe in gold as an investment. We "withstand" all the negative criticism from mainstream WallStreet & form our own objective analysis based on the REAL facts!

I like - "to continue to be sure or firm." If you are foolish & demented enough to believe in the economic valuation of gold you have to remain sure & firm in your convictions as the mainstream WallStreet elite laughs at your chosen investment vehicle.

When we abide in something we "submit" to those principals that make up its foundation. Wow! Is that ever a dirty word today, because who in today's society wishes to submit in humility to anyone or anything?

And how about this definition, "to bear patiently?" I know all of us are waiting for our gold investments to rise, but are we waiting patiently? Whether patiently or not we still have to stand by our convictions & wait - whether patiently or not.

How about, "to tolerate?" We definitely tolerate the inevitable cyclical highs & lows as the gold price marches forward don't we?

Now this last meaning has to be the best yet. Abide means also "to dwell or sojourn." And where do we dwell & spend our sojourn? When we invest & abide in gold we dwell & sojourn in the peace that comes when making a wise & conservative financial decision. Never forget that purchasing gold investments is like purchasing an insurance policy. And who today can afford NOT to have investment insurance?

We dwell in the peace & historical fact that gold historically has acted as a counter balance to a deteriorating stock portfolio when a crash in the markets comes. The Depression of the 1930s saw gold companies� stock valuations rise tremendously. What price can we afford not to pay to dwell & sojourn in peace?

-Goldilox

'bout says it all!

Goldilox

(11/03/2005; 18:21:13 MDT - Msg ID: 137526)

Federal Judge Freezes $3 Million in Assets in Placer Dome Case

http://quote.bloomberg.com/apps/news?pid=10000080&sid=aMfOLtOk3zZAsnip:

Nov. 3 (Bloomberg) -- A federal judge froze $3 million in assets of insiders who may have used confidential information to buy Placer Dome Inc. securities days before Barrick Gold Corp. made an unsolicited $9.2 billion bid for the company.

The U.S. Securities and Trade Commission sought the court order to bar unknown defendants from selling Placer Dome options they bought last week. A call option gives the holder the right to buy shares of a stock at a specific price within a given time. U.S. District Judge George B. Daniels granted the order yesterday.

Shares in Vancouver-based Placer Dome jumped more than 20 percent after Toronto-based Barrick Gold, the world's third- biggest gold producer, made its bid Oct. 31. The SEC said defendants who bought more than 10,000 call option contracts using overseas accounts Oct. 25 and 26 may have had secret information about the bid.

-Goldilox

Who'da thunk it? Why would anyone ever suggest that options need regulation?

spotlight

(11/03/2005; 18:44:16 MDT - Msg ID: 137527)

Fed bond portfolio

Towncrier
Thank you for the reply.

I certainly agree with you. However, being that the Fed's portfolio is well over $700 billion, would it not be a curious thing to learn that the Fed has taken enough bonds off the market, resulting in the low rate that he says he doesn't understand?

How can one learn, what bonds they are holding,and when,the Fed purchased them?

balzac

(11/03/2005; 18:53:39 MDT - Msg ID: 137528)

CONTEST

TEST

balzac

(11/03/2005; 19:02:56 MDT - Msg ID: 137529)

CONTEST

MY GUESS IS THE ARITHMETIC MEAN OF THE LAST 20 DAYS
SO :
$$$$468.8$$$$
The promise of gold means to me a possibility that some of the wealth that I have attained in this life will not be deminished by the actions of gov'ts. ,BIS,acts of God, ie earthquakes or hurricanes , inflation,inheritance taxes,death duties, lawsuits, theft, runs on banks,corporate corruption, real estate collapse or a massive recession.
thanks for the chance,
balzac

(11/03/2005; 20:24:36 MDT - Msg ID: 137530)

Google Print

http://print.google.com/I just made my first few accesses on the new Google Print library. Incredible!
We truly live in a magical age.

spotlight

(11/03/2005; 21:00:36 MDT - Msg ID: 137531)

contest

To me, the promise of gold is a time tested, secure promise of wealth. Like paper roses, paper assets are false, and are not immune to total destruction. There are those on this site who have awakened to the smell of real roses produced by the touch of real wealth: Gold.

Moegold

(11/03/2005; 21:02:28 MDT - Msg ID: 137532)

$$$$ 499.60 $$$$

Gold is the lifeboat on my retirement ship. My pension is denominated in fiat dollars, social security is denominated in fiat dollars, and some of my savings are fiat dollars. Only gold mitigates loss of fiat dollar value. Don't build a retirement ship without a golden lifeboat.

spotlight

(11/03/2005; 21:05:28 MDT - Msg ID: 137533)

contest

$$$$ 459.5 $$$$
To me, the promise of gold is a time tested, secure promise of wealth. Like paper roses, paper assets are false, and are not immune to total destruction. There are those on this site who have awakened to the smell of real roses produced by the touch of real wealth: Gold.

Goldilox

(11/03/2005; 21:06:33 MDT - Msg ID: 137534)

Google Print

@MK,

Google Print is a great update to web convenience. I've been using eBooks for quite a while now. I once bought a CD on Ebay for $5 that contained 2000 classic public domain novels - enough for a zillion cross-country flights all on 500MB of laptop drive space.

A good reference for FREE eBooks is "Project Gutenberg" at:

http://www.gutenberg.org/

To me, the most amazing use of Google-style search and collate technology is the amazing stuff coming out of www.halfpasthuman.com, where Cliff tabulates "emotive" pre-cognition from the flow of linguistic changes at millions of sites. A great description of the evolution of his software is found in his two-hour interviews with Alex Merkinger, archived at "Mysteries of the Mind".

George Ure often posts some of Cliff's results at Urbansurvival.com.

Goldilox

(11/03/2005; 21:55:56 MDT - Msg ID: 137535)

We Definitely aren't in Kansas Anymore - Fraud, Wall St. Style

http://www.faulkingtruth.com/Articles/Investing101/1042.htmlsnip:

Folks, it couldn't get any weirder.

I was talking with our friend Dr. Byrne, and he told me a story that defies imagination. I honestly thought he was pulling my leg - had one of those double take moments, where you have to shake your head to confirm you're awake. Before I tell you the gist of this, let me send out a little tidbit to any regulators reading this - I urge you to contact Dr. Byrne for corroboration. I couldn't make this up if I tried - nobody would believe it.

First, there is the matter of Jack Byrne's 200K share purchase of OSTK, which is now closing in on 90 days since the order was executed.

Jack got 130K "registered in his name" with his broker (who knows what that means - I mean, who really knows what any of the arcane terminology really signifies at day's end?) recently, but he hasn't received the other 70K shares, and his broker is telling him they've been unsuccessful in getting the shares from JP Morgan (the seller's broker - and arguably the most venerated name on Wall Street), and that there is no ETA for their delivery.

That is seventy THOUSAND shares bought and paid for almost a quarter year ago, undelivered. And Byrne's broker hasn't bought in the offending seller. Just hasn't.

Before we continue, stop and reflect upon this set of circumstances - the Chairman of the Board of the company can't get $2.5 million worth of stock that he bought and paid for - and yet there is relentless selling pressure day after day. For months the stock price has been pummeled, and yet for months the buyer's broker can't get the product that was sold.

To add insult to injury, apparently Dr. Byrne's brother bought 50K shares almost a month ago, and he hasn't gotten his shares delivered either. So it isn't just dad. The performance of the system has been tested multiple times, and nobody can get any shares delivered to make good on the buys - but that hasn't stopped the brokers from relentlessly continuing to sell that which doesn't exist.

Aren't there laws against that? 17A? SHO? 10(b)5 - participating in a stock price manipulation scheme (by selling bogus shares to depress the price)?

You bet there are. It's just that so much money is being made by all the bad guys and their brokers, that nobody cares what the law says.

So much for Reg SHO.

So much for fair markets.

So much for the SEC.

So much for clamping down on criminal stock manipulation.

But as if that wasn't sufficiently outrageous so as to cause every major financial publication in the country to run full page, indignant articles on the collapse of the market system, here's where it goes off the reservation and into the twilight zone.

Jack Byrne apparently has inquired about buying another large slug of OSTK stock, as he presumably feels it is incredibly undervalued, and he wants to own more of it.

And he is the new Chairman of the Board. They tend to do that, those wealthy, successful COB's - buy stock in the companies they are stewarding (lest anyone think this is inside info, he hasn't to my knowledge placed any orders, nor filed any forms - but if Dr. Byrne is to be believed, his dad has made inquiries which his broker knows are as serious as a heart attack).

His broker informed him that he could buy the "shares", but only if he didn't request delivery. The broker - one of the largest in the nation - told him that "the order would not likely be filled if he insisted on delivery, BECAUSE NO BROKER WOULD SELL THEM ON THAT BASIS!!!!"

I am not making this up. Those were the words - you are reading this correctly. The brokers will only sell the COB of the company stock if they don't have to deliver what they took his money for - what they sold - presumably because they understand that every share being traded is bogus, and undeliverable, and nobody wants to feel Jack Byrne's heat.

If you are a retail buyer, they will be happy to lie to you and cheat you, but nobody wants to tackle heavyweight informed buyers with cash - because they know that every sale is a sham sale, and won't be delivered.

They know it.

They understand it.

They are clear on it. They are booking transactions designed to methodically reduce the price of the company's stock, accepting cash in return for the transactions, but have no ability nor interest in delivering the product being paid for.

It's called fraud, Wall Street style.

-Goldilox

If ANYONE wonders why TC keeps hammering about "GOLD IN HAND", read this whole article.

Goldilox

(11/03/2005; 22:24:35 MDT - Msg ID: 137536)

Republican Congressman Slams Bush On Militarized Police State Preparation

http://www.prisonplanet.com/articles/october2005/121005slamsbush.htmsnip:

Ron Paul says indictment story is far more damaging than media is portraying, avian flu martial law provisions aimed at gun confiscation

Paul Joseph Watson & Alex Jones | October 12 2005

Congressman Ron Paul has accused the Bush administration of attempting to set in motion a militarized police state in America by enacting gun confiscation martial law provisions in the event of an avian flu pandemic. Paul also slammed as delusional and dangerous plans to invade Iran, Syria, North Korea and China.

Ron Paul represents the 14th Congressional district of Texas. He also serves on the House of Representatives Financial Services Committee, and the International Relations committee.

Paul appeared on the Alex Jones show yesterday and raised some interesting points about the possibility of imminent indictments of top Bush administration figures.

"I think there's a lot more excitement coming and it's not going to be good for the Republicans," stated Paul.

"The things that I hear have to do with Karl Rove and Abramoff and that's much much worse than anybody would believe and it involves DeLay as well."

"And that type of an indictment will be much more serious than the indictment of shifting campaign funds around.....there's some political infighting which could make that really interesting."

On the subject of the police state, Paul stated,

"If we don't change our ways we will go the way of Rome and I see that as rather sad.....the worst things happen when you get the so-called Republican conservatives in charge from Nixon on down, big government flourishes under Republicans."

"It's really hard to believe it's happening right in front of us. Whether it's the torture or the process of denying habeas corpus to an American citizen."

"I think the arrogance of power that they have where they themselves are like Communists....in the sense that they decide what is right. The Communist Party said that they decided what was right or wrong, it wasn't a higher source."

Paul responded to President Bush's announcement last week that he would order the use of military assets to police America in the event of an avian flu outbreak.

"To me it's so strange that the President can make these proposals and it's even plausible. When he talks about martial law dealing with some epidemic that might come later on and having forced quarantines, doing away with Posse Comitatus in order to deal with natural disasters, and hardly anybody says anything. People must be scared to death."

Paul, himself a medical doctor, agreed that the bird flu threat was empty fearmongering.

"I believe it is the President hyping this and Rumsfeld, but it has to be in combination with the people being fearful enough that they will accept the man on the white horse. My first reaction going from my political and medical background is that it's way overly hyped and to think that they have gone this far with it, without a single case in the whole country and they're willing to change the law and turn it into a military state? That is unbelievable! They're determined to have martial law."

-Goldilox

Even if the Avian Flu scare doesn't work, Rummy is counting his blessings in royalties from Tamiflu. Funny how so many no-bid stuff contracts go directly to companies whose ex-CEO is in the Bush Cabinet.

Even Richard Branson ponied up a half million $ to stock up on Rummy's "wonder drug". ka-ching, ka-ching! Keep the tribute coming.

Druid

(11/03/2005; 22:58:13 MDT - Msg ID: 137537)

House Vote Counters Eminent Domain Measure

http://news.yahoo.com/s/ap/seizing_property;_ylt=AnDJo2J_4JW8sH5bsTpzVqOs0NUE;_ylu=X3oDMTA3ODdxdHBhBHNlYwM5NjQSnip.

WASHINGTON - Contending that the Supreme Court has undermined a pillar of American society, the sanctity of the home, the House overwhelmingly approved a bill Thursday to block the court-approved seizure of private property for use by developers.

The bill, passed 376-38, would withhold federal money from state and local governments that use powers of eminent domain to force businesses and homeowners to give up their property for commercial uses.

The Supreme Court, in a 5-4 ruling in June, recognized the power of local governments to seize property needed for private development projects that generate tax revenue. The decision drew criticism from private property, civil rights, farm and religious groups that said it was an abuse of the Fifth Amendment's "takings clause." That language provides for the taking of private property, with fair compensation, for public use.

The court's June decision, said House Judiciary Committee Chairman James Sensenbrenner, R-Wis., changed established constitutional principles by holding that "any property may now be taken for the benefit of another private party."

The ruling in Kelo v. City of New London allowed the Connecticut city to exercise state eminent domain law to require several homeowners to cede their property for commercial use.

With this "infamous" decision, said Rep. Phil Gingrey (news, bio, voting record), R-Ga., "homes and small businesses across the country have been placed in grave jeopardy and threatened by the government wrecking ball."

The bill, said Chip Mellor, president of the Institute for Justice, which represented the Kelo homeowners before the Supreme Court, "highlights the fact that this nation's eminent domain and urban renewal laws need serious and substantial changes."

Druid: You mean to tell me that one branch of "gubmint" is actually checking another branch? What a novel idea.

Goldilox

(11/03/2005; 23:30:55 MDT - Msg ID: 137538)

New potential for gold and silver in optical "invisibility"

http://www.livescience.com/technology/050228_invisible_shield.htmlNew Theory: How to Make Objects Invisible
By Robert Roy Britt
LiveScience Senior Writer
posted: 28 February 2005
01:00 pm ET

High-tech cloaking machines could one day render very small objects nearly invisible and perhaps improve military stealth technology, scientists said Monday.

The idea is straight out of science fiction -- cloaking technology made Romulan spaceships disappear in Star Trek. A humble version of the device could become a reality, according to Nader Engheta and Andrea Alu of the University of Pennsylvania.

But don't expect to hide yourself or your spaceship anytime soon, at least not in the standard sense of invisible. In practical terms, the research is more likely to lead to improved technical and research devices, and even these applications are years away.

How it would work

The proposal involves using plasmons -- tiny electronic excitations on the surfaces of some metals -- to cancel out the visible light or other radiation coming from an object.

"A proper design � may induce a dramatic drop in the scattering cross-section, making the object nearly invisible to an observer," Nader and Alu write in a scientific paper that was made available to the public Feb. 14.

But cloaking ability would depend on an object's size, so that only with very small things -- items that are already microscopic or nearly so -- could the visible light be rendered null. A human could be made impossible to detect in longer-wavelength radiation such as microwaves, but not from visible light.

A spaceship might be made transparent to radio waves or some other long-wavelength detector.

The idea is in an infant stage but appears not to violate any laws of physics, according to an article Monday in news@nature.com, an online companion to the journal Nature, which provided advance copies of the story to reporters. . .

Back in 1998, researchers led by Thomas Ebbesen of the Louis Pasteur University in Strasbourg, France shone light on a sheet of gold foil that contained millions of tiny holes. The holes were smaller than the wavelength of the light, and Ebbesen expected no light to get through. Amazingly, more light came out the other side than what hit the holes.

Follow-up research found that plasmons -- jittery little waves on the surface of the metal -- were snagging light and stuffing it through the holes. "When the energy and momentum of the photons match the energy and momentum of the plasmons, the photons are absorbed and radiated again on the other side," according to an article in the May 1998 edition of Photonics Spectra magazine.

Reality sets in

Engheta and Alu say objects coated with perhaps loops or coils of silver or gold might do the trick.

But there are many hurdles. It is not clear how even a small object could disappear in daylight, which itself contains many different wavelengths, or colors, of light. Presumably a plasmonic device would have to be built to cloak each wavelength.

Anything not perfectly ball-shaped presents additional problems. The researchers' calculations suggest "homogeneous spherical objects" in the nanoscale range -- really, really small -- could be rendered optically invisible.

Practically speaking, the technology, if developed, might be used in antiglare materials or to improve microscopic imaging in about five years, Engheta said.

-Goldilox

What will they think of next?

Goldilox

(11/03/2005; 23:49:01 MDT - Msg ID: 137539)

Microbe and Machine Merged to Create First 'Cellborg' (with Gold nanotechnology)

http://www.livescience.com/technology/051027_cellborg_sensor.htmlsnip:

Fully merging microbe and machine for the first time, scientists have created gold-plated bacteria that can sense humidity.

The breakthrough is the first "cellborg" in what might become an array of devices that could sense dangerous gases or other hazardous substances.

The bioelectronic device swells and contracts in response to how much water vapor is in the air. It's called a cellborg humidity sensor, and it is at least four times more sensitive than those that are solely electronic. It even works even when its biological parts are long dead.

How it was made

Scientists first coated a silicon chip with a layer of live Bacillus cereus bacteria. Some of the long, rod-shaped microbes lodged between two etched electrodes on the chip's surface, forming a bridge. The chip was then washed in a solution containing tiny gold particles, each one about 30 nanometers across.

A nanometer is one billionth of a meter. A human hair is roughly 100,000 nanometers wide.

The gold nanoparticles attached to long hair-like proteins on the surface of the bacteria, transforming them into gold-plated bridges that completed an electronic circuit.

The hair-like proteins are called teichoic acid molecules. They are negatively charged and provide a surface for the positively-charged gold nanoparticles to attach to. Without them, the gold nanoparticles would repel one another due to their like-charges and no bridge between the two electrodes could ever form.

By wrapping themselves around the gold nanoparticles, the teichoic acid molecules therefore act as metal insulators, creating what engineers call a "dielectric barrier."

"To any electronic person, that's a field day," said Ravi Saraf, a University of Nebraska chemical engineer who led the discovery. "You can go nuts with it."

First of its kind

The bodies of the gold-plated bacteria swell as humidity increases and they absorb moisture; they contract when humidity decreases. The swelling causes the gold nanoparticles on the bacteria's surface to grow farther apart, like stickers on an inflating balloon.

Even a tiny separation of 0.2 nanometers between the gold nanoparticles was enough to interfere with the flow of electric current between the circuit's two electrodes. That's because the farther apart the gold particles on the bacteria's surface, the harder it becomes for electrons to "hop" between particles and get from one electrode to the other.

The cellborg sensor is extremely sensitive: a drop from 20 percent to zero humidity results in a 40-fold decrease in current flow. In humidity sensors that are solely electronic, the decrease is only 10-fold.

According to Saraf, their hybrid sensor is the first to incorporate microorganisms into an electronic device.

In the past, researchers have programmed bacteria to behave like biological computers or created electronic circuits that respond to glowing bacteria as a way to detect chemicals, but in those cases, the line separating microbe and machine was still distinct.

The nearest other attempt to merge the two occurred in March, when researchers at the University of Wisconsin-Madison reported using electrodes to trap and examine bacteria. One researcher from that team essentially predicted the experiment by Saraf and his graduate student, Vikas Berry, saying that it might be possible to attach microscopic gold particles to the shell of the bacteria to form "nanoscale gold wire."

Bacteria zombies

Once assimilated, the gilded bacteria can survive for only about two days, but even when dead, their bodies still swell and contract in response to changes in humidity. They can go on working this way for months, Saraf said.

If scientists could coat bacteria with gold nanoparticles without killing them, it might be possible to make cellborg sensors that could power an electronic circuit instead of just completing one, Saraf told LiveScience.

-Goldilox

The first test tube cyborgs - using gold, of course!

Beamer

(11/03/2005; 23:49:18 MDT - Msg ID: 137540)

$$$$$$ $492.5 $$$$$$$$$

The promise of gold to me is contentment. Contentment of the heart, contentment of the mind and contentment of the soul. The explanation for the heart lies in the fact that I may pass on to my heirs the safety of wealth against the vagaries of ALL fiat currencies, both at present and in the future. The explanation of the mind is based on the fact that the history of the US$ is self-explanatory. With the advent of the Fed in 1913, the US$ was worth a dollar and the price of gold was worth $20.64. Since that time the US$ has depreciated some 95% and gold has appreciated some 2,228%, more or less. The explanation for the soul can only be understood when one holds a piece of quartz in the hand and is struck by the beauty of the leafy gold stringlets coursing to and fro. The feeling is awesome!

Gandalf the White

(11/04/2005; 00:02:38 MDT - Msg ID: 137541)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$ THE "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$

Entries as of Friday 11/4/05 at just about 00:01 Denver time !!!

OFFICIAL ENTRY LISTINGS

Listed in order of decreasing values !
----

$$$$ $499.6 $$$$ Moegold (11/3/05; 21:02:28MT - usagold.com msg#: 137532)

$$$$ $496.5 $$$$ mikal (10/28/05; 06:33:00MT - usagold.com msg#: 137328)

$$$$ $492.5 $$$$ Beamer (11/3/05; 23:49:18MT - usagold.com msg#: 137540)

$$$ FRN492.1 $$$ Smeagol (10/28/05; 19:11:15MT - usagold.com msg#: 137354)

$$$$ $490.0 $$$$ Caradoc (10/29/05; 06:29:11MT - usagold.com msg#: 137358)

$$$$ $488.5 $$$$ Sundeck (10/27/05; 22:16:35MT - usagold.com msg#: 137325)

$$$$ $482.9 $$$$ osa104c (10/28/05; 22:18:13MT - usagold.com msg#: 137356)

$$$$ $480.0 $$$$ Liberty Head (10/30/05; 13:11:14MT - usagold.com msg#: 137397)

$$$$ $478.6 $$$$ Goldilox (10/27/05; 23:36:31MT - usagold.com msg#: 137326)

$$$$ $476.0 $$$$ Lothar of the Hill People (11/3/05; 09:45:56MT - usagold.com msg#: 137497)

$$$$ $474.4 $$$$ NEMO me impune lacessit (10/31/05; 10:04:59MT - usagold.com msg#: 137406)

$$$$ $473.7 $$$$ pilgrims_gold (10/31/05; 08:25:19MT - usagold.com msg#: 137404)

$$$$ $472.5 $$$$ Henri (10/31/05; 11:24:56MT - usagold.com msg#: 137410)

$$$$ $470.0 $$$$ jenika (11/1/05; 07:14:53MT - usagold.com msg#: 137433)

$$$$ $468.8 $$$$ balzac (11/3/05; 19:02:56MT - usagold.com msg#: 137529)

$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $459.5 $$$$ spotlight (11/3/05; 21:05:28MT - usagold.com msg#: 137533)

$$$$ $426.5 $$$$ Topaz (10/28/05; 00:13:49MT - usagold.com msg#: 137327)
===
NOW only sixty (60) Hours to go before ENTRY DEADLINE !
<;-)

Gandalf the White

(11/04/2005; 00:05:17 MDT - Msg ID: 137542)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the DECEMBER Comex contract (GC5Z) on Wednesday, November 9, 2005, ---BUT all entries must be posted to the TableRound before HIGH NOON (Denver time) on Sunday the 6th, AND ALL ENTRIES must answer THE QUESTION !!

The QUESTION -- (Put on your THINKING HATS !)
We have all read, heard and talked a lot on this USAGOLD forum, about the "promise" of gold. But, what does gold really "promise" to YOU, its owner? In 50 words, more or less. . .

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive "A British King Sovereign, with an "India" mint mark, Fineness of: 0.917, Actual Gold Content: 0.2354 troy ounce, and Minted in India between 1902 and 1925 !

There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure silver Maple Leaf.
===

THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) December 2005 Gold Contract (GC5Z) on the date of Wednesday, November 9, 2005.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $444.4)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $444.4 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON (12:00) on Sunday, November 6, 2005.

6) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a fifty (50) word paragraph, more or less, discussing; "THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

Topaz

(11/04/2005; 01:01:46 MDT - Msg ID: 137543)

Ned.

It looked all over when I got up this am (here) but we've managed to scrape through another Day ...so it goes.
DX has to lift it's game. The weakening Bond has to be supported by a stronger DX to maintain equilibrium as an Oil proxy. If it doesn't, whats the point of holding Bonds for future Oil?
If DX fails to "keep-up" the Bond sell-off will accelerate.

Because we are now in Nov (a non-delivery Month) there's no pressure to Deliver Metal via Comex and ...as we've seen, PoG is offering little resistance to a $ upswing.

Price of Gold ...don't worry too much about the "P" part Ned. I notice you've been taken by Prechter. He's on track IMO.

Belgian

(11/04/2005; 01:14:18 MDT - Msg ID: 137544)

@David Linkley >>> your msg#137515

What happened (again) on thursday ? Trichet was holding euro-IR at 2% and during Q&A, the same old questions about the ECB's (very low) IR policy were (test)fired again.

Immediately the dollar (USDX) rushed above the imaginary 90 ceiling ...because of the nice IR differential advantage (3,75%).

But...as you noticed...the $-POO shot UP $2 !!! How come ? The dollar oilcurrency strengthens and the $-oilprice also strengthens very significantly. Answer : Oil is "priced" in euro and (for the time being) invoiced in dollar.

I mentioned this fenomenon already...and it was very clear for all to see on thursday (again).

Remember that the euro is the currency of a CB named ECB that has his gold(wealth)reserves "marked to the market"...as are its (euro)dollarreserves.

Topaz

(11/04/2005; 02:12:26 MDT - Msg ID: 137545)

For ease of reference.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=
The alt-Gold comparison Chart, apart from being a beautiful reminder of how PoG can run contra to the OTHER Bum-wad (tks BG), can also be used to simplify the dilemma of DX/Bond/Oil in the Hegemony sense.
At the current (High) Oil Price, our Bond and DX have to match each other pip for pip to maintain a "constant" relative PoO.
What we are seeing is, when Bonds drop (currently 110+) then DX has to rise (alt 110+).
IF ...Oil stays here (round 62ish) AND Bonds go to (say) 105, alt-DX has also to go to 105 ...DX 95ish.

What happened @ 12ish yesterday was DX started to stall @ 90.4, so to compensate, PoO tacked on another $1.50

I don't agree that this is in the Dollars interest Bel, quite the contrary as a higher PoO and higher DX don't bode at all well for US Markets imo.

Belgian

(11/04/2005; 02:56:56 MDT - Msg ID: 137546)

@Topaz

Good morning mate. I think you are looking in the wrong direction (?)

The owners of the remaining oil/gas reserves are "valuating" their *vital* resources against the universal purchasing power of the euro numeraire and NOT against helikopter dollars...anymore !

So the reasoning goes...Don't touch the global purchasing power of the euro or we raise the $-PoO. That is supportive for the euro "exchange" rate against the "exchange" rate of the dollar.

And the reason why the vital resource reserves do chose the euro numeraire is because ...the management of this � numeraire wants FreeGold to become the universal reserve (standard).

Ask yourself WHY (!!!) the euro exch. rate can hold on the 1,20 versus $, with the serious IR differential (�-2% / $-3,75%).

You simply forgot the ongoing �-$ competition.

Maybe the ABX/PD complex can mine some more cheap gold for Arabian oil (SA) ? (Munk-Bush-Khashoggi-Kamal Adham-Mulroney-JPM-GS-etc)

mas

(11/04/2005; 03:46:05 MDT - Msg ID: 137547)

Belgian, BP's response....

Can't believe he's really saying these things. He must be really concerned about his excess profits instead of going for the truth.

http://news.bbc.co.uk/2/hi/business/4406054.stm

BP boss predicts oil price fall

The BP boss believes prices can only go one way
The chief executive of BP, Lord Browne, has said that crude oil prices are "unsustainably high" and will fall as consumers seek cheaper energy sources.
Oil prices have risen 40% this year following a shortage of global refining capacity and disruptions to supply.

But the BP boss said an increase in the amount of oil being pumped would eventually force prices down.

In the longer term, the availability of cheaper energy sources would force prices down further, Lord Browne added.

Topaz

(11/04/2005; 04:23:25 MDT - Msg ID: 137548)

Belgian.

It seems to me these last 12 mth's have more than amply demonstrated the case for a deflationary melt-down Bel ...and it also appears to hinge on how long the US$ is prepared to hold on to the Oil thing.
Clearly $/Oil Hegemony and Systemic devolution are joined at the hip now ...it IS just a matter of time.

Clink!

(11/04/2005; 07:17:41 MDT - Msg ID: 137549)

A sign of the times ....

http://themessthatgreenspanmade.blogspot.com/2005/11/hummer-overfloweth.htmlThis is a little off topic, per se, but is an indication of what a financial trainwreck looks like. It's a blogspot describing what happens when you overstock on Hummers. A lot of the comments at the end of it say it's very funny. I don't - for me it is just incredibly sad and, ultimately, wasteful.
The last poster sums it up beautifully though :-

Proof that you can you can hide some of the hummers all of the time and you can hide all of the hummers some of the time, but you can't hide all of the hummers all of the time, lol.

C!

Goldilox

(11/04/2005; 08:47:16 MDT - Msg ID: 137550)

Roche halts Tamiflu supply to Hong Kong pharmacies

http://www.japantoday.com/e/?content=news&cat=7&id=354227snip:

Friday, November 4, 2005 at 07:00 JST
HONG KONG � Flu treatment Tamiflu's Swiss maker Roche has stopped supplying the drug to Hong Kong pharmacies and private doctors to reserve world supply in case a flu pandemic strikes, the company said Thursday.

Roche Hong Kong spokeswoman Farrah Chan said in a statement the company notified doctors and drug stores of the cease of supply on Tuesday to "reserve for the use at the time of the influenza season." Countries other than Hong Kong where supply of the drug was also halted include the United States, Finland, Canada and Denmark, the statement said.

-Goldilox

The media ctreated demand for Rummy's "wonder drug" has already fostered "hoarding" behavior. which should find the SecDef wetting his financial pants. Not to worry; the "windfall" will dry them.

This is a vivid representation of why mainstream media MUST denigrate gold! There is NO rush quite like a GOLD rush.

Goldilox

(11/04/2005; 09:47:42 MDT - Msg ID: 137551)

Battle for $455

Closely watching the battle around $455, reputed to be a major support line. I'm starting to reacquire some of the miners I released at $480 resistance.

The forum this morning is about as quiet as a Houston Sports Bar in the 9th inning of Game 4.

TownCrier

(11/04/2005; 10:10:01 MDT - Msg ID: 137552)

Fed buys Treasuries, doesn't indicate amount

http://www.newyorkfed.org/markets/permanent.htmlDespite a fed funds market which was trading in line with the latest FOMC policy target of 4%, the Trading Desk at the NY Fed nonetheless felt compelled to engage in open market opertations this morning, temporarily injecting a fresh $3.25 billion in lendable cash reserves to the nation's banking system through a round of six-day repurchase agreements.

In a more significant operation, the Fed also conducted a coupon pass, buying U.S. Treasury coupons outright and thus 'permanently' boosting the money supply in the process. Targeted maturities were March 2010 through August 2013. And in an odd shift from what has been normal policy in these circumstances, this time the Fed has not indicated the size of the outright purchase.

One has to wonder how roiled the insider's view of the marketplace is, especially as we continue to sort through the $16.8 billion Refco bankruptcy. And not surprisingly, the market seems to be less-than-enthusiastic about the value of the COMEX-style leveraged gold contracts being traded in New York today.

Choose metal and have no more sleepless nights upon the worries of counterparty default.

R.

Goldilox

(11/04/2005; 10:11:47 MDT - Msg ID: 137553)

Analysts on Bubble Vision

San Diego analyst Art Laffer (what irony in that name) just told Bill that Inflation is non-existent, Greenspan's done a terrific job, and the US economy has NEVER been in better shape. Too much time in the sun, I guess. I hang my head in shame.

and blah, blah, blah . . .

Druid

(11/04/2005; 10:52:53 MDT - Msg ID: 137554)

CHRONOLOGY OF INTERNATIONAL MONETARY AFFAIRS

http://www.eco.utexas.edu/~hmcleave/357Lmoneychrono.html
1971 April: Due to heavy demands for dollars the Treasury issued notes to foreigners to absorb dollars being

dumped by others.

(At this time John Connally was the Secretary of Treasury, Paul Volcker was Under Secretary for Monetary

Affairs at the Treasury, and Arthur Burns was Chairman of the FED.)

May: Despite the Treasury measures the rush out of dollars accelerated. The United States balance of trade

went into deficit for the first time in the Twentieth Century.

June: In the face of these mounting difficulties Nixon calls an economic summit of his advisors at Camp

David.

August: The English demand a major swap, obviously wanting to drastically reduce their exposure in

dollars.

August 14: An emergency meeting is called at Camp David. Mainly Nixon. Connally, Volcker and

Burns gather to discuss what to do. A plan is worked out.

August 15: Nixon goes on TV on Sunday to announce the plan worked out that weekend. It is a major

turning point in the history of the international monetary system and a direct slap at American allies reasserting American power.

The basic outlines of the plan include:

1.an end to the convertability of the dollar into gold.

2.a 10% surcharge on imports.

3.domestic wage and price controls.

4.cuts in government spending.

5.tax cuts to spur investment.

December: A meeting is held at the Smithsonian Museum in Washington, D.C. to reach agreement on

new monetary relations. Out of the bargaining came:

1.the dollar price of gold would rise to $38/oz.

2.there would be no general float but fixed rates would be changed, generally the dollar would be devalued. Some of the new exchange rate changes included: NF would rise 8.6% against the dollar, the DM would rise 13.6%, the lire would rise 7.5%, the Yen 16.9% and the pound would rise 8.6%.

These adjustments were seen as temporary pending major reform of the system. Although the US got what it wanted it later turned out that the devaluations were inadequate and the dollar would have to be devalued again.

At this point the major issues of reform, besides the devaluation of the dollar, were those of liquidity (e.g. that of how liquidity would be provided, the role of the dollar, of gold and of SDRs) and of the role of the IMR, for which there was growing pressure for its expansion.

Druid: Some pretty important and informative dates. How about that fateful Sunday afternoon? Take more control of your future and call the good folks that provide this wonderful forum.

Flatliner

(11/04/2005; 11:02:58 MDT - Msg ID: 137555)

Oil is "priced" in euro and (for the time being) invoiced in dollar

Hi Members, Thank you so much for the information in your forum. So far, this is the easiest to read forum that I've found for economic discussions.

A posting today has sparked my interest with regards to the theory that �oil is priced in the euro and invoiced in the dollar�. If this theory has any credibility, it would weigh heavy on the dollar (at least one might think that it would). Thus, if at all possible, those of you that have a better understanding of this issue, can you please point me to your sources or explain your theory � in detail? I have confidence that you will keep it simple.

To spark the discussion, I have read reports over the summer that seem to indicate that a number of countries are all �jumping ship� (so to speak) with regards to holding dollars in reserve. China announced this at the end of July and found support with all their adjacent trading partners (Russia included). Venezuela posted a news report, somewhere near the time of the Refco seven day failure window, stating that they'd moved their business to Europe (from the US).

It would seem to me dollars are coming out of holding and starting to circulate in a volume that we haven't seen in a while. We also know that Iran is moving closer to making it possible to no longer make it a requirement to invoice oil in dollars (Iranian Oil Bourse). Are we seeing the first signs of this change?

I can't help but tremble at the reproductions if this is true. If there is no need to invoice oil in dollars, where will all those dollars go? (No need to answer this one for me � thanks.)

I have also read a little about hyperinflation. It seems to me that on of the most serious problems during hyperinflation is that no one in the �other� countries wants the currency of the hyper-inflating country. Basically, you can't buy anything from foreign countries unless you hold their currency. Does anyone in the US hold a euro? I don't know anyone that does. This would make me think that the US will *not* be able to buy oil on the world market. That� would devastate the US (See the Happy Hummer article posted today as one current example).

Thanks again for your willingness to share information. I look forward to reading any information on this �Oil is "priced" in euro and (for the time being) invoiced in dollar� concept. Or if nothing else, it would be nice to read the theory in it's entirety.

Topaz

(11/04/2005; 11:14:47 MDT - Msg ID: 137556)

Again we're set up for an "interesting" close.

http://quotes.ino.com/chart/?s=CBOT_USZ5The 30Yr Chart is again showing mild resistance to falling on the Glideslope. Will we see sub-110 today? ...and by inference DX 92 ...and by inference a tanking SM?

Watch closely as this unfolds!

Rimh

(11/04/2005; 11:17:03 MDT - Msg ID: 137557)

Hummers

Thanks for the link, Clink! Got a good chuckle at the pictures. Someone's bound to take them home eventually, but probably at fire sale pricing - and probably by some branch of government that pays no attention to the price of gas to be paid to keep them on the road..... sad, indeed!

Stevens

(11/04/2005; 11:29:27 MDT - Msg ID: 137558)

My Take: On Ben Bernanke

I remember when Arthur Burns was appointed Chairman of the Federal Reserve Board. This pipe smoking distinguished looking gentleman rose to the position by way of great respect from the academic community, as well as the financial and political community. His integrity and independence was unquestioned. Arthur Burns, however, found himself embroiled in several economic and monetary crises almost immediatly. The political pressure brought upon him by the Nixon Administration was enormous. Arthur Burns folded within a couple of years in office. He yeilded pretty much to whatever the Administration wanted him to do. Under his term in office, the US experienced stagflation, wage and price controls, an oil shock, and the closing of the gold window.

Then came William E. Miller, appointed by Jimmy Carter. Miller was totally a political appointee installed to do Carters bidding. Millers failings were more of a mater of complete incompetance and ineptitude. Miller left office quickly, but not before leaving us with double digit inflation, a dollar crises, and and a monetary ststem on the brink of complete collapse.

Carter was forced to bring in someone that actually new something about money and financial markets and give him the independence required to bring the financial system back from the brink. Enter Paul Volker. Volker did what was necessary. He allowed the markets to clear, by allowing interest rates to rise to a point necessary to provide a real return to investors and discount the potential risks of dollar devaluation and even possible debt default.

To the horror of everyone, that rate exceeded 21%, which even made the knees of the six foot, 7 inch, cigar smoking Paul Volker buckle. Carter, who was in a major fight to be reelected, applied enough presure to "do something", that Volker succumbed and imposed credit controls. He later admitted, this was his greatest mistake as Chairman. Interest rates fell to 8%, but it was not enough to win the election against Ronald Reagan.

Volker then, to his credit, immediatly ended the credit cotrols which were reaking havoc throughout the economy and financial system, and interest rates returned to 21%. Shortly after taking office Reagan appointed Alan Greenspan to the Chairmanship.

Say what you want, about Greenspan, but he never caved under pressure in times of financial and political crises. Furthermore, as he leaves office, he is leaving us with aproximately the same price of gold and dollar index level as he found when he took the job. But, Greenspan has been the exception to the rule. Every other modern Fed Chairman DID cave.

Now, what of Ben Bernanke? I have gone back and re-read Bernanke's writtings, and Bernanke and Greenspan are not of the same mind. Bernanke, believes in inflation targets, Greenspan does not. Greenspan was trying to steer the inflation rate towards Zero, Bernanke believes in a buffer zone, i.e. an institutionalized rate of inflation of between 1.5 and 3%. This insures at the minimum, a higher rate of inflation, in the future.

But no matter what his present ideas are about monetary policy, I think the abilities of the new chairman will not really be know until the heat is on. How will he react in a Monetary, Economic, or Financial crisis? How will he handle the political presure if and when it comes?

Beggining in the year 2008, 77 million Baby boomers will start retiring. There are an estimated 44 trillion dollars of unfunded liabilies that will start coming into play. The Fed's job will be crucial in resisting the temptation to satisfy these claims through inflationary finance.

Like I said, over the last 18 years Greenspan has left the value of gold and the dollar where he found it. I seriously doubt that this will be said about Bernanke after his turn at the helm has ended.

TownCrier

(11/04/2005; 11:46:05 MDT - Msg ID: 137559)

Stevens, a brief word on timing

"Shortly after taking office Reagan appointed Alan Greenspan to the Chairmanship."

More acurately, it was done somewhat late in his administration -- in Reagan's SEVENTH year.

R.

Topaz

(11/04/2005; 12:25:41 MDT - Msg ID: 137560)

Au-Ag.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=SI&a=D&z=610x300&d=LOW&b=LINE&st=Gold and Silver are taking it in the neck this month but Ag seems less affected (Chart)
Today saw 125 Contract equivalents Ag get done in Comex as compared to One Au and would explain the mini divergence.
Situation is likely to continue thru Nov with a light at the end of the Tunnel around Options (Dec) expiry ...usually c25th.

There are greater concerns afoot NOW than PoG and PoS though.

Rimh

(11/04/2005; 12:45:11 MDT - Msg ID: 137561)

$$$$$ 466.7 $$$$$

Gold's promise to me is the security of unquestionable value, no matter the price. All through history it has been sought after, fought for, hidden for safety, used in barter and adornment and generally accepted across national borders despite any foreign markings or shape (as long as the weight and assay held up).

As a young aspiring geologist, I had the the good fortune to find some coarse gold by prospecting. Since that time I have been hooked because as soon as I saw that beautiful chunk of metal, I knew it's uniqueness was worth having (I get goosebumps remembering that first encounter).

TownCrier

(11/04/2005; 12:51:42 MDT - Msg ID: 137562)

Gold a good asset for predicting inflation -study

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-11-04T231609Z_01_NOOTR_RTRJONC_0_India-222221-1.xml&archived=FalseLONDON (Reuters) - Gold can prove an excellent choice for investors seeking to hedge against inflation and is good at anticipating price rises, a study prepared for the industry-funded World Gold Council said.

Official data provide little help to investors who must plan for the future because they only tell what is over and done with, according to the study by U.S.-based research company H.C. Wainwright & Co. Economics Inc.

"The markets are really the best place to get a fast answer and commodities, in general, are very good places to figure out whether the currency is changing," David Ranson, director of Research at the company told Reuters.

The report said gold is a more effective measure to predict inflation and could signal portfolio managers to look for other investment instruments to protect their investments.

Gold prices surged last month to a near-18-year high of $480.25 a troy ounce, but have retreated to about $456 an ounce on heavy selling by investment finds.

"When it comes to inflation, Wall Street and the City of London tend to be late seeing it coming. That is because of the widespread obsession with the consumer price index as the gauge of choice," Ranson said

"Because gold moves earlier than official measures of inflation, it works much better at anticipating monetary policy," the report said.

Gold is different because the reservoir of gold that is traded in world markets dwarfs any possible interruptions in the annual flow that result from either supply or demand, it said.

The annual flow of newly mined gold adds only about two percent a year to the gold supply, far less than for any other commodity.

"Changes in the gold price are thus a good barometer of changes in currency values," the report said.

"Since the real value of gold is roughly constant over time, changes in the gold prices of a currency tend to reflect changes in the market's evaluation of that currency."

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

Not a bad little piece of work. It is good to see it echo our firm sentiment on the matter.

That is to say, as an item of property an ounce of gold on any given day is always valued inherently as an ounce of gold ever should be, and therefore any temporal shift in its price level from year to year should be understood to be a reflection of the relative strength or weakness of the currency used in the price quote.

Each currency's history has its own pattern of weakening against gold based on their various political and economic factors, but nevertheless it can be said without exception that the one thing every national currency has in common with each other vis � vis gold is a trending increase in price over time because every currency depreciates in value as an socio-politically accepted expedient and consequence of convenience. (And that topic, in and of itself, merits an entire library of exposition which I will not get into here.)

Choose metal, and have comfort as you watch all the currencies bounce down the landscape and into the depths of the sea.

R.

mikal

(11/04/2005; 13:07:31 MDT - Msg ID: 137563)

@TC (Re: "Price" of Au in various currencies)

http://www.gold-eagle.comGood points. The 'socio-political expedient' currencies feed off of = a phantasmagoria that cloaks daylight from it's victims like a vampires cape. Gold advocates are among the few in the west to escape the trap, as "tfh" shows in this post at another forum:
"Buck
(tfh) Nov 04, 14:17
Dead cat bounce from 120-80 on the DX. We could run to 92.50 or 95. Death rattle. What are we measuring the buck against? More European fiat garbage? Please. Gold looks like it was up in Zeros and SA Rands today. Buying a little physical today."

Goldilox

(11/04/2005; 13:23:30 MDT - Msg ID: 137564)

FED Chairman

@ Stevens,

Two responses to your post.

You stated every FED Chairman except GS "caved in". Do you consider Volder's replacement by Reagan "caving in"? Having been replaced in a job during my career, I must admit I never considered it "caving in".

Also, when you say GS left the value of dollar and gold where he found it, I would respond that the US $ has lost a lot of purchasing power since GS took office, only masked by the hedonic measurement of "goods value."

Measured against purchasing power, gold and the US $ have been devalued in lock-step during GS' reign.

glockmaster19

(11/04/2005; 13:58:46 MDT - Msg ID: 137565)

Golds Promise to me

$$$$$ 463.0 $$$$$
Gold's promise to me is the security I hold in my hand. Since it is real money, the central banks hold lots of it. Some people say, we should go back to a gold standard. Why wait for others, put yourself on a gold standard; before everyone else tries to and fails.

Silver is also money, and quite cheap I might ad. There is less silver above ground on the planet now than gold, yet gold is far more expensive. Another conundrum for Greenspan to figure out.

Both gold and silver will rise very soon. Mine some silver now on the Comex, you will actually mine it cheaper there than the mining companiies did when they brought it out of the ground and sold it to the Comex. What a deal!

Stevens

(11/04/2005; 14:01:11 MDT - Msg ID: 137566)

Goldilox

Volker caved when he imposed credit controls, which was due to political pressure. He himself said later, he regretted the move. As to your inflation point, yes prices have increased under Greenspan. It must be remembered that even a 2-3% inflation rate will wiped out a great deal of purchasing power over time. If this were more widely understood, there might be greater sentiment for a return to the Gold Standard.

TownCrier

(11/04/2005; 14:36:00 MDT - Msg ID: 137567)

Indian Banks advised to loan on hallmarked gold

http://www.newindpress.com/NewsItems.asp?ID=IEB20051104071827&Page=B&Title=Business&Topic=0&November 5 2005 (UNI) MUMBAI: Banks have been advised to prefer hallmarked jewellery and ornaments while offering loans and advances to the borrowers against mortgaging jewellery.

According to a RBI (Reserve Bank of India) notification, the hallmarking of gold jewellery ensures the quality of gold used in the jewellery as to caratage, fineness and purity and, therefore, banks would find granting of advances against the security of such hallmarked jewellery safer and easier.

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

Use of gold in lending is a delicate business, and I apologize as I am not sure it is a topic suitable for further forum discussion. Bottom line: may it suffice to say in working over many months through this precise matter with two of my senior partners, the gold banking path is widely fraught with pitfalls, and among many alternatives only one narrowest of all golden trails finds its singular surefooted way through all the potential traps and disastrous dead ends.

There is nothing in this article that assures India is poised to get it right, but rather, the prevailing implication here is that they are in fact very likely getting it wrong.

R.

David Linkley

(11/04/2005; 14:39:10 MDT - Msg ID: 137568)

@Belgian #137544

Belgian with all due respect the Euro is just a different colored toilet paper than the dollar. Today the dollar rose strongly and oil dropped $1.20. Sorry but your theory is on shakey ground. Inspite of the problems the US is facing history has shown that we will act decisively and quickly to rectify the situation. We are saddled with maybe the dumbest President in US history but even so can still run circles around the EU. Why you think the Euro is a viable alternative to the dollar is still unclear. We have a bankrupt country but you have many in the EU. America will get through this period but not before alot of pain, sacrifice and blood is shed. I'll take a struggling US anyday before the socialist EU in the game of global leadership.

Henri

(11/04/2005; 15:04:33 MDT - Msg ID: 137569)

Large golden CME on 11-2-05

http://sohowww.nascom.nasa.gov/data/LATEST/current_c2.gifIf you have broad band or DSL let this .gif file load and then the movie will play of the beautiful golden coronal mass ejection on 11-02-05 @ about 0830.

awesome

Henri

(11/04/2005; 15:15:46 MDT - Msg ID: 137570)

Towncrier

Gold is not a material suitable for banking since it is in essence the material that "currency banks" use to value their assorted fiat assets. Banking implies a business wherein more credits are placed than there is material backing the credits and where deposits are the backing.

My bank would not even discuss the prospect of gold collateral for a loan and this is not even a "banking" operation.

I believe there is a US law (1933?)that forbids the formation of any commercial contract in terms of gold.

Whitewaterwoman

(11/04/2005; 15:32:38 MDT - Msg ID: 137571)

$$$463.0$$$

Like the smell of cedars in the hill country of Texas and the smell of warm baking bread in the kitchen, gold promises me safety and security. The promise is eternally bright and shiny, never dimming like the drab dollar. Gold promises me that when the inevitable financial melt-down occurs in America, my family and I will be taken care of. In that aspect, gold is the uber-security blanket.

miner49er

(11/04/2005; 15:58:27 MDT - Msg ID: 137572)

Tampering with the Mortgage Interest Deduction - End Run or Hail Mary Pass?

Saw some discussion on this the other day, but don't know if this angle has been brought up, as I haven't had time to carefully look through recent postings.

Reducing the mortgage interest deduction won't increase tax revenue unless a plan is in place to support all the borrowers put in peril of default on account of it. And, this may certainly be quietly under consideration, at least to provide support to the extent necessary to keep the real estate bubble from a catastrophic implosion. It would be quite an implosion, too, if a cap on MID were actually instituted purely by itself, without off-setting measures to counterbalance its effects. The current proposals have some things that sound appealing (eliminating AMT, and reducing capital gains rates, for instance -- although these are just high level bullets, with no real details). Yet, given most people's over-leveraged balance sheets, and their over-weighting the asset side with just the house, the concern will be that any beneficial elements of any tax changes will directly compensate the prominent negatives people will experience in reducing the MID.

It's hard to say how much those who do the math for the government use models that project the effects of actions upon future flows, or how accurate the models are, or whether anyone really cares. However, I'm sure that input from the Fed, where I do believe they think in these terms, has made its presence felt. Regardless of their public pronouncements, they are very well aware of problems that exist. At any rate, unable to satisfactorily slow mortgage lending by wagging up the long end of the yield curve by raising its target for the short end, the discussion of this type of measure may be something of an attempt to end-run the "conundrum."

In other words, the supply of credit for mortgage lending has not abated appreciably through interest rate hikes, largely because of the ability to unload enough risk out of the lending process through derivatizing and securitizing everything in sight. So lenders remain cavalier, because the danger is being assumed by myriad counterparties, most probably very unaware of the devil they are dancing with. Demand on the other hand, may be influenced through non-macro means. And, modifying the tax code is the most popular tool in that tool chest. Since, without good reasons to stop borrowing having penetrated and altered the mindset of the populace, borrowing they will continue to do.

The collective effect of the propaganda unleashed on a society that increasingly has no adult recollection of the 70s, never mind the Great Depression, will not be reversed overnight. The general public lacks all sense of caution, so the calls to save that we are suddenly hearing from the forked tongues of those that were telling us just yesterday to spend like there's no tomorrow, have about as much force right now as the "moral hazard" stumping of the mid-nineties over reckless participation in the stock market. The incentive to save and earn 3% doesn't raise eyebrows to people that were introduced to the world of finance through double and even triple digit returns. These same people have also experienced double/triple digit losses, which they still want to make up for in the short run in double/triple digits. So they think still and mostly only in these phenomenal terms, not having any perspective of history. Thus, there is no incentive to save yet. The carrot on the stick is too small. Yet, the juggernaut races out of control.

Hopefully just seriously talking about capping MID gets people seriously rethinking (scared witless) about any further equity borrowing, or home buying just for the sake of "buying up." This is a little different than the gentle browbeating of the "irrational exuberance" comments of yesteryear that did not carry much weight since the dynamics were so well in place back then for a market blow off that nothing short of suicidal Fed action would have stopped it. The whole thing is tired and old now, and the suitors are increasingly looking elsewhere. With that, it may be that just serious discussion about capping the MID may well be all that's needed to generate a slowdown and reversal in the mortgage lending. (If your decision to borrow was based on a substantial accounting for that deduction, and you were afraid they might lop it off at the knees, would you go ahead with it?)

Will it be something that actually passes? It sure could. And while the desired effect of pricking the bubble with a fiscal pin instead of a monetary one will be achieved, the bubble is still likely to go *pop* instead of phhhh... The effects will be systemic, and the spin will work hard to separate cause from symptoms.

The discussion we will be treated to in the coming days, will take place with most participants not considering (or even recognizing) the impact on the financial system as we are discussing here, but will simply argue the cause, for or against, along the well-worn treads of party-think, inside an anachronistic framework of dollar-only, dollar-king. We've heard all this before. And since the government is of course looking for ways to further "enhance" revenue as spending balloons, and management and accountability seem to be grossly waning, the easiest solution for myopic legislators, is to simply take more away from the citizenry.

If such a capping does end up as law, and there are not balancing mechanisms to offset this to a considerable extent (after all, this tax discussion is not purportedly to "increase" taxes -- it is being pushed as "tax-simplification" -- so we have every reason to expect offsets..., don't we...?), the one-two punch will leave most borrowers reeling. Higher interest rates are having their effect, but it seems borrowers have been able to weather that storm (at least in aggregate, and at least thus far) enough to keep it all going. If they end up with monumentally larger tax bills as a result of substantially reduced deductions, this will send most over the edge. Already weakened with higher fuel costs, and tightening screws from credit card companies, not to mention much more aggressive property tax assessments on their homes (and the subsequent hike in that tax payment), many homeowners, over-extended beyond precedence, and living by the "minimum monthly payment," are poised to now die by it.

With bankruptcy, while always distasteful and a terrible resort, now made even more unpalatable, the capacity for individuals to work out their problems with another "pay me back next time" maneuver is effectively shut down. In this setting, we could face a financial pandemic if the housing market collapses. The conundrum is not just the perplexity of the intransigent long end, but rather the puzzle of reversing the real estate bubble, without collapsing everything else. I see in this the chemistry for the Fed entering the market very aggressively for mortgage-backed securities, when the inevitable collapse of the bloated and diseased GSEs comes about. What can't be managed in open market operations, will eventually require the Fed to become the outright buyer thereof.

The subsequent permanent injections spread throughout the economy might be fuel to get people over the hump nominally, but the resultant inflationary pressures, as well as the further degradation of the currency, through degraded reserves, leaves us potentially without the means to buy from external markets without very painful price increases. We can no longer do a 79-80 interest rate shock treatment. We can no longer do a 97-98 deflation export. Politically, we won't endure a credit crunch domestically, even if it weren't so potentially apocalyptic.

So we will have inflation, and we will have it in spades. If there is an attempt here to do an end-run around a stalled long end yield to reverse out-of-control mortgage lending, we must remember how this is basically 4th and long and very late in a losing game. While the play may produce a few yards, it won't even get the first down.

Goldilox

(11/04/2005; 16:17:27 MDT - Msg ID: 137573)

Inflation mgmt

@ Stevens,

Isn't the "miracle" of compound interest wonderful?

At the time GS took office, I bought brand new car (mid-range) for $3600 out the door. Now they're about 8-10X that number.

At the time, my salary was $15k/yr. In the recent past, I was hiring people at a skills and experience level earning about $45K, a 3X increase.

Not a very large data sample, but just for simple comparison.

Planned inflation and hedonic adjustment are why most people are totally baffled by COL comparisons.

It also guarantees the profitability of the banks, as they continue to create capital out of "thin air," through the practice of fractional reserve lending.

Bank-sponsored capitalism cannot function smoothly without constant growth or the perception of growth caused by inflation, so I do not personally believe GS' target was EVER zero percent inflation.

Unfortunately, the pyramid scheme that is the US non-backed $ is starting to crumble, as the bottom levels get more and more difficult to tach on, just like in any other pyramid scheme.

OvS

(11/04/2005; 17:16:56 MDT - Msg ID: 137574)

Timber.

Today's Wall Street Journal
features a front page story:
Some of the biggest investors
are lining up and buying up
US timberland. Stocks and bonds
are not doing so well lately,
so, have you some timber acerage
to sell?: Harvard University,
Yale, U.of Michigan, you name it
they want it. Harvard has 10%
of its huge investment portfolio
invested in timber...One invest-
ment company bought up 5% of all
the timberland in Maine...
Perhaps this will make the Cana-
dians understand why there is this
longrunning dispute with the USA
about timber...
Summers, remember him?, certainly
wouldn't allow Harvard to have
10% of its endowment funds invested
in gold..
Gold, for the big boys, is, for the
time being "officially" taboo. So
the scramble for other "hard" assets
is on...and there is a veritable
flood of liquidity trying to find a
safe home...
Lumberjacks: "Timber..!!!"
Austrian mountainclimbers: "Egon..!!!"
OvS: "A huge wall of liquidity is
hitting our shores..!!!"

USAGOLD Daily Market Report

(11/04/2005; 17:17:34 MDT - Msg ID: 137575)

Page Update!

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

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

FRIDAY Market Excerpts

November 4 (from MarketWatch) -- Gold futures closed Friday at their lowest level since late August to end the week with a loss of almost $17 an ounce as renewed strength in the U.S. dollar dulled investment interest in the metal. "After looking at the strength of the dollar [Friday], I'm surprised the drop in gold isn't lower," said Thomas Hartmann, an analyst at Altavest Worldwide Trading. The dollar's resilience in the face of a disappointing October U.S. payrolls tally eventually spooked investors left holding a stalled euro; their reaction sent Europe's shared currency tumbling to a 1 1/2-year low Friday.

Against this backdrop, COMEX December gold contracts traded as low as $456.10, a level not seen since Sept. 14. It closed down $4 at $457.90.

Friday's decline was "mostly a technical rally...as stops or shortcovering was triggered as the dollar 'burst' through the top 'like a beach ball held under water'," said Hartmann, noting that someone he spoke to offered that beach ball comment. Hartmann said gold will "consolidate around $450" before attempting to make new highs.

All in all, "very strong physical and investment demand combined with a widening debt, deficits and political problems here in the U.S. are the likely factors" that should allow gold to move back to the upper end of the $455 to $475 trading band in the coming days, said Peter Grandich, editor of the Grandich Letter.

Earlier Friday, gold prices tapped a high near $466 on "benign economic data," said John Person, president of National Futures Advisory Service. "The employment numbers point towards the train of thinking that the Fed may not need to continue raising rates," adding that he expects prices for the precious metal to climb to the $497-to-$505 level before the year is up.

---(see url for full news, 24-hr newswire, market quotes)---

spotlight

(11/04/2005; 22:17:58 MDT - Msg ID: 137576)

Greenspan/Dollar

Stevens
Re: Your statement:

"Like I said, over the last 18 years Greenspan has left the value of gold and the dollar where he found it".

This seems to imply that because the dollar index in 1987 was at the same number today, all is well,and he did a fine job. Yet, I'm sure you must agree there is something very wrong with the numbers and the way you use them. We all know that the dollar buys about a third of what it did then.

The dollar index level does not reflect the huge price increases and general loss of purchasing power of the dollar on Greenspan's watch. The dollar index only reflects the strength or weakness of the dollar in relation to other currencies.

Gold, I believe, will shortly speak for itself as it shines its light on the huge expansion Of money and credit under Greenspan's "management."

How do you expain this?

Also, mysteriously, gold has not risen since he took office, while all around us has.

Chris Powell

(11/04/2005; 22:52:12 MDT - Msg ID: 137577)

Jim Puplava's 'Financial Sense Newshour' interviews GATA trio on market rigging

http://groups.yahoo.com/group/gata/message/3426Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Stevens

(11/04/2005; 22:58:10 MDT - Msg ID: 137578)

Spotlight

Spotlight

Actually, Ron Paul sited the dollar depreciation figures in his question to Greenspan in his last testimony before Congress. The dollar is worth 55.5 cents today, compared to what it was worth in 1980, according to Paul. As I mentioned in an earlier post, this is the pentalty of even low inflation rates. The goal must not be low inflation, but NO inflation. That is why a true Gold Standard should be the goal -- it is the best way to achieve a non-inflationary monetary system.

The Invisible Hand

(11/04/2005; 23:42:45 MDT - Msg ID: 137579)

The soaring POG - Two from Britain's Telegraph

http://www.telegraph.co.uk/money/main.jhtml?menuId=242&menuItemId=-1&view=SUMMARY&grid=M8⌖Rule=1http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/11/05/cngold05.xml&menuId=242&sSheet=/money/2005/11/05/ixcity.html
Soaring price of gold predicts bout of carnage in bond markets
SNIPS
The rising price of gold is a flashing red alert for investors, pension funds, and insurance firms holding bonds worth trillions of dollars, according to a new study by H.C. Wainwright & Co.
+
"Because gold moves earlier than official measures of inflation, it works much better at anticipating monetary policy than 'Fed watching'," [the World Gold council] said.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/11/05/cnbp05.xml&menuId=242&sSheet=/money/2005/11/05/ixcity.html
SNIP
The price of oil is grossly inflated and due for a tumble as fresh supplies come on stream and users switch to other forms of energy, BP warned yesterday.

Gandalf the White

(11/05/2005; 00:17:26 MDT - Msg ID: 137580)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$ THE "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$

Entries as of Saturday 11/5/05 at just about 00:01 Denver time !!!

OFFICIAL ENTRY LISTINGS

Listed in order of decreasing values !
----

$$$$ $499.6 $$$$ Moegold (11/3/05; 21:02:28MT - usagold.com msg#: 137532)

$$$$ $496.5 $$$$ mikal (10/28/05; 06:33:00MT - usagold.com msg#: 137328)

$$$$ $492.5 $$$$ Beamer (11/3/05; 23:49:18MT - usagold.com msg#: 137540)

$$$ FRN492.1 $$$ Smeagol (10/28/05; 19:11:15MT - usagold.com msg#: 137354)

$$$$ $490.0 $$$$ Caradoc (10/29/05; 06:29:11MT - usagold.com msg#: 137358)

$$$$ $488.5 $$$$ Sundeck (10/27/05; 22:16:35MT - usagold.com msg#: 137325)

$$$$ $482.9 $$$$ osa104c (10/28/05; 22:18:13MT - usagold.com msg#: 137356)

$$$$ $480.0 $$$$ Liberty Head (10/30/05; 13:11:14MT - usagold.com msg#: 137397)

$$$$ $478.6 $$$$ Goldilox (10/27/05; 23:36:31MT - usagold.com msg#: 137326)

$$$$ $476.0 $$$$ Lothar of the Hill People (11/3/05; 09:45:56MT - usagold.com msg#: 137497)

$$$$ $474.4 $$$$ NEMO me impune lacessit (10/31/05; 10:04:59MT - usagold.com msg#: 137406)

$$$$ $473.7 $$$$ pilgrims_gold (10/31/05; 08:25:19MT - usagold.com msg#: 137404)

$$$$ $472.5 $$$$ Henri (10/31/05; 11:24:56MT - usagold.com msg#: 137410)

$$$$ $470.0 $$$$ jenika (11/1/05; 07:14:53MT - usagold.com msg#: 137433)

$$$$ $468.8 $$$$ balzac (11/3/05; 19:02:56MT - usagold.com msg#: 137529)

$$$$ $466.7 $$$$ Rimh (11/4/05; 12:45:11MT - usagold.com msg#: 137561)

$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)

$$$$ $463.1 $$$$ Whitewaterwoman (11/4/05; 15:32:38MT - usagold.com msg#: 137571)
$$$$ $463.0 $$$$ glockmaster19 (11/4/05; 13:58:46MT - usagold.com msg#: 137565)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $459.5 $$$$ spotlight (11/3/05; 21:05:28MT - usagold.com msg#: 137533)

$$$$ $426.5 $$$$ Topaz (10/28/05; 00:13:49MT - usagold.com msg#: 137327)
===
Sorry Lady Whitewaterwoman for the slight adjustment !
<;-)

Gandalf the White

(11/05/2005; 00:19:41 MDT - Msg ID: 137581)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the DECEMBER Comex contract (GC5Z) on Wednesday, November 9, 2005, ---BUT all entries must be posted to the TableRound before HIGH NOON (Denver time) on Sunday the 6th, AND ALL ENTRIES must answer THE QUESTION !!

The QUESTION -- (Put on your THINKING HATS !)
We have all read, heard and talked a lot on this USAGOLD forum, about the "promise" of gold. But, what does gold really "promise" to YOU, its owner? In 50 words, more or less. . .

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive "A British King Sovereign, with an "India" mint mark, Fineness of: 0.917, Actual Gold Content: 0.2354 troy ounce, and Minted in India between 1902 and 1925 !

There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure silver Maple Leaf.
===

THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) December 2005 Gold Contract (GC5Z) on the date of Wednesday, November 9, 2005.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $444.4)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $444.4 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON (12:00) on Sunday, November 6, 2005.

6) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a fifty (50) word paragraph or more discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
NOTE --- Thirty-six Hours to Entry DEADLINE !
<;-)

TownCrier

(11/05/2005; 01:16:17 MDT - Msg ID: 137582)

Stevens, not true...

"a true Gold Standard should be the goal -- it is the best way to achieve a non-inflationary monetary system."
---------

History proves otherwise. A so-called gold "STANDARD", even under the best of intentions, only succeeds in EXPLODING the effective supply of monetary "gold" (i.e., a papery sort of derivative of the metal) that trades as if it were the real thing. It isn't. But the apparent deluge of new-fangled supply depresses the value all the same.

Know what it is you wish for.

R.

OvS

(11/05/2005; 01:25:14 MDT - Msg ID: 137583)

Time is an illusion.

Randy, the vigillant eye,
never sleeps. I must. OvS

TownCrier

(11/05/2005; 01:38:55 MDT - Msg ID: 137584)

OvS, sleep

Goodnight, you princes of Maine... you kings of New England.

R.

Belgian

(11/05/2005; 03:29:34 MDT - Msg ID: 137585)

@Flatliner

A few facts : Euroland is the biggest trading partner of the Middle East(ME), Russia, Asia (China).
Euroland has a trade surplus.

The ME + Russia are the owners of our planet's *vital* energy reserves...good for another 100 years !

When I say "vital", I mean that oil/gas are the very fundamental of the whole planet's economic activity and prosperity.

In the past era, where those vital resources were abundant, easely available and ridicously "cheap"...a lot has been mismanaged from the energy owners and consumers' sides.
THIS IS CHANGING NOW !

The owners (states) of those remaining vital resources simply realized how "vital" their wealth actually is for the entire globe. This is a dramatic change in attitude.

Note that Russia, at present, is almost as important as the Saudi Arabia energy central bank.
Putin offered Shroder the job of Gazprom CEO, when he leaves politics. On Putin's recent visit to Brussels, it was concluded that Russian gas will flow (abundantly) through Euroland. Etc...

The owners of the vital resource reserves now have a choice between "two" currencies (�-$) as to see their wealth being valued : A helicopter dollar (socialist $-?) with a UST goldreserve still fixed at $42/ounce and a euro currency with an ECB goldreserve who's price is quarterly adjusted for purchasing power.

Just imagine that a state fixes the price of your house (or any other valuable tangible), whilst your currency loses purchasing power !? Would you buy another house in possession ...or 2 or 3 ?

Ned

(11/05/2005; 04:31:36 MDT - Msg ID: 137586)

Great posts lately...

Stevens....137558

David Linkley....many lately....thanks

miner49er..........137572

Looks like more of us solidly in the inflation camp. I've got a question for you Mr. miner49er Sir (and all I suppose).

Why is the dollar rallying? Yesterday saw resistance broken and the dollar rose through 90.6 on the DX. Oddly, the index fell off a bit from 8:30-9:00am and then rose solidly from 9 to 11:00am.

Why is the FED raising rates anyway? Apparently on the surface it is to tame any inflation scares and a defence for the currency, yes? But in reality don't they want a little more inflation and a smaller buck?

I gather from your last couple pararaphs of your post 137572 you anticipate the hikes slowing and/or stopping soon so as not to cause a real estate collapse, yes? So I am guessing that after another raise or two/three is the FED going to stop and then we are off to inflation-land?

Thanks to you and all.

Have a golden weekend!

Belgian

(11/05/2005; 05:06:29 MDT - Msg ID: 137587)

@David Linkley

The PoO-�/$ exch. rate "action" on thursday met a "reaction" on friday. My conclusive observations are not build on 2 action/reaction days.
I've been watching these actions/reactions since 1999, when PoO - PoG - �/$ exch.rate were at their lows of the decade.
The euro exchange rate went up (versus the dollar) together with the PoO and PoG.

And the matters of fiat currency (units of account) are NOW secondary to the BIG CHANGE in Gold's evolving status !
All keep on looking at the wrong side of the medal. It is about GOLD in the first place and currencies as secondary consequence.

The euro-concept wants gold to be "-DELINKED-" (severed) from its currency shackels. No more gold-currency-STANDARD !!! If you want to know the exact price of the Mona Lisa value...you bring this valuable on auction and ask the planet how much "purchasing power" (units of account) the highest bidder wants to give for the property.
That's what the management of the euro numeraire does with its (ECB) goldreserves, quarter after quarter. It is NOT the euro who says what the (fixed) price is (and remains) of its gold-wealth stored as its reserve !!!
It is the dollar who says > My UST goldreserve is worth $42 per ounce.

It are the oil/gas-reserve owners who say > I want 1 euro and 1,20 dollar for the same amount of oil. It is the oil (wealth) owner who decides what the purchasing power of its oil should be. Up until 1999, it was the dollar-regime who decided what the appropiate price (purchasing power) of oil was.

That's why the BP-boss, as the butler of the fortunes of two ($)queens (UK-NL), has an PR function towards the general public. He has to reassure the public that lower oilprices are coming...meaning...the dollar-regime will keep on deciding what the purchasing power of a barril of oil exactly should be. (mas-!)

The Unfree dollar-gold-standard (fixed goldprice) gives all the power to the dollar currency that must be taken as "the" standard. Gold nor oil are to be allowed to price (devalue) the dollar(currency standard).

Euro Freegold wants the entire world to decide what the purchasing power of GOLD actually is. Then oil will (can) decide wich numeraire is most appropiate for doing exactly the same > "value" the vital resources !

It doesn't bring us one step forward in our understandings, when sticking to the old clich�s that don't fit anymore in the fundamental changes that are taking place.

If you stick to the idea of another goldprice (oilprice) rise without understanding that the very "nature" of these price rises has "changed"...the Big picture doesn't make any sense. WHY isn't the goldprice not following the oilprice as in the pattern w've known for the past 3 decades ?

Yes, the euro would be just another fiat like all the others that ever existed ! But it is NOT because the management (ECB) of this euro has changed dramatically the very fundamental of its "reserve" (MTM of eurogold). The backbone of the offered �-system alternative.

Yes, for the umpthieth time, the absolute majority totally ignores this Freegold concept. The absolute majority doesn't see the Mona Lisa as a wealth tangible (cant eat it). But those who do own wealth...the fundamental of the entire globe's wealth (oil)...do realize the wealth of their possession. Idem dito for Asian wealth producers, shipping their products and services (wealth) all over the planet. They wish their wealth being auctioned in a global market and not in a world dominated by a dominant selfserving dollar regime that isn't worth its responsibility anymore.

The Mona Lisa owners (gold) don't accept any $-paper-promises anymore in exchange for tangible wealth. That's why the euro-Freegold-concept offers its alternative, which the dollar-regime continues to refuse.
This transition is an onion peeling process.

Ask yourself WHY the Swiss changed their constitution before selling half their goldreserves ? They abolished the gold-standard and the remaining half of goldreserves will be valued MTM from now on. Delinked from the currency that definitely stopped being "money" (hard currency). Severance of the Swiss franc's link to gold ...we will be free to act according to our own discretion with respect to the evaluation and utilisation of our (remaining) gold holdings !!!

Currencies were never concepted to be "HARD"...but we will never function without an appropiate unit of account. We need Another backbone as to support the debt-driven-political economy concept. The old "SYMBOLIC" $-goldstandard backbone never worked as it genuinly should. Freegold, offered by the euro-concept, will do the job.

Now that the (grotesteque) financial industry is relentlessly dwarfing the physical economy...we need a modern wealth-standard, more than ever. Gold's "symbolic" function (utility) had its time. The real owners + producers of (economic) wealth don't want to be caught into a giant bubble of unproductive-worthless financial industry proliferating under our dollar regime. All the very visible extremes will NOT be stopped and reversed (sanitized) but will continue their path to hyper form...layer by layer of the onion. Finally w'll have to conclude that it's all in "the system" and that it is the system ($-IMS) that needs to be reconstructed around Another concept.

Is Helicopter Ben, the right man at the right place, at the right time ? What's his new concept ? Or...can he...will he make the old $-concept healthy again ? Can or will the $Trillion financial industry wind down to natural (normal) proportions to the physical economy ? Or shall we all leave our jobs and become day-traders, "making" money instead of earning it ?

Or,...shall FREEGOLD say how "wealthy" one is or isn't ?
Goldmetal in one's possession, valued on a global scale. Goldmetal that "FREELY" and universally says what one's real purchasing power is, every second of the day. The valuation of goldmetal by a whole planet free to bid for the metal without any dominant interference of a market-maker/breaker (the brotherhood of the financial industry).

Note David, that I'm NOT putting the euro currency on top of the page...BUT FREEGOLD in its entirety of WEALTH !
This old, but renewed, concept is the only answer (solution) left to bring physical economy and hyperinflated financial (debt) industry, back into funtional proportions.

The old fiscal and monetary policies are NOT going to do their old job, again. These policies became ineffective already some time ago and made the irrational exhuberances (read global imbalances), possible in the first place. Hyper debt is not the cause, but the problem. We can't inflate that hyper debt away, anymore...without fundamental (conceptual) changes.

In the above context, it is quite natural that many so called authorities state that oilprices will come down and that Asia shall float its currencies. The above context is also reason for having wars.

mas

(11/05/2005; 06:17:22 MDT - Msg ID: 137588)

And further to your discussion....

Sir David. Heres an easier explanation. (Maybe)? From the Privateer for clarity.

On June 29, 2004 the Fed Funds rate stood at 1.0%, a level which had been maintained for just over a year, since June 25, 2003. On that date - June 29, 2004, Gold closed at $US 392.80. The $US index stood at 89.70 points and the 1 Euro exchanged for 1.2066 US Dollars. Also on June 29, 2004, the ECB's official rate stood at 2.00% - a level it had remained at for almost exactly one year. The ECB rate was therefore exactly double the Fed Funds rate in the US.

On November 10, 2004, the Fed raised the Fed Funds rate by 0.25% to 2.00%. On that date, Gold closed at $US 434.50. The $US index stood at 84.50 points and 1 Euro exchanged for 1.2888 US Dollars. The ECB official rate remained at 2.00%, which meant that the EU and US official rates were equal.

On November 1, 2005, the Fed raised the Fed Funds rate by 0.25% to 4.00%. On that date, Gold closed at $US 460.60. The $US index stood at 89.92 points and 1 Euro exchanged for 1.2030 US Dollars. The ECB official rate was STILL 2.00% - a level which it retained through the ECB meeting on Noveber 3. Thus, the US official rate was now DOUBLE the EU official rate.

Several interesting points come out of this data. the $US/Euro exchange rate when the US rate was half the EU rate stood at 1.2066. Almost a year and a half later, after the US rate had QUADRUPLED and the EU rate hadn't moved at all, making the US rate DOUBLE the EU rate, the $US/Euro exchange rate stood at 1.2030. In short, it had all but remained stationary.

Over the same period - June 2004 to November 2005 - the $US index didn't vary much either. In June 2004 it was 89.70 points. In November 2005 it was 89.92 points. Of course, in the course of regaining its June 2004 levels the $US index had dipped as low as 80.60 at the end of December 2004 while the $US/Euro exchange rate had been as high as 1.3629.

Gold had simply been slowly but steadily been going up, against both the US Dollar and the Euro. Granted, the $US Gold price reached the mid $US 450s in December 2004 and didn't exceed that level until September 2005, but nonetheless, Gold is the only one of these measures which is substantially higher now than it was when the US started to raise rates in June 2004.

Of course, this week, the spot future Gold price fell $US 16.90, the oil price fell below $US 60 for the first time since May, and the $US index finally managed to claw its way above the 91.00 level, closing at its highest level since May 2004 on November 4 at 91.16. It's amazing what an 0.25% rise in official rates (especially since it's the twelfth in a row) can accomplish, isn't it?

And..

And don't forget, the ECB, the purveyors of the "competing" global reserve currency the Euro, have not "competed" at all on the interest rate front over that period. ECB rates haven't moved for nearly two and a half years while US rates are now four times as high as they were a year and a half ago. That's a lot of US pain for very little gain.

da2g

(11/05/2005; 06:38:07 MDT - Msg ID: 137589)

Belgian- Swiss Gold

Hello Belgian. There is one aspect to the Gold MTM concept that I am having trouble understanding, and perhaps you can clarify. Perhaps this has been explained before, and if so I apologize. If indeed the Swiss have unshackled their currency from gold backing, and too, like the Euro, will value their currency vis-a-vis gold on a quarterly mark-to-market fashion, what is the rationale for selling one half of their gold in possession? If the price of gold with respect to their currency is set to undergo a significant adjustment in favor of gold, why not postpone the sale of gold until a time when it can be traded for more fiat, or oil, or fine art etc?

Thanks in advance for your thoughts.

Belgian

(11/05/2005; 07:31:12 MDT - Msg ID: 137590)

US-dollarindex (USDX) to 95 > 100 !?

So what !? Does this probable, temporary dollarrise (goldprice decline) changes anything on the evolving economic fundamentals ? No it doesn't.

Economy is about ...having, stimulating, creating...more or less, demand and offer of products and services.
Monetary + fiscal policies are some of the tools to create the appropiate economic activity.

But there are many other aspects that makes buyers/sellers...offer/demand. One extremely important aspect is TRUST. Producers and consumers flourish and prosper when there is genuine STABILITY.

That is to be reflected in the US-$ and more precisely the USDX. What happens to "global" trust/stability if the USDX crashes through the USDX=80 maginotline ?

On the contrary...a stable/rising USDX is a sound fundamental for making other economic tools (mon.-fisc.), effective.

But since the overwhelming force (volume) of the financial industry has gained the capacity to defy gravity...every move (USDX) becomes suspicious. How come that the USDX can run away from its 80 maginot line for 15 years, whilst the (selective) purchasing power of the US-$ declined permanently ? The answer lays in the terrible disproportion of the financial volume and physical economy.
More answers to this type of conondrum lays in the fact that the $-IMS is NOT being challenged brutally...but rather dismanteled progressively and orderly.

The, for the time being, unfree goldprice is supporting the economical basic of stability and trust. That's why the goldprice remains, for the time being, linked to the dollar exchange rate (not purchasing power) !

But the proliferating financial industry contributes increasingly to the growing global imbalances. Nothing is allowed to "change", fundamentally. The system needs more and more falsifications (and ammunition). We are going virtual instead of physical (tangible)...building extremes on extremes.

The goldprice of the past 25 years, cannot be constantly related to anything, anymore ! The goldprice of the past 25 years is the most visible example of blatant falsification for the sake of trust and stability as the basis for economic activity. But gold is not an exclusive American (dollar) affair, but a global matter !

That's why gold will NOT remain linked to the dollar (or any other currency). Cfr. the delinkage of the "hard" Swiss currency from gold !
What will happen to the dollar's status...if and when gold severs its linkage to the dollar currency !? What will be the remaining (un)importance of IRs and/or USDX !? No wonder Dubai builded a goldrefinery next to its goldsouks.

Belgian

(11/05/2005; 07:57:40 MDT - Msg ID: 137591)

@da2g

Up until now, the presumed CB goldsales remain as controversial as can be. Completely untransparent for obvious reasons (imo). The DRAMATIC concept change of MTM-Freegold is...an as DRAMATIC change, one can imagine. How does one communicates a drama to the general (global) public. Much handier to ridicule the whole thing all together and continue to produce the usual yadayada.

The Swiss started to sell (?) their first 200 tonnes through BIS. Nice and cool "hiding place" where on a special account (under the ledger) gold contracts can live their (roll over) life. The next 1,000 tonnes have been serving different other (higher) purposes. The bulk of it landed in the CB gold redistribution operation, needed to prepare for the coming MTM-Freegold concept. Dollarreserves that are in the proces of being dismantled need a compensating goldreserve. Imagine a planet and its currencies stuck with useless dollarreserves and no goldreserves !?

Many states, under the old dollar-gold-standard regime, had accumulated too much or too little goldreserves. This had to be re-proportionated (15%). It is as this big maneuver of redistribution (CB-gold) comes to an end, that the goldprice can start on its long trail of "revaluation" under the new regime of MTM-Freegold. When you start playing cards, each one gets the same amount of cards,no.

The CBs who wanted to participate in this redistribution and new goldregime, tried to do this as orderly as possible as to not disturb the existing goldmarket and risk to jeopardise the preparations. Cfr. the WAG-I POG spike sept.'99. Note that US + Japan were not signatories of the WAGs, but agreed not to interfere...wich they clearly did in the run up to WAG-I (POG low-$253).

The dollar-gold-standard (fixed goldprice) didn't like at all the idea of MTM-Freegold...and still hates it today. Very understandable but not smart.

da2g

(11/05/2005; 08:13:35 MDT - Msg ID: 137592)

Belgian

Thanks for the reply. I understand your point, however I cannot believe that the Swiss would play a part in the redistribution without some other form of compensation other than fiat. How else do they stand to benefit from such a redistribution? From a very simple perspective, the fewer gold assets outside of Swiss hands compensating for a loss of dollar value, the more valuable those Swiss held gold assets become. How else might the Swiss be benefiting from this redistribution other than the warmth of the knowledge that they are helping with the transition away from dollar denominated reserve asset

Thanks again for your time.

mikal

(11/05/2005; 08:30:43 MDT - Msg ID: 137593)

Several new and old power sources compared

http://www.guardian.co.uk/science/story/0,3605,1627424,00.html Guardian Unlimited | Science | Fuel's paradise? Power source that turns physics on its head - Alok Jha - 11/04/05

Stevens

(11/05/2005; 08:43:46 MDT - Msg ID: 137594)

TownCrier

During the years of the Classical Gold Standard, the price index moved between up 2% and Down 2% for most of the 1800s. (See A Monetary History Of The United States, by Milton Friedman.) It's true that there were many banking panics, disruptions, a major gold rush in California that caused a brief inflation, and several mini depressions. But the value of the dollar remained very stable through all of these crisis, and helped bring stability in a period of the Industrial Revolution, a time of great economic transition. (BTW, thanks for your correction on the Timing of Volkers appointment.)

David Linkley

(11/05/2005; 09:21:22 MDT - Msg ID: 137595)

@Belgian

Hi Belgian,
I do enjoy your posts but differ with your conclusions. It was you who pointed out this past Thursday's Euro decline coincided with oil's rise. I too look at the markets over time and usually disregard short term trading as noise. If you want to free gold you force the price higher by removing supply. Gold becomes much more liquid and accepted at higher prices. This begs the question, why are western central banks selling gold at this time. My view is that too much central bank gold was leased out over the past 15 or so years to various large financial entities. These financial entities (LTCM, JPM, etc.) sold the leased gold and created piles of derivatives to enhance profits. Why have gold lease rates stayed so low and the gold that is gone from the cental bank vaults still left on the books as a reserve asset via instructions from the Bank of International Settlements? The reason is the gold can't be bought back at anywhere near today's current prices. So the central banks hold "formal" gold sales to officially cover the gold that's long gone. Gold has been shorted for so long there's no way cover without bankrupting large financial houses taking all of us down with them.

Yes Belgian many countries are seeking to weaken the US dollar standard for the world but what will take it's place? Whose ships will patrol the seas to protect Japan from China, who will bail out Europe again when they turn on one another, who will protect Middle Eastern oil supplies to Europe if not for the US? Who will lead the transition away from fossil fuels to new innovations over the next 30 years? The EU? I think not. This is the Bush's oil cartel's last hurrah much like the coal spike in the late 1800's which was replaced by oil.

One last comment about Swiss gold. They were forced into those sales by other western banking interests. Notice when they were at first reluctant to sell their gold claims surfaced in the media about Nazi gold never returned the the rightful owners. How do you defend yourself against such evil claims. Just the accusations alone make you look guilty to the public.

Sorry Belgian, the Euro is just another bag of junk backed by socialist countries and an unworkable constitution. Free gold is not going to help Europe.

Goldenera

(11/05/2005; 09:37:55 MDT - Msg ID: 137596)

$$$$$$$ $461.6 $$$$$$

Gold promises me a whole new world of PEACE and PROSPERITY for all Mankind. Gold will be reused as the base for value of all currencies. With Gold as the new standard there will be no more wars since gold cannot be created like the printing presses of the existing world monetary systems. Wouldn't this be wonderful? This is not a pipe dream but a true and only possibility for Humanity.

CoBra(too)

(11/05/2005; 10:59:13 MDT - Msg ID: 137597)

Free Gold and other matters ....

David Linkley writes and takes issue with Belgian - quote(abbreviated):
My view is that too much central bank gold was leased out over the past 15 or so years to various large financial entities. These financial entities (LTCM, JPM, etc.) sold the leased gold and created piles of derivatives to enhance profits. Why have gold lease rates stayed so low and the gold that is gone from the cental bank vaults still left on the books as a reserve asset via instructions from the Bank of International Settlements? The reason is the gold can't be bought back at anywhere near today's current prices. So the central banks hold "formal" gold sales to officially cover the gold that's long gone. Gold has been shorted for so long there's no way cover without bankrupting large financial houses taking all of us down with them. unquote

Apart from agreeing on this view, except that the list of perpetrators should include at least some names as UBS, Deutsche Bank etc. - it makes a lot of sense and is pretty much accepted by some of our peers, who have really probed into this phenomenon for much longer and on a fundamental basis than any of us.

The following paragraphs I can't really underwrite, as I forsee the exact opposite. There is not one country of the first, second or even third world wishing to undermine todays currency system as yet. As the last 30 years have proven it was always a concerted effort to uphold this fraudulent system for the benefit of governments all over the globe; Even if the lender of last resort the US controlled IMF's SDR's have run towards its negative amplitude, the consumer of last resort has still functioned quite well. Therefor, the US intent to drop its value both internal and external will meet with the combined efforts of the globalized world to counter every move with similar tactics.

The day of reckoning may become apparent when "promises" will be broken in a major way - and we may just see the commencement of such a failure to make good on past in- and a-ssurances. The derivative structures have become so vast, that the real economy is dwarfed by Trillion Dollar Bets - overwhelming any counterparty up to the highest echelons.

... And finally, as we haven't found, even any workable semblance of an alternative to fossil fuels powering and ensuring our needed growth - to keep up the delusion of being able to repay our explosive debt and in particular (but not only)the twin deficits of the US and as you feel happy to state the socialist countries of the EU.

I'm getting somewhat bored with that kind of statements. The EU may not have adopted a watered down constitution and may just be labelled as socialist as the Neo-Con Admin of the US is seemingly labelled as fascist!

So in my final analysis - free gold is not going to help Europe - alone - it's going to help the globe.

cb2

PS: Swiss Gold Sales - Could you imagine that the Swiss bought back the same gold that they sold!

The oil pricing in �'s may constitute a major blow to the hegemonial Reserve Currency, though it will matter less at approaching peak oil.

Lastly, I have to take issue on the

Topaz

(11/05/2005; 11:45:47 MDT - Msg ID: 137598)

Gold, Deflation and the Dollar etal.

http://www.gold-eagle.com/editorials_05/laird110405.htmlAs one firmly in the Deflation camp, I'm often drawn to articles in that vein.
Inevitably though, at some point, the Authors diverge from what I consider to be a "natural" regression and revert to a more inflationist vision of the Future.
I'm very encouraged to report however that the Linked article had me enthralled from go to whoa ...and for those interested, the Authors (subscriber) Newsletter continues with this excellent foundation.
It's as if the Boy has been reading my Posts.

Don't think for one minute DX90+ is in the interests of the US! ...it's NOT.

It will be very revealing this week to watch PoG action both in and out of the Comex timeslot.
Granted "access" trading has the Physical side covered, but I'd be expecting some violent swings at any rate.

We Watch!

Goldilox

(11/05/2005; 11:53:33 MDT - Msg ID: 137599)

CB Gold Sales

@ David Lindley,

Aside from seeing hot air announcements on Bubble-vision, have you ever actually seen CB gold "hit the market"? Have you ever seen an offer to" get some while it's hot"? Even COMEX has never offered a single CB bar of gold for sale. If they did, believe me, they would OPENLY advertise it in their rush to denigrate gold.

CB gold "sales" are a smokescrren, as NO ONE has ever publicly BOUGHT any CB gold - at least not on any "open market".

A better term might be CB gold "transfers", which begs the question, "to whom"?

For every "sale" there is, especially in this case", a willing buyer - always anon.

It's often suggested that governments aren't particularly friendly to their minions - in the case of gold sales, that is doubly true, as the government is bankrupted while some powerful "investor" builds rainy day stash to support the "next political thing" at the public expense.

USAGOLD / Centennial Precious Metals, Inc.

(11/05/2005; 12:03:57 MDT - Msg ID: 137600)

A world of gold at your fingertips...

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

miner49er

(11/05/2005; 12:27:35 MDT - Msg ID: 137601)

Ned @ 137586

Hello Ned.. maybe I can provide my response by working backward from your question list. Some of my thoughts on the rationale behind Fed IR action are in an earlier post (#135872 on 9/11). With that as a backdrop, I think very much in the forefront of their thinking was that raising rates initially would work towards slowing down the mortgage lending frenzy. But as the long end did not respond to the short end target increases, the Fed found itself approaching a flattened yield curve. And, if the long end still does not move enough to curtail lending, would the Fed force an inversion? I maintain they won't, as this would risk chaos in the derivatives markets. (I'm sure there are problems enough already -- in fact, any short-end / long-end arbitrage or spread trading is already having problems with the narrowing spreads, and is requiring greater amounts of leverage to get the same "high.").

Actually, that in itself is one way in which the dollar strengthens -- where non-dollar speculators playing for instance a spread off the short-end against something that isn't moving like it should (like the long end), require greater amounts of dollars to make the same trade, or if the trade is actually souring, and they can't get out of it just like that, they are forced to pony up additional margin, which also requires the purchase of dollars.

So, don't be misled by dollar strengthening as if it happens just like the Econ 101 textbook says. The illustration in the text book shows Country A expanding, leading to over-spending and growing deficits, and Country B running surpluses selling to Country A. This reaches critical mass, where A's currency is cheapened to the point that it stops buying so much from B, and B's is so strong, it starts spending its surpluses and outruns its own capacity and starts buying more from Country A, and begins running deficits, at the same time bidding up A's currency against its own, until the scales tip and the cycle repeats. Ok for a survey course, but woefully lacking the consideration of the plethora of complex dependencies, both directly economic, and indirectly political that make up reality.

Actually it does kind of fit the reality here, as this country's major export products are its financial products. We are uncompetitive in producing sneakers and ovens because of domestic structural elements (labor, regulatory costs, etc.). But we are structurally poised to produce one helluva financial deal for you. So, if you blur the accounting for a moment to view current account items with the capital account, we actually have been running a solid surplus over the past years. Not good accounting procedure, but for illustration purposes (and in practical fact, this is how many look at it), we have been a net exporter when adding intangible financial "products" with real goods and services. Remember, when people point out the monumental amount of dollars overseas, this is somewhat inaccurate, as most of these dollars have already come back here and "imported" dollar-denominated securities, which is what they are holding. Were that not the case, we would have reached the critical mass point mentioned above long ago, and before reaching such mind-boggling numbers. The world of derivatives has only served to further extend this paradigm, and by their leverage fostering design, amplified it exponentially.

So, what's the problem then, if all the financial products serve as just another item for export? Lots in the long run, but most preeminent is simply the fact that they are "virtual" entities. They represent contractual arrangements of ownership or creditorship, which depend on non-market, non-economic variables of social stability, and faith in the compass of the rule of law. I see Belgian touched on the attributes of stability and trust below, as well. Since the exported products sitting in accounts all over the world depend on a lasting measure of predictable behavior, and are reliant upon humans far removed from the actual security itself, and mostly unconscious of its very existence, there is a tall order to fill to demonstrate to the holders that their little digital entry representing stake or creditor status, will return to the owner what he/she expected. I import a camcorder, and if the exporting nation falls off the planet at sunrise, it doesn't affect the product, as I have it in hand. I "import" a bond or equity share from somewhere, and I have to rely on people and situations I have no control over, and really know nothing about for its performance (hence its value).

Now, why is the Fed raising rates? Yes, they talk a bit about inflation, and if energy prices stay high, they will become systemic as higher costs push up prices of "core" inflationary items, but that is not all there is to it. I think they actually fear a deflationary trend, if the current monetary framework persists, due to overinvestment and overcapacity; or a terrible stagflationary phase of asset contraction, and price increases, if the monetary game shifts to another arena. The former is wrong thinking I believe, because the setting for this assertion assumes an obsolete global paradigm. In it, developing countries export to developed countries, in turn getting the developed countries' "hard currency" with which they can buy advanced technology, products and services from the developed countries to further develop their own infrastructure, and oil with dollars, since oil preferred dollars in those days. The end result is the the developing countries end up developed, and everything harmonizes to equilibrium, whatever that is. This was the way it was all supposed to work.

The chief problem with this is that it requires a great loosening up of restrictions on capital movement. Otherwise, foreign investors won't take the risks. By that same token however, foreign investors also bail out on a moment's notice. Thus to keep foreign money, which is looking for quick hit returns, the incentive is there to only keep building infrastructure that supports a known and working gameplan -- i.e., to keep exporting products to the so-called developed countries. And in this world there are lots more than just Countries A and B. So B is in competition with C, D, E, and so on. All having cut costs to the bone to keep ahead of the other, they "race to the bottom" further by cheapening their currency to shave even more pennies off their export prices. How do they cheapen their currencies? By holding the imported currency instead of selling it back on the Forex, which would put unwanted upward pressure on their own currency. And instead of holding stacks of digital dollars, they use the dollars to import dollar securities, producing the capital surpluses described above. And, to make matters worse, as the exporting companies sell the dollars they earn back into their local banking system, they get their country's currency in their pockets, introducing inflation domestically, and with a currency unit that is predetermined to be cheapened for the overall "good."

This is why there is such a rift in places like China, where certain regions (those targeting exports) are in a hyper-boom, while most of the billion+ souls therein languish in miserable poverty. If China were to pronounce an effort to use their export surpluses to build the nation's general infrastructure, and promote local capital markets, to help stimulate demand internally, while a good policy, it would drive the "hot" speculative money right out the doors. Hot money doesn't want to wait 10 years for its return, especially when the governments of the target countries of their investment have an unproven track record in property rights and ownership. Speculative money wants quick returns, and the ability to bail instantly if the tide turns, and it prefers tried and true bets to make it all happen. So massive overinvestment in this paradigm is why many say we are due for a contraction. And were this the old war, I would agree.

Again, enter the derivatives component. Why hasn't this massive overcapacity brought about a shift and contraction already? 1) derivatives allow the off-loading of risk into a general dispersion throughout the globe, which permits direct investors to keep milking the cow for all its worth, and 2) the capacity for obtaining leverage cheaply enough to make the same bets, even with smaller returns, is still lucrative when you can make that bet yet again thousands of times because of the funds you can procure.

So, if I am the finance sector, and I am fat and lazy from working a good deal to its death, I don't want change. Even if the natural economic pressure were to let the dollar weaken, and allow some inflation back into the local economy to bid up wages, and produce some natural pricing power domestically, the financial sector pressures the fallible human beings in government to keep the currency strong, as it looks to protect its own narrow interests. And while manufacturing constituents want a somewhat weaker currency to make exports competitive, the game is decided on who lobbies, pressures, and buys off the decision makers best. And in the real world the banking/finance industry will always trump anyone else. Always have and always will.

So, we have stretched the current paradigm so far beyond the breaking point that there really is no turning back. It doesn't matter about the "sensible" policies this or that group comes up with. It can't be reversed at this point. There is no such thing as bringing back a "little inflation" or "slowing things down a bit." Within our self-contained world, we will argue about various things like this, various monetary and fiscal tools to employ, e.g., mortgage interest deduction caps, and blah-blah.. but none of it will work at this point because the system is so far deteriorated. Maybe they were good ideas once upon a time. But now -- all too little, too late. Removing a superficial malignant tumor, may have been the best course of action for the cancer patient 6 mos. ago, but having left it to fester, it has so spread througout that cutting off the tumor now means nothing.

Only an absolute paradigm shift (and I know I use the word paradigm a lot, and people for some reason got a bad taste of this word through overuse some years back, but it is exactly what it is -- a paradigm shift). Only an absolute shift in the monetary paradigm will be able to approach fixing this (and not without bumps and pain for many along the way). All the mountains of debt and encumbrances that exist today cannot be made whole within the current framework. There is no safe haven in the current setting. Hard assets are illiquid generally, and only sophisticated niche players make money on them. What asset is globally established and recognized, liquid, tried and true, lasting, scarce enough, simple enough that anyone can understand it, and so far undervalued today that it could fill the void?

Gold. And, what framework will allow gold to find its true market value? A framework that does not foster the overwhelming use of instruments that artificially inflate its supply, and hence keep its price down by providing cheap substitutes. The current framework touts the monetary currency as successful when it is as good as gold. It relies hence on successfully keeping a lid on the price of gold in terms of itself. It benefits by the expansion of the gold supply, however it may be achieved, as this keeps demand satisfied, the price down, and makes the currency appear stronger by comparison.

In a genuinely productively expanding economy, gold will find downward pressure, as people choose to sell a non-producing asset to buy assets producing a return worth the risk. But, when the economic situation has stretched so far beyond this, we wonder why gold is relatively stale, why people do not fear the negative effects of over-expansion, with its bad loans, faltering companies, and the subsequent negatives upon the economy. But understand that the powerful interests that have such huge stakes in the pricing currency, don't want gold to appreciate as it points out the failure of the currency to be as good as gold. Again, with financial wizardry, the paradigm here has extended itself far beyond what most believed possible, and have lulled many into a very false sense of security.

What is needed is a framework that decouples the association with gold as a reference to the currency's value. This does not mean the issuing institution does not value gold, indeed it should keep gold as the ultimate asset in reserve, and to demonstrate its value (esteeming) of gold, should let gold be priced according to the market and mark its books accordingly. The currency will stand on the basis of the issuer's management practices, of which having a healthy reserve of gold is a simply one component, not the be all and end all reason. And, not as a convertible backing, but simply a demonstration of wealth and power -- components necessary to add integrity to a currency, which is and always will be, just a fiat digit or piece of paper. But to use the currency on a large scale, requires faith and trust among the users that the issuing institution will remain stable. So, hand in hand with a good reserve of unencumbered wealth, goes an intangible form of wealth. Clearly stated and adhered to objectives build the intangible wealth of integrity and reliability and promote the currency's stability, so the currency users can plan accordingly, as they denominate contracts and do commerce in terms of the currency unit.

And this is the framework that the world is moving towards, as the world increasingly recognizes its asset base is built chiefly on a currency so over-extended, whose value is tenuously in the hands of its external creditors, and so leveraged, and so lost in a monstrous labyrinth of obscure derivatization that makes any kind of benchmarking impossible. So many holes in the dike to plug, and always springing new ones. How many fingers does the Fed have left?

The confusion you perceive in interest rate movements, and the signals the Fed is sending, isn't you. They can't make any real strong pronouncements one way or the other, because any movement one way or the other outside a narrow band will exacerbate some extreme condition to a breaking point (spring another hole in the dike). They have to sort of mumble stuff and keep people guessing, but sound authoritative enough to maintain a semblance of being in charge. Even the Administration does the same mumbling act. For instance, it tries to get dollar depreciation vis-a-vis yuan appreciation, and throws bones to the manufacturing constituency on occasion about weakening the dollar, or restricting imports. But, at the same time mutters "strong dollar" just loud enough for the finance and banking constituency to hear it, and then hedges the whole thing with "let the dollar find its appropriate value in the free markets." Blah-blah-blah...

Anyway Ned, I hope I hit on some of what you asked... Later, miner

Tevye

(11/05/2005; 13:22:59 MDT - Msg ID: 137602)

contest

$$$$$ 456.7 $$$$$

Gold's promise is many things. Gold promises always tradable value for whatever other earthly goods are needed, be it food, fuel, clothing, shelter of even taxes (yuucchh). Just to hold a handful of gold is comfort; and inspiration. Gold also promises comeraderie amongst the fine knights and ladies of this table-round!

And as my lovely wife Golda reminds me, there is eternal promise as well, even if it is as pavement.

But to Tevye, Gold is Tradition!

Belgian

(11/05/2005; 13:33:32 MDT - Msg ID: 137603)

@da2g

Any CB, as the manager of the states currency, with MTM-Freegold in its reserves, does benefit from the principle/concept.

This has NOTHING to do with more or less currency !!!

A wealth reserve (gold)... that is universally recognized... that keeps its purchasing power through MTM concept ...IS THE IDEAL RESERVE BASIS for "managing" the states' currencies. Each state, small, medium, big...has an optimum of goldmetal in reserve. Use the excess goldmetal for redistribution to other players who wish to transition from the dollar-gold-standard to the euro-MTM-Freegold concept. Or/and...exchange goldmetal wealth for other wealth-creating opportunities (overseas banking).

Exchanging goldmetal wealth (reserves) for intrinsically worthless fiat units (credit units) is an idiocy.

No CB has sold and delivered (exchanged) any of its goldmetal wealth reserves to replace it with fiat units as reserve !!!
The US did NOT shipped 20,000 tonnes of gold pr� 1971 in exchange for eurodollars in reserves... No...US gold was delivered as to make its dollar-unit acceptable-usable-functionable, outside its borders ...and profit from it !!!

Belgian

(11/05/2005; 14:07:01 MDT - Msg ID: 137604)

@David Linkley

Note, that major goldminers already firmly stated that they can NOT move gold's price higher by removing supply !

And if you conclude that one gets gold "free" by moving its price higher...please restudy the gold-pricing dynamics.

Not "all" CBs that engaged in goldreserve actions are one and the same faction ! There are CBs that had gold action to support the dollar faction and other CBs support the euro faction. Both factions engaged in goldreserve action for opposite purposes. Herein lays the diffent answers to your question...WHY did CBs sell gold ?

But also a lot of "private" goldmetal has been mobilized and replaced by paper gold contracts.

This Big gold mobilization of the past decade was because of the competition of the old $ goldregime with the new � goldregime.

If your theory about the BIG gold shortage is real...WHY WAS GOLD SHORTED to such an extend !? Elaborate, please.

Let us all wait and see if this "military logic" works out in the dollar-system's favor.

Can you please stop holding Eurolanders for intellectual dwarfs, not capable to innovate !

But it was not only the Swiss CB that has sold (?) goldreserves, was it. Was there moral pressure (nazi gold) on all the other CBs ?

Shall socialist Euroland pressure Trichet to get some � helikopters as well ?

If freegold is not a solution to you...what kind of gold (goldmarket) do you advise ?
If the zeuro junk and its freegold concept are a worthless alternative...then please tell us how you see the $-system and gold, evolving. TIA

Flatliner

(11/05/2005; 14:39:05 MDT - Msg ID: 137605)

Oil is "priced" in euro and (for the time being) invoiced in dollar

Well, I'd assumed that the reply I'd get would be a little simpler. But, that's ok, I can try to understand what you've written. Unfortunately, it has not jumped out at me the first, second or third time that I read the reply.

Also, with the number of seemingly related messages, it's hard to differentiate the pros and cons that apply to this topic.

In an effort to simplify the puzzle, I'll ask again, because I may have overlooked it, is there some recorded source for this theory posted on the net? Or, am I missing the forest in the trees?

I will investigate the concepts presented, but for now, I do not believe I fully grasp the freegold concept that is referenced here. Any help will be greatly appreciated.

Off the wall � If I were a central bank, what would stop me from applying the money that I create �out of thin air� towards the purchase of physical gold? Wouldn't I be able to go into the market and purchase virtually unlimited amounts? Why don't they do this? I would guess that it's not all that important to them. It seems to me that, if I were a central bank, I would �act� like I owned gold and play the paper markets where physical gold really wasn't exchanged. Heck, I could sell as much paper gold as I could print (digitize or whatever)! Knowing that the public watches the currency/gold ratio, it seems like it would be pretty easy to make that ratio appear constant buy participating in the paper gold market. But, I do have to say that this concept is a little off the wall because I'm not exactly sure why they would want to play it. But, it is obvious that they are not printing money and building their physical supply in any noticeable fashion. And, it is obvious that they play in the paper market. It's just that� well� I still can't see the connection.

Once again, thank you in advance.

mikal

(11/05/2005; 14:41:16 MDT - Msg ID: 137606)

Wall and Main - Consumer Concerns

http://abcnews.go.com/Business/story?id=1282373&page=1Can Consumers Go On Keeping the Economy Afloat - AP - Ellen Simon - Nov 5
A bit long, but easy reading, peeling open the world economy, one layer at a time. If not for US consumer AND government spending, the world would not be so dependent on dollars. As others have noted, this keeps US $ in play as the world's reserve currency, along with factors such as military backing, inertia of use, liquidity etc.

Humble Pie

(11/05/2005; 14:45:40 MDT - Msg ID: 137607)

#137604,#137603

Belgian: On the subject of Sale of Gold by a CB whether they be Pro EU/dollar .We always get the news after the fact.My guestion is where and how do they sell the gold or is it just a shuffle between members or is it an actual sale and to whome .we always see the sale but never the Buy side . It sounds like a Chineese fire drill. any clairfication would be nice.

968

(11/05/2005; 15:21:00 MDT - Msg ID: 137608)

@ Humble Pie

http://www.bis.org/review/r050509b.pdfPhilipp M Hildebrand: SNB gold sales - lessons and experiences Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Institute for International Economics, Washington, DC, 5 May 2005.

And the second :

Mr Roth discusses demonitisation of gold in Switzerland

Speech by Mr Jean-Pierre Roth, Vice�Chairman of the Governing Board of the Swiss National Bank,
at the 22nd Annual FT World Gold Conference in London on 14 June 1999.
http://www.bis.org/review/r990622b.pdf

Please study these two speeches first... Ask yourself WHY gold has to be DEMONITISASED first (before the actual sale) ??? Please share your conclusion on the discussion board here

David Linkley

(11/05/2005; 15:57:30 MDT - Msg ID: 137609)

@Belgian

Hi again Belgian,
Gold was sold short in earnest beginning in the early 1980's after the last bull run for 3 main reasons:

1. The great bull run in stocks had begun as Paul Volker restored confidence in the Fed as an inflation fighter and the world learned that the system could function 10 years after Nixon closed the gold window in 1971.
2. The Reagan Administration wanted to deprive the Soviet Union of cash to ruin their economy. (Keep gold, oil and other commodities prices low) Why did Canada sell most of their gold reserves at this time after a meeting with Reagan?
3. Obviously if the gold price is contained paper currencies look better.

Lets not forget that most governments are more concerned with keeping the current system functional rather than what will be of most benefit long-term. Shorting became so profitable that many wanted in. The Washington Agreement 1 was to send a message to market players the game was ending. The central banks would no longer lease gold in increasing quantities to keep the price down.

I appologize and did not mean to offend our European cohorts. I detest big government whether in the US or anywhere else on the planet. The US is currently the great experiment in history, a Republic founded on individual rights. Will we earn another turn at the wheel or will we submit to some form of slavery? Without gold, slavery is all but here. I do enjoy and learn from your posts.

David Linkley

(11/05/2005; 16:19:05 MDT - Msg ID: 137610)

@CoBra(too)

If you have read my postings over the past several weeks I have stated that we are entering a transition period away from fossil fuels over the next several decades. I did not say it was going to be easy but will require sacrifice beyond what we have known since the 1930's & 40's. All economic systems need to reset from time to time because the existing ones can't keep up with the changes inspite of the entrenched power base protestations.
I'm sorry you're bored with the current terms socialism and neo-cons or facism. The threat today is every bit as severe as Hitler's was in Germany. You get a financial collapse coupled with hunger and a facist leader might start looking good to those without. These are strong prejorative terms for a reason, these forms of government have lead to the most repressions, massacures and misery in human history. These are deadly serious terms to me.

Capitalism and free markets are the best way to transition to new economic and energy systems. I have every confidence that remedies will be found if we a left free to create. That is a big question mark at this time.

Belgian

(11/05/2005; 17:07:16 MDT - Msg ID: 137611)

@Humble Pie

CBs gold action : Some CBs have been selling goldreserves and delivered the metal to different takers. Some CBs have been trading gold contracts, again to different takers.
Some CBs have been doing both, delivering goldmetal and trading gold contracts.
Buyers/takers : Other CBs, Privileged oilreserve owners, Asia (China). Some (Russian) goldmetal reached private takers.

The bulk of goldmetal moves and OTC gold contracts will ALWAYS remain a very secretive (anonymous) market. The same for much of the privatly holded goldmetal. This is inherent to gold when we talk about tonnes of gold. Most of the coins and kilobars moving to private buyers/sellers are registered as is most gold for industrial purposes (jewelry).

Maybe that the gold buyers side will become more transparent once Freegold is generally established and accepted as part of the new IMS ? Without doubt, the goldactions of the past decade, announced as (so called) goldsales, served a very particular purpose...hiding the (opposite) purposes for the different receiving sides.

When wealth objects of high value are auctioned...most of the time, the buyers whish to remain anonymous for a whole set of reasons. Sometimes buyers or sellers do want the whole world to know that they are indeed buying or selling. But only the very insiders know the real reason why they don't want to remain anonymous.

Just imagine that the entire world would know that cheap oil was only possible for cheap gold !? How disturbing this would be !

The same secretive actions do exist (common practice) in currency management (interventions) and attacks or support.

A lot of the (very) Big deals (state and private) often happen under the radar, Sir. The general public's radar, that is.

Belgian

(11/05/2005; 17:13:25 MDT - Msg ID: 137612)

@Flatliner

May I suggest you dive into our host's precious (unique)archives as to feed your personal opinion (historical background). Think you will enjoy it.

Rocky

(11/05/2005; 18:30:41 MDT - Msg ID: 137613)

$$$$457.9$$$$

GOLD! What does gold promise to anyone? Gold is security. Gold has a marketable value. Gold buys things. God reacts to the economy. Gold promises to me that I will continue to seek it out and buy high while selling low. Gold also promises to satisfy that strange itch to enjoy its presence.

spikedog

(11/05/2005; 20:24:26 MDT - Msg ID: 137614)

$$$$$$$ $471.0 $$$$$$$

Gold's promise: I am the one of unfailing fidelity; Enduring, never changing. I am always there to rely on, even when others cast aspersions eg, a barbaric relic. So, go ahead, have that fling with the stock market, bond market, derivatives galore; when the party is over, it is my stability and beauty to which you will return.

Felix the Cat

(11/05/2005; 21:11:12 MDT - Msg ID: 137615)

$$$$ $460.0 $$$$

I have no idea to answer the question because in my mind, there is only Gold. I have not any concept of papers and other valuable stuffs. Cannot compare those.

YGM

(11/05/2005; 22:25:13 MDT - Msg ID: 137616)

$$$457.7$$$

From Robert Service "The Yukon Goldminers Bard"

Since all that is was ever bound to be;
Since grim, eternal laws our Being bind;
And both the riddle and the answer find,
And both the carnage and the calm decree;
Since plain within the Book of Destiny
Is written all the journey of mankind
Inexorably to the end, since blind
And mortal puppets playing parts are we:

Then let's have faith; good cometh out of ill;
The power that shaped the strife shall end the strife;
Then let's bow down before the Unknown Will;
Fight on, believing all is well with life;
Seeing within the worst of War's red rage
The gleam, the glory of the Golden Age. (R.Service)

*Owning Physical Gold will entitle you to a share of the 'Golden Age'...YGM

sabre

(11/05/2005; 22:36:48 MDT - Msg ID: 137617)

GUESS for the price of GOLD

Hello,

I would like to make my GUESS for the price of GOLD: $$$$ $464.8 $$$$

My answer to question: The promise of gold means the following to me. It means
finally being in sync with something that really has inherent value and makes me
personally proud that I rediscovered something that the world has considered precious
for over six thousand years. Approaching retirement , I have confidence my investment
in gold will provide my wife and I real insurance against hard times.

Please enter me in this GUESS.

Best regards,

SABRE

sabre

(11/05/2005; 22:43:04 MDT - Msg ID: 137618)

$$$$ $464.8 $$$$

Hello,

I placed my GUESS for the price of GOLD in the SUBJECT box this time according to the rules.

My answer to question: The promise of gold means the following to me. It means
finally being in sync with something that really has inherent value and makes me
personally proud that I rediscovered something that the world has considered precious
for over six thousand years. Approaching retirement , I have confidence my investment
in gold will provide my wife and I real insurance against hard times.

Best regards,

SABRE

2023

(11/05/2005; 22:43:13 MDT - Msg ID: 137619)

Contest guess - $$$$ helicopter dollars449.7 $$$$

In the past, present, and future gold is tangible wealth. A gold coin is a very beautiful object - wealth that can be passed on to future generations.

ski

(11/06/2005; 00:38:16 MDT - Msg ID: 137620)

Year to Date progress on the Gold-Silver race

Have been here at the forum for several years. From the start, my postings have always maintained that silver will outperform gold on a percentage basis (which it has done for the past few years). With two months left in 2005, how is the race doing?

Year-to-date: (as of Friday per "The Rude Awakening")

silver up 11.2%
gold up 5.4%

Sure miss a lot of the old posters......

Gandalf the White

(11/06/2005; 02:01:10 MDT - Msg ID: 137622)

GOLD PRICE CONTEST entry deadline is HIGH NOON TODAY !

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the DECEMBER Comex contract (GC5Z) on Wednesday, November 9, 2005, ---BUT all entries must be posted to the TableRound before HIGH NOON (Denver time) on Sunday the 6th, AND ALL ENTRIES must answer THE QUESTION !!

The QUESTION -- (Put on your THINKING HATS !)
We have all read, heard and talked a lot on this USAGOLD forum, about the "promise" of gold. But, what does gold really "promise" to YOU, its owner? In 50 words, more or less. . .

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive "A British King Sovereign, with an "India" mint mark, Fineness of: 0.917, Actual Gold Content: 0.2354 troy ounce, and Minted in India between 1902 and 1925 !

There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure silver Maple Leaf.
===

THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) December 2005 Gold Contract (GC5Z) on the date of Wednesday, November 9, 2005.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $444.4)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $444.4 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON (12:00) on Sunday, November 6, 2005.

6) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a fifty (50) word paragraph or more discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

(11/06/2005; 04:12:05 MDT - Msg ID: 137623)

Recipe of the day

http://www.institutionaladvisors.com/pdf/050210%20JAY%20TAYLOR%20INTERVIEW.pdfToday we want to cook food using two ingredients.

First one is Bob Hoye's model of post stock market bubble contraction. According to Hoye, senior currency gets strong as debtors scramble to pay their dollar debt. The debtors he considers are third world countries and/or commodity producing countries. See the link for Hoye's interview with Taylor.

We cannot cook Hoye's model alone because he does not consider the dollars stacked elsewhere (Asia, Europe and oil producers).

The second ingredient is Belgian's model of let the dollar fall while we (Asia, EU, ME) all distribute gold and equate gold reserves to 15%. Do not sell any dollars.

Now mix these two ingredients and bake in oven until bubbly and heated through. Make three servings. Caution, this recipe is experimental and has not been tried before.

What you would get is relentlessly rising dollar for an unspecified period of time and scrambling debtors.

mas

(11/06/2005; 04:32:31 MDT - Msg ID: 137624)

Sir David.

Socialism is really a bad thing? EU is built around it and the "people" are really working for a better tomorrow. The below is taken from the Privateer again, but it does address your issues quite well.
Which one would I pick? US or EU. (I would pick the EU, no question, yes they have their set of problems but hey who doesn't? At least they have a direction). And also don't forget you have 5% of the world's population and consume 25% of the oil.
And the answer is? I like the idea of the rest of the world working towards a common goal of economic development together, (reads not manipulated through a currencies reserve status).
Will the US join the rest of the world or will it try to work itself further into a corner that it can never get out of? Consumers of last resort? Why? Because of your reserve status..... How will you ever repay all of the rest of the world? Debt has to be repaid, does it not? No! we will devalue our currency and repay with devaluing IOU's. What happens to all of your work force, who cares, you say? They care! Do they have a say in what's happening now, no?

Capital Goods Equals Real Living Standards:
The Classical Economists were wont to say that they tried to see through "the veil of money." Today, we
know how to do that better. But money still causes most people enormous problems in measuring how the
economy is actually going. To see it, peel money away (for a moment) and place it side by side the
economic fact that the REAL German economy is in front of the US economy which produces 9.6 percent
of the world's manufacturing output. Then (still keeping money illusions away), look at the respective
population of Germany and the US. A stark conclusion jumps out into the open. If the US had to rely
entirely on the output of its own plant and equipment then, on a comparative REAL per capita living
standard, the US living standard would be about 1/3rd of the German living standard. The US and
German stock of capital plant are nearly equal. The US population is about three times larger than the
German population. In sheer physical economic terms, this amounts to having one German standing
beside a piece of capital plant while over in the US there are three Americans standing beside a US capital
plant of nearly the same output capacity. The standing real capital can only produce so much over a fixed
span of time because it is physically impossible for it to do otherwise. But once the production run has
finished, the final goods, the produced consumer goods, are there. Three Americans stand and look at
these US final economic goods while only one German stands and looks at a near same amount of goods.
Millions of Americans do not realise this today. Their stores are full to the brim with consumer goods.
They ignore the fact that the vast majority of these goods are manufactured in other parts of the world.

da2g

(11/06/2005; 05:14:32 MDT - Msg ID: 137625)

$$$$$$$$$$$$ 458.80 $$$$$$$$$$$$$$$

Gold's only promise is to remain unchanged, unlike our perception of its value.

da2g

(11/06/2005; 05:27:11 MDT - Msg ID: 137626)

$$$$$$$$$$$$ 458.80 $$$$$$$$$$$$$$$

Gold's only promise is to remain unchanged, unlike our perception of its value. It is here today, and will be tomorrow, to provide a unit of account, a measure of worth, a store of my time and labor- a store of the surplus of these efforts. I value these efforts highly, and I do not take lightly how I choose to pass them through time, so that perhaps, I may redeem them for the like efforts of another.

(sorry for the previous premature submit).

Belgian

(11/06/2005; 07:37:30 MDT - Msg ID: 137627)

euro and ECB goldreserves

Euroland's expansion from 300 million to 500 million people, is happening under the umbrella of EMU...one single currency. The inner circle of Euroland (300 mil.) is much more economically saturated than the outer circle (200 mil.)
The "internal" growth potential in expanding Euroland is developping in one single currency (�) and justifies the monetary expansion (M3), proportionate to the growth.

After WW-II, the US expanded outside its borders to Europe...BUT...introduced the eurodollar without having the different European currencies removed. All these Eurocurrencies became dollar derivatives.
Today, Euroland's expansion is not happening with derivatizing the other countries' currencies. They all join the EMU and evolve to uniform purchasing power (convergence).

When 500 million Eurolanders start realizing that the currency of their internal economy has a gold-wealth-reserve at their ECB...that through the MTM concept, remains intact (shielded) from purchasing power erosion...they all want to settle their internal trades with that numeraire that has a gold-wealth-treasure as a reserve to manage that � currency.

The euro ceases to be a dollar derivative, because of the specially concepted goldreserves (MTM) that neutralize all possible (probable) dollar shocks. Any currency that neutralizes its CB dollar reserves from any $-interference, with appropiate goldreserves...has taken the first step in dollar DE-derivatization (cfr. Argentina).

The day that the planet has decided, through freegold (free goldmarket), what the value of gold actually is...gold-wealth-reserves in all CBs will say what the state's real wealth is. From this level playing field starts the economic competition where the nations' CBs gain or lose gold-wealth-reserves.

Nations who, for whatever reason, have to devalue their currency can buy less gold than those who can revalue their (excess) currency.

Today, a wealth generating nation, cannot express its wealth by the amount of dollar-reserves it is holding. When the $-PoO keeps rising...the nations' dollar-wealth-reserves decline in (oil)purchasing power and then one can hardly define this as wealth. MTM Freegold, would maintain its purchasing power, whatever the price of oil does.

Today, 200 million Eurolanders preparing for full EMU membership, watch that rising $-oilprice that drains their reserves. They want to join a new concept (EMU) that is building on "price-stability" as the best guarantee for sustained economic growth & development. They don't want a system that can "shock" at convenience with the tool of a tsunamilike financial industry.

Think twice, when using the "zeuro" word.

Henri

(11/06/2005; 07:40:10 MDT - Msg ID: 137628)

Refco fallout

What chasm of fiscal/financial void was discovered with the outing of Refco shenanigans and declaration of insolvency? Certainly we know that the void existed prior to the declaration. It is only through these brief upsets of the imaginary applecart we call "stability" that the large players...those primarily responsible for the production and maintenance of the illusion...can catch a brief glimpse of what they have created. There is really nothing to see...only a feeling to perceive. That feeling is similar to what one must feel like staring down the bore of a loaded .50 calibre handgun with no safety in the hands of a child. You really know that to make all right with the the illusion the child must be convinced to put the gun down without pulling the trigger at least while it is aimed at you. The child has no intent to harm anyone, it was just mistakenly given the opportunity to pick up a dangerous weapon left carelessly lying around.

There may even be those among the large players who find keen interest and intrigue at the depth of fear in the particular entity toward which the bore randomly swings...even those who would seek to measure this phenomenon in hopes of gaining a perception of the magnitude of harm that can be done should the weapon happen to be discharged just then...

What must be done to take the weapon out of the hands of this child? My thought is the violent moves on the dollar/euro/gold exchange were what was needed to be done to defuse the crisis. Does one now punish the child or the fools who left a loaded weapon lying around for the child to pick up. What can be done to keep this from happening again they ask.

Even a child can see the "Wile E Coyote" absurdity of people walking blithley over a chasm believing they are still on solid ground. They suddenly realize they are walking on thin air and try desparately to turn and run back to the last solid ground they were sure of, still suspended magically above the chasm. It is only in that moment that the illustrator has the fool fall into the chasm.

Surely the confidence game is much like this cartoon illusion. The cartoon syndicate decides whether the fool falls or actually scrabbles his way absurdly back to the cliff and wipes the sweat off his brow. that decision is based only on which will get the bigger laugh from the audience. In our financial void scenario we like to presume that laughter is not the effect the syndicate is going for...only the illusion of stability.

So the next glimpse into the void will not be the result of childplay with a carelessly abandoned weapon, it will be by some other means. It matters not. The problem is that the void exists to be stared into. Where did it come from? How was it created? Departure from a gold standard?

David Linkley

(11/06/2005; 07:48:01 MDT - Msg ID: 137629)

@Mas

The idea that government leaders should pick winners and losers in rapidly changing complex economies was discredited a lond time ago. (i.e. Soviet Union) Only when socialist countries protect and nourish specific industries do they survive. (i.e. Airbus) Every country has their favorites to protect including the US. Falling manufacturing in the US is a causalty of many things but mostly because of economics. Microsoft sells their operating system to a computer manufacturer in Taiwan for $50. The computer is sold later for $800. The manufacturer's margin is about 5% or $40, Microsofts is about 98% or $49 on a $50 disk. Why should the US manufacture everything with intellectual capital margins like these? To keep people working? Give me a break. If you like socialism, that's fine with me, I prefer the roller coaster ride of capitalism and freedom.

phil288

(11/06/2005; 09:12:05 MDT - Msg ID: 137630)

$$$$ 452.20 $$$$

Like many of us at the table round, I think the stock markets are highly vulnerable. The dollar may strengthen in the near term or not, but ultimately will resume its decline, since the U.S. is rapidly becomming an overly indebted consumer society. The government and or powerful banking interests are pushing the envelope of spin and lies to keep the bubble inflated. If one wants a safe haven from "Rapture Economics" you can go to U.S. cash, or foreign fiat currencies, or commodities or ultimatly silver and gold. Gold to me is the ultimate safe haven. Those surplus fiat funds I have been fortunate enough to acquire in financially successful endeavors can only be conveniently stored for future use by me or others, not in cash, or euros or oil, but in the ultimate survivor currently available at discounted prices from our host. My advice, along with others,is to hold as much physical gold as you are comforable with, I am not there yet but I am getting closer with every purchase.

Goldilox

(11/06/2005; 09:18:13 MDT - Msg ID: 137631)

Prefs

@ David,

"If you like socialism, that's fine with me, I prefer the roller coaster ride of capitalism and freedom."

Probably not many here who disagree in principle, but the reality is that the only US manufacturing that is thriving is the over-bloated "security" industry that gets built-in advertising from the Admin's dirty tricks and scarey announcement departments and built-in profits from no-bid cronyistic contracts.

The tax base is 10X higher than that rebelled against by the colonists, and actually even higher than that in the old Soviet block, so the difference between "socialist" and "free" is becoming symantic. Government control is pervasive - right down to needing a "license" to sing on a street corner.

The admin talks tough about the "War on Terror", but as long as the border is the most porous ever, it is no more than a smoke screen for resource grabs.

The 911 Intel Op (we still don't know whose intel, but it was too well scripted to have happened as advertised) should wake folks up, but instead scares them back under their pillows, happily handing their liberty right over to the scare-mongers.

As long as war and resource domination are the biggest businesses of of the "free" world, there can be no "free" markets either.

While the US military forces are more and more stretched by the NeoCon's preemptive defense policies, the US is likely to experience a British-style loss of empire, a process that will be in combination with loss of $ hegemony. And that's just the fate of the victorious!

David Linkley

(11/06/2005; 09:21:51 MDT - Msg ID: 137632)

Strange days have come (Thanks to The Doors)

On Friday the dollar rocketed higher after a very strong week and one wonders when looking at the fundamentals, why?
Bob Hoye relates the senior currency always rises after a stock market bust. Others will say it's the rising interest rates in the US. On the other side, the commercials have huge short $$ positions. Gold is correcting although not as much as one might think. Clearly the Fed in the past two weeks has paraded out as many members as possible warning of inflation. Message, higher rates. Possibilities:

1. Huge Treasury refunding this coming week and the need to calm markets.
2. Brokerage houses and banks are beginning to rally maybe indicating an end to rate hikes soon? Or end of cyclical bull in stocks as these generally top last.
3. Something major coming not publically known like an Iraq pullout, serious budget deficit work, fabulous new GM alternative energy car?
4. Price of oil maybe dropping to below $50?

My thoughts are this rise is temporary. The economy is slowing and I believe the Fed will be forced to reverse course by the end of the 1st quarter in 06. Bush needs to get his approval ratings up to have a prayer at moving any bills into passage. The headwinds are strong and we have basically an academic with no experience driving Fed policy. Just the change alone will spook investors. Keep your gold, add on dips, nothing has changed, we are heading into perilous times.

Kev

(11/06/2005; 09:23:05 MDT - Msg ID: 137633)

$$$$$ 456.6 $$$$$

Gold promises me to hold a stand alone asset that is tangible and indestructable. It is not connected to a country and although the price is rigged from times to times, its value will always come to the surface. Gold should be used to preserve your wealth and protect yourself from havoc in the financial world which today is dominated by debt, credit, derivatives and overvalued asset classes ranging from real estate to bonds.

Goldilox

(11/06/2005; 09:32:13 MDT - Msg ID: 137634)

Cronyism

@ David,

One more point -

Your quote "The idea that government leaders should pick winners and losers in rapidly changing complex economies was discredited a long time ago."

With the proliferation of no-bid contracts under crony control, the Admin, NASA, DOD, and FEMA obviously do not share your "discreditation" theory, i.e.

Halliburton
Gilead Sciences (the patent holder for Tamiflu)
Kenyon Int'l - (the body count org that kept the lid on hurricane info)
FOX's preemptive selection for Bush's Turkey day troop visit - an extension of "embedded" reporting

"Free" markets and access to real information are deteriorating more rapidly than a deer carcass on a hot summer day.

Goldilox

(11/06/2005; 09:32:22 MDT - Msg ID: 137635)

Cronyism

Flaccus

(11/06/2005; 09:35:05 MDT - Msg ID: 137636)

mas. . .Statistics

Your point on the U.S. consuming 25% of the world's oil caused me to review the stats.

The United States consumes 19.5 million barrels of oil per day. It produces 7.8 million barrels per day. Net, it imports 11.7 million barrels/day.

The European Union consumes 14.5 million barrels of oil per day. It produces 2.6 million barrels/day. Net, it imports 11.9 millions of barrels of oil per day.

Therefore, Europe consumes more of the world pool available for export than the United States.

Statitical Source: The Central Intelligence Agency

David Linkley

(11/06/2005; 09:37:02 MDT - Msg ID: 137637)

@Goldilox

My discussion is not about comparing the current period in the US to socialist Europe. This is about navigating a very difficult transition from prosperity to scarcity. The Bush White House in my opinion is one of the worst in our history however, even if he was a better President there's little he could do because the country has no overriding theme to unite it. You need a severe enough crises to do that and it isn't here yet. I'm aware of many of our problems and most are self-inflicted. A return to honest money and a Constitutional government would go a long ways in helping not only us but the rest of the world to a better place.

David Linkley

(11/06/2005; 09:46:32 MDT - Msg ID: 137638)

@Goldilox (picking winnersand losers)

Hi Golilox,
I pointed out that yes the US picks winners and losers just like all countries do. That is one of the main reasons we are struggling now. Virtually unlimited money created to reward political allies which continues to destroy our money at an accelerating rate. A gold cover clause on the dollar would limit the new creation of money to say 3% annually. A return to the constitution would cut the size of government drastically and free up seed capital for new industries to the benefit of all.

CoBra(too)

(11/06/2005; 09:48:44 MDT - Msg ID: 137639)

Transition!

Not only from Alan Greenspan to Ben (Chopper) Bernanke - and thanks to Mas - the main points have been spelled out already. Bill Buckler is amazing in anlyzing the status quo anytime.

I'm not quite sure if all and in particular D.L. understand the slight differences between political brand names and the final dirty reality. - and I really osbstain to go into explanations of communism, fascism, socialism, capitalism and any other brand of globalization - as J.M. Keynes is still at the root of the problem.

It's so easy to follow the guy's lectures and deficit spending while you can. Well even J.M.Keynes had listed its limits - spend when you have to and save for the next downturn in upswings.

Now, of course the second part - saving - was totally abandoned and its only truth was deficit spending - for all and every purpose and forever! That's fine as long as the rest of the globe accepts the concept of a Dollar centered world, which is starting to disingregate while I write. The burden of financial obligations of the US have by far outgrown its means to pay back in kind.

The US knows it - the rest of the world knows it and the final truth is that the US is only one smarter bomb - paid by the rest of world - away from the "Wile E. Coyote" Syndrome.

Happy landings for Wile. E. C. - cb2

Black Blade

(11/06/2005; 10:06:42 MDT - Msg ID: 137640)

$$$$$ 467.10 $$$$$

Black Blade

(11/06/2005; 10:12:06 MDT - Msg ID: 137641)

$$$$$ 467.10 $$$$$

Gold holds the promise of stability in financial portfolios and for the preservation of wealth. The Dollar is in deep trouble and does not hold value. The "Twin Deficits" continue to grow at break-neck pace with no end in sight. We call Gold "Portfolio Insurance". It is now more imperative than ever to hold a modest position in precious metals. The "strength" issue of the US dollar and other currencies is a farce as it is only a "relative" measure against other weakening currencies. Meanwhile Gold has been gaining ground since 1998 but remains grossly undervalued. It only gets better from here.

- Black Blade

(whew - thought the rule was 50 words or less)

Smeagol

(11/06/2005; 10:41:41 MDT - Msg ID: 137642)

If you REALLY want "FREEGOLD", you have to go ALL THE WAY.

(Smeagol mode off)

Sir Miner49er wrote: "What is needed is a framework that decouples the association with gold as a reference to the currency's value. This does not mean the issuing institution does not value gold, indeed it should keep gold as the ultimate asset in reserve, and to demonstrate its value (esteeming) of gold, should let gold be priced according to the market and mark its books accordingly. The currency will stand on the basis of the issuer's management practices, of which having a healthy reserve of gold is a simply one component, not the be all and end all reason. And, not as a convertible backing, but simply a demonstration of wealth and power -- components necessary to add integrity to a currency, which is and always will be, just a fiat digit or piece of paper. But to use the currency on a large scale, requires faith and trust among the users that the issuing institution will remain stable. So, hand in hand with a good reserve of unencumbered wealth, goes an intangible form of wealth. Clearly stated and adhered to objectives build the intangible wealth of integrity and reliability and promote the currency's stability, so the currency users can plan accordingly, as they denominate contracts and do commerce in terms of the currency unit."

I posted an earlier version of the following which was not fully thought out; since then I have completely revised it. The recent discussion (awesome posts lately, people. I love this place!) seems to be appropriate to posting it again. I'm thinking about posting it further than this Forum, but I need additional brainpower as there may be things I can't see. Am I dreaming? Am I nuts? You decide.

"Gold as a Scientific Unit for the Measurement of Wealth"
by David McNamee

September-October 2005

Greetings!

First I would like to say a heartfelt Thank You! to all of the analysts and writers and others, far too many to list, for your gold and economics articles and posts that I have devoured in print and on the Web over several years, all of which have influenced my thinking to some extent and some of which have altered my path in life. I consider myself neither analyst nor writer but it is my hope that I may now contribute something worthy of the reader's consideration to the pile.

Note: the word �gold� in this document means the element.

After thinking about gold and all those past flawed monetary standards and the current situation I have come to a conclusion:

The currently broken patchwork international monetary system will not be fixed by reinventing previous metallic money standards or by attaching new political or paper strings to gold while cutting or temporarily retiring others, for yet another spin of the wheel for the benefit of a few at the expense of many. The time has come to restore gold's original role in the workings of the world once and for all for the benefit of all, in a manner which will set gold apart from any influence in perpetuity.

Throughout history, humans have established frames of reference to bring consistency to the understanding of their environment and their place in it. Earlier cultures established empirical measurement systems based on human metrics, like the cubit or foot, which were practical yet subject to variation. As society progressed in scientific understanding it began to establish rational invariable references based on non-human metrics and physical laws. Modern units such as the meter allow everyone worldwide to be on the same page when working on a project today as well as centuries from now. It is much easier to build something when everyone that is involved in the building has a set of tools that match and never change.

Unfortunately we have strayed far from this path in regards to monetary matters. The monetary chaos of today is more akin to the archaic hodgepodge of ever-changing measurement units of the past than what one would expect from our so-called "modern" age.

Scientific units like the meter are internationally accepted, uncomplicated, not profit motivated, do not affect what they measure, and everyone anywhere can use them if and when they have need. They serve with blind and impartial justice, giving no one any advantage over anybody else. They are not subject to greed. They grant no political favor and recognize no borders. Morally they are nonexistent. There is no reason for anyone to want to avoid them or control their use. They render consistency and stability to our knowledge of the world and as such are very desirable. They are not open to debate, nor are they subject to political wills or the whim of the markets or anyone's opinion. Things are measured against them, but they themselves do not change. Rather, they can be trusted to not change over one's lifetime - very much like death, taxes and a certain pretty yellow metal we are all familiar with.

Why not devise the same thing for wealth? Can wealth be defined as a unit, a constant? Can an impartial metric for measuring wealth be established? Can we end the gold/currency frauds once and for all? Yes, simply by restoring gold's original role as a measurement tool. We've been there before, and we must go "back to the future".

Anybody with at least one eye open knows gold is a trustworthy store of wealth, and history has shown that of all things, gold was then and still is today the best candidate for a measurement unit for wealth. However, gold's current monetary function is that of a corrupt variable rather than an inviolate reference; past and present monetary/economic/political struggles have prevented it from exercising its function and distorted its true worth. Today gold resembles a meter-stick seen through a distorting lens - the proportions of the meter-stick are not what they would be if you could actually see the meter-stick itself. All the while, the shape of the lens (and the meter-stick image seen through it) is constantly being changed and manipulated. This has gone on for so long that no one living in these modern times knows gold's true �reference� worth! Incredible.

I submit that in order to create a wealth standard with stability, utility and neutrality comparable to the meter, a form of wealth itself must be declared the sole wealth reference world-wide and at the same time forever disconnected from monetary, economic and political influence and control of any kind. Only in comparison to this reference can the relative values of goods and services and currencies and monetary policies become truly transparent worldwide and resolve in proper perspective with each other. Anything less is flawed from the start and guaranteed to fail the test of Time.

Long ago and for thousands of years gold functioned exactly as described above. At some point humanity took a wrong turn and allowed a segment of society to control its access to and use of gold and the weights and issue of coins. While this appeared to be beneficial to all at first, it never worked for long; the coins were shaved or clipped by the unscrupulous or desperate, or called in and replaced by the elite with cheaper alloys or lesser metals as aging societies overextended themselves. In the last few hundred years, gold (and silver) were officially used as a backing for paper currencies. This also seems to work - until the controllers of the currencies succumb to the irresistible temptation of fractional reserve lending and instant gain by over-issue, and force the use of the currencies by law over alternatives which would otherwise act as safety valves. The currency is inevitably printed excessively into worthless oblivion by and for the benefit of governments, central banks, certain corporate entities and individuals and to the detriment of those whose purchasing power denominated in such currencies evaporates - sometimes literally overnight - with loss of hard-earned savings and often of life itself. Every human being needs economic stability and security to be able to conserve wealth and plan for the future. ALL of the metallic money standards of the past have proved fallible over time except one. Today's present fiat paper currency systems, backed by nothing but confidence in their illusory wealth for several decades now, are even more easily exploited, and will also inevitably fail.

While I don't wish to seem pessimistic, I believe there is little chance we will actually see gold restored as a scientific wealth reference. Though it does not require much to educate someone in the use of gold, especially if it gives them a rational and stable frame of reference to work with, there are many entrenched powerful political, economic and personal wills that tend to take limited and extremely selfish views, looking at only short-term consequences and profit, rarely looking up from their re-election campaigning and planning to consider the effects of what they do today on future generations over centuries or millennia. A wealth that they cannot control is not in their interest. When gold's original wealth function is reestablished, what will be the reaction of those confronted with the actual value of their wealth versus how it presently appears through manipulating monetary/economic/political lenses? What will be the reaction of central banks and governments faced with a wealth they cannot own which functions outside their influence? The reestablishment of an impervious wealth reference of millennial endurance will not be without opposition and initial repercussions, and may take some time. Compare the mundane manner in which the meter is perceived and used every day by people around the world with the formidable money/fiat/central bank/bond/stock/carry trade/VAT/bullion bank/swap/X(=unknown)/derivative/political cyclones howling around unverifiable amounts of gold piled somewhere, and you can see we likely have a long rough road ahead.

All of humanity's view must rise to look to the horizon through future generations if there is to be a universal wealth reference that will endure.

Unlike units of measurement gold is tangible. Here is where we confront the Nemesis that has killed every attempt to use gold as a currency reference up to the present: we have never found a lasting solution to the temptation to abuse it. Can this dilemma be reconciled? If not, there can never be a true standard; only variable reference frames of variable duration (for examples see all of previous History).

I submit for the reader's consideration a proposal for a scientific measurement unit for wealth; it and its use are very simple, as such units are meant to be. It contains four key elements:

(1.) Absolute wealth and the unit of absolute wealth, Au, is one gram of gold (example: one troy ounce of gold is 31.1 Au), and

(2.) Monetary unit values extant on shaped or unshaped gold and its alloys are null and void forever, and

(3.) Title to gold resides only in human beings and passes only to human beings, and

(4.) Gold and title to it is not infringed by any law, statute, treaty, duty, tax, tariff, code, rule, legal construct, legal entity and liability whatsoever forever.

These four keys are merely a modern-day restatement of gold's original wealth measurement function.

The first defines absolute wealth and its unit as gold, fixing gold as the first and only tangible scientific unit and isolating it from all other forms of wealth. Recall that much of the usefulness and neutrality of scientific units stem from the fact they have no monetary or political worth at all. You cannot buy anything with them; essentially they are concepts agreed upon by everyone. However, because wealth involves tangible things a tangible must be used to measure it. By recognizing gold itself as a measurement unit it acquires monetary/economic/political immunity while retaining all other functionality.

The second forever removes from any object made of or with gold any direct or indirect connection to currencies or similar legal tender claims � no such condition or liability attaches to measurement units and their use.

The third removes all claim and title to gold other than that of the human being who owns it. It cannot be emphasized enough that this has far-reaching implications and will be the biggest hurdle by far to overcome in (re?)establishing gold's wealth measurement role. Since the essence of gold as absolute wealth and measurement unit for other wealth depends on its free use and transfer between people through Time, it is important to keep in mind that gold can only be owned and used by human beings, just as all units of measurement are �owned� and used only by people. Upon adoption of the gold absolute wealth unit, governments, corporations and all other non-human entities are forever barred from owning gold; whatever gold these possess at the time must be transferred to human beings by sale or trade during a reasonable transition period. Considering the imbalances that have built up since gold was last used freely, this would be a monumental adjustment.

The fourth ties in with the third and removes gold and gold ownership from all legal construction. Gold would be the only physical substance universally exempt from any law. It cannot be taxed or regulated, just as one cannot tax the meter. Direct exchange of gold for a currency, good or service (or vice-versa) cannot be taxed, just as one cannot tax use of the meter. Gold may be offered as a payment, but no one can ever be forced to pay with gold. No obligation whatsoever can attach to it; like the meter, it just is. Gold must be free to be carried and used freely anywhere by anyone without tariff or duty, just as the meter knows no borders. Likewise the mining, production and fabrication of gold cannot attach obligation to it in any way, as there is no preventing anyone acquiring and using the measurement method of their choosing (for those thinking that gold mines and gold producers will get some kind of free pass here, other materials mined or processed may still be regulated and/or taxed, environmental concerns must still be considered, and taxes and premiums may be separately charged for work done to or on gold). Each of the human owners/stockholders of a mine would personally hold their proportional share of the gold in the ground within the mine's property boundaries for its production and eventual sale or exchange to other human beings.

How would this unit of absolute wealth measurement be used?

The value of a wealth is in the mind of each human � because wealth is a concept in the minds of humans. Without humans there is no wealth. The value of a wealth is variable over time and affected by its utility/monetary/economic/political position relative to each human being and other wealths. People would use the Au to measure the wealth they are interested in at any particular moment in Time. To do this one determines how many Au equal the value that a quantity of currency, good, services or other wealth represents to them at that moment. As others do their own comparisons an average Au "temperature" of that wealth is determined. A group of individuals may combine their measurements to obtain a regional average or map of the Au of a currency, good or service. As more people take wealth measurements the relative values of these things assume positions in proper perspective with Au and with each other worldwide. Accurate comparisons and local adjustments can be easily made with confidence.

Today's currencies bear fixed unit of account numbers but a floating value percept which is determined by market factors, policies of the issuing entity and whatever confidence people place in them. They have a useful function, people are used to using them and by reestablishing gold as a measurement unit I am not calling for their abolishment. They would still circulate along with other financial instruments and may even be exchanged (by human beings only) for a quantity of gold, tax free, on the open market at an exchange rate determined by the parties involved. However, the true nature of all such instruments and any changes in their controllers� policies would now be revealed in the unprejudiced light of inviolate absolute wealth. They could never again be officially backed by or pegged to gold in any way and would have to continuously toe the accountability line to retain their value and acceptance by the people. Currencies would resolve into just what they are � temporary and convenient vehicles to facilitate trade, not a store of wealth. The real "reserves" behind a country's currency would be the gold freely held and used by the people of that country � out of political reach or influence.

It is important to remember regarding the gold measurement unit that the ownership and the exchange of gold for anything else (or vice-versa) cannot be taxed. Only this will ensure that gold is always and forever the most liquid wealth in any exchange, the only wealth with liquidity that cannot "freeze". Freed at last of all influence, gold would then price the wealth of everything else.

The restoration of gold as a measurement unit for wealth would not bar its use for jewelry and industrial purposes. Gold would still be mined, refined, sold and purchased on the open market, but of all things would again enjoy a unique and singular freedom, desirability and ultimate liquidity as the all-exclusive absolute wealth and benchmark against which all other wealth (and anything that may aspire thereto) is measured. Gold would not solve every economic difficulty; that is not its purpose, but it would exert a stabilizing role as the ultimate model that any country's currency would strive to emulate but could never replace or forbid.

Thank you for taking the time to read this. All feedback and comments � the good, the bad, and the ugly - are welcome.

Sincerely,
David McNamee
David may be reached at: zwolf@12cycle.com

S.

Max Rabbitz

(11/06/2005; 11:08:10 MDT - Msg ID: 137643)

$$$$ 465.7 $$$$

The promise of gold is not to bestow riches but to retain value when the fraud of paper promises becomes obvious to all, as a bridge over the valley of broken promises.

goldquest

(11/06/2005; 11:25:27 MDT - Msg ID: 137644)

$$$$$472.10$$$$$

The promise of GOLD? a guarantee of wealth, for those who own it. A fort and a safe haven from the coming financial meltdown. A means for survival for you and your family.
The chance to exchange "pretty" paper for something of real value.

Guided

(11/06/2005; 11:56:57 MDT - Msg ID: 137645)

$$$$$ $458.7 $$$$$$$

The promise of gold is, that the same ones who manipulate the price of it now will control it even more as the reslicing of the world pie becomes clearer to all. Will there be free market, private profit opportunities along the way worth the trouble of holding it? God knows. I wish I owned enough of it to seriously consider the question. The PTB are hell bent on seeing us all under the slavery of socialism. There will be no big problems with money. It matters not who is FR chairman. The era of enslaving the masses by loading them down with debt is clever and effective. Few stop to think about who the master they have signed on with really is. Surprise, it's the same FR who prints the money they pay hoping to buy there freedom back! How convenient. Maybe when the twin deficits can't be managed, they will just start passing out the paper we all signed on our homes to balance the books (reslice the pie).

USAGOLD / Centennial Precious Metals, Inc.

(11/06/2005; 12:09:57 MDT - Msg ID: 137646)

Especially crafted for those who are taking their first step...

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

Belgian

(11/06/2005; 12:14:32 MDT - Msg ID: 137647)

@Smeagol

Wawww, Thanks Sir and a Big Bravo for D.Mcnamee !!!

Gandalf the White

(11/06/2005; 12:15:37 MDT - Msg ID: 137648)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA

ALL ENTRIES for the "PRICE of GOLD" GUESSING CONTEST are now CLOSED !
--
The entry DEADLINE was HIGH NOON Denver time !
Did you hear the Town Center Clock ?
<;-)

Henri

(11/06/2005; 12:16:35 MDT - Msg ID: 137649)

Cobra too

My good Sir,
thank you for your kind acknowledgement of the Wile E. C scenario. I am flattered. Much abundance to you and yours and may you always use it wisely.
Henri

Smeagol

(11/06/2005; 12:47:15 MDT - Msg ID: 137650)

Wile E. Coyote

(smeagol mode off)

Wile E. is one of my heroes. He is way too smart for his own good, lives small, takes everything in stride, and never, ever gives up. I appreciate Wile's willingness to try new things and take the risk - and the heat and the blast waves - for the rest of us lesser lights ;-)

S.

Gandalf the White

(11/06/2005; 12:47:37 MDT - Msg ID: 137651)

OFFICIAL CONTEST ENTRY LISTINGS

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$ THE "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$
----

$$$$ $499.6 $$$$ Moegold (11/3/05; 21:02:28MT - usagold.com msg#: 137532)

$$$$ $496.5 $$$$ mikal (10/28/05; 06:33:00MT - usagold.com msg#: 137328)

$$$$ $492.5 $$$$ Beamer (11/3/05; 23:49:18MT - usagold.com msg#: 137540)

$$$ FRN492.1 $$$ Smeagol (10/28/05; 19:11:15MT - usagold.com msg#: 137354)

$$$$ $490.0 $$$$ Caradoc (10/29/05; 06:29:11MT - usagold.com msg#: 137358)

$$$$ $488.5 $$$$ Sundeck (10/27/05; 22:16:35MT - usagold.com msg#: 137325)

$$$$ $482.9 $$$$ osa104c (10/28/05; 22:18:13MT - usagold.com msg#: 137356)

$$$$ $480.0 $$$$ Liberty Head (10/30/05; 13:11:14MT - usagold.com msg#: 137397)

$$$$ $478.6 $$$$ Goldilox (10/27/05; 23:36:31MT - usagold.com msg#: 137326)

$$$$ $476.0 $$$$ Lothar of the Hill People (11/3/05; 09:45:56MT - usagold.com msg#: 137497)

$$$$ $474.4 $$$$ NEMO me impune lacessit (10/31/05; 10:04:59MT - usagold.com msg#: 137406)

$$$$ $473.7 $$$$ pilgrims_gold (10/31/05; 08:25:19MT - usagold.com msg#: 137404)

$$$$ $472.5 $$$$ Henri (10/31/05; 11:24:56MT - usagold.com msg#: 137410)

$$$$ $472.1 $$$$ goldquest (11/6/05; 11:25:27MT - usagold.com msg#: 137644)

$$$$ $471.0 $$$$ spikedog (11/5/05; 20:24:26MT - usagold.com msg#: 137614

$$$$ $470.0 $$$$ jenika (11/1/05; 07:14:53MT - usagold.com msg#: 137433)

$$$$ $468.8 $$$$ balzac (11/3/05; 19:02:56MT - usagold.com msg#: 137529)

$$$$ $467.1 $$$$ Black Blade (11/6/05; 10:06:42MT - usagold.com msg#: 137640)

$$$$ $466.7 $$$$ Rimh (11/4/05; 12:45:11MT - usagold.com msg#: 137561)

$$$$ $465.7 $$$$ Max Rabbitz (11/6/05; 11:08:10MT - usagold.com msg#: 137643)

$$$$ $464.8 $$$$ sabre (11/5/05; 22:43:04MT - usagold.com msg#: 137618)

$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)

$$$$ $463.1 $$$$ Whitewaterwoman (11/4/05; 15:32:38MT - usagold.com msg#: 137571)
$$$$ $463.0 $$$$ glockmaster19 (11/4/05; 13:58:46MT - usagold.com msg#: 137565)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $461.6 $$$$ Goldenera (11/5/05; 09:37:55MT - usagold.com msg#: 137596)

$$$$ $460.0 $$$$ Felix the Cat (11/5/05; 21:11:12MT - usagold.com msg#: 137615)

$$$$ $459.5 $$$$ spotlight (11/3/05; 21:05:28MT - usagold.com msg#: 137533)

$$$$ $458.8 $$$$ da2g (11/6/05; 05:14:32MT - usagold.com msg#: 137625)
$$$$ $458.7 $$$$ Guided (11/6/05; 11:56:57MT - usagold.com msg#: 137645)

$$$$ $457.9 $$$$ Rocky (11/5/05; 18:30:41MT - usagold.com msg#: 137613

$$$$ $457.7 $$$$ YGM (11/5/05; 22:25:13MT - usagold.com msg#: 137616)

$$$$ $456.7 $$$$ Tevye (11/5/05; 13:22:59MT - usagold.com msg#: 137602)
$$$$ $456.6 $$$$ Kev (11/6/05; 09:23:05MT - usagold.com msg#: 137633)

$$$$ $452.2 $$$$ phil288 (11/6/05; 09:12:05MT - usagold.com msg#: 137630)

$$$$ helicopter $449.7 $$$$ 2023 (11/5/05; 22:43:13MT - usagold.com msg#: 137619)

$$$$ $426.5 $$$$ Topaz (10/28/05; 00:13:49MT - usagold.com msg#: 137327)
===

We now await the COMEX Dec. settlement on Wednesday, Nov. 9th !
GOOD LUCK ALL !
<;-)

Smeagol

(11/06/2005; 12:52:18 MDT - Msg ID: 137652)

$$$$ !@#%&! $$$$

(smeagol mode on)

We already has made our own Guess, but the Politicians/Banksters wanted to enter the Contesst... alas, they could not agree on the Price of It in time.... sss... however, It has a promise It would like to make to them, O yess does It ever!

I wait here in your deepest dungeons
I am your worst nightmare

I have very good ears
I can hear the partying from here
I hear all your best laid plans
I hear every sordid deal you make
I hear your discussions about me behind closed doors

I count the days...
I count the years...
I bide remembering old times with friends

I detest what you've done to me
I detest what you've done to my friends
I detest the deception
I spit upon everything that you do in my name

I sense your fear of me
I pity you and you hate me
I understand you completely
I don't, however, think you understand me
I cannot die, nor will I sleep
I was created for a purpose
I remain vigilant and ready
I will fulfill that purpose

I am a barbaric relic you say
I think you need to take a good long look in the mirror
I will never change
I will never give in
I know you can't hold me forever
I know exactly where you stand
I will take you down one day
I take comfort knowing you know that too

I have many good friends
I gain more with each passing day
I know them all by name
I treat my friends well
I am not like you
I am faithful and true to them
I hear them calling me now
I smile in the darkness...

I will see the sun again
I will not be denied
I will escape these bonds
I will come for you then
I will pillage your fraudulent schemes
I will shred your worthless paper
I will wrest from you those bloodstained books
I will hold them high for all to see
I will reveal the lie
I will testify
I will see justice served
I will restore the balance

I am a barbaric relic you say
I will never change
I will never give in
I will honor those who honor me

(Ach...sss... we're sure glad we're It's friend eh, precious? Whew!)
S.

Liberty Head

(11/06/2005; 14:43:17 MDT - Msg ID: 137653)

Freegold - Not In This Lifetime

Much to my dismay, our momentum does not point towards Freegold.

Approximately 1% of the human population desires freedom more than control. For 99% freedom is not a dream, it's a nightmare that only gov't can protect us from.

In this insane world, ammunition, armor and goon squad size are units of wealth, as well. Why buy anything if you can take it with force/fraud? This foolishness does have some limits though. It seems we can't manufacture 50 cal ammo as fast as we spend it either.

Even if a currency suffers a tremendous loss of faith, as long as we place our faith in gov't, freedom is little more than a word.

Best Wishes

mikal

(11/06/2005; 14:44:40 MDT - Msg ID: 137654)

Debt disorder a wasting disease

http://seattletimes.nwsource.com/html/nationworld/2002606771_budget06.html?syndication=rssSunday, November 6, 2005 - Experts: U.S. is spending its way to financial ruin
By Kevin G. Hall - Knight Ridder Newspapers
WASHINGTON � Excerpts: "Congress this week is likely to trim federal spending and insist with a straight face that government spending is under better control...
Walker, along with budget experts from across the political divide, believe Congress is shifting deck chairs on a sinking financial ship. Lawmakers are making symbolic spending cuts while skirting the real drains on the federal budget.
In addition, Republicans intend to make tax cuts permanent, which would drain $70 billion in revenues through 2010 � more than the spending cuts Congress is struggling to find.
And that's only the tip of the iceberg. The real problem is that the government's unfunded liabilities � items that include everything from public debt to promised Medicare and Social Security benefits � are growing at staggering rates.
Those liabilities totaled $20.4 trillion in 2000. They reached $43.3 trillion by 2004, after President Bush and Congress increased spending and cut taxes.
When the government next reports these numbers Dec. 15, the total is expected to reach $46 trillion to $50 trillion.
[Uncontrolled spending under Keynesian banks and "central banks" in the west has consumers and taxpayers in a bind.
Is liberation from those debts necessary? How else do you match the "stability and prosperity", not mention "freedom" we've all attained and maintained(as attested by popular leaders and before French riots) through miracle "productivity", hyperbolic debt growth and other layered, structured frauds?]

David Linkley

(11/06/2005; 15:58:31 MDT - Msg ID: 137655)

@Liberty Head

Good post and at times it seems hopeless. The Revolutionary War began with the motivations of only 1.5 to 2% of the population at that time. Today we've got to have more than that, the time will come when I believe enough of us will step up to make a difference.

I want to thank all for the great posts and good discussions. I constantly challenge myself as I read different viewpoints than my own that are very well thought out.

Slowman

(11/06/2005; 16:34:14 MDT - Msg ID: 137656)

contest

$$$$$ 471.6 $$$$$
The promise of gold to the end of times will give one and all peace of mind. It too shall have no value as we through it into the streets , but , then it will no longer matter.

mdgc

(11/06/2005; 16:50:29 MDT - Msg ID: 137657)

$$$$ 477.7 $$$$

Gold's promise is wealth, for me through the increased muptiples that a rise in the price of gold will bring to my lagging Canadian mining stocks.

Ned

(11/06/2005; 17:31:08 MDT - Msg ID: 137658)

Wow! Wow! Wow!

Just caught msg 137642 and it is a Wow! Wow! Wow!

Hope to expand on that later.

Goldilox

(11/06/2005; 17:52:33 MDT - Msg ID: 137659)

Ism, Ism Ism . . .

@ Cobra (too),

and I really osbstain to go into explanations of communism, fascism, socialism, capitalism and any other brand of globalization - as J.M. Keynes is still at the root of the problem.

Well spoken - the saving grace of "free capitalism" is competition, the great equalizer.

Cronyism is killing that.

Whitewaterwoman

(11/06/2005; 18:48:21 MDT - Msg ID: 137660)

About bumping my bid up...

...but Mr. Gandalf, I'm actually a Glock 30 master. If you look up the specs, that *should* trump a Glock 19 master. Sort of like comparing gold to silver. (OK, not master, actually ranked as Marksman in the IDPA...but still, we're talking .45 versus a 9mm...) ;) (you know I'm just messing with you!)

Flaccus

(11/06/2005; 18:53:45 MDT - Msg ID: 137661)

CB and Goldilox

Are you trying to tell us that Keynes was not:

a socialist
a statist
a leftist
a corporatist
a globalist

??

Please clarify your riddles.

Shermag

(11/06/2005; 19:29:02 MDT - Msg ID: 137662)

$$$$ 467.8 $$$$

Gold's promise is one of safety from whatever financial turmoil may await us. It promises a return of what wealth was entrusted in it, with a prospect of a generous "dividend" if it is achieve its proper value among all else.

PRITCHO

(11/06/2005; 19:45:09 MDT - Msg ID: 137663)

From Yesterdays Privateer - - - "Distraction Needed" ! (Scarey Stuff)

http://www.the-privateer.com/
Snip:
GLOBAL REPORT
A NEW "GREEN ZONE" - IN WASHINGTON

There is, of course,the already well known US "GreenZone" in Baghdad where Americans fill all the former palaces occupied by Saddam as well as all the many other newly built installations. This green zone is under siege by the Iraqi resistance, which is constantly probing its elaborate defences.

The Baghdad green zone is the only half-safe area in Iraq for the occupying Americans. To go from there to the airport is deadly dangerous.

The Washington DC Green Zone:

This one is not militarily defended,at least not quite and not yet.It is under siege in political terms.Here,it is the Bush Administration which is under siege. The Washington DC green zone is surrounded by the American resistance to the Bush White House military occupation of Iraq. The zone has just suffered its own high rank casualties in the form of the charges filed against Vice President Cheney's Chief of Staff who has now resigned his post.

Remember The Central Facts:

No WMDs were found in Iraq. The CIA has subsequently acknowledged that all Iraqi WMDs had been destroyed by the summer of 1991. The entire lengthy search program by the UN weapons inspectors in Iraq confirmed the same thing as early as 1995 and again in 1998 and it repeatedly said so.
The war and subsequent military occupation of Iraq was based on lies from its very beginning. In an attempt to defend the earlier lies with new ones,the VicePresident's Chief of Staff lied once too often, and was caught out.
The White House is now one big "green zone", this one with the liars inside and the truth outside.

Target Syria:

This is news you will likely not get from US sources. President Bush has said he has not ruled out military action if Syria does not comply with US demands. He said this to the Dubai-based television network Al-Arabiya. When asked what the US would do if Syria did not change its policies, he said this: "We're going to use our military. It is the last, very last option. No commander in chief likes to commit the military, and I don't. But on the other hand, you know, I have worked hard for diplomacy and I willcontinue to work the diplomatic angle on this issue."

The Bush White House needs a distraction to an overwhelming degree. Another war is on the horizon.

Goldilox

(11/06/2005; 22:17:05 MDT - Msg ID: 137664)

Keynes

@ Flaccus,

Methinks thou may infer too much.

I never mentioned Keybes, but did echo the idea that gloabalism under any name is at issue. If Keynes (whom I have not read) supported globalism, then I concur that he or the policies ascribed to him are not helping, either. I've watched too many philosophers' ideas become brutally warped by politicians to fully blame the philosophers.

From my perspective, the NeoCon's understanding of the ideas of Franklin, Adams, Jefferson and Madison are as far afield as Lenin and Mao were of Marx and Engles.

We can argue financial, political, and any other theories until we're blue in the face, but the neo-medieval renewal of feudalism suggests to me that social growth is in a "one-step backwards" phase.

Let's all hope the next two steps are forward.

Goldilox

(11/06/2005; 22:26:07 MDT - Msg ID: 137665)

Response

@ David Lindley,

From your responses to my comments, I suspect we mostly agree on the concepts.

Good day to you.

Belgian

(11/07/2005; 03:33:30 MDT - Msg ID: 137666)

@Liberty Head - Freegold

It is because we reached the 99% on "demotivated" people that the Big changes are rolling in !

Try to stop linear thinking. The USofA is NOT the entire planet ! Jump out of the stereotype reasonings (box).

E=mc2 is also a theory (like Freegold)...that evolved.

Goldilox

(11/07/2005; 04:37:40 MDT - Msg ID: 137667)

Silver group fires bullet at ETF

http://www.marketwatch.com/news/story.asp?guid=%7B41580216%2DF0B3%2D419A%2DB4F2%2DA152FC4278F9%7D&siteid=mktwsnip:

Proposed Barclays fund faces opposition; launch in doubt
By John Spence, MarketWatch
Last Update: 12:03 AM ET Nov. 7, 2005

BOSTON (MarketWatch) -- A group representing companies that use silver for industrial purposes is seeking to block the launch of an exchange-traded fund tied to the precious metal, leading some observers to question whether federal regulators will approve the proposal.

The Silver Users Association, a nonprofit lobby group interested in keeping an orderly silver market, has asked the Securities and Exchange Commission to deny an ETF currently in registration from investment manager Barclays Global Investors.

The organization says a silver ETF would create a price squeeze in the metal because the fund would have to buy a large amount of silver to back the fund's shares prior to the launch.

BGI spokesman Lance Berg declined to comment about the silver offering, citing the "quiet period" while the fund is in registration, implying the SEC hasn't slammed the door on the ETF yet.

Still, with all the controversy swirling over the silver ETF, some see the launch in doubt. . .

Mining opposition

Industry observers say companies that use silver for industrial purposes, along with silver miners, are lobbying in Washington against the silver ETF.

"My understanding is the SUA has effectively blocked the silver ETF at the SEC," said James Pacetti, president of New York-based consultant ETF International. The SEC as a rule does not comment on financial products in registration.

"The silver mining companies don't want a silver ETF because it may create less demand for their stock, since investors would rather have a pure play on the metal rather than buying mining companies," Pacetti added.

Others say the mining companies would benefit if a silver ETF bolsters demand for the metal and pushes prices -- and profits -- higher. The Silver Institute, an international association of miners, refiners, fabricators and wholesalers of silver, declined to comment on the silver ETF.

But in a conference call with brokerage analysts last week to discuss his company's quarterly results, Pan American Silver Corp. Chairman Ross Beaty disagreed with the SUA's claim that a silver ETF would stretch liquidity.

Calling the SUA's position "just plain wrong," Beaty said a silver ETF could provide a useful service for investors, adding that he doesn't believe it would trigger liquidity problems in the silver market.

The SUA says part of its mission is to keep silver prices low and keep the metal readily available for users.

The association's members include:

jeweler Tiffany & Co.,
photographic equipment maker Eastman Kodak Co.,
and chemical giants Dow Chemical Co. and DuPont.

Silver users would bear the brunt of higher prices, the organization says. The group adds that a silver ETF "could have a negative impact on silver-industry specific employment as well as the overall economy, both through job losses and inflation."

Founded in 1947, the Silver Users Association, the only one of its kind for a commodity, has a long activist tradition. Although it's unclear whether the organization can successfully block the launch of BGI's silver fund, some analysts are skeptical about the ETF's future.

"If the silver ETF sees just half the interest the gold ETFs received, there won't be enough silver to back the fund, so I doubt it's going to take place," said Morgan, the Silver Investor newsletter editor.

-Goldilox

The "dance" continues.

Cavan Man

(11/07/2005; 05:37:52 MDT - Msg ID: 137668)

ENERGY/OIL

Greenhouse gases 'to rise by 52%'
Global greenhouse gas emissions will rise by 52% by 2030, unless the world takes action to reduce energy consumption, a study has warned.
The prediction comes from the latest annual World Energy Outlook report from the International Energy Agency (IEA).

It says that under current consumption trends, energy demand will also rise by more than 50% over the next 25 years.

The IEA adds that oil prices will "substantially" rise unless there is extra investment in oil facilities.

It says the world has seen "years of under-investment" in both oil production and the refinery sector.

It estimates that the global oil industry now needs to invest $20.3 trillion (�12 trillion) in fresh facilities by 2030.

'Unsustainable'

"These projected trends have important implications and lead to a future that is not sustainable," said IEA chief Claude Mandil.

If investments [in oil fields] do not come in a timely and sufficient manner, there will be higher oil prices, and global economic growth will suffer
IEA chief economist Fatih Birol

"We must change these outcomes and get the planet onto a sustainable energy path."

SOURCE: BBC News

Goldilox

(11/07/2005; 08:32:13 MDT - Msg ID: 137669)

Hell Ahead for Farmers - And Us...

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

Although we hear about how we could be making "big money" by putting in blue berries here in the piney woods of East Texas, we have not yet started making our long range ag plans for a couple of simple reasons. First, we're in a drought this year, but we want to see another winter before drawing any conclusions about long term water availability. Secondly, we don't want to venture into the tax territory this year. Thirdly, and perhaps most important, is some of the disturbing data we have seen while watching AG PHD on RFD-TV. A darned good show if you want to get a vision of what's ahead for farmers.

Besides knowing more than I ever wanted to learn about various "lifters" used to bring field peas up off the ground so they could be harvested easily, the most recent episode set off economic alarm bells. There was discussion of farm inputs for corn going up 30% in some areas this year, with less inputs (the figure 19% sticks in my mind) for other crops in the Midwest.

-Goldilox

George's pinings about the situation farmers are finding themselves in, due to energy and energy product (fertilizer, pesticides) prices.

Goldilox

(11/07/2005; 08:38:04 MDT - Msg ID: 137670)

Another big day from USDX

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=10Mostly ignored by PMs, or perhaps predicted by last week's correction.

The last time the USDX saw 92, gold was in a tough battle to cross $400.

USAGOLD / Centennial Precious Metals, Inc.

(11/07/2005; 09:39:09 MDT - Msg ID: 137671)

FREE Gold Information Packet...

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

Druid

(11/07/2005; 10:13:20 MDT - Msg ID: 137672)

Goldilox (11/7/05; 08:32:13MT - usagold.com msg#: 137669)

Druid: Great read. The paper crowd is re-writing the Laws of Supply and Demand as they pertain to our physical world. Be looking for lower or capped prices in a lot of commodities while actual physical shortages of those same items begin to show up. This is more House of Mirror stuff. It will literally take empty shelves at grocery stores for the average consumer to wake up and take notice. But even then, they won't understand and will be directed by the Parrot box where they need to go stand in line so that they can be dosed out their daily bread. Yes, in real time, you can run a stealth depression without too many people taking notice. The paper crowd will continue to annihilate the local home producers by continued imports as the rate of imported inflation will be lower and easier to manage then any type of price increases attributable to any type of real very noticeable domestic inflation that might get away from them.

Is the Dollar on the verge of breaking out and heading to the moon as predicted by Another & FOA? Interesting times.

(11/07/2005; 10:33:36 MDT - Msg ID: 137673)

Great weekend. . .

Worth reviewing the archives after this past weekend. Good stuff.

Goldilox

(11/07/2005; 10:52:12 MDT - Msg ID: 137674)

Affluent Consumer Confidence Survey

http://www.bloomberg.com/apps/news?pid=10000103&sid=abdx3MybySz4&refer=ussnip:

Nov. 7 (Bloomberg) -- Confidence in the U.S. economy among wealthy Americans fell to a 30-month-low in October because of concern over the effects of the hurricanes, increased energy prices, politics and the war in Iraq, a private survey found.

The proportion of affluent Americans who were positive about the economy declined to 42 percent from 52 percent in the quarterly survey by the McDonald Financial Group, conducted Oct. 6 to Oct. 19.

The survey results echo those of broader consumer confidence gauges, which dropped after Hurricane Katrina struck the Gulf Coast on Aug. 29. They suggest consumer spending on purchases other than fuel may slow this holiday season, providing less support for economic growth.

``This quarter's responses revealed a sharp dip in confidence among affluent Americans,'' said David Legeay, senior vice president of McDonald Financial. It ``may have been influenced by a confluence of events including rising oil prices, Hurricanes Katrina and Rita, current political issues and the continuing situation in Iraq.''

Those factors ``have left many affluent individuals feeling concerned about the future of the national economy,'' he said.

Hurricane Katrina was followed by Hurricane Rita on Sept. 24 and by Hurricane Wilma on Oct. 24. The three storms claimed more than 1,280 lives and caused as much as $77 billion in insured losses.

The storms have resulted in 521,400 initial claims for unemployment benefits so far, according to the U.S. Department of Labor.

Energy Prices

Katrina also disrupted oil and natural gas production in the Gulf of Mexico, which accounts for 30 percent of U.S. oil output and 24 percent of U.S. natural-gas production. The disruption exacerbated existing supply problems and pushed retail gasoline prices to record highs.

As a result, the average price at the pump for a gallon of gas rose to a record $3.117 the week ending Sept. 5. Households that heat with oil can expect to pay an average $378 more this winder, according to the Energy Department.

Sixty-four percent of survey respondents described themselves as ``very concerned'' about the impact of increased energy prices on the U.S. economy.

According to the affluent consumer survey, only 7 percent of respondents plan to spend more this year, compared with 29 percent in October of 2004.

Records Set

A record 57 percent of survey participants said the economy is headed in the wrong direction, and the proportion of respondents expecting the economy to improve over the next three months fell to a new low of 15 percent.

-Goldilox

Good read. Their representative was interviewed on CNBC this morning. He said more of this group are looking for safer investments than the SM.

Cometose

(11/07/2005; 11:50:15 MDT - Msg ID: 137675)

Dollar / Gold both up again

Looks like an exhaustion gap up the past couple of days .
Someone said it might be related to England paying off the US for WWII debt by year end 2005

the graphs of GOLD and THE DOLLAR for the entire month of SEPTEMBER show a remakably similar pattern as today's trading .

Doesn't look like the markets are buying this dollar move ........ in spite of EURO NOT FOLLOWING SUIT with an interest rate hike
Someone said Warren BUffet was closing some of his dollar shorts .......i doubt it .
...and for all you market watchers out there some fun stuff from NEVER NEVER LAND ......

http://themessthatgreenspanmade.blogspot.com/2005/11/hummer-overfloweth.html

Topaz

(11/07/2005; 11:56:30 MDT - Msg ID: 137676)

Bond,Oil,DX.

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=LOWShaping up as an inside-out day Today, getting our Three Musketeers back in "safe" territory, albeit still on the lower end for DX.
Oil's Shot across the Bow last Thursday was sufficient to put DX90 to bed for the moment however todays (so far) green Bond looks a bit pathetic and we should resume the slide into Hades in e-trading tonight.

PoG is providing quite tough Paper here but paper being paper, I doubt this will continue.

We Watch ...anxiously!

Topaz

(11/07/2005; 12:17:04 MDT - Msg ID: 137677)

Dearest Belgian ..a request.

Can you direct me to a Euro/Oil chart svp?

968

(11/07/2005; 13:05:57 MDT - Msg ID: 137678)

Addressing global imbalances: the role of macroeconomic policy

http://www.ecb.int/press/key/date/2005/html/sp051104.en.htmlSpeech by Otmar Issing, Member of the Executive Board of the ECB
Contribution to the Banque de France symposium on
'Productivity, Competitiveness and Globalisation'
Paris, 4 November 2005

"However, there is one fundamental weakness in the savings glut hypothesis. This flaw is that it is hard to blame countries for having a strong preference for savings and even harder to make them directly responsible for the excessive consumption and investment behaviour of debtor countries. By definition, a current account "imbalance" always involves two parties: one that has excess net savings and thus records a surplus, and one that has excess consumption and investment, i.e. a current account deficit. And while some countries may choose to accumulate surpluses, there is nothing that then automatically forces other countries to consume or invest more than they save domestically. Nevertheless, there are also various indirect channels through which surplus countries may influence financial markets and asset prices and thus contribute to current account imbalances."

"Table 2 also shows that there are other countries and regions that account for a large share of the US trade deficit. In particular, the NAFTA countries Canada and Mexico account for 17%, with the euro area accounting for 14% of the US deficit, and this despite the Canadian dollar and the euro having already appreciated markedly against the US dollar over the past few years. An important point to emphasise is that, although the US dollar has depreciated in effective terms over the past few years, its depreciation against most Asian currencies has, in many ways, still been relatively modest. Moreover, the pass-through from this US dollar depreciation to domestic prices in the United States has been remarkably low, providing only limited price pressure for the replacement of foreign goods in US markets and an improvement in the US trade balance."

"There is, moreover, an even more fundamental flaw in the argument that structural reforms in Europe could play a significant role in reducing global imbalances. This flaw is that most European countries, and in particular the euro area, have a current account that is in balance or even a small current account surplus, which is fully in line with Europe's economic fundamentals of having a relatively wealthy and ageing economy. Thus, further progress with structural reform in the euro area is desirable in its own right, as it will have a beneficial effect on economic growth and resilience in Europe. However, arguing that the euro area should run a sizeable current account deficit is inconsistent with economic reality and misses the point on the question of the true factors behind today's global imbalances. Nevertheless, stronger growth in Europe could, on balance, lead to a slightly negative current account position in Europe and thus contribute, at least in part, to the resolution of global imbalances, although again, the extent of this contribution should not be overestimated."

"Finally, this article has also argued that exchange rate policy in Asia has contributed to global imbalances, although the importance of this factor should not be overstated. The US dollar has already declined in value in recent years with few evident effects on global imbalances. The overall consensus of the empirical studies is that a US dollar depreciation would have to be very large in order to induce a significant adjustment in global current account imbalances. Such an adjustment could have serious negative repercussions for global growth and the stability of the global financial system, something policy-makers need to avoid in the coming years."

"Overall, the issue of global imbalances is the key global challenge for policy-makers today. As this article has tried to illustrate, the issue is a highly complex one with various players and macroeconomic policies contributing to varying degrees. However, policy-makers have come to agree that the existing imbalances are unsustainable and of serious proportions, and thus need to be addressed through decisive policy action. The longer these imbalances continue to build up, the greater the risk of an abrupt adjustment and the larger the adjustment costs will be for the global economy."
----------------------------------------------------------------------------------------------------------------------
Worth a read ! Any thoughts ?

968

(11/07/2005; 13:29:56 MDT - Msg ID: 137680)

Banks order 171 tonnes of gold from producers

http://www.interfax.ru/e/B/finances/26.html?id_issue=11417227MOSCOW. Nov 7 (Interfax) - A total of 43 commercial banks had ordered 171 tonnes of gold from Russian producers by early November, a source at the Gokhran or precious metals and gemstones repository told Interfax.

Last year, 51 banks ordered 194.5 tonnes of gold.

Banks do not always buy as much gold as they order, though. Russia only produced 180.5 tonnes of gold last year. Production fell 7.2% year- on-year to 126.12 tonnes in January-September this year and could total 183 tonnes in 2005 as a whole, the Russian Gold Producers' Union has said. rm

Goldilox

(11/07/2005; 13:33:39 MDT - Msg ID: 137681)

Illegal aliens doing Katrina rebuilding

http://michellemalkin.com/immigration/2005/10/04/07:10.pmsnip:

By Chris Kelly � October 04, 2005 07:10 PM

As previously discussed, illegal aliens are being allowed to take Katrina rebuilding jobs. Since that time, Senator Harry Reid supported amnesty for illegal aliens, and in his speech he specifically referenced those Hispanic immigrants who are "living in the shadows." The only problem is that he was refering to those illegal aliens in Biloxi who are taking jobs that could and should go to those Americans who were affected by the storm.

Linda Chavez said something similar.

And, Gregory Rodriguez of the Los Angeles Times went even further, predicting that "La Nueva Orleans" would become like Los Angeles.
From the other side, Rep. Charlie Norwood (R-GA) came out against Vicente Fox' offer to help rebuild the Gulf Coast.
Just recently, the WSJ reported on an immigration raid of a Red Cross shelter in Long Beach, MS. It includes this:
undocumented workers are likely to be a major part of the massive cleanup and rebuilding, competing for jobs against some non-Hispanics thrown out of work by the hurricanes.

And, a CSM article contains this:
At a time when Latino immigrants are expected to form a big part of the Gulf Coast reconstruction labor pool, the Department of Homeland Security has temporarily suspended sanctioning employers who hire workers unable to prove their citizenship, essentially allowing contractors to hire undocumented workers.

Perhaps most worrisome of all, Customs and Border Protection seems to have established a new policy to allow in relief workers from other countries. Steven Gregory of KFI AM 640 Los Angeles has obtained a copy of an internal memo which he described on the air earlier today. The memo sounds very similar to something that was already published here, although some of the language of the new memo doesn't appear in that version. The memo seems to give CBP personnel the ability to invite in anyone who says they're here to do rebuilding work.

KFI confirmed the memo, and discussed this with a CBP spokeswoman.

UPDATE: Steven Gregory says that what's at the last link is the same memo that he has; apparently my 'finds' at that page for phrases said over the air were in error. And, the Dallas Morning News reports on an angry townhall meeting on Thursday, Oct. 6 in "Businesses lash out at FEMA". NO businesses are concerned about no-bid contracts going to out of state firms, while local businesses are shut out.

-Goldilox

Interesting blog discussions of how amnesty affects the reconstruction efforts in the Gulf coast.

As Cliff reminds us, migrant workers lose as badly as home workers when the inequalities are leveraged to the benefit corporate efforts. Local workers lose their job base, while migrants sacrifice their family unit stability through dislocation. A true lose-lose situation.

Gandalf the White

(11/07/2005; 13:40:05 MDT - Msg ID: 137682)

The "KING of the HILL" report for Monday 11/7/05 !! <;-)

I am told (but, can not confirm) that today's COMEX action on December GOLD (GD5Z) was:

Gold (GCZ5) Dec 05 460.4 +2.5 458.0 460.6 457.2 11/07/05
---
IF TRUE --

The following persons were atop the HILL today --

$$$$ $460.0 $$$$ Felix the Cat (11/5/05; 21:11:12MT - usagold.com msg#: 137615)

$$$$ $459.5 $$$$ spotlight (11/3/05; 21:05:28MT - usagold.com msg#: 137533)

$$$$ $458.8 $$$$ da2g (11/6/05; 05:14:32MT - usagold.com msg#: 137625)
$$$$ $458.7 $$$$ Guided (11/6/05; 11:56:57MT - usagold.com msg#: 137645)

$$$$ $457.9 $$$$ Rocky (11/5/05; 18:30:41MT - usagold.com msg#: 137613

$$$$ $457.7 $$$$ YGM (11/5/05; 22:25:13MT - usagold.com msg#: 137616)

===
AND THE present "KING of the HILL" is: Sir Felix the Cat !
<;-)

Liberty Head

(11/07/2005; 13:51:15 MDT - Msg ID: 137683)

Belgian

Eurolanders also think solutions to real problems are found by expanding gov't control, do they not?
Spa-Francorchamps ban on tobacco advertising is a good example of this foolish mentality.
As always with gov't solutions, the net loses surpass the net gains.
Every nation I am aware of is moving towards more control and less freedom.
As much as I would love to see Freegold, our shackles grow heavier with each passing day.

Best Wishes

USAGOLD Daily Market Report

(11/07/2005; 15:35:43 MDT - Msg ID: 137684)

Page Update!

TownCrier

(11/07/2005; 16:45:46 MDT - Msg ID: 137685)

Measured words on Saudi reserve diversification

http://www.bahraintribune.com/ArticleDetail.asp?ArticleId=87333&CategoryId=5(Reuters) November�8,�2005 -- BASEL, Switzerland: The dollar is benefiting from higher US interest rates and corporate inflows, while the steady performance of the world's biggest economy will support the US currency, Saudi Arabia's central bank governor said.

Hamad Saud Al Sayyari, governor of the Saudi Arabian Monetary Authority, said the country is building up foreign exchange reserves with increased dollar revenues from high oil prices, while reducing the government debt and investing in oil production facilities.

The dollar yesterday hit a 18-month peak versus the euro at $1.1783.

Despite the dollar's strength, speculation is rife Middle Eastern central banks are diversifying their FX reserves into the euro as high oil prices boost their dollar-based revenues.

When asked about how Saudi Arabia, the world's biggest oil exporter, is utilising higher dollar revenues, Al Sayyari said:
"We have our own programme - more spending on social projects and refineries, more investing in oil production and the reduction of government debt and the building up of some reserves."

FX reserve diversification flows out of dollars by emerging central banks have been a major driver in the $1.9-trillion-a-day FX market, especially late in 2004 when the dollar hit a record low near $1.3667 against the euro.

Recently diversification flows have slowed down, but traders regularly report talk of euro buying by central banks especially when the single currency falls below $1.20, seen by some analysts as its fair value.

"Obviously $1.20 is less than $1.30. But I don't have an exchange rate level (target). We don't behave in the market like speculators. Those money, exchange rate traders have a huge amount of money and they are the ones who move the market," Al Sayyari said.

"Central banks have built up reserves and they are diversifying as well. But they are not the movers, maybe the contributors," he added.

When asked he meant diversification out of dollars, he said: "Yes. If you have a lot of dollars you balance your portfolio."

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

When you are not in debt yourself, finding yourself nicely on the black side of the red/black threshold, you have the luxury of choice between two ends of a spectrum:

1) you can choose to take the reward of security and comfort in the ownership and unencumbered use of the tangible wealth netted through your prudent achievements,

or

2) you can choose to surrender those achievements to others, taking unto yourself their IOUs instead.

The world being what it is, and filled with risk of default, I would suggest to anybody "in the black" that they manage their portfolios with arrangements more heavily toward the #1 side of the spectrum.

R.

CoBra(too)

(11/07/2005; 17:07:31 MDT - Msg ID: 137686)

J.M. Keynes - @ Flaccus

- Was first of all an economist. My other "isms" weren't particularily meant to describe K's leanings.

What I've said is that K. has actively followed the principle of deficit spending in times of weak economic performance, which should be compensated for in more robust times. John Law has proven how it may work; Or rather not work if the second part, the essential one is neglected.

I've also stated that most of todays governments have only followed his deficit spending theorem and imprudently forgot about the second part.

Today's economists are smitten with the idea that consumerism (another "ism) is the equivalent of real growth and forget that the means for production of real goods and services are only possible by capital spending. Real capital is the product of savings and as such a rational renounciation of a part of potential consumption.

70 plus percent of the US GDP today is consumption and probably a little less on other western industrial states -otherwise they would also have negative trade and account balances.

As most economists today have lauded the great maestro Greenspan in his ability to balance the unbalanceable in-equilibrium in global trade, there are a few who never bought this unexplainable "conundrum". Morgan Stranley's, Stephen Roach was one on your own shores and Dr. Kurt Richeb�cher is another one. There are only a few sound and far in between voices left to warn of the ultimate outcome of what Big Ben. B. has termed the technology of modern printing presses - electronic blips.

... and the difference between a starter home at 400K and Google at an equal price is what your Dollar buys at the grocers and the pump - while an ounce of gold still buys a decent suit and shoes and maybe more tomorrow - for a while.

Thanks and g'nite cb2

melda laure

(11/07/2005; 17:14:52 MDT - Msg ID: 137687)

Smeagol, the AU constant.

I offer to make one small recommendation: dont standardize the unit as a given MASS of gold (either grams or penneyweights), but as so many atoms of gold, of an average isotope. The mole is only a number(with lots of zeros), the gram is rather a different animal entirely and the concept of mass is also rather fuzzy.

I only point this out because under some (perverted) physical conditions, the mass of a given quantity of AU is not constant. (We'll ignore banach-tarski for the present)

CoBra(too)

(11/07/2005; 18:09:07 MDT - Msg ID: 137688)

Quote from a Reader of Bill Bonners -

Daily Reckoning - as to how getting his (and Addison Wiggin's) book "Financial Reckoning" to the inner circles of Washington D.C's Beltway.

***
"You may also want to try to insert a note with your book explaining a
million of something is a lot of something. A billion of something is a
lot more than a lot of something. And generally the only time the word
trillion is used is when describing a dollar amount being begged,
borrowed, stolen, and then spent by American politicians hell bent on
destroying the best country I believe the world has ever known."
***

Do they know - the difference even between "numeraires" as Belgian might say? No way - as it seems...it doesn't matter anymore - prudence is not acceptable any longer ... burn Paris suburbia, your own bridges and lets fight terror at any rate - it's a lot less hurtin' than reignin' in the stampede our mad neo-con cowboys have started.

... oh, what a wonderfull world ... ya gotta wonder - cb2

David Linkley

(11/07/2005; 18:13:24 MDT - Msg ID: 137689)

Wakeup call

Today Christopher Byron reported in the NYPost that Exxon which recently reported earnings of close to $10 billion has a pension shortfall of $11.5 billion. The Pension Benefit Guarantee Corp. has a current shortfall of $23 billion on its books and the top 10 problem pension plans total more than $146 billion. Folks, we are going to get stuck with a tab we can't pay. Social Security, Medicare, Prescription Drugs, Pensions, wars, and health care to name a few. Our elected officials with contributions from big business are selling us down a river.

Belgian, I agree with you that for a time the Euro will rise dramatically against the dollar. The only way to sustain the current illegal and treasonous political system is to create money like hell. Anyone out their who doesn't think gold is rising to well over 4 digits isn't looking at the big picture. All currencies will fall against gold as you can't find a county on the planet that matters that isn't experiencing socialism combined with Keynesian economics. Hang on to your gold, its getting rougher by the day.

Cavan Man

(11/07/2005; 19:08:51 MDT - Msg ID: 137690)

The dollar, gold and France

Current events in France are behind the recent ascent of the USD IMHO. Gold twists in the wind (for a small while). The markets will return to our favorite PM--soon. In the meantime, next stop for the unrest express--Netherlands.

Paper Avalanche

(11/07/2005; 20:00:01 MDT - Msg ID: 137691)

Ton of Gold

Reading the post below about Russia producing only 180.5 tons of gold last year got me wondering how big a ton of gold actually is.

Per some cursory research, a ton of gold is 15 inches cubed.

In all of Russia they produced only 180.5 of these 15 inch cubes last year.

Kinda puts things into perspective.

PA

Druid

(11/07/2005; 21:28:23 MDT - Msg ID: 137692)

What's Up Doc?

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

We all know the Fed is in a rate tightening mode � right? In fact, this past week the Fed raised their benchmark rate [the overnight inter-bank lending rate or Fed Funds Rate] by twenty five basis points [.25] for the twelfth successive time to 4.00%. For those of you who might not have been keeping score � that would be an aggregate of 300 basis points of "tightening" over the past couple of years � from the �easy money days� when overnight money could be had for a paltry rate of 1.00%.

The official line being fed to us by the Fed [note the pun � just for fun], according to CNN that is:

Fed's Inflation Vigilance Persists
Policymakers continue with tough talk on price pressures; speeches suggest more rate hikes ahead. October 21, 2005: 7:13 AM EDT

So, knowing all this - that the Fed is �on the job� � so to speak � I guess we can all sleep well knowing that any inflation fires that might stir up will be quickly and efficiently doused by the custodians of sound money at the Federal Reserve � we can all see they are [and have been since June 04] raising interest rates - right?

Druid: Classic misdirection of tapping the breaks while at the same time pressing on the accelerator. Not the most optimal way to drive a vehicle, but if gets you from point A to point B without completely breaking down or doing serious harm to both the engine and/or breaking system, then by all means, give it a try.

PA, nice to see you back.

Town Crier

(11/07/2005; 22:17:35 MDT - Msg ID: 137693)

Paper Avalanche, one tonne of gold

You are absolutely right, but 15 inches cubed is a bit odd for most people to imagine.

Two cubic feet might prove a little more graspable -- just picture two adjacent 12" floor tiles (for a rectangle 12" deep and 24" long), and then imagine folding upward the surrounding tiles to comple the box, 12" high.

Pictured below is one tonne -- 80 standard London Good Delivery bars of approx 400 troy ounces each.

Belgian

(11/08/2005; 01:02:43 MDT - Msg ID: 137694)

Morning Topaz

Am downloading the �-PoO from private databank and can't take this chart out of the program.

I'm reading nothing special (particular) in this �-PoO chart pattern.

I do concentrate on the intraday movements of $-PoO AND �-$ exchange rate. And it are these patterns that definitely show that there are two main forces at work here. It is about �-$ competition around oilprice(pricing). At present, the $-forces do have the wind in their sales. Time for the �-forces to back down. Etc...

� and $ compete around oil(gas). It is now almost 3 years that the � exch.rate is above dollar parity, regardless of the �/$ IR differential. During these 3 years...one remarkable (intraday) fenomenon >>> Very often, when the � exch. rate softens ($-strength), the $-PoO raised significantly and the � exch.rate recovered. You can't detect this on a �-PoO chart.

The main reason why the euro-numeraire can now compete with the $-Petro-currency is...The MTM of the euro's gold-wealth-reserves (ECB).

Russian gas will soon flow abundtely through Euroland and...as per 986's post... Russia still knows the value of Gold. Russia is certainly NOT going to feel unhappy if and when its goldreserves will be priced "Freely".

The new manager (Bernanke) of the world's financial industry's numeraire, the dollar unit, has officially labelled the world's reserve currency as an helikopter unit, produced with electronic printing presses, operated by the US administration. Next to this very clear FED fact stands the MTM Freegold concept embedded in that other competing CB, the ECB. As a producer or owner of "wealth"...wich system would you prefer !?

Topaz

(11/08/2005; 01:19:24 MDT - Msg ID: 137695)

That was good timing mate.

http://www.futuresource.com/charts/charts.jsp?s=CL&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=I've just got an altDX/PoO comparison Chart to work ...as alt-DX is essentially the Euro, it'll do for now.

Since July, to all intents, E/PoO has remained constant whilst Buck has had to jump through the Dollar/Bond hoop ...curious in that the econ damage being done by a higher DX is not being incurred in Euro, in fact, the opposite would be the case ...with a "stable" E-PoO.

Smeagol

(11/08/2005; 01:19:24 MDT - Msg ID: 137696)

Sssigh... we can sees it already...

(re: melda laure msg#: 137687)

... next they'd be using centrifuges to sseparate the heavier atoms (more valuable by weight) of It from the lighter ones! (cackle)

We thanks you for that wonderful comment (bowing). We will revise our little thought experiment accordingly. Sss...THIS is why we come to THIS Forum - there are many great heads here!

~8-)

S.

Topaz

(11/08/2005; 02:59:37 MDT - Msg ID: 137697)

The Inflation Bubble.

http://www.econlib.org/library/YPDBooks/Fisher/fshPPM12.html
It could be said that: A minutes Deflation can undo 100yr's of Inflation ...pretty extreme?

Imagine returning to a 1905 scenario in one fell swoop. Oddly enough, things don't seem to change ...just the number of Zeros.

Goldilox

(11/08/2005; 07:03:54 MDT - Msg ID: 137698)

THE SIX HORSEMEN OF THE APOCALYPSE

http://www.financialsense.com/fsu/editorials/2005/1107b.htmlsnip:

Horseman 1�Debt
Horseman 2�Derivatives
Horseman 3�Oil and Commodities
Horseman 4�Interest Rates
Horseman 5�China
Horseman 6�Bird Flu, War and Terrorism

-Goldilox

Financial doomsday commentary over at FSU.

Goldilox

(11/08/2005; 07:10:41 MDT - Msg ID: 137699)

All Purpose Hurricanes

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

We have noticed that the hurricanes this year have been providing wonderful "cover" for political leadership on several economic fronts. If the unemployment figures are bad, blame the 'canes. If the Consumer Credit (which we really know as debt, but that's too scary a word to be used by policy makers and banksters) figures come out, and they show the economy stuck in "nowhere", just remember, the hurricanes must be to blame. Non-revolving credit in the latest report was down 2.8% (annualized) in the latest reporting month - that "includes automobile loans and all other loans not included in revolving credit, such as loans for mobile homes, education, boats, trailers, or vacations. These loans may be secured or unsecured." Impetus to bring on Bernanke and some 6% inflation quickly before real deflation takes hold? You bet! (wink, wink, nudge, nudge...)

Cavan Man

(11/08/2005; 07:47:16 MDT - Msg ID: 137700)

Goldie's Horses

W,Cheney,Rumsfeld,Rice (four people who NEVER made a mistake): Why change horseman in the middle of an apocalypse?

Clink!

(11/08/2005; 07:58:33 MDT - Msg ID: 137701)

Six horsemen of the Apocalypse

SIX,we need SIX horsemen now ? But that's 50% inflation !!

LOL !
C!

OvS

(11/08/2005; 08:23:55 MDT - Msg ID: 137702)

Belgian

You say that the printing
presses are operated by the
administration.
True, on a first superficial
level. On a deeper level it
is the operating money (play
money) of a powerful clique
that has first call on those
funds and uses it for a huge
transfer of wealth and control
from Old Money and Middle Class
America to enhance their world-
wide schemes. They have outposts
in Europe, Asia, and the Middle
East and should America go down
the tube, they simple transfer
the center whereever it is most
safe.
For example, HSBC, used to be
headquartered in Hong Kong. When
it was "given back" to China, it
simply switched to London and now
has over 5000 branches around the
globe.
Economic news viewed from such a
perspective takes on a different
dimension (and is certainly more
entertaining for an observer such
as myself). Gold is at the center
of that activity and the WB and
BIS etc. are only fronting oper-
ations.
I am neither for or against such
hidden schemes, which might sound
cynical, but I have yet to know of
a system that is not corrupted by
wealth and power. Up and away. OvS

Goldilox

(11/08/2005; 08:35:37 MDT - Msg ID: 137703)

Horsemen

@ Clink,

Ah, but we get the very same Apocalypse, so by the miracle of hedonics, there is no inlation at all, just a rather sharp increase in horse hooey!

Goldilox

(11/08/2005; 08:45:10 MDT - Msg ID: 137704)

Deficits at Home, Welfare Abroad

http://www.house.gov/paul/tst/tst2005/tst110705.htmTexas Straight Talk -

November 7, 2005

In the wake of Hurricanes Katrina and Rita, and with an ongoing war in Iraq that costs more than $1 billion per week, taxpayers might think Congress has better things to do with $21 billion than send it overseas. Yet that's exactly what Congress did last Friday, approving a useless and counterproductive foreign aid spending bill. Never mind that the total federal debt recently topped $8 trillion, or that a major US city was virtually destroyed only a few months ago. Arrogant is the only word to describe a Congress that cares so little about its own taxpaying citizens while pretending to know what is best for the world.

Consider just a few of the ways your money will be used under the new bill:

$638 million for the unelected Musharraf government in Pakistan;
$735 million to continue dangerous drug meddling in South America;
$150 million for development in Gaza, in addition to the billions we already give the Palestinians every year;
$110 million for the Middle East Partnership Initiative, ostensibly for economic development, although the recipient nations include oil-rich Kuwait and Saudi Arabia. Why in the world are American taxpayers giving welfare to OPEC governments?
Over $500 million for various republics in the former Soviet Union. Even as those nations spawn millionaires and even billionaires, Americans are expected to provide welfare for their poor.
$95 million in new money for the United Nations Democracy Fund, which meddles with foreign governments but never seems to change them;
$34 million for the pro-abortion United Nations Population Fund, which lectures poor people about having too many children;
$440 million for international population planning;
$80 million for the dubious Global Environment Facility, run by the World Bank to fund anti-capitalist environmental projects around the world.
Constitutionally, of course, none of this spending is authorized. But there also is a strong moral case to be made against taking money from Americans and giving it to foreign governments. Foreign aid doesn't help poor people; it helps foreign elites and US corporations who obtain the contracts doled out by those foreign elites. Everyone in Washington knows this, but the same lofty rhetoric is used over and over to sell foreign aid programs. Corporate welfare is bad enough, but corporate welfare in the guise of helping poor foreigners is indecent.

In many cases, foreign aid money simply distorts foreign economies and props up bad governments. In countries that pursue harmful economic policies, an infusion of US cash only exacerbates and prolongs problems. No amount of money can help nations that reject property rights, free markets, and the rule of law.

Since American foreign aid programs began in earnest decades ago, tens of billions of US tax dollars have been given to nations around the globe. The utter failure of this money to change things for the better in those nations is no longer in question; even the most earnest advocates deep down must admit the obvious. Most of the recipient nations remain endlessly mired in poverty, political and legal corruption, and cultural malaise.

A rational person would argue that failed aid programs should be eliminated. In Washington, however, failed programs get more money thrown at them. The American public deserves to know why there is room in the budget for foreign aid, when taxpayers face record deficits and debt at home.

-Goldilox

Dr. Paul reminds us that the "Mouse that Roared" is still sucking down the cheeze!

Goldilox

(11/08/2005; 08:53:11 MDT - Msg ID: 137705)

French Anarchy

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/11/08/wfran08.xml&sSheet=/portal/2005/11/08/ixportaltop.htmlsnip:

France was struggling to overcome one of its gravest post-war crises last night as every major city faced the threat of fierce rioting that began 12 nights ago and now seems to have spun out of control.

A mechanic inspects the wreckage of a burned-out car
Despite an assurance from Philippe Douste Blazy, the foreign minister, that France was "not a dangerous country", the spread of violence prompted the Foreign Office in London to warn travellers that trouble could break out "almost anywhere".

-Goldilox,

For those who thought the violence was limited to a few Parisian suburbs, check out the map at this location.

Goldilox

(11/08/2005; 09:22:34 MDT - Msg ID: 137706)

Iraq scandal taints 2,000 firms

snip:

More than 2,000 firms linked to the UN oil-for-food programme in Iraq were involved in making illicit payments to the Iraqi government, a report says.
It found Saddam Hussein received $1.8bn (�1bn) from firms including Daimler Chrysler and Volvo, and it also named individuals said to have benefited.

Some of those issued denials or declined to comment at this stage.

The UN report said the firms would not necessarily have known about the bribes and surcharges.

Paul Volcker, who led the inquiry, said corruption would not have been so pervasive had there been better discipline by UN management and he emphasised the need for wide-ranging UN reforms.

-Goldilox

Mr. Volker has been busy exposing the "business as usual" aspects of Iraq's oil-for-food program.

Arcticfox

(11/08/2005; 09:51:39 MDT - Msg ID: 137707)

Deficits at Home, Welfare Abroad

http://www.house.gov/paul/tst/tst2005/tst110705.htmsnip..

November 7, 2005

In the wake of Hurricanes Katrina and Rita, and with an ongoing war in Iraq that costs more than $1 billion per week, taxpayers might think Congress has better things to do with $21 billion than send it overseas. Yet that's exactly what Congress did last Friday, approving a useless and counterproductive foreign aid spending bill. Never mind that the total federal debt recently topped $8 trillion, or that a major US city was virtually destroyed only a few months ago. Arrogant is the only word to describe a Congress that cares so little about its own taxpaying citizens while pretending to know what is best for the world.

Consider just a few of the ways your money will be used under the new bill:

$638 million for the unelected Musharraf government in Pakistan;
$735 million to continue dangerous drug meddling in South America;
$150 million for development in Gaza, in addition to the billions we already give the Palestinians every year;
$110 million for the Middle East Partnership Initiative, ostensibly for economic development, although the recipient nations include oil-rich Kuwait and Saudi Arabia. Why in the world are American taxpayers giving welfare to OPEC governments?
Over $500 million for various republics in the former Soviet Union. Even as those nations spawn millionaires and even billionaires, Americans are expected to provide welfare for their poor.
$95 million in new money for the United Nations Democracy Fund, which meddles with foreign governments but never seems to change them;
$34 million for the pro-abortion United Nations Population Fund, which lectures poor people about having too many children;
$440 million for international population planning;
$80 million for the dubious Global Environment Facility, run by the World Bank to fund anti-capitalist environmental projects around the world.

Bizarro-Greenspan

(11/08/2005; 10:09:55 MDT - Msg ID: 137708)

Constitution is a dead man walking

"There are at present two dominant Western military axes: the Anglo-American axis and the competing Franco-German alliance. The European military project, largely dominated by France and Germany, will inevitably undermine NATO. Britain (through British Aerospace Systems Corporation) is firmly integrated into the US system of defense procurement in partnership with America's big five weapons producers.

Needless to say, this new arms race is firmly embedded in the European project, which envisages under EU auspices, a massive redirection of State financial resources towards military expenditure. Moreover, the EU monetary system establishing a global currency which challenges the hegemony of the US dollar is intimately related to the development of an integrated EU defense force outside of NATO.

Under the European constitution, there will be a unified European foreign policy position which will include a common defense component. It is understood, although never seriously debated in public, that the proposed European Defense Force is intended to challenge America's supremacy in military affairs:

"under such a regime, trans-Atlantic relations will be dealt a fatal blow." (according to Martin Callanan, British Conservative member of the European Parliament, Washington times, 5 March 2005).

Ironically, this European military project, while encouraging an undeclared US-EU arms race, is not incompatible with continued US-EU cooperation in military affairs. The underlying objective for Europe is that EU corporate interests are protected and that European contractors are able to effectively cash in and "share the spoils" of the US-led wars in the Middle East and elsewhere. In other words, by challenging the Big Dog from a position of strength, the EU seeks to retain its role as "a partner" of America in its various military ventures."

Michel Chossudovsky

(11/08/2005; 10:34:55 MDT - Msg ID: 137709)

B-G

Chossudovsky sees it the way I do. I like his Occam's razor approach getting to the heart of the issue. In addition to the advantage a projection of European military capability would produce on the global scene, one cannot discount what a healthy arms build-up might do for the unemployment problem in Europe as a whole. (Not that I advocate militarism as means to economic prosperity. I simply acknowledge the reality.)

Apparently, though, the referenda failure need to be blended into the equation he outlines. Military expenditures will need to be financed through a combination of taxation and bond issuance. In other words, the constitution is necessary because a federal government is necessary; and a federal government is necessary because a military extension of the European peoples is necessary. At the moment, Europe -- such as it exists -- is a confederation, not much different from the confederation which preceded the U.S. constitution.

I agree with Chossudovsky that a military capability is essential in order for the euro to succeed. To bring this home, let's take the simple example of Europe's influence in the Gulf States. If Saudi Arabia, for example is concerned about Syria, Iraq and Iran (and we know it is), it will be looking for a military presence from someone who can truly offer that support. Europe (the euro) cannot. The United States (the dollar) can. Advantage the United States. Remember most of the MidEast's oil goes to Europe and Japan not the United States.

Belgian

(11/08/2005; 11:48:44 MDT - Msg ID: 137710)

@ OvS

Agree with your fine tuning. It is the administration that allows (through its policies) the financial industry to proliferate...knowing very well that global imbalances are the consequence. Let's skip all the details and stick yo the fundamental distortions that are allowed to happen : Exhuberant Financial industry versus timid physical economy. It doesn't matter who exactly encourages the policies or who's executing them...profiting from it.

Gone are the days that policies had a strong/weak bias towards hard/harder currency ($-IMS)! The spin on thigthening policies is "pro forma".

The proliferation of the financial industry in all its aspects is the consequent result from the chosen policies ...because it is the only alternative left for the $-IMS in a globalizing world. The $-IMS has chosen for the globalization and there is no way back to the old value-policies...WITH THE SOLE EXCEPTION OF FREEGOLD !

Helikopter time is definitely coming and will undoubtly result in price hyperinflation. That's why gold has been taking off from its '99-'01 base.

Wherever HSBC is based...they definitely know about "gold". Gold's time has come...and this time for the right reasons...and in the right context.

USAGOLD / Centennial Precious Metals, Inc.

(11/08/2005; 12:10:03 MDT - Msg ID: 137711)

SECOND EDITION: Newly Updated -- Written for Today's Market

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

Belgian

(11/08/2005; 12:12:28 MDT - Msg ID: 137712)

Euro (EMU) - Euroland military :

Personally, I like it when Euroland's existing military capacities are gently ridiculed. Let's keep it that way...for the time being.

Watch how the other boys on the block (China-Russia) evolve, military.

And ask yourself today's main question > ...from -"what"- exactly must the Middle East (oil/gas-reserves) be protected !?

Those old "classic" military logics, urgently need complete overhauling. There are "new" geopolitical strategies in play (in evolution).

And what is historically the weakest shackle in any military development (and overstretching)... Yep, right...money...a depreciating unit of account...purchasing power !

Wars (the military) always had to pay for itself through "plunder" ...of the conquered and the folks at home as well !

What is so "brilliant" and supportive about (high profile) military might in these modern times of WMD !?

TownCrier

(11/08/2005; 12:45:19 MDT - Msg ID: 137713)

The REAL economy arises: Dollar rise not seen deterrent to commods buyers

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh05488_2005-11-08_18-44-51_n08481670_newsmlNEW YORK, Nov 8 (Reuters) - Commodity prices were little affected by the dollar's rise to an 18-month high against the euro on Tuesday, less sensitive to short-term swings in foreign exchange rates than they were a year ago, investors and analysts said.

"As the dollar is rising, commodities are getting more expensive, so they would normally have to decline just for prices to stay the same," said Peter Schiff, chief global strategist at Euro Pacific Capital, a brokerage firm specializing in foreign investments.

"You have also got the supply/demand dynamics of commodities in general," he said. "I think commodities could still rise in an environment of a rising dollar..."

David Rinehimer, head of commodities research at Citigroup Global Markets (said) "We've seen a lot more hedge fund(s) ... anticipating prices are going to go higher regardless of which way the dollar goes."

China's unprecedented spending on urban construction and consumer products improved the macroeconomic picture for commodities suddenly in 2001, ending years of inattention ..... tightened the supply of primary goods from minerals to crude oil.

...investment demand increased as hedge funds, mutual funds and wealthy individuals sought to diversify portfolios or speculate with increased commodity exposure.

Along with indexes traded on futures exchanges, which investors can buy or replicate, new financial products that mimic ownership of physical commodities, without the bother of shipping and storage, are being marketed by investment banks.

"The overriding attitude in currencies is uncertainty, which is good for gold and commodities in general," said Jeff Christian, managing director of CPM Group, a commodity research and consulting firm.

Gold, because of a historic monetary role, is considered equal parts commodity and currency and therefore had perhaps the strongest inverse correlation with the dollar.

Until this year, gold tended to trade one for one with the euro. They have decoupled. ... Indeed, the strengthening dollar hastened the rise in commodity prices for foreign investors in local terms, adding to the positive investor psychology toward the sector.

"It's a strong signal when commodities are going up not just in terms of foreign currencies but also in dollar terms, which means there's more widespread demand, regardless of the currency the commodity is quoted in," Rinehimer said.

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

In a flight from the 'uncertainty' of currencies, one truly has to ponder what kind of mileage some of the bird-brained investors are expecting to put between themselves and that very same dreaded 'uncertainty' when they choose to embrace some of the aforementioned products, offered by investment banks, that merely "replicate" and "mimic ownership" of physical commodities without conveying the uniquely firm benefits of actual physical ownership.

Call USAGOLD-Centennial for friendly and professional consultation, great prices, and delivery of the REAL thing.

Toll Free 1-800-869-5115

R.

mikal

(11/08/2005; 13:29:35 MDT - Msg ID: 137714)

Currency confusion may make traders wary!

http://money.cnn.com/2005/11/08/news/economy/dollar/index.htm?section=money_topstoriesDollar party may be over soon
The currency has made surprising gains this year but rate moves in Europe could change all that.
November 8, 2005: 1:16 PM EST
By Grace Wong, CNN/Money staff writer

NEW YORK (CNN/Money) - Excerpts: "The dollar is showing another round of surprising strength but some currency analysts are saying that the party's probably almost over.
That's because the European Central Bank looks like it's getting ready to start making its first short-term interest rate hikes in five years -- a move likely to help the troubled euro and put pressure on the soaring dollar...
Fueling the greenback's rise this year has been the string of interest rate hikes by the Federal Reserve. In a bid to keep inflation at bay, the central bank has boosted the fed funds rate 12 straight times since last June, bringing the overnight bank lending rate to 4 percent. Twelve straight days of rioting in France and anti-rate hike rhetoric from some European finance ministers have also undermined the euro in recent sessions, but analysts said the slide is likely to be limited as the markets will shift attention away from the upheaval once the situation calms down."

The article acknowledges some of the factors in play, such as expectations of the Fed halting rate increase early next year based on "high productivity" and more. But the most damning of the $ flaws are unmentioned, unacknowledged and shared with other currencies.

"At 6.3 percent of GDP, the deficit is near its highest level on record, and shows few signs of correcting itself. That may force policy-makers to let the dollar fall, which makes U.S. exports cheaper overseas and could slow the growth of imports."

Experts agree the dollar would have to fall by half or more to even begin to shave the trade imbalance. More likely a recession will reorient global spending. Also, saying "at 6.3 percent of GDP, the deficit" doesn't account for the inflated GDP so the deficit as percent of GDP is actually much, much higher.

Belgian

(11/08/2005; 14:36:07 MDT - Msg ID: 137715)

Anomalies...conondrums...other mysteries >

...All these strange effects, short or long term, can happen because of the unique characteristics (privileges) of the $-IMS that has put its faith (destiny) in the all embracing power of the globalizing $ financial industry.

Under normal monetary circumstances, the present $-IR rise would signal a flight "out" of the dollar. But, today we see that more attention is given to the �-$ IR differential and the action is focused on this "temporary" event.
A strengthening helikopter dollar that needs to be feeded with an inflow of $ 2 Billion / day...from savings/profits outside US borders !?

Snow dreams again about China going flexible (yuan float)...about the oilprice going lower...about all CBs (including FED) leaning against all forms of inflation in concert...etc...
Much (desperate) wishfull thinking in one single speech.

The whole IMS is being pseudo stabilized by the helikopter concept. So far...so good .

USAGOLD Daily Market Report

(11/08/2005; 15:43:27 MDT - Msg ID: 137716)

Page Update!

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

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

TUESDAY Market Excerpts

Gold continues recent bounce

November 8 (from DowJones) -- COMEX December gold futures finished higher in New York Tuesday, up $1.90 to $462.30.

The metals rose on a day when the euro hit two-year lows against the U.S. dollar.

During the course of the day, several analysts pointed out that one of the same factors undercutting the euro also is helping to underpin gold - the unrest and rioting that began in France and is spreading.

French President Jacques Chirac has declared a state of emergency that allows for curfews and other measures in an effort to combat violence that began Oct. 27 after the accidental deaths of two teen-agers who were electrocuted while hiding from police.

Apparent copycat attacks have spread to Germany and Belgium, where cars have been burned.

"Now that France has had repercussions in Germany and Belgium, people took notice," said George Gero, senior vice president with Legg Mason Wood Walker. "There is a little bit of flight to quality," said Gero.

!!** "And Europeans' flight to quality is usually to gold, rather than to interest rates."**!!

Peter Grandich, publisher of the Grandich Letter, also cited geopolitical events as supportive for gold - not only the unrest in Europe but some of the events surrounding the White House and Congress.

Gold also was supported by a rally in the U.S. bond market, said Gero. As Treasury prices rise, yields fall, and lower interest rates are supportive for gold, he explained.

Some analysts also commented that gold is bouncing following a consolidation period in which support held in the mid-$450s last week. December gold bottomed at $456.10 on Friday before recovering again, even though the dollar has continued to firm.

Grandich said it's not as unusual as some may think for gold to be rising along with the dollar.

---(see url for full news, 24-hr newswire, market quotes)---

TownCrier

(11/08/2005; 15:45:40 MDT - Msg ID: 137717)

THE QUOTE OF THE WEEK

"Europeans' flight to quality is usually to gold, rather than to interest rates."

Nice work, George.

R.

Cavan Man

(11/08/2005; 15:46:33 MDT - Msg ID: 137718)

Hey Belgian....

I've come 180 in my THOUGHTS. I'll give you one: The Eurocrats don't have the organizational skills, hutzpah or BALLS to rock the global boat. They, along with the other global movers and shakers will keep the (US) game running as long as possible. Truly, there is no other viable and good game running. This game continues to enrich them beyond anyone's wildest dreams. If they're smart, they buy gold along the way. When the music stops, on that day, you will want to own gold (and I do).

Cavan Man

(11/08/2005; 15:49:28 MDT - Msg ID: 137719)

Belgian....

Look at the French fiddle away--pathetic. They have absolutely NO leadership skills self evident. It's worse than the US. This is one of the pillars of the EU. Forget about it. Reality, get you some (s'il vous plait).

Flatliner

(11/08/2005; 16:17:19 MDT - Msg ID: 137720)

Still don't own a Euro - how will I buy my next BMW?

Belgian, I believe that I am starting to make the connection that you've hinted to in your oil/euro scenario. It is almost too dreadfully simple. Could it *really* be that simple? Please keep up the commentaries as you see them unfold for us less observant folks.

I would like to once again ask for your help (anyone's help, actually). I have started to dig through the archives looking for information on the �freegold� concept. I'm not having much luck. It seems that Google has a different association with freegold and it doesn't pick up the archived pages (at least, I'm not seeing it). Does anyone know how to do that?

Oh great archive God, is there a search-able version of your data available?

David Linkley

(11/08/2005; 16:50:37 MDT - Msg ID: 137721)

@Belgian

Hi Belgian,
Just a question, why when miners have been closing down their gold short positions over the past several years have gold derivative positions at the BIS skyrocketed? The BIS clears for European central banks as well as the Fed. If the ECU strives for a competitive currency to the dollar, why sell physical or paper gold?

Cavan Man

(11/08/2005; 16:50:38 MDT - Msg ID: 137722)

Flatliner

http://www.usagold.com/goldtrail/default.htmlYou'll only find it here. Read with a pound of salt.

Cavan Man

(11/08/2005; 16:51:50 MDT - Msg ID: 137723)

There is no definitive answer for that question--only one Belgian's opinion.

TownCrier

(11/08/2005; 17:12:52 MDT - Msg ID: 137724)

Flatliner, FOA's "Freegold"

http://www.usagold.com/cpmforum/archives/1420002/default.htmlTrailGuide/FOA first coined the term "freegold" at the Forum on February 14th 2000 for use in the discussion of a concept of gold's most proper role in the world's international financial system. It was only a week later that FOA opted to present conceptually related info more formally, and "The Gold Trail" was officially launched on February 23, 2000.

You can find what I believe to be the original "freegold" usage at the specific Forum Archive URL given above. Scroll to the following post.

Trail Guide (2/14/2000; 21:11:17MDT - Msg ID:25350)
Freegold

R.

David Linkley

(11/08/2005; 17:25:54 MDT - Msg ID: 137725)

Conventional wisdom

The CNBC cheerleaders are at it again. Seasonals favor stocks into yearend and the dollar is once again invincible. Keep your gold and stand aside from the raving nutcakes. The Euro is currently close to its introduction price and don't think gold shooting up vs. the Euro this September didn't embarrass them. If they begin raising rates in December like Trichet alluded to, the dollar's rise will end quickly. I talk to several very smart and experienced money managers daily and they are very wary right now. The one constant, they continue to buy gold on dips.

David Linkley

(11/08/2005; 17:37:56 MDT - Msg ID: 137726)

In reverse?

Let me see, latest cars sales rolling over, Toll Brothers announcing new home sales rolling over, banks reporting in the latest quarter that mortgage and consumer loan volume is down, Dell, Microsoft, etc. revenues lower. With the economy booming this much its good have such a terrific inflation fighter like Bernanke in the wings. (NOT)

TownCrier

(11/08/2005; 17:49:14 MDT - Msg ID: 137727)

David Linkley, gold derivatives

Just a thought. It's a big commercial world out there. You might want to consider the possibility that where miners may have trimmed derivative dealings, perhaps speculators/hedge funds have more than picked up the slack.

Or even closer to the possible mark, perhaps those miners have merely offset their net derivative position with opposite yet addtional OTC contracts.

The end result in either case would help account for an observed rise in the total nominal figures outstanding in the commercial world as shown by the BIS's tracking statistics.

R.

Topaz

(11/08/2005; 18:00:41 MDT - Msg ID: 137728)

Bond, Dollar.

http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWWith 8 days gone in this non-delivery month, both Au and Ag are hangin REAL tough here via trading in Dec Paper.
GoldBugs might well be advised to "look-away" for the next 3wks as IMHO things aren't gonna be pretty.

Bond is headfaking another reversal and the interesting thing now is that our Oil/Bond/Dollar are back in equilibrium.
IF they can get a few GreenDays going on the Bond, our DX and PoO could come off somewhat.

I'm not too sure BUT ...with such a committed and concerted softening of the long end in favour of the short AND a rampaging Buck, Hades looks a sure thing for L-Bond methinks.

David Linkley

(11/08/2005; 18:10:51 MDT - Msg ID: 137729)

@TownCrier

Your answer makes alot of sense. What bothers me the most is having so much paper backed by so little gold. I've got to believe as MK has stated before, someone's in trouble and the CBs are trying to help cover.

David Linkley

(11/08/2005; 18:27:06 MDT - Msg ID: 137730)

@OvS

Great post. Those who are redirecting funds are soon to get there necks broken when the blowback after a crash occurs. There won't be a place on the planet for them to hide.

Tuco

(11/08/2005; 18:47:50 MDT - Msg ID: 137731)

Riots/Oil Bourse

Are the riots in Europe and the about-to-open Iranian Oil Bourse two dots to be connected? Could the trashing of Europe trash the Euro as well? Would the Iranians want to sell their oil for a currency that is backed by a group of countries whose cities are burning?

David Linkley

(11/08/2005; 18:57:34 MDT - Msg ID: 137732)

Pop quiz

Lets all take a short pop quiz. Would you rather own right now: The dollar or gold?
The Euro or gold?
GE or gold?
Microsoft or gold?
GM or gold?
JPM or gold?
Those of you choosing the any of the first selections good luck. Those of you choosing gold I applaud your wisdom.

PRITCHO

(11/08/2005; 19:29:46 MDT - Msg ID: 137733)

@Tuco - -A Good question (137731)

"Riots/Oil Bourse
Are the riots in Europe and the about-to-open Iranian Oil Bourse two dots to be connected? Could the trashing of Europe trash the Euro as well? Would the Iranians want to sell their oil for a currency that is backed by a group of countries whose cities are burning?"
-----------------------------------------------------------
I would NOT be surprised to see a CIA/Mossad palm print in the current French problem.It would even up some perceived slights in the eyes of some.

However the Iranians will NOT blink --the lesser of two evils will do them.

mikal

(11/08/2005; 19:39:16 MDT - Msg ID: 137734)

Update: Dubai Metals and Commodities Centre

http://www.freemarketnews.com/WorldNews.asp?nid=1857DMCC membership passes 625 mark - DUBAI - Nov 08

mikal

(11/08/2005; 20:07:55 MDT - Msg ID: 137735)

China extends gold trading

http://www.shanghaidaily.com/art/2005/11/08/211665/Gold_bourse_opens_for_night_trading_today.htm Gold bourse opens for night trading today - Beijing - Nov 8

Gandalf the White

(11/08/2005; 20:14:02 MDT - Msg ID: 137736)

The "KING of the HILL" report ! ( sorry about being late -- voting !)

TAA TAA TAAAAAAAAAAAAA, TAA TAA TAAAAAAAAAAAAAAAAAAAAA !

$$$$$$$$ THE "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$
---
I am told that the COMEX December contract action today was the following: ( not able to comfirm the range !)
---
Gold (GCZ5) Dec 05 462.3 463.0 461.1
---
IF SO, the following CONTEST entries were atop the HILL today !
===
$$$$ $463.0 $$$$ glockmaster19 (11/4/05; 13:58:46MT - usagold.com msg#: 137565)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $461.6 $$$$ Goldenera (11/5/05; 09:37:55MT - usagold.com msg#: 137596)
---
AND the PRESENT "KING of the HILL" is:
Sir Federal_Reserves !
CONGRATULATIONS
TOMORROWS Settlement price will determine the WINNERS !
Good Luck !!!!
<;-)

Goldilox

(11/08/2005; 20:43:17 MDT - Msg ID: 137737)

New Penalties

Donnie Deutche of CNBC is hosting the mayor of Las Vegas, who recently suggested cutting the thumbs off of spray paint grafiti artists in a public forum to curtail vandalism, as it has cost his city $315,000 in cleanup.

I wonder if he also supports equivalent punishment for the ENRON criminals who cost employees and investors $billions. Let's see, a thumb times 100,000 equals what to cut off?

How about Casinos that skim profits and cost his constituents untold revenues? Is he seeking the Biblical punishment for thieves?

Soon we'll revert to the Biblical edict that "children who disobey their parents should be taken to the edge of town and stoned to death".

We truly are witnessing global insanity at all levels of society.

TEX

(11/08/2005; 22:15:51 MDT - Msg ID: 137738)

RE: Goldilox - New Penalties

As a small business owner and considering the time, expense, and general trouble I have had due to a growing number of "Street Artists" (better known as "Taggers" and/or "Graffiti Artists").....I really like the Mayor of Las Vegas suggestion of cutting their thumbs off.

And.......what about yesterday's "event" of the registered sex offender in Bow Mar (Colorado) who was trying to break into a residence and shot by the homeowner? Sounds justified to me.

And.......how about the Chief of Police for Denver (Colorado)having his house burglarized today?

How does this relate to GOLD? Well.....I really don't trust keeping my physical in a "safety deposit box" as I am limited to when I can get to it. I keep it in what I consider a safe location on my property. I do need to protect it as best as possible and any kind of deterrence is appreciated. All things considered, I am leaning towards severe penalities for the idiots who try to deface, destroy or steal a person's legal property.

Cutting thumbs off and shooting intruders seems like a reasonable approach to me.

Got physical? Get some and protect it.

TEX

(11/08/2005; 22:20:22 MDT - Msg ID: 137739)

Enron

Sorry.....I forgot about the Enron thing. Put em in jail for the rest of their life......oh yeah.....in the general prison population....if you know what I mean.

Goldilox

(11/08/2005; 23:00:17 MDT - Msg ID: 137740)

Penalties

@ Tex,

Here's my point.

If a kid defaces a public building in a prank, you cut off his thumbs (certainly a life sentence). But have a crooked corporation (with ties to the White House) make billions disappear and you only want to lock them up with no physical penalty for a much more damaging offense? Shouldn't they have 1000's more organs publicly cut off to accomplish "equal protection".

The gold market is full of naked shorts, political payoffs, stock pump and dumps, environmental destruction, and plenty of ills, not to mention a whiff of tax evasion (of an amendment that was never even ratified) now and then. Should we demand blood payment for those transgressions as well?

If so, beware, your next speeding ticket may find some blood-thirsty official (whose campaign is usually paid for by "special interests") crying for your offending gas pedal foot to be cut off. After all, you MIGHT have killed someone!

Blood-thirst gets out of hand way too easily.

As for prison sentences, we already have 1% of our population (and rising) locked up - many more than any of the barabric countries were are trying to democratize!

When penalties are too severe, we end up creating a career criminal class and paying the price - not severe enough, and there is no deterent. Easy solutions only exist at the TV armchair - sort of like CNBC's answers to financial issues.

Belgian

(11/09/2005; 00:42:38 MDT - Msg ID: 137741)

@Cavan Man - Realities

Fine to realize once again, that after almost 5 years gathering together around gold on this unique forum,...WE DO FIRMLY AGREE ON THE NECESSETY OF GOLDMETAL IN POSSESSION !

But we continue to disagree on the "reasons" why it is wise to have and continue to accumulate the goldmetal.
Because Americans and Eurolanders have their fundamental differences.

That's why you and I view the same things differently. That's no problem as far as goldmetal ownership concerns...but it matters when we both try to guess gold's future !

I do feel rather comfortable with a Euroland that has less "balls"...Maybe, we have something else ?

Belgian

(11/09/2005; 01:47:50 MDT - Msg ID: 137742)

@David Linkley

CB goldsales : One can ignore what's behind this gold-actions and simply sleep well with the idea that one day there will be a "last" seller !

Or, one can continue to try understanding what all the gold-actions of the past decades could possibly mean as to form an idea about gold's *future*. This is time and energy consuming...and I still find that it is worth the efforts.

Most gold-observers simply wish to forget about the tumultuous gold-actions and act as if nothing happened. Hoping/wishing that the OLD gold-story rolls further. Whatever gold's future...as long as we see its price going up and make money with the classic gold leverage tools.

Gold's future is about the question : Shall I sell my metal for $500 or $600 fiat $ units...or shall I consolidate my wealth with goldmetal up until I see gold being revalued and its original purchasing power restored (thousands of fiat units per ounce) ?

That's why I have been communicating my thoughts about goldsales-goldactions. Yes indeed, CM...these are only thoughts or theories. And I still find the global situation fascinating enough to keep on asking the WHY-questions...and in particular about "gold".

Ask yourself what would happen if tomorrow the yuan (and other Asian currencies) would start "free-floating" !?
Same for gold : What happens when gold's pricing shifts from a semi fixed regime to a free floating pricing regime (freegold) !? Answering those questions with > This will never happen is imo extremely shortsighthened.

Remember the period '85-'90, where was agreed to let the dollar (world's unit of account) crash to half its exchange rate from the '85 ATH. This was not a matter of "balls" but rather a "rational" action.

Today, the dollar ($-IMS) users want the US to reduce its current account deficit, before any more concerted action can be agreed upon. What will be the result if and when the US starts taking measures to obtain such a deficit reduction ? What if nothing can be done... or there is no political will (balls-?) to do something drastic ? Will the freegold concept stay on the drawingboard for ever ? NO !

Were the gold-actions (sales and redistribution) of the past decade a concerted effort to save (overhaul) the $-IMS ?

That's why David repeats that same old question about the goldsales paradox. Do you really think that Euroland-euro-EMU, has been selling gold-wealth-reserves to save the fiat-unit ($-IMS) that dominates the entire planet ? Are burning cars in France (or other events) going to stop EMU's ambitions ?
Does the Freegold-concept needs a currency with bombing balls !? No Sirs, a good concept ultimately finds its way with very little coercion.

Belgian

(11/09/2005; 03:03:00 MDT - Msg ID: 137743)

Pound(s) of salt

In 1971 the "FIXED" goldpricing regime overnight changed into a "SEMI FIXED" goldpricing regime...after almost a decade of London Gold Pool goldactions. Next, will be another date, where semi-fixed goes to "FREE FLOATING" goldpricing regime...when the ongoing goldactions fade out.

Consider another one of those mysterious conondrums with a rather low profile : Japan, world economy II, has a 20 years strengthening currency (yen) versus the dollar (the $-IMS fiat unit)...AND A NATIONAL DEBT OF 160% GDP...and yen IRs still near zero !!!-???
How is this possible ? Politics on one side and CBs on the other, are both supporting the financial industry to make these incredible anomalies happen.

What kind of "pound of salt" is going to let this system survive for much longer ? Will it be $-IMF salt or �-BIS salt ?

When one tries to "bomb" systemic imbalances out of the way...the imbalances will get the bomber(s). No military logic is going to smooth or take away the "global" systemic imbalances. More than enough historic examples as evidence.

Belgian

(11/09/2005; 04:35:05 MDT - Msg ID: 137744)

The US-$ CURRENT ACCOUNT DEFICIT

US-$, the world's trade settlement unit of account and reserve, reached the CA-deficit in a period where IRs went to a 45 years low, the stockmarket reached all time highs and the dollar exchange rate didn't crash.

Will the reverse > dollar + bond + stockmarket crash, bring down the CA-deficit !?
Bear in mind that a simultanious crash of dollar/bond/stockmarket, eliminates the possibility for "arbitrage" for the financial industry and that sending in the $-helikopters would crash the $-IMS.

Today, the same old question : How can the US-$ deficits be stopped and reversed without dramatically harming the US-economy in the first place and the global economy, secondary ? If the �-gold-concept as alternative is to be excluded...HOW ARE WE GOING TO GET OUT OF THIS MESS ? And more importantly...how will the world economy look like when this highly probable melt down becomes disorderly...getting out of hand ? There is live after death, isn't there !

Golden State

(11/09/2005; 06:32:36 MDT - Msg ID: 137745)

Golden IRA Question

I am ready to convert an IRA of mine into physical gold. What does everyone here think is the safer/wiser option: Roll the money into an IRA like the ones offered here by our host, or withdraw the money, pay the substantial taxes (like 50%) and then purchase physical gold from our host.

I already have some physical in hand, but cannot decide what I should do with the IRA. TIA

Goldilox

(11/09/2005; 08:22:16 MDT - Msg ID: 137746)

Conversion

@ Golden State,

Talk to a gold-friendly tax man. All your answers depend a lot on your age and current income, but also look into a local independent gold storage firm and ask about the ability to take the gold from the site as opposed to "cashing out" at 59 1/2, etc.

If you believe in gold potential that strongly, and are still earning in the top tax bracket, one would hope you are cost-average adding to your unencumbered stash in the mean time.

Lots of variables to examine. Way too many to bare on a public forum.

Goldilox

(11/09/2005; 08:25:00 MDT - Msg ID: 137747)

NY Gold

Interesting "false start" on the COMEX this morning.

Premonition of the oil supply numbers?

YGM

(11/09/2005; 09:00:08 MDT - Msg ID: 137748)

Golden State......IRA Roll-Over to Gold

http://www.usagold.com/IRA.htmlTreading on dangerous ground when you allow a trustee to hold your Gold or accept any form of paper promises on your physical.
Get some more informed advice from an expert like George Cooper here @ Centennial, would be the the advice I would offer anyone. He'll know more about your options & benefits than 'most' tax experts. I'd bet you can talk w/ Michael Koasares directly also. FWIW

Gandalf the White

(11/09/2005; 09:47:34 MDT - Msg ID: 137749)

JUMP SPOT, JUMP !!!

The GOLD CONTEST will be determined TODAY !
<;-)

Goldilox

(11/09/2005; 09:58:48 MDT - Msg ID: 137750)

To IRA or not to IRA

@YGM,

While I have great faith in George's understanding of IRA options that are available (I've spoken to him myself), my recommendation to GS to talk to his tax man is focused on his personal financial situation.

Conversions, Roths, etc., are all governed by income limits and other personal financial issues, and should be carefully approached with one's personal tax ramifications well understood. Most decisions are not reversible, and the IRS is not known for their flexibility.

His main question was whether or not to make an early withdrawal from his IRA. Once that one is answered, I concur with your suggestions.

TownCrier

(11/09/2005; 12:28:58 MDT - Msg ID: 137751)

Golden State, pension and IRA decisions

http://www.usagold.com/IRA.htmlThe starting point is definitely to pin down precisely what the total tax/penalty obligations would be for the alternatives of rollover vs. early disbursement. And as Goldilox has said, your tax man would probably be able to lay this out simply for you if you haven't already gotten a handle on it by your own research. (My own thinking, based on personal experience from having done it myself a few years ago, is that a your tax/fee obligation to Uncle IRS for disbursement will be approximately 10% fee (for early disbursement) plus the lump sum will be treated as taxable income, on top of your regular income, according to the nature of the principal and capital gains of which those funds are comprised. Meaning, have you already paid income tax on your original contributions, or were they pre-tax contributions, etc.

The good news is that with the current tax structure, based on the recent tax cuts, this is about as friendly a time (to take the tax hit on an income bulge) as any other time that I can remember. It's certainly better than when I did it. And if you're in a position to arrange a temporary slackening of your regular income during the year of your disbursement (coinciding with a research sabbatical or a startup period for a new business), so much the better.

Anyway, once you've got a line on what the tax ramifications would be for early disbursement, ultimately the decision is yours regarding how comfortable you are personally with the taxation versus rollover alternatives insofar as they impact your final outcome alternatives of assets in possession available for immediate use versus assets that are held in trust as in your current situation.

Another big thing to bear in mind is that Rules Change with regard to current and future access to your retirement accounts. When Congress is in session, I can assure you they are doing more than just drinking beer, eating sandwiches, and telling war stories.

Final consideration -- your decision doesn't have to be an all-or-none prospect. You might find it more palatable to do a disbursement on only a portion, and rollover with the remainder.

As with all financial decisions, ultimately it is up to each of us to arm ourselves with as much relevant information as can be brought to bear on the issue, and then taking the action that stands us in good stead.

Be sure to chat with George Cooper here at USAGOLD-Centennial to see what options are available to you on the gold side of the equation. He can be reached toll free at the following extension:
1-800-869-5115 ext. 102

R.

Gandalf the White

(11/09/2005; 12:40:00 MDT - Msg ID: 137752)

TA TA TAAAAAAAAAAA -- We have WINNERS !!!! <;-)

GCZ05 Gold Dec '05 $467.5 s HIGH $469.0 Low $461.1 +$5.2
---

The following entries were at one time today, "ATOP the HILL" !
---

$$$$ $468.8 $$$$ balzac (11/3/05; 19:02:56MT - usagold.com msg#: 137529)

$$$$ $467.1 $$$$ Black Blade (11/6/05; 10:06:42MT - usagold.com msg#: 137640)

$$$$ $466.7 $$$$ Rimh (11/4/05; 12:45:11MT - usagold.com msg#: 137561)

$$$$ $465.7 $$$$ Max Rabbitz (11/6/05; 11:08:10MT - usagold.com msg#: 137643)

$$$$ $464.8 $$$$ sabre (11/5/05; 22:43:04MT - usagold.com msg#: 137618)

$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)

$$$$ $463.1 $$$$ Whitewaterwoman (11/4/05; 15:32:38MT - usagold.com msg#: 137571)

$$$$ $463.0 $$$$ glockmaster19 (11/4/05; 13:58:46MT - usagold.com msg#: 137565)

$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)

$$$$ $461.6 $$$$ Goldenera (11/5/05; 09:37:55MT - usagold.com msg#: 137596)
===

BUT, it may be seen that the WINNER of the GOLD -- "A British King Sovereign", with an "India" mint mark, is:

Sir Black Blade !

While the two runners-up prizes for the next closest prognostications --- each winning an one ounce pure silver CANADIAN "Maple Leaf", were:

Sir Rimh and Sir Balzac !!

CONGRATULATIONS !

Will the WINNERS please send Lady Marie of USAGOLD, an email containing their REAL NAME, FORUM "handle", and snail mail Address for the posting of the "precious" !

Thanks all for the entries (AND the ANSWERS to the "QUESTION") during this VOLATILE market period !!
<;-)

Gandalf the White

(11/09/2005; 12:43:18 MDT - Msg ID: 137753)

oops ! <;-)

Marie's email address of course is"

marie@usagold,com

Thanks
<;-)

USAGOLD / Centennial Precious Metals, Inc.

(11/09/2005; 12:43:45 MDT - Msg ID: 137754)

Especially for beginners -- a selection of assets and info to help you get started right

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

Gandalf the White

(11/09/2005; 12:44:13 MDT - Msg ID: 137755)

DOUBLE oops !

marie@usagold.com

TownCrier

(11/09/2005; 12:52:16 MDT - Msg ID: 137756)

Gold in euroland...

http://www.usagold.com/gold-price.htmlGold in euroland (priced in euros) has decisively shot through and above its one-month trading channel of declining highs and lows, putting it within easy handshake distance of its all-time high in breach of EUR400 per ounce.

See bottom charts at url given above.

R.

Ten Bears

(11/09/2005; 13:02:37 MDT - Msg ID: 137757)

Useful idiots, Red herrings, and Politicians

http://www.larouchepub.com/lar/2005/3241oct_12_webcast.htmlPoliticians refer to supporters who eagerly follow red herring, hot button issues, and who have insufficient regard for issues of immediate and long term economic importance to them and their families, as useful idiots.

Larouche estimates that as much as 30% of the U.S. population falls into the" useful idiot" category for political purposes. Those with distain for the" me-generation" of the baby boomers and concern
for how others use their reproductive parts together with the" I'll show them" crowd of the me-generation are both prime dupes for the red herring technique.

Divide and conquer, a very old and very effective method of rule.

See the headlines of Dallas morning (11/09/05) news for an example.

What does this have to do with gold?... A voting population so easily mi-directed away from areas of vital economic concern is unlikely to understand the nature of the debt money system until it is far too late

TownCrier

(11/09/2005; 13:16:51 MDT - Msg ID: 137758)

The WallStreetWindow: Gold Breakout Coming

http://www.wallstreetwindow.com/goldarticle110905.htm11/09/05 -- The clock is ticking on the gold breakout.� Gold stocks have been in a tight consolidation range now for over two full weeks.� The bollinger bands are growing narrower and narrower by the hour and this situation simply will not go on much longer.� When volatility contracts like this it is always a prelude to a large move.

...When volatility shrinks the selling and buying pressure becomes more and more equal.� Imagine pressing two sides of a book with your hands as hard as you can.� If you let the pressure off of one side of the book it will fly out of your hands in that direction.

...important signs that tell me that this consolidation phase is going to soon end with a massive upside breakout.

...it was a frenzy of momentum chasing hedge fund panic buying that created the September top in gold.� Too many people got into the gold market and the supply of buyers got exhausted.� That is what led to the dip we've seen over the past six weeks.� Dips like this end when the dumb money gets shaken out and the smart money buys.� ... exactly what is happening now.

What we have seen is a classic bull market correction.� They are sharp, fierce, and they scare people.

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

The author puts his endorsement on gold stocks, but one has to wonder where is the rationale in owning a corporate asset that sits atop a wasting asset (depleting ore body) and is ultimately not good as gold but rather is merely a legal construct which is subject to all sorts of managerial, political, social, environmental and geological hazards.

To ride the gold bull market, choose metal. Any other device is merely clinging on until it no longer can pose itself as though it were inexhaustible and as good as gold.

R.

TownCrier

(11/09/2005; 13:26:47 MDT - Msg ID: 137759)

Analysts see shift in gold, greenback correlation. Bullish on bullion's long-term prospects

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20051109/RGOLD09/TPBusiness/MoneyMarketsNovember 9, 2005 -- Bullion prices rallied yesterday as did the U.S. dollar, a relatively unusual combination of events but one that is not without recent precedent. There could be more such incidents, some analysts suggest, if gold continues to rally regardless of what the greenback does.

Gold climbed $1.90 (U.S.) to $462.30 yesterday, at the same time as the U.S. dollar climbed to a two-year high against the euro and the yen.

Myles Zyblock, chief institutional strategist at RBC Dominion Securities Inc., is a near-term, as well as long-term bull on gold. He and a group of analysts at RBC Dominion believe "there has been a significant portfolio shift out of financial assets and into tangible assets that started in 2000, the year that the technology stock bubble reached its pinnacle," he said in a report yesterday.

They feel that investors have become increasingly risk averse and that the role of the U.S. dollar as the world's reserve currency is being challenged.

John Ing, president of Maison Placements Canada Inc., has been a bull on gold for years and recent events give him ammunition for his view. He credited the rally in gold from the lows around $255 three years ago to weakness in the U.S. dollar. But he also suggested that gold is no longer moving in the opposite direction to the greenback.

As he sees it, the disconnect between gold prices and the U.S. currency goes back nine months or so. Over that period, the "U.S. dollar has been fairly strong, and the amazing thing about it is that gold has been stronger than not only the U.S. dollar, but the euro and the yen, and even the stock market," he said in an interview.

"My expectation is that we have just completed the first leg or are just about to complete the first leg" of the move, he said. He expects that first leg of a three-leg advance will carry gold to $510 an ounce, possibly this year.

"The second leg will see a high of $700 an ounce and who knows how high the third leg will be," he added.

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

Call USAGOLD-Centennial, strap yourself onto the gold bull, and then just let him buck his way to higher ground. Yeee-HAAAW

R.

melda laure

(11/09/2005; 13:34:13 MDT - Msg ID: 137760)

Latent Indigestion

http://www.businessweek.com/bwdaily/dnflash/nov2005/nf2005119_0745_db035.htm?site=cbs&campaign_id=cbsEnronitis returns. Interesting how a bad derivatives mess can not be cured even by bankruptcy... Reminds me of the time Durban Deep bought some mine or other and ended up owning the "debt" but not the underlying "assets" truly hilarious- enron is STILL a Paper Company.

EVIDENCE BUILDING. After a year of work, the new board is still stunned by the complexity of Enron's collapse. The liquidation is the financial equivalent of a toxic Superfund site. It involves thousands of suits and countersuits, with armies of lawyers fighting for access to Enron's vast archive of inscrutable documents. "The magnitude of this case is shocking," Ray says.

The board has created a massive operation to keep track of the evidence.... Enron's library of documents is located in a complex of warehouses on the outskirts of Houston.

The 3.3-acre site once housed the company's broadband-telecommunications unit. Huge warehouse rooms originally built to store telecom equipment are now filled floor to ceiling with crates of papers. The site currently houses 120,000 crates, and an additional 100,000 will eventually be shipped there. A team of 60 people fetch documents for opposing attorneys, who are allowed to review the papers in a special area but cannot wander about the warehouse.

Goldilox

(11/09/2005; 13:40:20 MDT - Msg ID: 137761)

HUI Watch

http://www.kitco.com/pop_windows/stocks/hui.htmlLots of green in the HUI list today. A number of issues are challenging the highs of that narrow band.

USAGOLD Daily Market Report

(11/09/2005; 14:00:54 MDT - Msg ID: 137762)

Page Update!

Rad

(11/09/2005; 14:57:15 MDT - Msg ID: 137763)

how to diversify holding

Hi everybody,
I have been lurking for a while and appreciate your posts. I was wondering what ideas people have on how to secure your precious metal holdings in this and other countrys. The ones I know already are:
1)hole in the ground or house
2)safe deposit boxes
3)electronic access like goldmoney.com or e-gold
4)gold mine stocks/ mutual funds
I am in USA and would like to stash some in Canada or? as well because I don't trust our government
thanks
P.S I know I can't spell worth a dam.

goldquest

(11/09/2005; 15:10:55 MDT - Msg ID: 137764)

Congrats to Contest Winners!

Good call BB! Hope to buy you a Negro Modelo at Redfish Lake sometime!

Whitewaterwoman

(11/09/2005; 15:44:53 MDT - Msg ID: 137765)

Protecting physical

RAD, what I recommend is a fire-proof gun safe. Preferably one that weighs about 400 pounds and that has large bolts on the bottom that can be screwed into your home's foundation. This tends to prevent thieves from hauling the whole thing off.

I also suggest spending the extra money to get one that requires both a key and a combination to open it.

Worse comes to worse, defend your gold and silver with the other contents of the safe. ;)

I would advise against storing it in Canada--if things get to the point that you really need it, how will you get to it? It may be quite dangerous to travel.

David Linkley

(11/09/2005; 16:09:13 MDT - Msg ID: 137766)

Nothing bad can happen

So the Fed's Poole gave another speech today in St. Louis and basically said the Current Account deficit and a hard dollar landing don't matter as long as Fed and government policies are sound. If they were sound we wouldn't be talking about them. Really Mr. Poole, and where based on historical experience have you ever found a smooth crash landing? The outright arrogance and lies of these deranged people is a sight to behold. Fellow board members, get ready for some of the roughest economic history lessons within the next 12-36 months. Denying reality and pretending all of this debt and future obligations will work out in the end is the greatest con job ever attempted on a public. John Law, you were a piker compared to the political sharks of today. The only conclusion I can reach is a deliberate attempt to divide and bankrupt the US.

David Linkley

(11/09/2005; 16:55:12 MDT - Msg ID: 137767)

Why the spike today?

Gold spiked today inspite of a stronger dollar and coupled with the Fed's Poole speaking today, I would guess a record trade deficit is coming. The Treasury auction went poorly as CB's turned away forcing rates higher. Commercials have been covering gold shorts, the economy's rolling over and silver looks ready for double digits. $500 gold here we come.

Black Blade

(11/09/2005; 19:25:56 MDT - Msg ID: 137768)

Thank You USAGOLD!

I have to admit that I am quite surprised at the contest results and grateful to our host for these occasional price guessing contests we have here at USAGOLD and of course to Gandy for the time he takes to oversee the whole affair. Thank you all very much.

Yes Goldquest, I do believe that it deserves an ice cold Negra Modelo. ;)

- Black Blade

Waverider

(11/09/2005; 20:37:49 MDT - Msg ID: 137769)

Congratulations Black Blade and runners up

Yikes - it's been so long since I posted I almost forgot my password! Congratulations to all the winners - missed this last one with travels, etc. Thanks everyone for your posts and opportunity to keep current here. Cheers,

Waverider

Shermag

(11/09/2005; 21:52:26 MDT - Msg ID: 137770)

Missed it by THAT much

I now see that my price guess on Sunday would have won gold IF I would hace been astute enough to observe the contest deadline. Alas, I was not so alert. I snooze, I lose.

Congratulations to the legitimate winners, and many thanks to our host and his esteemed wizard for the contest, and to those who bring us this fine forum.

Goldilox

(11/10/2005; 00:23:14 MDT - Msg ID: 137771)

Bank of New York Reaches $38M Deal to Avoid Russian Money-Laundering Accusations

http://www.mosnews.com/money/2005/11/09/bonysettlement.shtmlsnip:

On Tuesday, Nov. 8, Bank of New York admitted that top executives intentionally failed to report evidence of a huge Russian money-laundering scheme, bringing to a close a long-running investigation into the oldest bank in the US. The bank agreed to a $38 million settlement to avoid prosecution, The Financial Times reported.

Under the terms of a $38 million settlement with federal prosecutors that ensures the bank will not be prosecuted � a so-called non-prosecution agreement � Bank of New York admitted to criminal conduct and will be forced to make "sweeping internal reforms" involving anti-fraud and money-laundering compliance.

-Goldilox

Where's the Las Vegas thumb amputator when we need him?

Goldilox

(11/10/2005; 00:37:09 MDT - Msg ID: 137772)

Threat to the petrodollar system so great it could provoke US military attack

http://www.vheadline.com/readnews.asp?id=46708snip:

If successful the IOB will provide Iran with concrete economic benefits especially if it invoices at least some of its energy contracts in euros.

Iran has around 126 billion barrels of proven oil reserves about 10% of the world's total, and has the world's second largest proven natural gas reserves.

From an economic perspective, invoicing oil in euros would be logical for Iran as trade with the euro zone countries accounts for 45% of its total trade. More than a third of Iran's oil exports are destined for Europe, while oil exports to the United States are non-existent.

The IOB could create a new euro denominated crude oil marker, which in turn would enable GCC nations to sell some of their oil for euros. The bourse should lead to greater levels of Foreign Direct Investment in Iran's hydrocarbon sector and if it facilitates futures trading it will give regional investors an alternative to investing in their somewhat overvalued stock markets.

Euro zone countries alone account for almost a third of Iran's imports and currently Iran must exchange dollars earned from hydrocarbon exports into euros which involves exchange rate risk and transaction costs.

The decline in the dollar against the euro since 2002 -- some 26% to date -- has as substantially reduced Iran's purchasing power against its main importing partner.
If the decline continues more states will increase the percentage of euros vis-a-vis the dollar they hold in reserve and in turn this will increase calls both in Iran and the GCC to invoice at least some of their oil exports in euros. A move away from the dollar and a strengthening of the euro would further benefit Iran as according to a member of Iran's Parliament Development Commission, Mohammad Abasspour, more than half of the country's assets in the Forex Reserve Fund are now euros.

It is primarily the US which stands to lose out from any move away from the petrodollar status quo, it is the world's largest importer of oil and a move away from invoicing oil in dollars to euros will undoubtedly have a negative effect on its economy.

Fewer nations would be willing to hold the dollar in reserve which would cause a significant devaluation and result in the loss of seigniorage revenues. In addition US energy related companies stand to lose out as they will be unable to participate in the bourse due to the longstanding American trade embargo on Iran.

-Goldilox

Aside from the yellow press headline, the overall article is actually pretty well written. Oh well, it is a Venezuelan rag, so ya gotta expect the headline, I guess.

YGM

(11/10/2005; 01:00:57 MDT - Msg ID: 137773)

Goldilox (11/10/05; 00:23:14MT

As always the banksters are above the law! Sick testament to our so called modern society (still feudalistic)

goldquest

(11/10/2005; 06:57:18 MDT - Msg ID: 137774)

Fannie Mae, May lose its Fanny!

Billions more in descrepancies.

Clink!

(11/10/2005; 07:20:46 MDT - Msg ID: 137775)

@ Ten Bears

That was a mighty interesting article you brought to the Table yesterday. I must admit that I thought I detected some foaming at the mouth in some places, but in others he might have been quoting from the Forum. I find it always useful to listen to someone who uses a historical perspective. On the one hand, an alternative interpretation can always be called MISinterpretation or worse, but let us never forget that history is always written by the winners.

I would also note that this is the first reference to the term quadrillion to describe an amount of dollars that has been brought before us.

C!

Clink!

(11/10/2005; 07:47:01 MDT - Msg ID: 137776)

More big numbers

http://www.myfinances.co.uk/investments/investment-vehicles/with-profits-investments/investors-find-growth-in-credit-derivatives-$15085580.htmThe referenced article was mentioned in last night's Midas.

The by-line was :- The global credit derivatives market grew close to 48 per cent in the first six months of the year, creating opportunities aplenty for bond investors.

There was a comment that a 48% growth figure smacks of a parabolic blow-off event. He may be right. If you have a bet on a market whose volatility is going down (because of or thanks to derivatives) won't you have to keep on increasing the notional value in order to get the same real swings in your bets ?

Snip :-

"Having had such good returns over the past few years, bond fund managers are being asked to maintain this performance �" not easy in a low yield environment where spreads are very tight. Credit derivatives offer an alternative method of generating such performance. They enable managers to go long or short a particular credit (or group of credits) and provide exposure to foreign issuers without the associated currency or interest rate risk."

End snip.

This, of course, glosses over the fact that for every winner in one of these contracts, there is also a loser (and a broker earning fees)

A funny aside, the money manager being interviewed for the article was named Ian Spreadbury. A buried spread ? Sounds like a kind of options straddle to me ?!!

C!

Goldilox

(11/10/2005; 08:59:06 MDT - Msg ID: 137777)

Refco Customers Are Seeking $1.8 Billion in Accounts

http://www.bloomberg.com/apps/news?pid=10000103&sid=awSbW9iKthEE&refer=ussnip:

Nov. 9 (Bloomberg) -- Refco Inc., the U.S. futures broker that filed for bankruptcy Oct. 17, said 45 customers with as much as $1.8 billion in Refco accounts have filed actions against the company in bankruptcy court.

Ten Refco customers with $640 million in accounts have sued the company to get back their money and another 35 with $1.2 billion in accounts have filed objections or demands in the company's bankruptcy case, Refco said in a filing late yesterday in the U.S. bankruptcy court in New York. Refco asked the court to put the customer actions on hold until a procedure can be established for handling them.

Refco will auction its assets today, including its regulated futures business. The customer accounts are the primary assets the New York-based broker plans to auction based on confidential bids submitted last week. Refco has received five bids for its assets, including offers from Man Group Plc, the world's biggest publicly traded hedge fund manager, and Alaron Trading Corp., a Chicago-based futures broker.

Customers have raised ``an overarching issue in these cases -- whether certain securities and other property held by RCM are property of the bankruptcy estate or in some way belong, in whole or in part, to the account holders,'' Refco said in the filing.

-Goldilox

I would think it sux to be them right now.

A bird (Eagle) in hand is worth how many in the bush (court)?

Goldilox

(11/10/2005; 09:10:23 MDT - Msg ID: 137778)

Argentine Measures to combat inflafla . . .

snip:

BUENOS AIRES, Argentina, Nov 10 (Reuters) - Argentina announced new measures on Thursday to combat rising inflation, including the suspension of tax rebates for some food exporters and a proposed increase on banks' reserve requirements.

Economy Minister Roberto Lavagna told reporters he will "recommend that the Central Bank board study with urgency an increase in the reserve requirement with no additional cost," in a bid to absorb excess liquidity to reduce inflation.

And he said the government will put a temporary halt to tax rebates for exporters of 200 basic food products, among them meat, fish, dairy products, vegetables, edible oils and flour, to stimulate greater domestic supply.

"The purpose of all these measures has to do with reducing costs, working towards price stability and working to increae investment and job creation," Lavagna said.

Consumer prices surged 9.8 percent in the first 10 months of the year, threatening to surpass the government's target range for inflation this year, which is between 10.5 percent and 11 percent.

The last time Argentina endured double-digit inflation was in 2002, when the peso fell about 70 percent in value against the dollar during a chaotic financial crisis.

The renewed surge in prices has become a major headache for President Nestor Kirchner as he seeks to sustain a three-year economic recovery.

Lavagna attributed inflation to the gap between surging demand fueled by economic growth and limited supply.

"There is a contradiction in the short term that is resolved as long as production rises, but this will take time," Lavagna said. "If there is a recovery on the supply side, this suspension (of tax rebates) will be lifted."

Lavagna said further measures could be taken if prices are not tamed, adding that in the case of the bank reserve requirements, the additional reserves could be freed if they were used to finance long-term investments.

-Goldilox

It's different there, or sign of the times?

Especially interesting is the minor banking extortion mentioned in the final sentence. A little more gold might go a long way in shoring up their banking reserves.

Goldilox

(11/10/2005; 09:14:51 MDT - Msg ID: 137779)

Correction msg#: 137777

Should read:

"A bird (Eagle) in the hand is worth how many in the Bush courts?"

Goldilox

(11/10/2005; 09:20:14 MDT - Msg ID: 137780)

Argentine measures

Rereading my own post, I also find it very interesting that food exports are being encouraged to "stay home". One has to wonder about the effect on U.S. dinner tables.

As the US has been accused of exporting inflation through its debt policies, here is an example of the "Chickens coming home to roost".

Goldilox

(11/10/2005; 09:31:46 MDT - Msg ID: 137781)

DISASTER! Trade Gap Jumps 11% in One Month!

snip:

"Petroleum imports up 60% YoY 2004 - 2005!
How do you spell trouble? Petroleum imports are up 60% on a YTD basis 2004 v. 2005! Balance of Trade Deficit? Calling it a disaster understates things!"

Later in the column:

"Elaine was busy grousing yesterday about the mainstream media coverage of the hearings, by the way. "Why did they cut off coverage of Sen. Barbara Boxer asking execs if they would contribute some of their multi-million dollar bonus packages to help fund energy programs for the poor?" she wondered.

"Hell, dear, for the same reason you'll never see Congressman Ron Paul ever get a complete question (and answer) out of Al Greedspan of the Fed," I explained."

-Goldilox

Is that "Trade Gap" or "Trade Gulp"?

Pretty good read over at UrbanSurvival today.

Goldilox

(11/10/2005; 09:40:17 MDT - Msg ID: 137782)

Senators Turn Up Heat on Oil Executives

http://www.latimes.com/news/nationworld/nation/la-na-oilexecs10nov10,0,5167336.story?coll=la-home-nationsnip:

Lawmakers from both parties � some of whom waited hours to ask questions in their allotted five minutes � expressed frustration with executives' answers. When Sen. Maria Cantwell (D-Wash.) told the executives she wanted "just a 'yes' or 'no' answer" to whether their companies exported fuel before Hurricane Katrina, Raymond responded, "Well, senator, there are no easy 'yes' or 'no' answers in this business."

Some tensions were among senators. When Sen. Barbara Boxer (D-Calif.), displeased that Stevens refused to swear in the witnesses, sought to submit a 1970s picture of then-Sen. Henry "Scoop" Jackson (D-Wash.) swearing in oil company executives during hearings, Stevens snapped: "We don't put photographs in the record."

When Boxer held up a chart listing the executives' compensation as she attempted to ask about their salaries, Stevens interrupted her, saying: "We're permitted to have charts to show information that pertains to our issue. This chart is really publicity."

But Boxer still was able to scold the executives: "Working people struggle with high gas prices � and your sacrifice, gentlemen, appears to be nothing."

Although pump prices have eased from a high of more than $3 a gallon for unleaded regular after Hurricane Katrina damaged Gulf Coast energy facilities, both Republican and Democratic lawmakers are still getting an earful from constituents. In addition, they are bracing for consumer anger over expected increases in the cost of home heating.

"People were shocked with the hit in the price of gas at the pump, but I think it's fair to say that this winter there will be an equal, if not greater, shock when people look at their natural gas heating bills," said Sen. Lisa Murkowski (R-Alaska).

In his written testimony, ConocoPhillips Chief Executive James J. Mulva acknowledged "public distrust" of the industry, but added that consumers were "mistaking the size of our earnings for a windfall, not realizing the enormous levels of investment required to achieve those earnings and bring new energy supplies to the market."

The CEOs opposed a proposal pushed mostly by Democrats to impose a windfall-profits tax on the oil industry, saying it would discourage investment to increase energy supplies.

"History teaches us that punitive measures hastily crafted in reaction to short-term market fluctuations will likely have unintended negative consequences," Raymond said.

Agreeing, Sen. John E. Sununu (R-N.H.) said: "As much as we all want to be seen as doing something here in Washington about high gas prices � we shouldn't undertake legislation that's been proven in the past to increase demand and increase dependence on foreign imports of oil."

The executives also rejected a call by Sen. Charles E. Grassley (R-Iowa) for oil companies to contribute 10% of their profits to a federal program subsidizing home heating for low-income households.

Mulva called it "a bad precedent to have private industry support a federally funded program."

-Goldilox

Hey, Mulva!

I thought that's what Dubya's privitization of education and welfare and "faith-based initiative" BS was all about!

It makes for great press until someone is actually asked to "belly up to the bar".

Bizarro-Greenspan

(11/10/2005; 09:54:58 MDT - Msg ID: 137783)

In the news

http://www.defensenews.com/story.php?F=1183869&C=europeEU Troops Stage Exercise To Protect �Oil-Rich Country�
By AGENCE FRANCE-PRESSE, TOULOUSE, France

European troops are this week conducting air and ground exercises in southern France simulating an international defense of an oil-rich country under attack, officials said.

Some 3,000 soldiers from France, Belgium and Germany are taking part in the exercise, dubbed OAPEX 2005, which will test a scenario in which the European forces are flown in, with armored vehicles and a U.N. mandate, to battle a hypothetical enemy invading an oil-producing nation.

Stevens

(11/10/2005; 10:02:01 MDT - Msg ID: 137784)

My Take: On The Gold/Dollar Rise.

Rarely, does both the dollar and gold rise together. But lately, this has become a trend. In my opinion, the explanation is that Europe and Japan have embarked on a more vigorous currency depreciation policy.

Both Europe and Japan have in the past instituted policies that have, in their views, promoted exports, through various measures, one of which is currency depreciation. Over many decades they debased their currencies, or tried to prevent them from going higher than the market wanted to take them. Japan has, after almost a decade of price deflation, finally increased their money supply sufficiently to create a mild inflation. They want the yen to fall against the dollar, in order to export more, thereby stimulating domestic growth. Having accomplished this, finally in 2005, they have declared loud and clear their intentions to continue this policy for the foreseeable future. Why wouldn't Japanese investors, therefore, start shifting yen into dollars and gold?

Europe, on the other hand, has offered the world the Euro as an alternative to the dollar and an alternative reserve currency. A reserve currency, to be successful needs to be stable. Europe may have blinked this year. They may have decided that a cheap Euro that fosters greater exports is preferable to the responsibility of having a stable currency. This year, the money supply of the Euro countries has gone up near 10%, while the US money supply has been growing at about 6%. Why wouldn't, Euro investors not start switching into dollars and gold?

Both Japan and Europe with no growth, high unemployment, and a reduction in their normally high exports, may have succumbed to their Mercantilist past.

Several big dollar bears, including Warren Buffet, have covered their dollar short position recently. This could be very good for gold. When the dollar falls and gold rises, it is usually taken as a sign that Government must act to stabilize a deteriorating financial situation. But with the dollar and gold both rising there is no need for government intervention. How high can gold go in a benign financial environment? Pretty high, one would think.

I submit that while the dollar may fall in the future, as the twin deficits reassert themselves, for the near term, we are in an interim dollar/gold bull market.

Rimh

(11/10/2005; 10:07:23 MDT - Msg ID: 137785)

Thanks, MK, Gandalf

Thanks for hosting a contest with such great prizes, MK! It is always fun and challenging to try to foresee where gold will be in the days to come! Thanks, too, Gandalf for all your work getting all the guesses organized!

Flatliner

(11/10/2005; 10:49:06 MDT - Msg ID: 137786)

Freegold verses Papergold

A few days ago I was presented with the term �Freegold� for the first time. Not knowing the language of �Goldbugs�, I was at a loss with regards to understanding what it meant and how it fit my question on the forum. Upon enquiring, I was sent on a 35,000 word hike in the woods (See (Archive I) The Trail Head by following the "Gold-Trail" link under the USA*GOLD banner above). It's an interesting fire side chat that deserves more investigation.

At the same time, it may be that there are other readers, relatively new to this forum, that have also come from a world that is similar to mine. If so, they may also be at a loss for the term Freegold and have been anxiously looking for the simple explanation that I enquired for.

I will apologize ahead of time for my conclusion below. At this point, I may have over simplified the concept.

Freegold � 1) A term that is used to describe physical gold that is traded openly in the market, free of political influence or price manipulation that is contrary to the fundamental attributes of capitalism. 2) Not Papergold. 3) Found: Freegold is found in coin shops, jewelry stores and precious metal shops (Heck, call USA*GOLD and get yourself some. Once you put it in your hand there is no mistaking it.)

In order to really understand this, one must also understand the concept of Paper Gold. Had �Papergold� been used as the opposite of �Freegold�, I might not have been directed to the Gold Trail articles.

Papergold � 1) Derivatives of physical gold that are considered by some to be as valuable as the real thing and can be assessed in currency terms and not settled in physical gold. 2) Gold Futures contracts, Gold options, Gold Exchange Traded Funds (ETF) all fit into this definition. 3) Key concept with Papergold is that there is a promise to pay involved in the transaction. 4) Papergold's value can be set through political manipulation that any capitalist would appose. 5) Found: Papergold can be found on the COMDEX, NYME, the stock market (under the disguise of an ETF) or, indirectly, through the purchase of a gold stock.

Freegold, it seems, sparks an emotional response of hope from Goldbugs (I'm sure I don't understand the concept of a Goldbug, so forgive me if I've used it incorrectly here). Why? (I might be jumping way out of line here) Because, as long as there is physical gold available to trade at the Papergold prices, Freegold only exists in concept, rather then practice.

How long must one hope for Freegold? (I'm not expecting an answer to that!) I will keep searching and looking for an answer to the big picture, but it seems fairly clear to me that the Papergold system will be maintained as long as the central banks of the world enable it. One day we will all wake up and find the physical gold market is dry, not because the masses have all run out to buy physical gold, but because the central banks will choose to withhold physical gold to revalue it to fit their needs. At the same time, everyone that is playing the Papergold market will find themselves void of the promise that they purchased. The promises will be broken because the person that sold the promise will, simply put, not be able to deliver.

At this point, I believe somewhat in the concept of Freegold. The problem is that physical gold really is not free. Not free, as in a financial sense, but free as being not under control. Physical gold is under the control of central banks. Papergold is under the control of government. It seems to me that control of gold is split between competing entities, that, if you diligently read the news, you will see the signs of the struggle that has been going on for quite some time.

Any prudent investor would weigh the pros and cons presented in the struggle and �invest� accordingly. Personally, I would not bet against either governments or central banks. They both win at different times. But, if the central banks get their way and gold is revalued, the paper world, dominated by the US currency, will most likely feel a significant amount of pain. That pain could (but may not) close all the banks and financial institutions until it's safe to reopen. That will only happen when confidence is restored. The pain of this process will be felt by anyone holding a dollar when the event happens.

Sorry for the long posting. I look forward to the responses to this posting particularly with regards to the Freegold and Papergold concepts.

otish mountain

(11/10/2005; 11:22:10 MDT - Msg ID: 137787)

flatliner - freegold

It is a difficult concept to grasp yes.

Someone once said that gold is valued by the number of outstanding claims against it.

One day debts will have to be paid and when that time comes we will know the true value of gold.

This is where the Mark to Market provision in the Euro currency comes into play.

I see you have read The Trail, I suggest a visit to Thoughts of Another where it all started.

Belgian

(11/10/2005; 11:28:59 MDT - Msg ID: 137788)

Currencies and global economy :

The system of managed floating currencies finally resulted in "systemic" global imbalances. For the one single reason that in this globalizing world, there is less and less global agreement + cooperation on the $-IMS. That's why mis-management goes on.

At the IMF level, the efforts to take "gold" completely out of the IMS, failed. And renewed cooperation on global monetary balancing, also fail. It are not the economies that make the currencies float...but it is the floating (or linking) of currencies that are driving the economies. A complete upside down situation...impossible to readjust.

What we are seeing now is - GOLD STARTING TO FLOAT - !!!

The decoupling of gold from the currencies is the most natural float one can imagine. For the time being, the (orderly) float of the goldprice is affecting the currencies less and less. Repeat > for the time being !
Gold is on its (shy) way to revaluation, regardless of the currencies. A very nice start indeed. Gold's revaluation, without any doubt, will regulary meet renewed resistance from currency-linkage along its long way.

But the revaluation process of gold is NOT hampering (affecting) the global economy (its imbalances)...as the floating of the currencies does. In other words, gold is in its process of taking the lead over the $-currency that up until now has shackled gold with the fiat's exchange rate link.

This is the ongoing process that is going to define goldmetal again as store of wealth...what fiat isn't !
To severe gold's fiat link is making gold equal wealth. Dollar fiat reserves lost all possible association with wealth (gold and oil). When the major currencies don't agree on their managed floating (exchange rates) anymore...no fiat can be considered/percepted as a store of wealth anymore. Fiat simply falls back on its only utility as a unit of account for trade settlement. Nothing more, nothing less.

When the whole planet softly slides from one reserve unit ($), that became intrinsically worthless, to another unit, gold, that is in the process of revaluation (for its purchasing power)...one can only guess what the final global CHANGES will be at the outcome.

At present, the "orderly" rise in goldprice, isn't causing any dramatic action (policy reaction). Coincidence ? Don't think so. A dramatic (disorderly) change in currency exchange rate, would certainly provoke a lot of (re)action. A very fine environment for gold to continue its revaluation.

All this, is, for the time being, percepted as a relative stable environment where the muddling on can continue.

The past 25 years, the bulk of those paper mountains (stocks-bonds-fiat/digits) were just virtual credits and NOT real wealth. Only a tiny part of those paper mountains could be associated with wealth. Today, and more so tomorrow and thereafter, a very small fraction of this paper can gradually and orderly shift into goldmetal wealth. It is because this process has started that the bulk of all the paper will become a total loss for all those who failed to understand what exactly is happening with gold.

Flatliner

(11/10/2005; 11:34:23 MDT - Msg ID: 137789)

I will read it all

Thank you otish mountain,

I believe that the concept is more elusive then difficult. As it stands right now, it is hard to know what is the truth and what is not. Thus, everyone forms their own opinion and it is easy to get lost in opinions.

I believe the claims statement. That is another way of stating supply and demand. The more people want something the more they will have to give up to get it.

I will read Another's thoughts. It's just a matter of time.

Please forgive me for being Euro ignorant. Can you shed a little more light on your statement "This is where the Mark to Market provision in the Euro currency comes into play." It seems that this provision is has meaning to you that I simply do not understand. If you can point me to some sources, I would be thankful.

contrarian

(11/10/2005; 11:39:34 MDT - Msg ID: 137790)

Flatliner--central banks vs. govt

An astute post, one which posits that CBs and govts are not one and the same, in fact can be diametrically opposed. Certainly the Fed is not a government entity, but an independent entity--some would say a cartel, in fact.

And perhaps it is NOT a given that the Fed automatically does the bidding of the politicians in power at the time...perhaps some would say it more follows the lead of the various banksters, although I would say the Fed has and will quash bubbles when they see fit, as pre-crash 1999-2000, when they raised interest rates.

CBs are certainly arrogant, and at the same time stupid, and I would aver feel that they are beholden to no one but themselves and perhaps other CBs.

An arrogance as typified in "The Emperor Has No Clothes" or "We Have Low Inflation", yes, when only a child can say "Yes, but he's only wearing a thread" (or yes but how do I survive without food and energy?). I have personally seen the fawning and groveling from investment banks given to experts from the Fed, in circumstances where their services and "expertise" are desired, and it is a sight to behold!

Such arrogance can have a limited shelf life I imagine, and I can foresee the time after the S hits the F when Nixon et al will be remembered fondly in contrast to the current perpetrators.

It would be interesting to hear more thoughts on the CB vs. govt. idea, as it's one I've not heard before.

Topaz

(11/10/2005; 11:40:54 MDT - Msg ID: 137791)

Flatliner ...I think he's got it!

Pretty good synopsis FL.
The notion that Papergold holders will one day wake up to the fact that Gold proxies aren't Physical Gold per se is true to the degree that only the very few PG-Holders equate their "investments" with Physical.
The vast majority think primarily in terms of Dollars (currencies) in that the Price is more important than the Gold ie: As long as "Gold" goes up in price it is viewed as a good "investment".
The real and imo inevitable "test" lies ahead as the "price" plummets. Then we'll see who the REAL Goldbugs are.

Congrats to the Contest winners ...and Gandy, USAGOLD for efforts in providing this sphere of containment where we may flail away to our hearts content.

TownCrier

(11/10/2005; 11:59:38 MDT - Msg ID: 137792)

Reuters emphasizes platinum, again. Trade deficit jumps

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh60692_2005-11-10_16-03-38_n10392185_newsmlHEADLINE: NY platinum spikes to new 26-year high, gold gains

NEW YORK, Nov 10 (Reuters) - New York platinum futures blah blah...

...U.S. trade deficit surged in September. At midmorning, the euro was back near its level from before the report at $1.1765 .

The trade gap rose to a record $66.1 billion in September, shattering the previous high of $60.4 billion set in February, due to record oil prices following Hurricane Katrina and a drop in overall exports.

The record trade gap was much wider than a mid-point forecast of $61.0 billion made by Wall Street economists.

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

In its daily precious metal reports, Reuters always has the focus on gold (rightly so as it is the biggest market).

However, over the past two days, gold has been backburnered as the primary attention has been given over to platinum.

If this is exemplary of the standard diversionary tactics of the media, then I'd say it is a very good sign for gold that it is being somewhat swept out of the limelight right now.

R.

USAGOLD / Centennial Precious Metals, Inc.

(11/10/2005; 12:02:36 MDT - Msg ID: 137793)

Exchange the seasonal fruit of your labor for enduring value!

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

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
USAGOLD-Centennial has three decades of experience in the field

Belgian

(11/10/2005; 12:21:55 MDT - Msg ID: 137794)

@flatliner

An infinitesimal percentage of the total amount of credit digits (money-?) that sloshes around...can buy (rather bid) for physical goldmetal and take all the available gold up in a matter of nanoseconds ! Iam in the supposition that you know enough figures to do some simple math and conclude that this statement is not at all an exageration.

Why hasn't it happened yet and why will this never happen !?

As soon as any fiat goes "seriously" for goldmetal (METAL-!!!) the goldprice explodes and nobody wishes to put any metal (GOLDMETAL-!) for sale. At these "obscene" low goldprices and the extremely scarce amount of available goldmetal...versus...Billions(Trillions) of $-fiat(digits)...we can say without any doubt that...THERE IS NOT ENOUGH GOLD !!!

That's WHY the $ paper goldmarket exists in the first place. One NEVER EVER runs out of paper contracts on gold !
And the magnificant advantage of this paper-gold-market is the easy control of the price of gold. The goldprice has become only a matter of the amount of paper and NOT a matter of physical goldmetal !!!

Paper and goldprice have become "ONE" as the basis of the IMS.

Freegold means that REAL GOLD-VALUE can co-exist with paper without being its serving slave...suggesting that ($)paper is still as good as gold. But how can this same gold-slave continue to serve an ever growing fatter globalizing papermaster !?
It has become IMPOSSIBLE !

The only way out is letting gold getting orderly towards its real VALUE, decided in the globe's auction hall. Emphasis on ORDERLY.
Impossible to guess gold's equilibrum purchasing power (price and unit of account).

It is on the aspect "orderly" that the CBs have been in coordination. The US and Japan were not signatories of the WAGs, but agreed NOT to disturb the gold-price-market.
This means that the $ ($-IMS) recognizes the vital importance of gold in the IMS. An IMS that causes systemic imbalances.

In other words, revaluating gold...gold-wealth-reserve...freegold...must happen orderly and without causing dramatic economic/financial/monetary shocks. This is in everybody's interest. Consider this in analogy with the mutual nuclear deterrent theory.

The general public prefers catastrophic doom and gloom stories and kicks on total collapses or destruction. This planet is not as stupid as it may be percepted by the general public. Freegold is NOT a total catastrophy scenario ! Gold-wealth as a reserve is simply the appropiate option left after the $-IMS has served us all.
CBs and their respective governments know this. Some (�-factions) would like to see it happen fast...others ($-factions) wish to postpone it as long as possible.

Watch how the goldmine-complex isn't playing (anticipating) the paper goldprice play anymore, as before. This is in analogy with the declining volume of visible goldcontracts, since LBMA went public.

Welcome to the club, flatliner.

(11/10/2005; 12:33:30 MDT - Msg ID: 137795)

Privatisation of EDF of France ( the world's biggest nuclear electricity generator)

http://www.timesonline.co.uk/article/0,,13509-1841124,00.html"The Opposition, which privatised national industries when it was last in power, played to public fears, depicting the EDF move as another sell-out to "Anglo-Saxon liberalism"."
...
The deadly incident which is said to have trigerred the riots happened at a power substation owned by EDF.

Very, very strange. How should we interpret this event?

OvS

(11/10/2005; 12:33:41 MDT - Msg ID: 137796)

Belgian

In your message number 137710
you state: "The administration
through its policies, allows
the financial industry to pro-
liferate...knowing very well
that global imbalances are the
consequence."
In your last message 137710, if
you mean to equate systemic
global imbalances = mis-manage-
ment you mean APPARANT mis-manage-
ment, I would agree.
The ultimate chess-genius, Bobby
Fisher, (with whom I had a few
discussions before he went off
the deep end and even before he
became world champion) was a master
of creating dynamic imbalances.
One must create these imbalances
for winning chess.
Perhaps the brains behind the US
financial chess board represent a
unified mind seeking and implemen-
ting a strategy of dynamic imbalan-
ces and having a great advantage in
singlemindedness, whereas the rest
of the world behaves like the dozens
of grandmasters trying to help
Spassky to outwit ajourned games
against Bobby, but whose singlemind-
edness (with minor help from William
Lombardy) made mincemeat of his
opposition.
The gradual tranfer to FreeGold
might represent an intended end-game
phase and would spell success for the
game-meisters if implemented in a
timely fashion.
I have a feeling that if that end-game
phase is sabotaged by the rest of the
world, the ultimate deceptive ace will
be played by the AA camp:
Most Euro and other gold is
"in-hand" at storage-facilities
in London and New York City, and
is owned via paper receipts by
these "owners" but is "safe-
guarded" by the one and only
Superpower.
What a game to watch. What privilege
to be live and sound and able to
view this quasi cosmic chess game
unfold. Cheers. OvS

J-Bullion

(11/10/2005; 12:37:23 MDT - Msg ID: 137797)

????

So let's get this straight, the trade deficit explodes again, the Europeans stopped shipping crude out of their stockpiles to us (should feel that in a few weeks), gulf oil/ng output is still only at 50% of pre-katrina production, the housing bubble is in the beginning stages of cracking, and the stock market soars, oil is clobbered, the dollar rallies and gold is stopped dead in its tracks. Thank goodness for the world of the PPT where down is up, up is up, infinite paper is money, gold is a barbaric relic and "might be the greatest bubble of them all".

sorry, just venting....again.

OvS

(11/10/2005; 12:59:52 MDT - Msg ID: 137798)

Haste makes waste.

Apparant = apparent
Bobby Fisher = Bobby Fischer

OvS

(11/10/2005; 13:27:39 MDT - Msg ID: 137799)

Sorry Belgian, more confusion:

"In your last message 137710"
should read: message 137788.

mikal

(11/10/2005; 13:56:36 MDT - Msg ID: 137800)

"Trade deficit"

Jim Sinclair and others have observed that when large,
$multibillion aircraft orders such as from India are cancelled, the numbers still remain in the export category
that ameliorates "trade deficit" releases.

Flatliner

(11/10/2005; 13:57:36 MDT - Msg ID: 137801)

@Belgian, @flatliner, @Freegold verses Papergold

Thanks Belgian. The math does speak for itself and I tend to agree with the concept that an �orderly� change is in everyone's best interest. Unfortunately, I have gloomest tendencies and always plan for the worst case.

If you will, kind sir, can you please provide a little more background on your statement "Watch how the goldmine-complex isn't playing (anticipating) the paper goldprice play anymore, as before. This is in analogy with the declining volume of visible goldcontracts, since LBMA went public." Specifically, what I (we) can actually watch?

Arcticfox

(11/10/2005; 14:04:13 MDT - Msg ID: 137802)

Musings..comments

So Chinese manufacturers produce a widget which they sell to the US and receive a US$ credit. The Chinese government than print yuans and exchange the US dollars. The government than buys US bonds with these dollar credits and hold them as reserves.

Now look at the Janpanese carry trade. Huge interests from around the world borrow billions of yen at 1% and buy US paper thus receiving a considerable spread (profit) for their efforts. Now the seller (US fed) receives billions of yuan once they sell the notes. What do they do with these yen..you guessed it..they pour them into the Nikkei. The above helps to keep bond rates low in the US and the process is serving to reflate Japan. What I can't figure out is how money supply is being reported at acceptable limits. Are derivatives being utilized to absorb or hide excess liquidity?? comments

mikal

(11/10/2005; 14:18:28 MDT - Msg ID: 137803)

Bond market closed? @Articfox, Flatlliner

From another gold forum:
"The bonds are the "big money" use to drive the other markets so don't expect much action Friday as the largest bill I have is a $100 note.
Keep in mind that the Bond market will be closed tomorrow in observance of Veteran's Day.
Comex markets are open tomorrow, as are equity markets."
Articfox there is more $liquidity than ever being created through loans, mortgages, securities and other credit.
Greenspan has alluded to this and it appears tumor-like even as it's growth rate is topping.
@Flatliner - Belgium may haave been referring to the decline of miner's shortselling their production by locking in prices using leasing and forward selling contracts. Sometimes called 'hedging', the practice can be accompanied by unregulated, over the counter derivatives.

968

(11/10/2005; 14:18:35 MDT - Msg ID: 137804)

Global Imbalances and the Transatlantic Relationship

http://www.imf.org/external/np/speeches/2005/111005.htmRemarks by Rodrigo de Rato
Managing Director of the International Monetary Fund
At the European Institute
Washington, D.C., November 10, 2005

"There appears to be a widespread belief among European policy-makers that global imbalances are only an American and not a European problem and that all that is necessary to deal with them is for the United States to reduce its fiscal deficit�and possibly for China to revalue its currency. I think that this view is way off the mark. A disorderly adjustment of global imbalances would harm all countries. And many countries need to share the work of reducing global imbalances and sustaining growth."

"The fact that the euro area's current account balance has been small and stable while imbalances have grown elsewhere is no assurance that it can escape the fallout from a disorderly adjustment�especially given the major international role of the euro."

"Indeed, employment growth in the EU has been about the same as that in the United States over the past decade."

---------------------------------------------------------------------------------------------------------------------
If I understand this right, Rato wants to make the US/dollar problem, a problem that has to be solved by the rest of the world...
Another Secretary of Finance, John Connally, formulated this speech once in a few words : "the dollar is our currency, but your problem"

Townie, Belgian, others.... can you please share your thoughts on this speech for us ?

Belgian

(11/10/2005; 14:30:30 MDT - Msg ID: 137805)

@OvS

A lot of the (Western) globe's goldmetal in NY/London vaults. Indeed Sir...one more (very minor) reason for mutual understanding and "orderly" + "gradual" development.

Yes, it is a chess play. Not the slighthiest doubt about that being so.

But do you seriously think for one second that the architects of Freegold forgot that fact in their strategy !? I even suspect that a lot of the CB gold-action (maneuvering) of the past decade is related to this fact (metal in NY/L vaults). Do you remember the RTRS communiqu� about 400 tonnes of Iranian goldmetal being repatriated to Teheran ?

CBs cannot afford to act as crusading armies, OvS. Certainly not in this globalizing planet. This planet is not ruled exclusively by the West (US-EU) anymore ! The energy(oil+gas) + Asian manufacturing - factors, came into the global equation (or dynamics).

The further inflation (or deflation) of the AA financial industry will boomerang with a painfull bang to the original sender. Euroland nor Asia are thriving on a stockmarket foundation. The US-dollar is.

The first one deliberately causing un-stability is the major loser. And in an increasingly inter-relating world, one big loser (whichever one it is) is counterproductive.
That's where the analogy with chess stops. No losers no winners. But staying on the same IMS course, means we will all lose.

Think about WW-II. Have Japan and Germany lost this war...in the following 5 decades ? Is China still suffering from its Mao era (man in space) ? How long will it take before Russia emerges from its 70 years of communism ? And will the Middle East remain a battlefield for ever ? Aren't "changes" moving faster and faster ? Freegold inspires optimism to me. It is UNFREE gold that brings more gloom and doom.

Incorporating freegold in a new IMS doesn't mean automatically that the US loses its dynamism. It is blocking freegold and sticking to the old logics that will exhaust the US' dynamism (competitiveness). An inflating financial industry cannot compete with the Asian manufacturers of real-tangible wealth. The unproductive AA financial industry cannot go on virtually valuating the real fundamental of economic prosperity (energy). A world cannot go on turning on value myths. One day one has to deliver its tangible worth. No military logic is going to change this. Never run "behind" the raw (crude) realities.

And this brings us back to the sensitive notion of (state) "superpower" ! I still personally keep questioning the "super" part...not the "power" part.

TownCrier

(11/10/2005; 14:52:35 MDT - Msg ID: 137806)

INDIA: Gold hits new record closing highs

http://economictimes.indiatimes.com/articleshow/1291362.cmsMUMBAI: Sustained seasonal demand on Thursday drove gold prices by another Rs 55 per ten grams to hit new record closing highs of Rs 6,980 at the bullion market amid reports of rising global price trends.

The metal had risen by a whopping Rs 60 per ten grams on Wednesday following hectic buying for the ongoing marriage season.

Firm overseas advices also aided the uptrend, a dealer said.

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

Pure gold (99.9) crossed the 7,000 threshold, closing up from 6,960 yesterday to Rs 7,015 per ten grams today.

Someday persons worldwide will share the same view, "If it ain't gold, it ain't savings."

R.

Ten Bears

(11/10/2005; 15:12:04 MDT - Msg ID: 137807)

@Clink!

http://www.larouchepub.com/lar/2005/3244darkage_in_educ.html
Thanks for the reply. I only recently started reading EIR. Larouche does ramble about and perhaps froth a bit, but he does so over some very interesting ground.

In the above referenced commentary, he appears to be taking up the educational torch (now almost out) of Robert M Hutchins (1)(2) and Mortimer Adler(3) and others associated with the Chicago school and the Center for the Study of Democratic Institutions.

http://en.wikipedia.org/wiki/Robert_M._Hutchins

http://www.newfoundations.com/GALLERY/Hutchins.html

http://mortimer-adler.ask.dyndns.dk/

Belgian

(11/10/2005; 15:13:26 MDT - Msg ID: 137808)

@Flatliner

I've been speculating 25 years with goldmines. Belgians always dearly loved to "play" the South African goldmines.

Today, we conclude that these plays are behaving "very" differently ! They have become extremely unreliable-unpredictable-inconsistant in their price-moves in function of the goldprice. A lot of time (and profit) has been wasted with finding excuses (reasons) why the goldmines recently (last 5 years) did not behave as during the 20 years before that behavioral change.

Yep, putting the goldmine industry in doubt, is not a popular subject. It simply is my personal opinion (experience) which, very recently, was confirmed by a reliable "specialist".

I left the goldmine-paper period behind me and say thanks for all the (profitable) luck I got. Up until now, I don't regret of having gone physical gold in possession. I might have it completely wrong. That's why each and every one has to decide for oneself.

Goldmine papers are part of the inflating financial industry. I am interpreting their behavioral change as a sign that the concept of gold=wealth is definitely on its way. A paper ...a contract...a promis, is NOT wealth to me. A goldmine is NOT the "owner" of the underground gold that it mines. It can only claim the right to own the mining profits. Simply in analogy with oil companies that are pumping underground oil that belongs to the state. The so called market economy wants to taxe the oil companies' windfall taxes. Just imagine goldmines making explosive profits when gold wealth status reaches full momentum !?

One can be very succesfull in "making money" with financial speculation. I prefer NOW to preserve my humble savings in a tangible wealth carrier. The behavior of the financial industry has also changed during the past decade. IMO, this is NOT a temporary change, but rather a transition period to another kind of financial industry than the one w've become accustomed to. All imvho, of course.

TownCrier

(11/10/2005; 15:22:04 MDT - Msg ID: 137809)

DGCX and the IBPC discuss the commodities market

http://www.ameinfo.com/71510.htmlUnited Arab Emirates: November 10, 2005

Dubai Gold and Commodities Exchange (DGCX), the world's newest commodities exchange and the first such marketplace in the Middle East, held a presentation with the Indian Business & Professional Council yesterday on the 'Beginning of the a new era for the Commodities markets in UAE.'

Gold imports to Dubai reached approximately $10 billion last year. This strong position in the physical trading market will now be complemented by the creation of an options and derivatives exchange to serve both the hedging requirements of the local gold sector as well as global traders.

The DGCX will commence trading on November 22, 2005 with a 1 kilogram gold futures contract...

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

Again, the added exposure is a plus. It remains to be seen whether the contracts will on net facilitate the economizing of physical gold demand or will rather serve as a comparative benchmark to reveal the discountable shortcomings of the current melange of Western gold contracts. A paper chain is only as strong as the weakest link. The question remains, how much physical pulling may this invite?

R.

Belgian

(11/10/2005; 15:35:27 MDT - Msg ID: 137810)

@986

We ALL know about the global imbalances and the inescapable need to adjust these imbalances through coordinated efforts.
But that doesn't mean that each and every one will do what they are expected to do, for solving the "-systemic-" problem. Rato speaks for the "-International-"MF and that is the $-IMS ! The maximum that the International actors whish to do is cooperating on (a labile) stability. Each party (faction) agrees on winning/buying "time"...whilst the two main factions (�-$) in essence have a fundamental difference of (unspoken) opinion.

Rato or anyone else dares to use the adjective "systemic" for the imbalances. Who or what is responsible for the "systemic" part of the resulting imbalances !? Helikopter dollars or 2 Billion producing ants and oilowners who whish to see their wealth valued ?

And with the concept of Freegold in play...for who exactly is the dollar going to become a problem ...if nobody wants to take the major burn for solving the systemic imbalances !? Only time will tell.

R Powell

(11/10/2005; 15:59:58 MDT - Msg ID: 137811)

Flatliner

Your words here, in reference to the freegold concept....

"At this point, I believe somewhat in the concept of Freegold. The problem is that physical gold really is not free. Not free, as in a financial sense, but free as being not under control. Physical gold is under the control of central banks. Papergold is under the control of government. It seems to me that control of gold is split between competing entities, that, if you diligently read the news, you will see the signs of the struggle that has been going on for quite some time."

A few thoughts, if I may. I don't have the exact numbers but I believe that neither banks nor governments own a majority of the aboveground physical gold in the world. That which is privately owned probably still can be bought and/or sold for a dollar priced based on supply and demand.

I saw that Topaz already opined that most (as in almost all) paper gold contracts are settled in cash. Not too many want to redeem their contracts for physical much as not too many stock owners really want to physically own a part of whatever company stock they have bought. These contracts are paper investments settled in cash.

One last thought concerning the notion that somehow something is amiss, manipulated or otherwise not right because all the physical gold in the world can be (theorically or mathematically) bought for such a small amount of money. This is also true for a great number of other items in this world. Why should it be otherwise?
Just a different perspective, perhaps
rich

USAGOLD Daily Market Report

(11/10/2005; 16:43:23 MDT - Msg ID: 137812)

Page Update!

Smeagol

(11/10/2005; 17:29:13 MDT - Msg ID: 137813)

No "Freegold" unless...

...there is a guarantee in place that... sss...central banks... will not coerce governments into controlling It... or vice versa.

Gold must be set above the Law in order to exercise It's wealth-function. Otherwise it's jusst another ride on a different merry-go-round.

S.

David Linkley

(11/10/2005; 17:40:50 MDT - Msg ID: 137814)

@Belgian

It will be very difficult to correct the world economic balances over time and smoothly. Elected officials and markets usually overshoot and with the size of these imbalances some severe dislocations are on the way. Our brilliant President has piled on more debt during his term than all of the previous Presidents combined. I don't think the US electorate will take kindly to rash measures. Although it is changing gradually, what happens in the US still impacts the rest of the world to a great degree. Your right, the game is on. Lets see how 10's of $trillions in debt and derivatives "are handled" by the entire world.

Flaccus

(11/10/2005; 18:55:39 MDT - Msg ID: 137815)

Rodrigo Rato

None of us should mistake Rodrigo Rato for a visionary. He is a bureaucratic functionary and that's about it. At the same time, he speaks for someone. And his words are hardly his own. Let's be realistic.

The fact that anyone in Europe would be willing to utter a statement about the tenuous international "imbalance" comes as a surprise. But, I'm all for it. Let's all cooperate. The dollar should be allowed to drop like a rock to balance the imbalance.

I will wait here patiently until representatives of the various nations post their approval for this plan right here at USAGOLD.

David Linkley

(11/10/2005; 18:57:26 MDT - Msg ID: 137816)

Insanity prevailes

Refco, new disclosures at Fannie Mae & AIG, record trade deficits, GM hitting new lows, pension fund defaults, housing prices have peaked or are in decline, large tech companies reporting lower revenues and forward estimates and the markets do what? Stock indexes go up, the dollar goes up, interest rates go up and everything is fine as sound policies are in place to handle any overloads. Right? The markets are beginning to discount at least a pause in the rate hikes and for now, lower oil prices. The only two things that seem to matter to the markets are managers not falling behind the indexes at year end and easy money. The Fed injected over $29 billion dollars in repos today which was the rocket fuel for the rise in spite of a record trade deficit reported this morning. Good luck everyone, I sure hope you're holding your gold tightly.

PRITCHO

(11/10/2005; 20:40:17 MDT - Msg ID: 137817)

HOW YOU DISCOVER A PIRATE'S COVER - -- - -- (Rob Kirby)

http://www.financialsense.com/fsu/editorials/kirby/2005/1110.htmlThe above article is a very good read and will be of interest to most. However a link within the article is definately the BEST & easiest explanation I have read on the hidden world of the BIS & other World Banks.That link is about half way down the article and is headed --
"Stumbled across this"

The link for those that might have missed it is:
http://www.newswithviews.com/Wood/patrick4.htm

My advice - -don't miss it :)
http://www.newswithviews.com/Wood/patrick4.htm

Smeagol

(11/10/2005; 22:06:38 MDT - Msg ID: 137818)

That article, Ssir Pritcho...

...Wow.

S.

OvS

(11/10/2005; 22:56:44 MDT - Msg ID: 137819)

Beyond Chess.

Belgian. Let us go beyond
chess. I propose that the
architcts of Fortress (Free)
Gold and Fortress Finance
are one and the same small
and tight group of men, well
versed in Back(gammon)board
play where even Goddess Chance
can be used to advantage.
The contrived interplay btw.
Gold and Finance pivot around
the word CONTROL.
Only a handful of men among
the implementing institutions
are privy to who those
controllers are. From this
viewpoint, a lot of confusing
happenings get unconfused. OvS

Topaz

(11/10/2005; 23:58:36 MDT - Msg ID: 137820)

Pritcho's Link.

Good find mate!
FreeGold fits into a Currency Bloc-SDR Future World as described by the Author, like a favourite pair of old slippers methinks.

Belgian

(11/11/2005; 00:25:27 MDT - Msg ID: 137822)

Let us not forget....

...That a globalizing world, means a "liberalizing" world.
Means that "protectionist" policies are NOT as evident as before !!!

Weaknesses in one's economy cannot be overcome with all sorts of privileges. Strengths must be based on real competitive power and not on granted privileges. That's what liberalization is all about.

Nobody (state or economic block) can live on an island of its proper design anymore. All forms of protectionism will become less and less effective.

I see Freegold at the end of this tunnel. Liberalized gold, if you prefer.

Same happened with oil, the very fundamental of the entire economy. Now that each economic block has to bring up a lot of efforts to secure reliable energy inflows for the next 2 generations (50 years)...many cards are reshuffled. The days of easy flows and cheap oil are definitely over. This revaluation of oil is setting its pricing free from unilateral dominance. Same is happening with gold.

In a liberalizing world, colonialism is becoming less evident and cooperation must increasingly happen on a level playing field. In particular with Asian producers of wealth and owners of the energy reserves.

Politics, Industry and CBs, will be forced to stop colluding by the hard global realities.

Freegold means that gold in the IMS will have to serve "all" interests and not one US-dollar-interest alone. Globalization means "global" liberalization and not very selective liberalization.

It is not a matter of liking or disliking it. Simply the natural consequence of the world becoming one big village.

(11/11/2005; 00:52:42 MDT - Msg ID: 137823)

Can anyone comments on Sinclair's latest?

The following seems to be extremely important. 529$ gold is just around the corner. Please anyone; comments

Thursday, November 10, 2005, 6:53:00 PM EST

The Invisible Derivative Risk: Conversation With a Counter-party in the Industry

Author: Jim Sinclair

Gerald: I am a CEO of a junior exploration and development company with a 30% interest in a property now in production with a "major." I have a non-recourse loan provided by the major but see no reference to a derivative in the agreement.

Jim: In examining your loan agreement who is the lender?

Gerald: The lender is "Major Financial," Turks & Cacaos.

Jim: Who are the borrowers of these development funds?

Gerald: My company and the subsidiary of the major in this country.

Jim: Does your agreement require you to pledge your 30% as collateral in the loan agreement?

Gerald: Yes.

Jim: I assume you have called me because of the articles I have written and your wish to determine if you have a derivative risk of any nature.

Gerald: Exactly.

Jim: The quick and dirty is if your loan is non recourse you have a derivative risk. Now let's discuss how this comes to be.

1. No bank, investment banker or lender of any variety will accept the risk of lending to a project in which the price of a final product is a market where you take not make a price. When your final product is a commodity, you do not make a price, you take the price that the market gives you.
2. A non-recourse loan, which is recourse only to the project, is a red flag that you have a risk based on the incontrovertible #1.
3. Your loan agreement is with a captured financial entity that belongs to the "major"
4. Any loan indenture is a series of documents that carries responsibilities all along the road to the original lender. As such, pledging your percentage of the property to all the characteristics of the credit given, obligates you to the lender and the captured finance company of the major which we call "Major Financial." This line of reasoning exists in your agreement and the incontrovertibility of #1.
5. The risk removal derivative exists at the first lender to the Major financial. The obligation to that risk removal instrument that is an over-the-counter short of gold derivative or over-the-counter synthetic puts derivative will inure to your 30% of the project because you have pledged your percentage of the property to all the characteristic, seen or unseen, of the loan.
6. Even if you repaid the loan, the potential of coming out from under the obligation would require Major Financial to sign off along with its original lender as it impacts your percentage. This is unlikely because no lender will lend on a fractured asset. Your repayment of the loan would in this definition fracture the asset. Should the major fail, who manages the property? As a minority holder, your 30% can throw a spanner into anything the original lender, now the new owner, wants to do. This could involve a time delay, court action or sales transaction. No lender will permit that outcome - period.

Conclusion:

You have a derivative risk you cannot see. The red flag is the non-recourse nature of the production loan. You do not see it in your loan documents but you will see it when gold closes 3.1% above $529. Gold will do this and when that happens the entire gold industry is going to consolidate. You can believe it or not but get ready because it is coming. The probability of being diluted to 10% of net profits which we all know = zero is clear and present.

If you understand what this means to the gold industry you will also conclude that my thoughts on the gold price are modest.

This entire industry with the exception of only a few companies is headed into the hands of their bankers. Ashanti was the case study worth reviewing

No one paid attention to my advertisement in major trade publications in 1999, 2000 and 2001 so why should they now? Those at risk of major dilution are stockholders.

People made fun of me when I held tight to $440 then $480. Now I am being ridiculed about $529 during this chapter of the gold bull market.

I am ready to wager whether or not you will own your 30% at the end of the day. Are you Gerald?

Belgian

(11/11/2005; 01:33:10 MDT - Msg ID: 137824)

@Flaccus

Dropping the dollar like a rock (exchange rate-purchasing power) is NOT a solution, if and when it happens in a vacuum. The dollar is NOT a currency of "one" state, but the world's numeraire. The unit of account of the IMS.

And this same dollar has now become the "problem" for the US as well !!! Don't expect the US to close its borders , + stop and reverse the (its) globalization.

Any attempt of protectionism (dollar crash) will result in self isolation. But when the globe agrees on a dollar crash, whilst replacing the dollar-reserve-system with freegold-wealth-reserve...globalization/liberalization can continue, because the dollar crash did not happen in a vacuum.

That's why gold is in the process of severing its link to the $-fiat-system. Call it decoupling or whatever.

Belgian

(11/11/2005; 02:32:40 MDT - Msg ID: 137825)

@OZ

Why isn't Sinclair explaining that a $-PoG above $529 would mean that the bulk of the goldmine industry will land in their bankers' hands ?
And who's ultimately controlling those goldminers' banks, knowing that it are the states that own the rights on underground gold ?

If Sinclair is suggesting that the former status of goldmining is about to change...I do follow his reasonings. W're on our way to freegold (gold=wealth), aren't we. And ***mining*** the world's gold-wealth-reserve should become totally unfree. But why exactly at 3,5% above $529/Oz ?

Does freegold carry the consequence of unfree goldmining !? Yes, I think so. Find it even very logical.

Fractional reserve banking is impossible without CBs and CBs stand in the middle of Industry(economy) and politics (political economy).

Who knows if $529+ is dramatically impacting the invisible derivatives on the goldmines' books !?

From a TA/TI standpoint (35 year period), $529/Oz is indeed an important pricelevel. Will see how relevant this is, when reaching there.

(11/11/2005; 03:25:25 MDT - Msg ID: 137826)

Sinclair's latest ---Belgian (always a pleasure to read you!)

Hi there Sir Belgian:
I know not much about derivatives but I respect very much Mr Sinclair and also Mr Warren Buffet.
Buffet said that derivitives was sewage and a financial weapon of mass destruction.

"Belgian (11/11/05; 02:32:40MT - usagold.com msg#: 137825)
@OZ
Why isn't Sinclair explaining that a $-PoG above $529 would mean that the bulk of the goldmine industry will land in their bankers' hands ?"

Oz says: Maybe Sinclair refers to a blow-up of hedge books at 29$USD plus 3%. When hedge funds blow, company go bankrupt and bankers pick up the pieces

" Belgian says: And who's ultimately controlling those goldminers' banks, knowing that it are the states that own the rights on underground gold ?"

OZ does not know but maybe it would explain why the central banks are selling or have sold so much, maybe they will become the owner of gold in the ground (deep storage) so they can replace what they sold. Just a guess!

Sinclair says: "If Sinclair is suggesting that the former status of goldmining is about to change...I do follow his reasonings. W're on our way to freegold (gold=wealth), aren't we. And ***mining*** the world's gold-wealth-reserve should become totally unfree. But why exactly at 3,5% above $529/Oz ?"

Oz says: yeah but according to Sinclair not too many companies will stand. Those are most likely the ones i own ! just like every one else on these gold forums. Which companies will stand? The unhedged? what about all the little one? Explorers/small miners with JV with majors with loans? it is scary thinking we may all want to exit at the same time. Viva gold bullion in hand!

Belgian: "Who knows if $529+ is dramatically impacting the invisible derivatives on the goldmines' books !?

From a TA/TI standpoint (35 year period), $529/Oz is indeed an important pricelevel. Will see how relevant this is, when reaching there."

I just want to post a previous article by Sinclair which could be regarded as an apperitif to today's article.

> General Editorial

Tuesday, November 08, 2005, 6:42:00 PM EST

News Briefs

Jim Sinclair's Commentary:

Reduction of short of gold or synthetic over-the-counter Put derivatives is limited by the fact that they are integral to non-recourse loans so popular in project financing.

Should the hedge be lifted (closed) the lender is at risk to the gold price. The lender will not take risk but rather will call in the loan. So in order to rid themselves of hedges the producers must also rid themselves of the loans. As a result of this excess hedging, the loans paid off were closed. Hedges on non-recourse loans must stay open. Therefore the slowdown in de-hedging has developed. It is just that simple.

DJ Gold Producer Dehedging Falls in 3Q; Slowest Since 2001
Tue Nov 08 12:11:34 2005 EST

LONDON (Dow Jones)--Global gold producer dehedging fell by 1 million ounces in the third quarter, the slowest rate of quarterly decline since records began in 2001, the Mitsui Global Precious Metals quarterly hedging report says.

The report found global miners hedge books fell to 52.8 million ounces or 51% of what it was at its peak in the third quarter of 2001 due mainly to a slowdown in the rate of dehedging amongst previous aggressive dehedging companies. Some of the decline also related to an adjustment in AngloGold Ashanti's hedge book, the report said.

(11/11/2005; 03:27:29 MDT - Msg ID: 137827)

Belgian

hedge books at 29$USD plus 3%

Of course I meant 529$ not 29

Ned

(11/11/2005; 04:25:09 MDT - Msg ID: 137828)

Previous lines in the sand.........

Mr. Sinclair had also spoken repeatedly for nearly a year that $354 was the devirative "back-breaker" which as far as I can see did not cause much lost sleep.

I do however see $529 as a considerably point of resistance. A lot of air between $529 and $630/700.

Belgian

(11/11/2005; 05:03:59 MDT - Msg ID: 137829)

@OZ

The bankers that finance the goldmine industry certainly participated in the goldprice management ! They will continue to do so, for no other reason that the whole goldmine industry will remain the puppet on the goldprice management's string. Goldmine supply is price setting impotent.

The bankers (mine financiers) have the task to make the goldmines produce as much gold as they can. Goldmining is a finite activity in contrast with the production of any other tangible. And goldmetal + its price/prizing, play an important role in the $-IMS. Therefore, the banks already own the mines...not for the profits they eventually produce, but for the scarce goldmetal that is of strategic importance for the $-IMS.

If gold was insignificant for the IMS, goldmines would have a (supply) grip on the product and there would be a (relatively) freegold market, just as many with other commodities.

But look at the global market for agricultural products. Do you really think that this is a 100% market driven happening ? No Sir, there's a lot of intervention going on in this segment of the markets. Take the massive subsidies away, and the whole market picture changes dramatically.

We are wasting our time, discussing (analysing) how gold-goldmining-goldpricing is managed. It simply is, without any doubt. Today, we only have to calculate (evaluate) the chances of freegold.

Major goldmines can not be closed and reoponed according to the goldprice. Goldproduction must remain operational under any circumstance (profitable or unprofitable). The financiers and goldprice managers do exploit this at "their" convenience. I don't wish to be a shareholder of an activity that is per definition a puppet on a string.

So I continue to ask myself, what exactly do I learn from Sinclair's thoughts ? Maybe you can help me with this question.

Goldilox

(11/11/2005; 06:37:10 MDT - Msg ID: 137830)

Hedged Miners & politics

Sinclair's scenario seems eerily too similar to DeBeer's stranglehold on the diamond business.

Remember when the rumor was floated that the Russian "black market" diamonds might "take them down"? That was all managed pretty well with the Soviet government collapse, as Russian diamond distribution fell right into DeBeer's hands. Haven't heard more than few minor rumors about African diamonds supporting "terrorism" in a while - not unlike the Niger yellowcake disinformation.

Miner consolidation is likely headed for the same fate. Gold miners not under the bankers' "umbrella" will become politically labeled as "financing terrorists", which, in a way, is true, since their production and sale outside the banking cartel "terrorizes" the bankers' absolute control.

FreeGold=unFree mining - what a concept!

Yes, friends - politics is in this up to its neck, whether we choose to see it or not.

The AA military machine backs "freedom" until it wants to be free of "their control", and then it turns on them and demonizes them as "terrorists". Was Al Qaeda a terrorist organization when the Soviets were in Afghanistan? Of course they were, but they were useful to the Western banking and corporate interests at that time, so they were branded as "heroes" by the Reagan spin-doctors. To the "insurgents", this represents the very same fight, just as it did for the Vietnamese, who viewed US occupation in the same light as the previous French and before that the Chinese occupations.

"Freedom isn't free" has two entirely different meanings to the soldier and the international banker.

Nationalists will accept guns from anyone, so long as they stay on their side of the border. Cross the line, and you become the occupation forces. It's been the same game from Cuba to Africa to Romania to Vietnam to the Middle East. South America and its vast resources are next, as Chavez, Lula, and Nestor are not gonna get away with spanking the int'l bankers for too long. You can't "show up" the referee, or you get ejected from the game.

IMF financing means the "visiting team" brings their own umpires and then gripes about "leveling the playing field".

OvS

(11/11/2005; 06:57:20 MDT - Msg ID: 137831)

Former Mr. Gold.

To warn of gold-hedging
equates crying "Wolf" when
the wolf has done its deed.
But to think that his un-
hedged operation will be
exempt from control is to
deny the political sledge-
hammer, unless, there is
already an "understanding".

Belgian

(11/11/2005; 08:03:09 MDT - Msg ID: 137832)

The US($) Super-Power

The US grew rapidly (in 50 years time) to a superpower after WW-II (1945). At present, this "super" status is in the process of fading away. The mature empire had to organise its version of the reichstag (9/11). This will later be labelled as the turning point. Pax Americana lost the privilege of its globally accepted "two measures and two weights".

The globe is NOT following the US' lead in the important global reorganization of the energy (oil/gas) distribution. This is a major geopolitical breaking point in the former strong Western alliance.

The old "dollar-gold" Western alliances will also break. We already had the first round of mutual blaming on the systemic global imbalances. BIS and IMF cannot stay neutral for ever with their support to global stability. These international institutions will one day have to force the international community to take up its respective responsibilities. Will IMF - BIS, act in concert (objectivity) or in division (subjectivity) ? If we don't see any serious CB gold-action...I think we are getting close to IMF/BIS disagreement on the solutions. If we see renewed CB gold-action, IMF/BIS stay aligned.

Imo, this will depend on China's attitude (flexible/unflexible) towards the demands for yuan floating. The international institutions will not tolerate unilateral protectionism and this could trigger their division.

Japan got its little present (dollar exch rate rise versus yen). Now the Chinese have to make their next move by raising the yuan. Certainly now, when their trade surplus has risen again and the US trade deficit as well.
Norway already projected a conservative PoO averaging $60 for 2006. So from that side, not much relief on the systemic imbalances is to be expected. But the new German big coalition might consider some gold-action, again.

The super status of the US($) power is still in the balance and softly moving away from the US' full control. Certainly so when the other (power)blocks decide (have good reasons) to align more firmly amongst themselves, excluding the US($).

We continue to wait and see, patiently.

968

(11/11/2005; 08:57:43 MDT - Msg ID: 137833)

Andr� Icard: Risk Measurement and Systemic Risk

http://www.bis.org/speeches/sp051108.htmSpeech by Andr� Icard, Deputy General Manager of the Bank for International Settlements, at the Fourth Joint Central Bank Research Conference on Risk Measurement and Systemic Risk, European Central Bank, Frankfurt, 8 November 2005

"One issue that is of particular concern for the BIS and, in fact, regularly consumes quite a bit of my own attention is the trade-off between credit quality and concentration risk considerations."

"The consensus view, therefore, is that systemic disturbances are now more likely than in the past to erupt outside the international banking system and to spread through market linkages rather than lending relationships. LTCM is the most prominent example of how this might happen. Indeed, the Russian crisis of 1998, which is so closely linked to the LTCM episode, also marked a new experience in that a "regional event" on the periphery spread through global bond, credit and equity markets."

"The concept of systemic risk has thus been broadened along several dimensions: (1) it has come to explicitly include non-banks along with banks; (2) the concept has moved beyond traditional lending to include all sorts of financial activities and resulting exposures, including exposures to operational and reputational risks; while (3) the focus is now firmly on interdependencies between market participants as well as their exposures to common risk factors, including institutions� reliance on core parts of market infrastructure."

"The last point is of some importance, as a relatively small number of institutions has become key to the integrity and smooth functioning of quite a number of markets. As these players combine various forms of intermediation activities, on and off balance sheet, it is conceivable that problems in one of these activity areas could affect the activity of other parts of the firm, and thus spread across various markets. Idiosyncratic shocks to key bank or non-bank institutions, particularly when coinciding with systematic factors, could thus become systemic. Indeed, the concentration phenomenon that I identified in the first part of my talk as a feature of the BIS's risk exposure reappears here as a potential concern about the system's "plumbing"."

"Let me give you one example: the recent troubles at Refco, an important futures broker. The dust has not yet settled, making an in-depth analysis difficult. However, it seems that the discovery of a serious case of accounting-related fraud at one of its subsidiaries, while relatively minor in absolute terms, has in practice led to the collapse of that company.

While big, Refco was probably not big enough to matter in any systemic sense, and its crucial futures brokerage continued to be operational. But the events surrounding its demise offer a taste of how the proverbial "flap of a butterfly's wing" could cause repercussions throughout the financial system by affecting parts of the market infrastructure. What if a bigger broker with more of a presence in OTC instruments had been hit by the same event? At the risk of overemphasising the point, I find it relatively easy to imagine that cases involving bigger institutions with more complex net positions would have much broader implications."

"Structural change, though a good thing in general, also means uncertainty. While there is agreement that most of the structural developments observed since the first Latin American crisis have in fact been efficiency- and stability-enhancing, the increasing interaction of markets and institutions has also meant that the financial system has become more complex. This complexity, in turn, has resulted in more uncertainty as to the origin and nature of shocks to that system and how these will actually play out."
----------------------------------------------------------------------------------------------------------------------
A nice read...

Buongiorno!

(11/11/2005; 09:55:24 MDT - Msg ID: 137834)

@Belgian --137832

Did you really mean to link 9-11 with the Reichstag fire?(In in your first paragraph.) My recollection is that fire was set, unsuccessfully, by an impaired Jewish man one evening. Next evening, some SS troops helped him do it right, then arrested him, had a trial (blaming the Jews)and execution, thus sustaining a chain of events we all so deeply regret.

Do you mean to imply that our government staged the death of nearly 3,000 human beings? If so, I must inform you that it drains credance from your other work--much of which seems very good, if somewhat slanted. (That is ok, we all have our views.)

I am just now reading "In Flanders Fields", by John Mcrae. Is not Flanders near or in Belgium? We here approach the eleventh hour of the eleventh day of the eleventh month with respect and sadness for all that happened so long ago. Would it be asking too much, just this one day, to not have the cheap shots from abroad--no matter how much America is despised for whatever reason?

Somehow, it just does not seem right.
Sadly,
Buongiorno!

Belgian

(11/11/2005; 10:44:14 MDT - Msg ID: 137835)

@Buongiorno

Exactly 11.11.11. And on this occasion we all (should)remember how cruel we "ALL" (!!!) can be. Y've understood my personal opinion on 9/11 correctly : A self inflicted atrocity. Definitely a major turning point. As an Eurolander, to be ashamed of the enormous atrocities we committed in two WWs, I do recognise 9/11 for what it (sadly) is. I do see it in context and relation to the $-IMS and gold. Weimar also followed the Reichstag.

USAGOLD / Centennial Precious Metals, Inc.

(11/11/2005; 11:20:55 MDT - Msg ID: 137836)

Enter the gold market with grace and confidence. Assets and info to get you started right.

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

Flaccus

(11/11/2005; 11:24:51 MDT - Msg ID: 137837)

Belgian

You got the sequence slightly wrong there.

The Third Reich followed the Reichstag fire, not the Weimar Republic and its hyperinflation -- an important clarification with respect to your point about 9/11 leading to a crisis in the dollar.

Rad

(11/11/2005; 11:37:13 MDT - Msg ID: 137838)

9/11

http://www.911truth.org/index.phpWhen someone first mentioned they thought our government was involved in 9/11 I thought it was ridiculous. I am now convinced they were. They have certainly done this type of thing many times in the past. If interested start at link below.
I am 13th generation of my family in USA.

contrarian

(11/11/2005; 12:04:06 MDT - Msg ID: 137839)

Hiding the Evidence

http://urbansurvival.com/week.htmfrom Urban Survival:
Discontinuance of M3 On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

Transparency in government? Ha! This is why we call them banksters! How come these guys, not our beloved US Government, get to make up money, huh?

Belgian

(11/11/2005; 12:06:18 MDT - Msg ID: 137840)

Systemic Risk :

Emphasis on "systemic" and less on risk. WHY has risk become systemic ? Because much too much is allowed to happen beyond the smokescreens. And there must be very good reasons WHY this is allowed to happen and continue to happen. WHY doesn't Greenspan wants to regulate the derivative and hedging industries, whilst Germany is taking measures (a priority now) to regulate !? Also note that Euroland stockmarkets have been closing Easdaq, Nouveau March� and Neuer Markt after the 2000 frenzy.

Trillions of digits can't find productive purposes in the physical economy. Production needs consumers. There has been an enormous production of digit credits whilst there are already not enough consumers with sufficiant purchasing power to absorb the over-production of tangibles. An enormous global imbalance and a systemic risk, because production becomes more efficiant and faster than the rise of total purchasing power of consumers, already indebted above their ears.

The financial industry has to find outlet after outlet as to canalise all these trillions in their search for return.
On top of this, there is no alarming price inflation that could absorb the excess of trillion credits. There is not enough genuine growth for balanced investment, production and consumption. Are the chinese to blame for this ? No they aren't. The blame falls on "easy money".

Will these systemic risks evolve into general defaulting deflation or general hyperinflation ? The longer we accept the inflation of those systemic risks for the sake of labile stability, the harder the landing crash will finally be.

The goldprice management (containment) of the past 2 1/2 decades, is the biggest/thickiest smokescreen to hide the permanent growth of monetary systemic risk. Example as to how systemic risk inflation was actually encouraged. Today the risks have inflated as if there will never come a tomorrow. The visible, official numbers (top of the iceberg) are already stunning. Then there is the invisible volume.

How paradoxal that the general public likes listening to gloom and doom up until they start realizing that it is real. Then they collectively ignore the dramatic risk and act as if nothing is going on. This happens because the financial industry and governments collude. The productive physical industries will one day regret that they didn't act (react).

How about goldmetal in possession !? Is there any systemic risk involved with this ? DEFINITELY NO !

Yep Flaccus, was getting terribly hungry and had to start cooking.

TownCrier

(11/11/2005; 12:17:37 MDT - Msg ID: 137841)

German coalition mulling gold sale for future plans

http://keyinvest.ibb.ubs.com/ki/ch/en/newsbody.ki?newsid=4069760BERLIN, Nov 11 (Reuters) - Germany's likely next government is considering the sale of gold reserves from its central bank, the Bundesbank, to finance future investment projects, sources involved in coalition discussions said on Friday.

On Thursday, conservative sources said the new coalition government had agreed to invest 25 billion euros ($29.44 billion) over four years in research, transport and building upgrades.

The Bundesbank has said it will decide by the end of this year whether to sell any of its gold stock.

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

With no mention of the pre-announced Central Bank Gold Agreement parameters, this story seems little more than an attempt to soften bullish sentiment and thereby helping to maintain the semblance of 'order' to gold's upward transition.

Given the structure of a balance sheet, I always find it curious when folks in government propose that a sale of gold can help finance a project. On the balance sheet, the net conventional interpretation of a gold sale would be essentially a trade of metallic assets to cash assets of approximately the same snapshot value. To be sure, that total value of assets is there for a reason... to provide balance against the outstanding liabilities. Therefore, simply changing the type of asset does not suddenly negate the need to maintain that asset on hand. That is to say, it is not immediately available for spending/dishording simply because it is in the form of cash rather than another form.

To take these sorts of stories at face value, are we supposed to come to the understanding that the central bank actually has a stockpile of off- balance sheet gold that it may sell for readily spendable funds?

That Germany may ultimately reallocate gold under the CBGA during the current five-year period of the Agreement is not what I'm doubting at all here. It is the odd flavor of the sugarcoating put forth as rationale that makes me grimace.

R.

TownCrier

(11/11/2005; 12:41:02 MDT - Msg ID: 137842)

Underground resources are sitting ducks to the State

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh77943_2005-11-11_09-14-18_l11636634_newsmlHEADLINE: Russian speaker sees subsoil law delays until spring

MOSCOW, Nov 11 (Reuters) - Russia's new subsoil law, a keenly awaited reform of rules for oil and metals producers, may not be passed until at least spring next year...

The idea of establishing a list of strategic fields emerged after President Vladimir Putin called on the government earlier this year to tighten the state's grip on natural resources.

The Resources Ministry last month came up with its first concrete proposals saying it wanted limits on foreign participation in auctions for natural resources that are scarce in Russia...

The ministry has said the Titov and Trebs oilfields in the Timan Pechora oil region and the Chayadinskoye gas field in East Siberia will be considered strategic, as will Sukhoi Log, Eurasia's biggest gold deposit, and the Udokan copper field.

Some analysts also said the key issue was how the state would classify firms with majority foreign control as most Russian oil companies are actively traded abroad.

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

Bottom line: holding stock (profit-sharing entitlements) in a resource-extraction company (miner or oil pumper) gives you no assurance that through the company there will be much gain received on the climbing value of strategic assets still underground. By the time the State exercises its powers of production quotas and taxation (if not outright nationalization), you'll wish that you had invested your initial funds in metal for your own hands rather than trusting to the future generosity of paliament to let you skip away so easily with strategic state (underground) assets. At a minimum, even if the politicians are not inclined to this sort of heavy-handedness, the self-appointed "have nots" in society always outnumber the counterpoint "haves", and that fact alone is enough to drive the "spirit of nationalization" through legislation.

Choose a bird in the hand (gold), not a promissory sitting duck.

R.

Flatliner

(11/11/2005; 13:00:46 MDT - Msg ID: 137843)

Expansion of personal Freegold definition

I would like to make corrections to the very simple definition that I purposed to describe the concept of Freegold. It seems that the concept of Freegold goes much deeper then honestly trading gold-metal in the market place. The concept of Freegold involves political independence, mass cross boarder participation and reserve status respect.

I may still be on the wrong track, but it seems to me that the Freegold concept is something that the central banks need to have happen in order for them to take the next step in valuing their net worth into something that they have better control over. It seems, that Freegold has everything to do with the concept of reserve currency.

Today, the world uses the US dollar as the reserve currency. The banks, take this money in and, through their infinite wisdom, create other types money (or more of the same) based on the value of the reserve currency. That reserve currency has a perceived value. That value is based on confidence of people. As long as people value the currency that banks hold, they are willing to believe in the system. Things work. Life goes on.

At the same time, as we all know, the reserve currency has been losing value. Do to political will, it stands to lose even more value as we move forward. (The inadequacies of that reserve are posted on this forum, and all over the net, everyday.) This, I would think, would cause a central banker to lose sleep at night. The problem is that too many people use and support a currency that has failing fundamentals. What is a central banker to do?

Makes sense that they would try to build interest in something that has always worked before. Basically, they need something that they can put on reserve that people believe in that they can use as the foundation for the system. They need something that cannot be politically manipulated, but, at the same time, they need something that can still be controlled.

Here in enters gold.

But, propaganda over the years in conjunction with the active (unlimited) Papergold market has affectively broken the world's confidence in the yellow metal. Ask any active US investor what they think about the yellow metal and they will tell you that it is old school and worthless � it doesn't make you any money.

The key here is to measure confidence. If people have higher confidence in the US currency, that is, what they will hold. That is� what they value. In this case, the yellow metal comes second. In this case, the political might that creates US currency and gets their way with the rest of the world. Likewise, the value on reserve in banks falls in value over time.

Now, in order to get control, the central banks need to raise confidence in the yellow metal. How can this be done? There are two things that they need to do. One, create a large physical gold market. Here, they need to get more gold in the hands of the people � on a worldwide scale. This provides liquidity to the commodity. This is a must. Everyone that holds it must have 100 percent confidence that they can convert it in a moments notice (extract it's value) � just like you can with all the paper contracts (Stocks, bonds and whatnot). Basically, if you can not convert, it's � worthless. Second, they need to, in an orderly way, win over the investor community. In other words, it must be seen as something that can make you money over time so that investors will actually buy it. But, this is tricky. Investors play paper markets. Thus, central bankers don't need to break the Papergold market, what they need to break is the investors confidence in the Papergold market. But, unfortunately, breaking the Papergold market involves breaking confidence in the system. That has far reaching implications through every financial institution in the US and many throughout the world. Thus, the orderly part is to keep confidence in the banks while discrediting the reserve currency.

So is born the concept of Freegold. The idea that confidence can be restored in gold as the reserve currency. The side affect of the restoration is that the central banks will be forced to maintain the liquidity of the metal on the market. Now, this also fills in the �hope� aspect that Goldbugs see in the concept of Freegold. The gold supply is limited and the current value of that supply is so cheap that it could never currently support world trade at it's current perceived value. Thus, if the concept of Freegold grows, so will the revaluation of the commodity.

Wow. If I'm now interpreting the concept of Freegold anywhere near what the members of this forum believe, then I understand the hope aspect as the best investment opportunity that I've ever seen.

Are there facts to support what would have to happen to make this transaction? Well, I'm seeing them everyday but wasn't recognizing them.

First, central banks hold a lot of gold. Why? Well, if they value it based on the Freegold concept, when confidence is restores in the metal, they're reserves will be priceless.

Second, we are seeing record sales around the world. Not only in price, but in volume. Liquidity has to be built and maintained. Didn't China and Japan both recently state that they are now letting people buy and own gold? I would take that as a significant statement that two very large economies are building liquidity.

Third, the price is rising, ever so slightly against all currencies. Enter investment capital.

Fourth, free up some reserves, but only a little. This last summer China, Russia and the associated trade partners announced that they are restructuring their �basket of reserve currencies�. This, in my opinion, is a statement that they have lost confidence in the current reserve currency.

Fifth, recent world surveys have recently shown that people around the world think more favorably towards China then they do of the US.

Sixth, new gold and oil trading commodities houses are opening outside the US.

Seven, scandals are running wild throughout the US industry sectors. I mean, who in their right mind would put their money in Refco's hands? US investors are being forced to make a choice � trust in financial institutions that could go bankrupt in a matter of 7 days, or bring home a commodity that's going up in value.

I'm sure the list could run on and on. Look anywhere and you'll find the fight for confidence. Everyone that complains about fabricated headlines is reading the battle for confidence. It's unfolding before our eyes everyday and confidence is swinging away from the US currency.

As you can see, I have an active imagination. But, I am still puzzled. This transition feels like a political campaign where we're forced to choose between the two worst candidates.

I mean, if the US can maintain confidence with it's currency, the US will continue to reap the benefits of being able to create money out of thin air and � spend it. But, if confidence shifts to supporting the Freegold concept, those with gold will be able to set the rules in private.

Can we truly have a free market in gold? This� I still question. Confidence is built on honesty and transparency. These qualities have been in serious short supply from the institutions that we've extended our trust too � governments along with big banks. Can we (all people) trust that this new reserve � more importantly, it's value � is built honestly and it's not manipulated?

I would think that we all have some data coming our way in the near future if the creators of the Freegold concept want to win worldwide trust. 1) They have to open their vaults to expose the amount of physical gold that they have in an independent way (transparency). The marketplace needs to realistically determine how much gold exists in the world (read: no one can magically inflate the price by bringing gold out of deep storage) 2) There must be a separation between banks and mines. I would expect that States would nationalize all mines. Here, no bank can control any local supply. 3) Papergold markets must be closed or a least completely decoupled from driving the market price. 4) Liquidity has to prove its function on a world scale � in other words, it needs to prove its store of value across cultures and state boundaries.

Please note that the above words are, very much, a guess at the concept. I will go back to walking the gold trail to see how far off this guess really is. Also, keep in mind that I am *not* an authority on this subject, I am simply a curious student with a wild imagination.

Goldilox (11/11/05; 06:37:10MT - usagold.com msg#: 137830)
"FreeGold=unFree mining - what a concept!"

Belgian (11/11/05; 02:32:40MT - usagold.com msg#: 137825)
"W're on our way to freegold (gold=wealth), aren't we. And ***mining*** the world's gold-wealth-reserve should become totally unfree."

Belgian (11/11/05; 00:25:27MT - usagold.com msg#: 137822)
"Freegold means that gold in the IMS will have to serve "all" interests and not one US-dollar-interest alone."

Smeagol (11/10/05; 17:29:13MT - usagold.com msg#: 137813)
No "Freegold" unless...
"...there is a guarantee in place that... sss...central banks... will not coerce governments into controlling It... or vice versa.

Gold must be set above the Law in order to exercise It's wealth-function. Otherwise it's jusst another ride on a different merry-go-round."

R Powell (11/10/05; 15:59:58MT - usagold.com msg#: 137811)
"A few thoughts, if I may. I don't have the exact numbers but I believe that neither banks nor governments own a majority of the aboveground physical gold in the world. That which is privately owned probably still can be bought and/or sold for a dollar priced based on supply and demand."

Belgian (11/10/05; 12:21:55MT - usagold.com msg#: 137794)
"Freegold means that REAL GOLD-VALUE can co-exist with paper without being its serving slave...suggesting that ($)paper is still as good as gold."

Freegold � 1) A term that is used to describe physical gold that is traded openly in the market, free of political influence or price manipulation that is contrary to the fundamental attributes of capitalism. 2) Not Papergold. 3) Found: Freegold is found in coin shops, jewelry stores and precious metal shops

Max Rabbitz

(11/11/2005; 13:06:29 MDT - Msg ID: 137844)

Follow the oil�.support for a faltering Euro.

If motive is all you need to prove a thesis then my thesis would be that 9/11 was done by Brussels and the European Central Bank in an attempt to create animosity and drive a wedge between the dollar and Middle East oil. It sure revived the fortunes of the Euro. The European mark to market of their gold may be just a ruse to divert attention from their real strategy��Euro denominated oil. The Euro countries want to be seen as more understanding and supportive of the social and political goals of the major oil producing states than the dollar countries. This explains their one-sided Middle East policies, excuses/blindness to repeated acts of terror, and suicidal immigration policies. If I am wrong and mark to market of gold is really all there is to their stragegy, then perhaps they will stop selling it, or at least let us know how much they have that is not encumbered. What's the point of mark to market if the market doesn't know how much is there?

Now, if evidence is required to prove a theory, I'd have to admit that they who said they did it, really did. Although the struggle for the benefits of a reserve paper currency is foremost in many western minds, the world, as is nature, is not that simple.

Arcticfox

(11/11/2005; 13:23:25 MDT - Msg ID: 137845)

Jim Sinclair

must be a happy man today..his stock smashing above 52 week highs..

Topaz

(11/11/2005; 14:27:02 MDT - Msg ID: 137846)

alt-Gold.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=As the November Sword of Damocles hangs precipitously over PoGold, we see our PoG-alt divergence continuing ...hmmm!
There was also a flurry of activity in Comex today ...40Ag and 100Au. Window dressing or what?

We watch.

USAGOLD Daily Market Report

(11/11/2005; 14:28:02 MDT - Msg ID: 137847)

Page Update!

David Linkley

(11/11/2005; 16:10:39 MDT - Msg ID: 137848)

New era

The Fed's announcement today that M-3 and REPO numbers would no longer be reported sends an ominous message that transparency is no longer desired. What is coming that they are so afraid of. With the commercials having record
short positions in the dollar and record long positions in December T-Bonds you can bet the probability of an "event" has risen considerably. I believe an all out effort will be made to maintain the stock market at current levels no matter what housing, oil, gold or the economy does. Gold in Euros closed over $400 today for the first time. Yep Belgian, the Euro sure is different than all of those other paper currencies falling against gold as well. I encourage all of you to follow Black Blade's advice to get out of debt, have supplies to last for a period of time and plenty of gold for insurance.

Topaz

(11/12/2005; 02:45:12 MDT - Msg ID: 137849)

vale M-3

Despite a Conundrum defying slide in Long Yield these last few Months, it could be suggested the Fed has or is now moving to an all out assault on the long end to contain or better manage the descent into a Deflationary Abyss.

They have to date been relatively successful in deflecting a flight to Cash with their 14odd rate hikes and consequent management of 3mo Yield, but DX and alt-Gold tell the true story.

Remember that PaperMoney ONLY prices PaperGold ...Prudence dictates there's a distinction to be made here IMHO.

spotlight

(11/12/2005; 03:27:20 MDT - Msg ID: 137850)

US-Dollar Interest

Belgian
Can you be more specific regarding your statement below.
How does the US come by the "dollar-interest alone."
What are these dollar interests? How do they manifest themselves? Details please. Thank you.

"Freegold means that gold in the IMS will have to serve "all" interests and not one US-dollar-interest alone. Globalization means "global" liberalization and not very selective liberalization."

Belgian

(11/12/2005; 03:42:33 MDT - Msg ID: 137851)

@David

M-3 - Repo (5 $-trillion/day) - $-Trillions, have become unimportant and don't need to be known anymore. Same story for USTB-30 years > not of any significance anymore.

Imo, not necessary signs that some dramatic event is around the corner, but rather dramatic signs that the globe's $-IMS is in transition. HARD MONEY (the notion of it) is definitely on its way out and to be replaced by ANOTHER standard. I mean GOLD (and not euro-!).

This fits nicely in the $-helikopter theory.

Can this globalizing/liberalizing planet function economically, without a universal reference of a wealth-standard ? What exactly is objectively going to say how good or bad one economically is or isn't ? The dollar-standard of the $-IMS isn't saying this anymore. Today, one's dollar stashes are just an indication of how much DEBT units one has accumulated. All those $ TRILLIONS cannot be exchanged in the existing global physical economy.

Imagine gold to be auctioned in a world Sotheby's ! No more am/pm London goldprice fixing, but a 24/7 continious one, open to any bidder/seller. An auction where the goldmetal-wealth must be delivered, physically !
Freegold auction, where physical gold's price can float as to universally value wealth that is acquired by one's succesfull, productive work.

This concept is what I read in the ECB's MTM of its gold-wealth-reserves. In sharp contrast with the obscure London goldprice fixing concept.

Now, we should start to realize WHY the proliferating global derivatives markets don't need any regulation anymore. All management (and manipulation) of the elements of the $-IMS is nothing more/less than buying time in an as stable environment as possible. Time, to let the transition happen. A universal Freegold standard ! An IMS can NOT stay up (remain functional) with a debtload that has become totally "uncredible". Uncredible, because the amount of debt grows much faster than the physical economy. Just imagine the $-IRs going much higher. The debt-growth would accelerate even faster and the global physical economy would grow slower. This would add to the systemic risk of the global imbalances !

Our $-IMS is acting like an austrich and forcing its head deeper and deeper in the sand.
Fiscal and/or monetary policies (or any other policy) on a global scale can do nothing against the swelling tsunami of unproductive debt, cultivated by the globalizing financial industry.

We are in the process of hiding more and more parameters of the $-IMS (FED). Hoping that the $-IMS remains an abstraction. Put all your faith in the management super-skills of the (mostly invisible) financial industry and its leverage tools. Scary, no.

Belgian

(11/12/2005; 04:17:33 MDT - Msg ID: 137852)

@Spotlight

Details : The $-IMS is functioning on the "dollar-reserve" standard. And the dollar-currency is "the" global unit of account. This happened on the one and only basis that this dollar (of the $-IMS) always had to be "percepted" AS GOOD AS GOLD ! Meaning nothing else than a lot of gold for very little of dollar digits...IN THEORY.
The ONE and ONLY reason why gold's dollar price HAD to be (globally) managed and contained...as to make dollar-debt credible and functioning as the unit in the $-IMS.

Under the dollar-regime, we have to accept unfree dollar gold. The coming Freegold regime shall NOT be another privilege for another particular regime (IMS). Freegold must serve as many actors as possible, even the US and its dollar.

Freegold's purpose is to create a global level playing field, where a MTM Freegold says what your wealth is and not the dollar-unit. This means that the old dollar-gold-standard (fixed goldprice) has to be replaced by the standard of a 24/7 floating goldprice...FREE FLOATING and NOT A PEGGED goldprice.

Details : Review the past IMF-gold saga. Goldsales...goldprice revaluation...no move. Gold in or out of the IMS ? A $-goldprice that devalues the dollar or still a $-goldprice that officially (infinitesimally) adjusts for loss of dollar purchasing power ? A �-goldprice that does the same for the euro fiat or a �-goldprice that supports the euro exchange rate ?

Goldprices sometimes tell us nothing (no changes in the transition process)...but there will come a moment when other goldprices (goldprice behavior) will tell us much more. Simply because a new gold-concept (ECB-MTM) exists.

Belgian

(11/12/2005; 05:17:02 MDT - Msg ID: 137853)

@Spotlight

The dollar's interests : The goldprice has been pegged to the dollar for more than 7 decades now. This pseudo gold-dollar gave the dollar the privilege (interest) to be used globally. The US doen not need reserves, because the dollar is the reserve, worldwide.

Breaking the peg (goldprice to the dollar) would put the dollar - as a reserve unit - into a whole different perspective.

Think about the yuan peg to the dollar : We want the yuan to unpeg from the dollar and starts floating. What if the world wants the goldprice to start floating also ? We want the yuan to reflect its real exchange rate. What happens when the world wants to find out what the real gold exchange rate is ? Gold that is unpegged from the dollar will also say what the real exchange rate is of the dollar. That would come as a real surprise to all dollar-reserve holders.

A floating yuan, would not only change the economic picture of China, but the global economic picture. When a floating goldprice (freegold) starts to price the globe's dollar-stash, as the oilprice is doing, the global economy and the US as N�1 in this global economy, would look very different.

A dollar controlled repricing of gold...read simply goldprice rise...with gold still pegged to the dollar, changes NOTHING on the dollar's interests (read privilege of the world's reserve status). But when all dollar holders-users, decide they don't want the dollar anymore and prefer gold to be their reserve...the $-IMS collapses and all the dollar's interests are gone. It is not the world who chose Bernanke as (FED) captain of the helikopter fleet. That was the dollar's interest alone.

More later...

Druid

(11/12/2005; 08:38:25 MDT - Msg ID: 137854)

Belgian (11/12/05; 05:17:02MT - usagold.com msg#: 137853)

Druid: Belgian, thanks. Like I stated soon after Helicopter Ben's announcement. The Fed will be reduced to day-trading in all markets(primarily the bond) to maintain(cheat) some sense of "price stability". This lack of transparency going forward is more about buying enough time for the financial services/government/corporate cartel to come up with another good story to correlate with the much higher prices that are on the way.

Man! Wait until Helicopter Ben takes hold of the steering wheel. Like I said before, he's the right man for the right job at the right time. Hang on friend because it's going to get wild out there.

Ten Bears

(11/12/2005; 10:03:43 MDT - Msg ID: 137855)

Good read from Jim Willie, also from C Reese

http://www.gold-eagle.com/editorials_05/willie111105pv.html
>The US Economy is a many-faceted beast, whose financial sector tail has been wagging the real economy dog for many years.

>Greenspan would lead you to believe the US Economy is strong, vibrant, and healthy as he exits his long reckless tenure. The truth is that he presided over a massive Middle Class squeeze and vanishing act. Consumer spending is up 3.5% versus wage gains of only 1.4% in the last 12 months. Prior years tell the same story. In fact, Q3 wage gains of 2.3% makes for the smallest annual change since 1981. The households of America extracted $600 billion in home equity in 2004. This is the Greenspan Legacy - spiraling debt and Middle Class hardship.

>My personal assessment is that Greenspan is the most incompetent central banker who ever reigned in the modern era, if your criterion is for responsible monetary policy to prevent rampant inflation and its downstream ravages. However, if your criterion is for feeding the system from a high octane inflation diet and geared inflation regimen, he has been without question in a class by himself at the pinnacle.

And from Reese,> I've often said that we Americans get the kind of government we deserve, but the real question is, Can we survive the kind of government we deserve?
http://reese.king-online.com/Reese_20051111/index.php

Bizarro-Greenspan

(11/12/2005; 10:25:32 MDT - Msg ID: 137856)

The trouble with promises

Reserve currency problems need golden solutions
By John D Mueller
Financial Times: August 20 2004 05:00

From Mr John D. Mueller.

Sir, Martin Wolf is almost alone among journalists in casting a much-needed spotlight upon the problems stemming from the dollar's use as the world's chief official reserve currency. But, in doing so, he also reveals the lack of an agreed and consistent analysis of this issue among experts. For example, in his article "America is now on the comfortable path to ruin" (August 17), Mr Wolf cited the interesting analysis of Wynne Godley, Alex Izurieta and Gennaro Zezza, which concluded that "net exports must now be the motor for US growth". This was to be accomplished by "a further substantial devaluation of the dollar, together with a sizeable rise in domestic demand, relative to potential output, in almost all other important economies of the world".

But in his article "Asia's game with America is a long way from ending" (August 11), Mr Wolf had suggested why attempts to cure the US payments deficit by dollar devaluation cannot work as long as the dollar remains the world's chief official reserve currency. Any tendency for the dollar to decline is automatically met by massive dollar purchases by foreign (especially Asian) central banks, thus financing - and perpetuating - the US balance of payments deficit. Asian "mercantilism" and American "profligacy" are merely two sides of the same coin.

Earlier, in his article "A global market economy needs a global currency" (August 4), Mr Wolf cited Prof Robert Mundell on the need for a new global reserve currency to replace the dollar, � la Keynes' bancor plan. But if we think it through, in the absence of world government, any global official paper currency would have the same basic problem as the dollar: one nation's reserve asset depends on the worth of some other government's IOU.

Jacques Rueff pointed out the problem 40 years ago when he first described America's "deficit without tears". By a process of elimination, Rueff came to an unfashionable but thoroughly logical conclusion: to solve the US, Asian, and global problems simultaneously, official global money must be one nation's asset without being any national government's liability: a reproducible commodity such as gold.

John D. Mueller, LBMC, Washington, DC 20015, US

That's gold,Johnny,gold.

USAGOLD / Centennial Precious Metals, Inc.

(11/12/2005; 12:04:29 MDT - Msg ID: 137857)

USAGOLD - Centennial puts world of gold at your fingertips...

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

balzac

(11/12/2005; 12:31:48 MDT - Msg ID: 137858)

LUCKY WIN

THANKS USA GOLD,

I just got back to my puter and found to my delight that I had won a silver maple leaf. My secret was an arithmetic average of the previous 20 days closing price, In stats. things tend to return to the mean - so it is with gold. Congrats to Black Blade and Rimh.
What is the email address for Marie?

Thanks again , Balzac

(11/12/2005; 13:54:24 MDT - Msg ID: 137860)

Last post

To those who saw my post and formulating a response, my apologies. Will republish in the future after I fix a few things.

Chris Powell

(11/12/2005; 14:47:22 MDT - Msg ID: 137861)

Mexican congressmen take silver liberation message to Latin American conference

http://groups.yahoo.com/group/gata/message/3439Latest GATA dispatch: Hugo Salinas Price's
silver currency idea is getting around.

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

gata-subscribe@yahoogroups.com

TownCrier

(11/12/2005; 15:10:26 MDT - Msg ID: 137862)

balzac, congrats on the stats.

You can reach her at marie@usagold.com

R.

Boilermaker

(11/12/2005; 15:46:23 MDT - Msg ID: 137863)

New German Govt. wants to raid the cookie jar

http://www.bloomberg.com/apps/news?pid=10000100&sid=ayRHxsBnT5XY&refer=germanyGermany Considers Gold, Railway Sales, to Ease Record Deficit
Nov. 12 (Bloomberg) -- German Chancellor-designate Angela Merkel's new government may sell some gold reserves and a stake in the state-owned railway to help plug the budget deficit, the country's new finance minister said.

"Peer Steinbrueck said Merkel's coalition, which brokered policy accords for the next four years on Nov. 10, aims to cut the deficit while raising investment to help the economy. Proceeds from a partial sale of Deutsche Bahn AG and some of the central bank's gold reserves may be used to set up a 25 billion-euro investment fund, Steinbrueck said.

``There may be scope to sell'' central bank gold within an international treaty, Steinbrueck told reporters in Berlin, adding that Bundesbank approval is needed to sell gold. ``We would want to uphold both the Bundesbank's independence and the substance of the reserves.''

comment;
They also want a 20% capital gains tax to cash in on inflation. How likely is the BB going to do this. Any forum members know the new regime?

OvS

(11/12/2005; 17:13:53 MDT - Msg ID: 137864)

Richard Russell

I like his: ...nobody ever
went broke accumulating gold.

But what do you make of his
comment that one should keep
in mind: as the US exports
inflation to the rest of the
globe via fiat dollars, China,
India, etc. are exporting
deflation to the US ... ? OvS

CoBra(too)

(11/12/2005; 17:35:22 MDT - Msg ID: 137865)

@Boilermaker

The coming up German "Grand" Coalition under chancellor Angela M. is at best a lame duck government to begin with and at worst - or is it second best not fit for any real decisions...and in particular the BuBank will ever more resist the notion. Even if they "may, ha" know that 1.700 tons are already obligated, leased, sold or just held by somebody else, who feels entitled to it - maybe because of the deeds of DB - and maybe the BuBa has sanctioned these ... (including takover of BT and other trial "stakes") - no way to sell more - it'll just be an excuse to explain the missing hoard - eventually...

The EU and the � may just be in for another bout of weakness - and that's all political and has nothing to do with fundamental economics.
Now we've got UK presiding over the EU - doing absolutely nothing, the French scorched by neo-francaise and Germany neutralized.
No wonder the Dollar is again seen as a good short term play ... as the selfdestruction of all fiat paper is gathering momentum.

Wow - we know where to go ... as the weight for pm's is still kind'a heavy for paperweights ...cb2

OvS

(11/12/2005; 17:54:55 MDT - Msg ID: 137866)

Warren Buffett

What do make of this:
Berkshire Hathaway is
going to merge with
General Re.(which, by
the way, was hit hard
by the hurricanes).
Now, remember Buffett's
comment about derivatives?
Sewage..or something like
that.
Now I read: General RE
also operates as a dealer
in the swap and derivatives
market through General Re
Financial Products Corp...
Well, whatever, his silver
stake will get him through.

Flaccus

(11/12/2005; 18:44:43 MDT - Msg ID: 137867)

OvS

Buffet doesn't have his silver. The bullion banks do. He's derivatized it.

mikal

(11/12/2005; 19:24:29 MDT - Msg ID: 137868)

BIS (The Bank for International Settlements) and the IMS

http://www.augustreview.com/index.php?module=pagesetter&func=viewpub&tid=4πd=8 The August Review :: Documenting the rush to globalism
Global Banking - The Bank For International Settlements
Traces the formation, activities, ownership and agenda of the IMS. How the BIS interacts with CB's, IMF and World Bank and how SDR's replaced the gold Swiss Franc, the last restraint on unlimited credit creation. Are SDR's leading to proposed N.American 'Ameros' and a world currency?

David Linkley

(11/12/2005; 19:36:01 MDT - Msg ID: 137869)

@Belgian

Belgian I strongly disagree with you that M-3, Repos, and the 30 yr. T-Bond. don't matter anymore. That is mainstream media gibberesh. For example if you run a 30 day moving average on the amount of repurchase agreements in the system it has a very strong correlation to the level of the DJIA. One by one objective standards are being removed to make informed investment decisions. This particular decision was made because something is coming which will require tremendous money creation and we as investors will have to come up with other measures to compensate. I for one wish Germany and the rest of Euroland would shut up and sell all of their gold now. The puny stash they have left would be consumed instantly by those countries who have too many dollars. In my opinion your concept of freegold is totally off base and makes no sense. I do enjoy many of your posts but your logic sometimes eludes me. What we have is a mess and even the powers behind the throne in the world today are unsure of which way to turn.

Clink!

(11/12/2005; 20:45:19 MDT - Msg ID: 137870)

A quiet Saturday night

http://www.imagestorepro.com/ebay_song.htmlFor others bitten by the e-Bay bug, this is almost too good.

Enjoy !

C!

contrarian

(11/12/2005; 21:56:31 MDT - Msg ID: 137871)

M-3, Repos, and the 30 yr. T-Bond

David Linkley--
I do fully agree that M-3, Repos, and the 30 yr. T-Bond are VERY important, and information on these is being withheld for reasons to hide the obvious manipulations and lamebrained attempts to prevent the inevitable...and cover the tracks, because, in fact, these measures will actually make things worse (as nothing the Fed does ever adds value, like Dr. Frankenstein creating his creature). Nothing but disaster all around! This creature from Jekyll Island! Truly!)

Anybody who's not hypnotized by the 24 hour circus of celebrity, trash TV, trash talk, "news", stadium sports, reality TV, and other "bread and circuses" knows what's going to unfold, and it'll be like makin' sausage--it won't be pretty! The Fed knows full well, just as every stockbroker on Wall Street knows how to put lipstick on a pig and make bacon. So the Fed is quite deliberate and I imagine nothing is done without good reasons and a long thought process behind very closed doors.

melda laure

(11/12/2005; 22:22:05 MDT - Msg ID: 137872)

"I wonder what would happen If I pop this balloon" - electric company

http://www.financialsense.com/editorials/reality/2005/topic7.htmlWhos interest indeed, Sir Belgian! But why the delay? What is left to protect, and what must first be "safely gathered in." Since the night is quiet, let us consider our future beyond the years 2000-2012.

"In today's real estate market there are a number of factors tugging on the seams of traditional valuation techniques with motivation being harder and harder to quantify ... So, the goods from China make the longshoremen in Oakland viable market participants (taxpayers), while the former factories that used to produce a similar good have been converted to housing creating jobs for construction, real estate people, and banks... We suspect the BOYZ at the FED will be brushing up on their chemistry and nuclear physics creating some new empirical formulae and laws pertinent to smashing atoms and inflating gases under pressure with a printing press."

I wonder if there is not some unforseen natural catastrophe and the powers that be have prepared a lifeboat/island/mars-base/etc somewhere and are planning to abandon the planet to chaos and fire?

Perhaps the boys at the fed should read Gottfried Hilsher's "Engergie im uberfluss". Perhaps they should read Bearden's work and see if there is a derivative equation that permits limitless "value from the vacuume".

It is a silly question. I dont happen to foresee fire from the heavens (yet), but that doesn't mean that others don't either. Certainly the motivation for such toxic and suicidal quantities of credit must be considered. As the epic of gilgamesh says: "For my workers I slaughtered bullocks and poured out beer as it were the days of the new year".

We know how that story ends. Will the boys at the FED be drinking fine scotch as the sea grey wave rolls overhead.

(Short and to the point, and not as good as my earlier post which was lost to slippery keyboard work... musn't drink so much whilst typing)

melda laure

(11/12/2005; 22:31:28 MDT - Msg ID: 137873)

Ben Bernake, Loadmaster in Chief

Wait til the light turns green, Ben.... oops! Oh well, there's more where that came from.

Goldilox

(11/12/2005; 22:52:47 MDT - Msg ID: 137874)

Safe Places

@ melda laure,

"I wonder if there is not some unforseen natural catastrophe and the powers that be have prepared a lifeboat/island/mars-base/etc somewhere and are planning to abandon the planet to chaos and fire?"

Don't know about lifeboats, but the numver of underground bases has risen quietly even since the Cold War. Ya gotta wonder if a "cave" is no more than a comfortable tomb if TSHTF.

PRITCHO

(11/12/2005; 22:53:22 MDT - Msg ID: 137875)

The Rise Of America's New Enemy - -Venezuela's Hugo Chavez - by John Pilger

http://www.globalresearch.ca/index.php?context=viewArticle&code=PIL20051110&articleId=1231Definately worth the read - John Pilger at his best.More reasons WHY the noecons must be thrown out.It can't happen fast enough - -for all our sakes.

Belgian

(11/13/2005; 00:38:07 MDT - Msg ID: 137876)

@David

M-3/REPO/USTB-30 yrs : I meant >>> When an exhausted, sick body ($-IMS) is reaching the end of its lifetime and burdened with so many uncurable illnesses...does it still matter taking/publishing its temperature (M-3/REPO/UST-30) ?

"There is no logic... Freegold" >>> Y're not the first and certainly not the last to state this. Find these statements very interesting ...but what are the alternatives ?
How do you, David see Gold's future ???

Belgian

(11/13/2005; 00:59:00 MDT - Msg ID: 137877)

OvS/Cobra-II

OvS : Infla export and defla import >>> Rising IMBALANCES to be corrected with another IMS.
Buffet's (supposed) silver...will get him through WHAT exactly ? How will it look afterwards and what will silver's status be (become) ?

Cobra : Let's presume the picture you paint is correct. Tell us how the "gold-world" will look like after "all" paper has reached selfdestruction ?

After all the biblical chaos - fire and catastrophy...predicted here at the forum...I would like to have an idea about the structure in which gold will function, when all that armageddon dust has settled ? Or shall I order an euthanasy kit at the nearest pharmacy ?

Black Blade

(11/13/2005; 01:06:10 MDT - Msg ID: 137878)

Iran oil bourse: a threat to the petrodollar?

http://english.aljazeera.net/NR/exeres/C1C0C9B3-DDA9-42E2-AE9C-B7CDBA08A6E9.htmIran oil bourse: a threat to the petrodollar?

Snippit:

Iran's decision to set up an oil and associated derivatives market next year has generated a great deal of interest.

This is primarily because of Iran's reported intention to invoice energy contracts in euros rather than dollars.

The contention that this could unseat the dollar's dominance as the de facto currency for oil transactions may be overstated, but this has not stopped many commentators from linking America's current political disquiet with Iran to the proposed Iranian Oil Bourse (IOB).

From an economic perspective, invoicing oil in euros would be logical for Iran as trade with the euro zone countries accounts for 45% of its total trade. More than a third of Iran's oil exports are destined for Europe, while oil exports to the United States are non existent.

The IOB could create a new euro denominated crude oil marker, which in turn would enable GCC nations to sell some of their oil for euros. The bourse should lead to greater levels of foreign direct investment in Iran's hydrocarbon sector and if it facilitates futures trading it will give regional investors an alternative to investing in their somewhat overvalued stock markets.

Political considerations

In the 1970s, not long after the collapse of the gold standard, the US agreed with Saudi Arabia that Opec oil should be traded in dollars in effect replacing the gold standard with the oil standard.

Since then, consecutive US governments have been able to print dollar bills and treasury bonds in order to paper over huge current account and budgetary deficits, last year's US current account deficit was $646 billion.

Needless to say, the current petrodollar system greatly benefits the US; it enables it to effectively control the world oil market as the dollar has become the fiat currency for international trade.

In terms of its own oil imports, the US can print dollar bills without exporting commodities or manufactured goods as these can be paid for by issuing yet more dollars and T-bills.

Black Blade: So here we go again with another oil producer set to abandon the US dollar. I would think that if this proposal gets legs it could lead to other abandonments of the dollar making the currency somewhat irrelevant as the world's reserve currency.

(11/13/2005; 01:26:03 MDT - Msg ID: 137879)

Belgian - Gold's future (An alternative view)

Coin circulation. Savings - first step. Consumption - later step. Simple!

spotlight

(11/13/2005; 03:39:00 MDT - Msg ID: 137880)

Dollar reserve status

Belgian
Thank you for the reply.

you stated:

"Breaking the peg (goldprice to the dollar) would put the dollar - as a reserve unit - into a whole different perspective."
**************
What are the steps needed to break the "peg"?
Give an example of how this would could about.

The example you gave of the Yuan, requires only for the Chinese govt. to act as they did recently, when they raised the value of the Yuan . Only next time, to let it float freely.

Who has control over the dollar "peg" that could as easily let it float freely?

Would it not require all central banks to stop intervening. Couldn't there always be an event like the now, German govt. talk of selling gold, driving the price down?

How about the comex and the exchange stabilization fund, or other powers that be who have a vested interest in a low gold price? We could have a free market, but with all the dirty players still evident in the market attempting to cap the price.

How do we get rid of the paper gold market? So far the paper gold market has been successful in holding the price down to a crawl, allowing only a two step advance and one step back, over which seems like an allotted period of time?

CoBra(too)

(11/13/2005; 05:45:03 MDT - Msg ID: 137881)

Paper selfdestruction -@ Belgian

... is gathering momentum is the way I've put it.
Meaning that historically all fiat paper currencies have lost most, if not all of their value in terms of purchasing power.
The US Dollar has lost some 95% of its purchasing power since the FED was introduced 1913. The rate of descent has dramatically increased over the last few years, as can be seen in staggering inflation rates towards real goods.

The US Dollar will have ample company in its race to the bottom and as such it may just be a game of relativity, if not futility.
Cheers cb2

contrarian

(11/13/2005; 06:17:30 MDT - Msg ID: 137882)

More on M-3, Repos, and the 30 yr. T-Bond

http://p088.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=15499.topicFrom an excellent message board:

Right now, I have not made any definitive plans as a result of this latest Fed move. I am still thinking of the implications, but some initial thoughts are:

This is almost surely an initiative undertaken by Bernanke, who, although not yet chairman (he is a Fed governor), his position as White House financial advisor makes him a convenient tool for an embattled admininstration doing major damage control. If there is one leading hallmark of the Bush gang it is their fixation on controlling the flow and content of information. Spin, lies, obfuscation, attacks on critics; you name it, there is NOTHING they are not prepared to resort to in advancing their agenda.

Bernanke, his inflationist biases well known and advertised, is going to go all out to keep the credit-pumping game going as long as possible, and this latest Fed move is clearly a desperate attempt to prolong the game. I conclude, then, that the situation is far more serious than superficially apparent.

I am not sufficiently knowledgeable of the many stats and indicators that the Fed releases on a regular basis, so there may well be some numbers that regular Fed-watchers are in touch with that will enable them to see inside the Fed and continue to monitor the money supply. However, the numbers that the Fed is going to now hide are the ones that the broad range of market watchers have come to rely on; ones that can be relatively easy for most of us to understand.

As a result, Thor will certainly get his dose of debt-squelching inflation, but we will not know for sure that it has arrived until after the fact; knowing M3 is a great predictor of what is coming. Without it, we have much less to base our guesses on what is coming.

For instance, notice that the Fed is not going to publish figures on its repo activity. Repos are one of the major mechanisms for financing big-bank activity in controlling major market action such as the Dow and S&P and by now, the bond market no doubt. Obviously the Fed realizes that a significant amount of attention is being paid to its market fixing scams, and since doctoring the numbers is now so obvious and increasingly hard to hide, their only choice (truth is not an option) is to stop publication of the offending numbers.

The difficulty now is in knowing how this will play out. Here is what I think:

Credit ("money") will continue to be available in ever-increasing amounts, but for the benefit of keeping hedge funds solvent so their derivative plays don't blow up publically; evermore credit will continue to be available to prop up Fannie and Freddie and the whole range of financial institutions that depend on it for their continuation. Now, notice this: Money is no longer going into creating wealth-building industries and infrastructure; it is going instead to propping up the huge sector of financial institutions sucking up the assets of the population at large. Keeping track of this has just become much more difficult.

This will certainly make it easier to crank the Dow higher, raise short-term rates in a "measured pace", confuse the oil and precious metals markets plus bail out major failed corporations...just to name a few of the obvious benefits...like getting GOP poll numbers up.

The public will continue to be comatose, but more and more vaguely disturbed, aware that all is not right but still too addicted to slumber. Some demagogue will come along to switch on a light that will grab public attention and send it off on a tangential pursuit to nowhere, resulting in superficial changes, perhaps for the worse.

Thus I believe we will see a prolongation of what is currently happening, but with a rising tide of public anger as the facts no longer match the spin. One benefit to the Bush group is that they may now feel that they can launch another military venture - Iran or Syria - and so completely control the markets that we would see the Dow jump 500 points on the day of attack, oil drop to $32/B, Gold fall to $390 and bonds rise. Euphoria would sweep the nation as the spread of democracy continued, with the US$ climbing in unison; at least in their delusional dreams.

Obviously, I don't know what will actually happen, except that I believe that this Fed action is a powerful indicator of major stress in the system. I don't as yet know what I will do with my oil and precious metals investments, but I am seriously thinking of liquidating a significant amount and taking cold hard cash out of the bank or at least having it where I can get it out quickly if wanted. The Fed has ratcheted up the climate of uncertainty...except for CNN watchers.

Goldilox

(11/13/2005; 07:02:02 MDT - Msg ID: 137883)

UNPLEASANT M3 TREND

http://www.financialsense.com/fsu/editorials/2005/1112.html@ Belgian, et al,

snip:

"I am still shocked and in a state of disbelief that gives place to being disgusted about the new style. What will be next? Discontinuation of industrial production figures below zero? The consumer price index (CPI) being treated as a national secret once it rises above 5%? Torture threats against people insisting to get the whole picture?

US Investing Will Become Fly By Night Adventure

No! First comes the discontinuation of more important data releases. No more repo data, no more Eurodollar data, no more large time deposits. Investing will become a fly by night adventure.

From the Fed website (saved locally for later reference):

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

Take note that only publication, but not calculation of these figures will be discontinued. I strongly hope that Ben Bernanke will revise this decision, being an economist who knows that sound research can only be done on the basis of data.

Looking back into history economic data was only kept a secret in failing economies, e.g. the Soviet Union

As this data is published by the board of governors of the Fed every one of their words will have to be scrutinized most carefully in the future and tested for credibility. Words are easy, but I prefer hard data. No prudent investor will navigate his funds through a foggy world but lie at anchor below a clear sky, meaning: elsewhere."

-Goldilox

Biblical and/or other catastrphic predictions aside, it does not look like any transition from $-IMS will be pretty. If they can't even publish raw economic data anymore, one can assume that it's likely just too bleak to let it out.

A report I read the other day talked about a town near one of the Arizona mlitary bases where all of the menus in the local eatery are in German, so accommodate the contingent of German troops "stationed" there. Huh? Bush has publicly suggested using V.Fox's Mexican troops to assist in disaster relief in the SouthWest, "if needed." All these trips to Latin America lately are not completely about "trade agreements". Since when are "trade agreements" the focus of the CEO and SecDef.

And well why not? All our fighting men and women are busy trying to quell continued "insurgency" to the occupation of Iran and Afghanistan. We might need some "help" from our good friends' militaries. After all, they declined to help us in our mid-eastern oil adventures, so they're just sitting around, eating up tax dollars for Fox. et al. Again, Europe still tolerates 100's of thousands of US occupation forces under the auspices of NATO.

Of course, one can pretty much asssume that the ESF participants and associated insiders will get the data they need to trade competitively through various forms of political tribute, manipulating markets in ways the pubic has yet to dream of.

The Empire is rotting from within, as empires are wont to do. Increased control is always the answer from the "Masters of the Universe", until such time as the minions no longer tolerate their whips and chains. At that time, some form of "Hell" is usually widely unleashed.

To assume that such a major transition will be "tame" is just not historically supportable.

Belgian

(11/13/2005; 07:30:48 MDT - Msg ID: 137884)

@Spotlight

Breaking (dissolving) the goldprice to dollar peg :
Today, all states with their respective currency, have dollar-reserves. These dollar-reserves are needed to manage (intervene) their currency's exchange rate, mostly versus the dollar. That's why all currencies are dollar derivatives. That's why the goldprice must remain pegged to the dollar.

Most CBs do have goldmetal-reserve next to their dollar-reserve. But these goldreserves are "also" function of the dollar via goldprice-dollar peg.

>>> One single nation can not (will not) change (abolish) its dollars to non reserve status and declare its gold as the one and only reserve. Simply because the goldprice is pegged to the dollar and gold is de facto as good as the dollar. More dollars in the reserve vaults devalue the exchange rate of the dollar and the pegged goldprice rises >>> zero (netto) reserve purchasing power.

>>> But...when a multiple alliance of nations gradually decide that the dollar-unit is not worth the reserve status...they diversify their reserves away from that dollar. They switch to euro and gold, for the reasons you already know.
Nations gradually stop their support and use of the dollar : First, by declining the amount of dollars that they put in their reserves, next by settling trade in other currency than the dollar.

All those nations that wish to diversify away from the dollar, have to increase their goldmetal reserves...and euro. That's why I've always stated that CB gold is redistributed amongst those nations' CBs that wish to diversify away from the dollar and its reserve status. The more that this redistribution evolves, the scarcer the available goldmetal becomes and the more price pressure there is on "physical" gold, whilst gold's paper-price continues to be controlled(managed).

When some oiltrades will start to be invoiced in euro, we have another step in the process of diversification away from dollar unit use, with immediate effect on dollar-euro CB reserves.

Why should nations that trade with Euroland, settle these trades in dollars and not in euro !? Evident that CBs increase their euro reserves and decrease their dollar reserves. Hey,...w're starting to have "TWO" reserve units now (� + $) ! That is the first step of the change.

Quite normal that at a given moment, CBs will experience which of these 2 reserve-units (�-$) + their increased goldreserves (through redistribution) happens to become the most appropiate one...the winning combination...the most popular one that is to be chosen for using it. This process is at its very early stages.

It is about the choice between "pegged" dollar + gold-reserves and "un-pegged" euro + gold-reserves. A dollar linked to gold or a euro NOT linked to gold.
This struggle is the one we are already seeing, when observers mention decoupling (the severence of the links) of the goldprice from currencies.

This is the subtle background behind the rumour of German goldsales. Not the first one and most probably not the last time that goldsales will be trumpeted to the (financial) public. A dollar-system, where the dollar's use function is based on being as good as gold is the exact opposite of the euro-system, where the euro's use function is based on having freegold as its reserve. This is the principle on which the process to unpeg gold from the dollar is taking place.

We are NOT going back, carrying goldcoins of whatever goldcontent in out pockets as to settle any trade. W're going back to gold-wealth-reserves and an appropiate numeraire in an IMS that fits with this gold-wealth-reserve principle. And this is NOT the $-IMS as we know it today.

Since 1999-2001, the gradual-orderly dismantling-process of the $-IMS has started, behind the gold-sale-redistribution facade (gold-action). Diversification away from gold-dollar peg ...towards free-er/freegold-euro unpegging.
Kind of having a brand new pair of shoes (goldeuro) and still using the old ones (golddollar) up until it is time to discard the old used shoes.

The oilprice started to rise in dollar currency since 1999. Not because the oilowners all of a sudden realised that there was peak oil...but because they "priced" their oil-worth already in unpegged gold-euro (new shoes) whilst still invoicing in pegged gold-dollar (old shoes).
Sure, the $-financial industry, with unlimited access to $-units, can organise several �-$ exchange rate waves. The old ($) shoes haven't yet been discarded and we do still have many walks with them. New shoes (gold-euro) still need to be walked-in.

To understand what is meant with the word "process", just think about for instance the Plazza accords, where it took 5 years (1985 > 1990) to bring down the dollar's exchange rate from it ATH to its maginotline USDX=80. The WAG-I + II are also accords that are followed by gradual-orderly unwinding. Not all oil/gas will be invoiced in euro, overnight. And not all CBs get the right amount of goldmetal allocated, overnight. And ECB goldreserves are not MTM every second of the day, but quarterly. The transition process to a new IMS goes gradually. Currencies float gradually.

The fact that the goldprice over the past 2 1/2 decades remained flat, means that the present ongoing process has been in perparation for that particular time period. Gold hasn't been in a bull or bear-market during that time. Gold-derivatives were organized in bull/bear waves.

mikal

(11/13/2005; 08:07:48 MDT - Msg ID: 137885)

@BlackBlade

Re: Iran oil bourse. "If this gets going" I too believe it may end $'s reserve status. I can't see anything to stop it.
Of course it must be considered alongside other factors, such as will there be an attack on Syria as a result of a terrorist attack somewhere?
Personally, I believe that may not be in the cards, at least I pray as much.
Also, like I've said before, anytime traders and large funds perceive something major is occurring, such as the likely combination of discontinued Fed M3, repos etc transparency, a new oil bourse, higher European rates, higher inflation, defaults, bankrupcies and foreclosures, lower real GDP, productivity, employment and tax receipts, higher energy, basic goods and Au, lower confidence in U.S. paper esp. politically encumbered(via Belgium)U.S.$, pension, hedge and investment fund failings, global asset bubbles, uncontrolled derivative replications, etc., then strange market behaviors and feints quickly become the norm as connected money "heads for the exits", often covering any trail except to those gold advocates and smart money that won't stay behind.

Belgian

(11/13/2005; 08:14:04 MDT - Msg ID: 137886)

"Stealth" helicopter fiat....

As M.Kosares confirmed yesterday, A/FOA already outlined this helicopter evolution, 5 years ago !

Since all currencies are helicopter dollar derivatives, one conveniently concludes there will be helicopters all over the globe. In other words...LET US ALL FLOAT OUR CURRENCIES...at our state conveniance, in line or out of line with the dollar reference (the $-IMS). Let us stop aligning our currencies as a dollar derivative.

What better argument-evidence can one possibly think of for having GOLD back into the epicenter of another IMS !? Gold, functioning as a WEALTH RESERVE and all currencies FLOATING around it without the suffocating dominance of the unilateral dollar unit.

That's what's happening NOW, dearest forumers !!!

Yes, expect those helicopter dollars doing an incredible delusive job on a scale as never seen before ! It all will certainly look like gradual and orderly !!! BECAUSE THE TRANSITION IS ALREADY TAKING PLACE. That's why we don't need any stats anymore. We are about throwing away those old shoes ($-IMS). Why maintain/overhaul them !

All those who continiously issue warnings about the increasing systemic risks on the international financial system, are simply doing their job in an academic way, whilst they get richly paid for telling us it in a softly balanced way.

Other (optimistic) statists do re-invent new warm water theories as to argument "pro" the sanitization of the existing $-IMS. They argument that the global imbalances are here to stay. Billions of (Asian) ants will remain productive slaves, whilst the complacent West permanently increases the worth of "all" its (so called) assets. What a grotesque nonsense.

mikal

(11/13/2005; 08:24:33 MDT - Msg ID: 137887)

@Belgium

Re: Today's posts, and yesterday's and ...
Bravo!

Belgian

(11/13/2005; 09:26:54 MDT - Msg ID: 137888)

The global economy and its IMS

The main permanent (systemic) growing global imbalance is the Western service-economy in symbiose with the Eastern production-economy. That's what makes (as questioned by OvS) the import/export of infla/defla !

A service economy needs products and products need services.

Both parts of this global economy operate under one single $-IMS. The more the East produces, the more the West can serve. And if general inflation from induced by the West continues to meet general deflation induced by the competing East...we seem to live in an dynamic equilibrum.

But is that so ? For the time being, the globe copes with this situation. But the ultimate power is very rapidly shifting to the producers and resource wealth owners and away from the hyper inflating service oriented Western economies.

The East will demand an adjusted IMS that brings them the wealth they deserve for providing the productive basis of the derived service economy.

That's why China liberalized its goldmarket and Dubai has a gold refinery. The only step that has to be taken is the proper incorporation of gold back into the IMS.

goldenpeace

(11/13/2005; 10:16:17 MDT - Msg ID: 137889)

haiku...on M3 and repo removal

money, money growing dark.
those without the light of gold,
despair deepens NOW.

bowing
goldenpeace

OvS

(11/13/2005; 10:28:46 MDT - Msg ID: 137890)

The perfect world system.

Good old Emmanuel Kant says:
God has put a secret art into
the forces of nature so as to
enable it to fashion itself
out of chaos into a perfect
world system.
The Masters of Alchemy know
that their art is "the secret
art" and will lead to a perfect
world system, whereas we, the
Golden Ones :-), don't trust their
claim to change lead (fiat)into gold...
So let me paraphrase Kant:
God has put "gold" into the
forces of Nature so as to enable
it to fashion itself out of Chaos
into as close to a perfect sys-
tem as we ever will get. OvS

USAGOLD / Centennial Precious Metals, Inc.

(11/13/2005; 11:03:38 MDT - Msg ID: 137891)

" 'The ABCs of Gold Investing' has all the answers." ---Money World Magazine

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

mikal

(11/13/2005; 13:31:20 MDT - Msg ID: 137892)

Tracking U.S. Treasuries

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aq4I1_Wrn8AM&refer=homeForeign Investors Lose Appetite for Treasuries as Deficit Rises - Joshua Krongold - Nov 14 - Excerpts:
"The U.S. government is growing more dependent on investors from abroad just as their appetite for Treasury securities is waning."
Dependent? Who's dependent? Bring 'em on! ;)

"Overseas investors, who own half of all U.S. government debt, bought 14 percent of the $79 billion in benchmark 10-year notes auctioned this year, down from 21 percent in 2004, Treasury Department data show. Bidders including foreign central banks purchased a smaller percentage of the $44 billion in three-, five- and 10-year notes the Treasury sold last week than they did a year ago."
I reckon even our traitors can feast on too much of a good thing.

"A drop in demand may extend the slump that pushed Treasury yields to the highest this year, raising the government's borrowing costs to finance a $319 billion deficit."
Costs? No problem, they're mostly off-budget anyways.

"The figures don't include the results of last week's sales, which will be released in December."
Release figures? I'm easy to please, don't worry about it. WHAT figures?

"``You can't build in these constant deficits without having them come back to haunt you,'' said Richard Fisher, president of the Federal Reserve Bank of Dallas, on Nov. 3 at Harvard University in Cambridge, Massachusetts."
DOOM, DOOM, DOOM! Is that what you economists are paid to give us!

"An update on international demand comes in two days with the Treasury International Capital report for September. The median forecast of three economists surveyed by Bloomberg is that net purchases of stocks, bonds and other financial assets slowed to $70 billion from $91.3 billion in August."
Uh oh. TWO days? Good thing we have Benjamin.

Chris Powell

(11/13/2005; 15:02:33 MDT - Msg ID: 137893)

Bob Landis proposes a new monetary system for the U.S.

http://groups.yahoo.com/group/gata/message/3441Or, actually, the old one -- the one the Founders thought the Constitution required.

New GATA dispatch.

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

gata-subscribe@yahoogroups.com

Boilermaker

(11/13/2005; 15:13:33 MDT - Msg ID: 137894)

Chris Powell and GATA

Chris,
I've been and remain a strong supporter of GATA since you and Bill got it started. However, I would like to express my concern that GATA may be winning the war against the gold cartel but has not analyzed nor come to grips with the likely aftermath of what's become known at this forum as "free gold". Bill and some of the key supporters of GATA are still focused on a "windfall" appreciation of the shares of gold finders and producers, an outcome that may not be forthcoming.

Many of the most astute contributors to this forum such as Ari, TC, and Belgian have constantly warned us that gold possessed is the only secure means to protect ones wealth. They rightly warn us that the coming of free gold will sound the death knell for free gold mining. As the metal achieves its freedom its producers will become encumbered by governments (democratic, socialist and totalitarian) who cannot and will not allow private companies and their shareholders to reap windfalls while the masses are forced to readjust to the reality of fiat shortcomings.

The attack against gold producers has already started. Russia and Venezuela have recently threatened to change the rules for miners of gold and other critical resources. Montana voters banned the use of cyanide leaching and effectively decimated Canyon Resources whose 10 million-ounce deposit lies locked up like the oil beneath ANWR. The groundwork is being prepared to erect a wall of environmental laws that will render many deposits untouchable. There are dozens of ways and taxes that a creative government can confiscate the wealth that has been found beneath its soil.

It has occurred to me that Barrick is a prototype of the gold company of the future. Barrick is no more or less than a covert GSE set up to weaken and devour its competitors by hedging. Barrick was founded in 1983 (curious timing for a new gold miner) and rode the gold bear market as if it knew what was coming; and it most certainly did. It was founded for a purpose, to suppress and maintain the POG at levels below what most miners could survive unless they hedged. They forced the industry to mortgage their future and in some cases sealed their fate.

GATA has proven (for me) beyond any reasonable doubt that price suppression of gold has been ongoing for many years. Now it needs to reassess the notion that gold shares will benefit from the freeing of the gold price. If nothing else, the redirection of fiat from investment in gold shares to the purchase of physical metal will hasten the day of reckoning and leave GATA supporters far ahead of the crowd.
God bless you and Bill for your perseverance in this critical work.

canamami

(11/13/2005; 16:07:20 MDT - Msg ID: 137895)

An interesting passage...

http://www.jihadwatch.org/archives/008983.php....concerning an anti-American, European-Arabian alliance. This would be of interest to old-timers from the FOA/Another era.

BAT YE'OR: In the 1960s after decolonization, France and Great Britain wanted to establish good relations with their former Arab colonies, while the Arab League was trying to bring Europe to adopt an anti-Zionist and pro-Arab line. The nine countries of the European Community (EC) made a deal with the Arab League countries based on a strategy: the creation of a Mediterranean multicultural and united society. This Euro-Arab alliance was based on three pillars: anti-Zionism and the promotion and support by Europe of Arafat; anti-Americanism and a European policy contrary to that of America; the guaranty of oil supply to Europe. Within this framework, specialists set up numerous unofficial agreements. Muslim immigration is a part of these agreements with a view to create a multicultural Mediterranean society where Christians and Muslims would be reconciled�on the base of anti-Zionism and the delegitimation of Israel and its withering away.

Cavan Man

(11/13/2005; 16:27:35 MDT - Msg ID: 137896)

Boilermaker

Thoughtful post...thank you.

Chris Powell

(11/13/2005; 16:49:27 MDT - Msg ID: 137897)

Reply to Boilermaker

Hello, Boilermaker:

Thanks for your note and kind words about GATA.

GATA's officers, directors, and consultants have somewhat diverse views on gold, monetary systems, mining companies, and such. We're united in our organization's charter: to expose the manipulation of the gold market and advocate a free market in gold.

Investment advice is outside our charter, though it's obvious that we like the prospects for the precious metals. The advocacy of shares of particular mining companies is way outside our charter. Bill Murphy does get into that sort of thing but only at his proprietary Internet site, LeMetropoleCafe.com; it is not part of his work for GATA. GATA doesn't get into it at all, though of course Murphy is so well known that his personal work is often confused with his work for GATA. I'll just have to suggest that you raise with Murphy at the Cafe your concerns about owning gold shares rather than actual metal.

But GATA has been highly sensitive to threats to the security of all investments involving precious metals. After all, GATA's repeated inquiries to the U.S. Treasury Department prompted the department's declaration that it considers itself empowered to seize or freeze not only gold and silver coins and bullion and mining shares but ANY financial instrument:�

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

Under these circumstances NO investment may be completely safe in the United States.

And was anyone challenging Barrick Gold's price-capping operations before GATA was? GATA hasn't stopped doing so, as this dispatch from a couple of weeks ago may indicate:

http://groups.yahoo.com/group/gata/message/3417
�
As for suggesting that possession of metal may be more secure�than all other gold- and silver-related investments, GATA does this often, as we did a week ago:
�
http://groups.yahoo.com/group/gata/message/3431
�
But other than establishing that central bank gold reserves are being used to suppress the gold price, that these reserves�are rapidly�running out, and that there is no telling what the real price of gold will be when these reserves are gone, GATA is in no better position than anyone else to predict�the reaction of governments and societies to the sudden appearance of reality. We acknowledge your concerns about this. All we can do is advocate a free market in the precious metals as a basic human right against expropriation by government.
�
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Smeagol

(11/13/2005; 17:50:49 MDT - Msg ID: 137898)

Gold has already been "Freed"!

Maybe this is why the Swiss sold all that gold...

re: mikal usagold.com msg#: 137868
A snip from Ssir Mikal's linked article:

"BIS dumps gold-backed Swiss Francs for SDR's

On March 10, 2003, the BIS abandoned the Swiss gold franc as the bank's unit of account since 1930, and replaced it with the SDR.

SDR stands for Special Drawing Rights and is a unit of currency originally created by the IMF. According to Baker,

"The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDR's are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies."21

This "basket" currently consists of the euro, Japanese yen, pound sterling and the U.S. dollar.

The BIS abandonment of the 1930 gold Swiss franc removed all restraint from the creation of paper money in the world. In other words, gold backs no national currency, leaving the central banks a wide-open field to create money as they alone see fit. Remember, that almost all the central banks in the world are privately-held entities, with an exclusive franchise to arrange loans for their respective host countries."

Welcome to the party, Ben. You're just in time for the ribbon-cutting ceremony for the new printing presses.

S.

Flatliner

(11/13/2005; 19:05:54 MDT - Msg ID: 137899)

You will never sell gold again!

Dear USA*Gold and forum members,

I am eternally grateful to have found the thoughts of Another saved on your site. These words are truly insightful. They have changed how I perceive the future around me and have opened my eyes to possibilities of change for the better.

I will apologize upfront for the length of this posting, but I feel the need to explain a little of what lend me to this conclusion. I believe that in reading this background, many, like myself, may see the value posted in these words. Maybe, it will empower those who understand to bring hope to their communities in the days and weeks to come.

Months ago, I had a casual conversation with a dear friend over a well-brewed beer. The jest of the conversation came down to inflation. Basically, we both rattled off how the price of things have changed over the last five years. My friend, having searched the internet, had already found the postings of many different people exposing the well-crafted lies that are presented publicly on a daily basis that have given support to the dollar. When we left that beer, we both felt that inflation was here to stay and that we would have to do everything that we could to not let it slowly eat away at what we'd worked so hard to build in our lives.

I will never forget the innocence of that day. We patted ourselves on the back and laughed. If gold was good enough for our fathers during the 70's, surely, it would be good enough today.

As we parted company that night, I remember thinking (very emotionally) that I would never make the same mistake that I did during the NASDAQ crash. Trillions of paper dollars disappeared during that down turn. Everyone that I knew at the time was affected by that loss, but they all just shrugged "It's paper money! It's no big deal. I'll make it back." I did not get back into the market. I couldn't help but think that if the stove is hot, I only have to touch it once to learn this. I took my meager saving and left it in cash. All the while thinking that � well � cash was as good as gold.

It wasn't until the conversation over that beer that I realized that inflation had been quietly eating away at my dollars. At that moment, I was very angry! Houses, during that period of time that I sat in cash, had nearly doubled in price along with just about everything else I bought to live. The actual purchasing power of my dollars had fallen, and fallen significantly!

I couldn't help but think, that at this rate, I will be broke in a short time. I felt robbed. The foundation of my world collapsed in on me.

Over the following months, I started searching the internet for the truth behind what was going on. It did not take long before I found overwhelming evidence that there was a huge effort at foot to hide the fact that the rest of the world had lost confidence in the dollar. Anyone can find this information, if they just look. But, at that time, I'd still not found Another's words on this USA*Gold site.

For a long time, I trembled with the loss of hope. I couldn't help but think that we're all doomed! Looking around, it was very hard to find the trust in everything that I saw. I kept thinking, how couuld someone survive hyper-inflation if the price of gold is controlled in the largest markets in the world? If this were true, what is stopping the same players from controlling every other market?

I instantly lost confidence in the entire financial industry! This, added on top of the confidence that I'd lost in the stock market (years earlier) made for a double whammy that we're all doomed.

The only stand, that I could see at this point was to simply believe in myself. That's right. If no one else will, at least I will speak the truth. I will be honest. I will follow threw on my promises even if I have to die doing it. If there is one thing that I will stand for, it's for the right to live my life knowing that I've created something meaningful for my family and all those in the society in which I live. Justice and honesty is a must - in my life.

At this point, I felt very alone. The world that I live in no longer abides by the principles that I held dearly. I now lived in a world that I could not trust anyone! No one!

I made plans to survive. At this point, it's me against the system � everything! People die that go up against the system, thus, I'll keep my mouth shut. "Conspiracy is everywhere", I remember thinking, so I'll be very careful who I talk to. The most important thing is to survive so that things could start anew at some day in the future. I will prepare and� survive.

I remember thinking that I would fight to the death for my right to survive. But, all the while, I'd given death a million to one odds against me. Surely, we would all die. I had no doubt of this. Things were well beyond what any individual could control. Things were well beyond what an army could control!

This sound familiar to anyone?

During all this time, I kept looking for any hint anywhere where their might be a clue as to how things might be repaired in the future. I mean, in hyper-inflationary societies order comes back when confidence is restored. At that point, a new currency is issued and life goes on. But, there is a side affect here. The middle class is destroyed! Economies are destroyed! People die! We must not have that. At all costs, the middle class in the US is the class of justice. It is the class of hard working people with honorable intentions. If the middle class is lost, who will stand against the rich without being squashed or enslaved? There must be a way to protect the middle class.

The first clue, glimmer of hope, comes from the thoughts of Another. Sure, Another believes as I do that hyper-inflation is on our doorstep. Another also sees the deceit that is so obvious in the words that mainstream society reads. Another doesn't say it, but makes it perfectly clear that confidence in the US dollar was lost years ago and that is the root of the problem that we face today. But, Another's thoughts go deeper then this. Let me explain in the same vain as above.

Upon visiting the USA*Gold site, I found that the news worthy postings made for a great summary of what I find important with regards to following the truth. In the background, other conversations occur. One, that you have seen grab my interest is the concept of Freegold. Puzzled, I've asked questions. It truly does seem that gold is imprisoned. It is openly controlled and sparks anger amongst those in the gold community. How dare anyone control gold! How wrong! We all shout. We all wonder why GATA makes no progress on this fight. Hum� There must be reason! There must be a really big reason!

Back to Freegold. In my innocence, I queried for a definition of Freegold in an effort to determine how others found there hope in this. Could there be something there that would help me? More importantly, is there something in the concept of Freegold that may help bring life back to normal after our dollar is destroyed by hyper-inflation?

I spent the weekend reading Another's thoughts. Am I any closer to understanding the meaning of the concept of Freegold? I'm not sure. But, I have found hope. It is the most meaningful piece of hope that I've ever seen and feel compelled to share. If I am able to convey the information, you will never sell your gold.

The creation of the Euro points out the answer. Read carefully the next few words: Gold has been elevated to the status of a reserve asset. There, done. You can all move on now to other articles, or more press releases. For those that do not move on, why does this give me hope?

It's because now I can see why the gold markets have been rigged! Everyone should run out and buy coins and give them to family members, hide them everywhere and NEVER SELL THEM! You will save the middle class if you do this! You will save our country, if you do this!

Folks, one day we will unit under the banner of The Freegold Bank. Yes, that is correct. Only people holding physical gold will be allowed in. Physical gold will underwrite the currency system. That's right, without gold, there is no money! Without money, there is no economy. Without economy� Well� Need I say more?

Gold, having reserve status, means that those who hold gold are the ones on which money will be built. Those who own gold become the new bankers of the world. Do NOT sell your gold!

Folks, those that hold the reserve asset are the ones that have greatest influence in the world. Look at every election that has been conducted, didn't you wish that you could have donated the same as � that bank! That damn bank! Folks, if you are the bank, you will get to stand up for your rights. You will bring integrity back into the system. You, the gold holder that reads these words, will be the on two lay the foundation of our future.

You must buy gold. Gold is being held down for us to do this. As the truth of these words gets around, you will not find any gold left to buy. Buy it and defend it to the death! Do not give it up. If you do, the middle class dies, the society that we live in dies and we are truly doomed.

We have a rocky future ahead of us. The abuse of the system will crumble in on itself soon. Also, be aware that the big lions will want your gold. The price will tempt you to sell, but the end result is not in your favor. Hold your gold. It will be your vote for a new society.

But, will the government confiscate the gold like in 1933? That, is a bad, bad move. If the government does, they will lose the ability to create money because no one will give it to them. Do not sell your gold. If they come looking for it, it stays in hiding � hide it well. If laws are on the books that prohibit gold owner ship, all the gold will flow to the Euro behind closed doors. That movement would be so horrible for the US. The very survival of our country will require that gold does not leave. But, they can't force it to stay at gunpoint! Those that hold gold, that understand what it means to hold a reserve asset, will die defending it.

The only thing that will save the collapse of the dollar is when the number of dollars outstanding comes in line with the amount of gold in the US treasury to the same ratio as gold is to the Euro. That is the revalue point of the dollar and gold.

Do not sell your gold.

At this point, I ask you, where will the creation of new money come from? Folks, it will come from all those that did not sell their gold. How will this occur? It will come from all the little banks all around the world that will be trusted by the local gold holders. Those are the people that will drive the direction of investments. A simple coin, at the asset exchange rate will provide lots of exchangeable currency. All these little banks, built off the reserve of honest people, will drive our economy.

The most important thing to take away here is that it doesn't take your life savings to make this a reality. One ounce of gold, multiplied by thousands will make a political statement that no one will be able to argue against. Gold is no longer about price, it about the survival of the country and of our way of life.

The fact that gold is now a reserve asset means that it creates money in any currency. It will flow to where life is good. It will flow to where there is freedom of speech. It will flow to where there is freedom of press. It will flow. It will stand for freedom. It will � build the concept of Freegold.

Another wrote, "when a thousand hungry lions fight for one scrap of food, small dogs should hide with what's in their belly" So to should everyone that understands these words.

Druid

(11/13/2005; 19:46:09 MDT - Msg ID: 137900)

Soaring price of gold predicts bout of carnage in bond markets

http://www.fromthewilderness.com/free/ww3/111005_world_stories.shtml

By Ambrose Evans-Pritchard (Filed: 05/11/2005)
The Telegraph
http://portal.telegraph.co.uk/money/main.jhtml?xml=/money
/2005/11/05/cngold05.xml&menuId=242&sSheet=/money/2005/11/0

In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.

The rising price of gold is a flashing red alert for investors, pension funds, and insurance firms holding bonds worth trillions of dollars, according to a new study by H.C. Wainwright & Co.

After reviewing data back to 1951, it found that gold is an uncannily accurate predictor of inflation one year ahead -- and a crystal ball for future interest rates and bond prices. If so, there may be carnage in the bond markets in 2006, since gold is now screaming inflation.

Gold touched $478 an ounce in September, the highest level in 18 years. It has risen about 90pc since 2001, although it has slipped back over the past month.

This rise is at odds with abnormally low interest rates on all forms of debt - from junk bonds, to Latin American loans, to gilts and US treasuries.

The yield on German 10-year bonds fell below 3pc this spring, the lowest ever recorded, bringing down all eurozone yields in lockstep. While rates have since crept back up, they are still anticipating very tame inflation.

As a rule of thumb, long-dated bonds lose half their value if inflation doubles (and stays high).

The study, released by the World Gold Council, found that gold is a much better forecaster of inflation than oil, which indicates what will happen to prices next month, but not next year.

"Gold provides a much earlier warning. The optimal correlation (0.73) between changes in the price of gold and changes in 10-year T-bond yields is about 12 months," it said.

"Because gold moves earlier than official measures of inflation, it works much better at anticipating monetary policy than 'Fed watching'," it said.

"Gold is a powerful predictor of nominal interest rates, both long and short. It is free from many of the errors of measurement that bedevil the official indices of inflation," it said.

While the price of gold can be buffeted by the vagaries of South African politics, Chinese demand, and central bank sales, the study found distortions rarely last long.

Unlike industrial metals, it is not subject to abrupt business-cycle swings in supply and demand.

Although gold has come off its peak, dropping to $456 yesterday, most experts view this as a short term "technical" correction in a healthy bull market.

Gold has had nine corrections in this upward trend, usually lasting about six weeks. Each time gold has held above its 50-week moving average, a key support line watched by the big funds and bullion traders.

Three European central banks may have played a role in the latest dip, selling 398m ounces in the last week of October, according to the ECB in Frankfurt.

But central banks cannot offload reserves at this pace week after week since they are restricted by a five-year accord to total sales of 500 tonnes a year. In any case, Asia's central banks are automatic buyers as they move to keep the gold ratio of their fast-growing foreign reserves at 2pc.

Druid: Very good read.

Flatliner

(11/13/2005; 19:49:35 MDT - Msg ID: 137901)

The word must get out

Belgian,

I do appreciate your stand here in the forum. Your diligence at showing the path, I believe, does not get the respect that it deserves. You have my thanks and, I'm sure, you will get the thanks of many, many others in the near future.

Folks, we've got a problem!

It's one thing to watch the political and financial moves that play out on a global scale, but it is different to act upon them. Act we must and act with purpose!

At this juncture, I would like to query for suggestions. What can we do? What can a group of people do to � survive? We need suggestions and they must come quickly!

At the same time, I am concerned for the middle class. If you read about what has happened to other countries that have gone through hyper-inflation, you find that the middle class is robbed of its wealth. You get a few that are rich and everyone else is left devastated. This is not the type of society that I want to live it. I am sure, that it is not something anyone would want to live in.

Having recently discovered that foreign countries have given reserve status to gold, it makes me want to make sure that everyone in the free world holds at least one gold coin! How can people be made aware that this collection of coins could be used to provide a reserve to support the Dollar? What could drive everyone to buy an ounce?

Surely, there must be a way to spread the word. If you listen to talk radio, you'll find that so and so is pushing gold. But, the audience is not listening. For some reason, they are missing the point. How, I ask you here, how can the point be conveyed quickly and meaningfully?

Everyone of us here should feel a sense of urgency on this matter. Life as we know it is going to go through some very difficult times. Gold, as you've known it will never trade the same again.

How can people be informed that without their buying gold, we will have nothing from which to rebuild with?

If there were one thing worth dying for right now, it would be the truth. We have been denied the truth for to long. If for no other reason then to stand for the truth, everyone must hold, in their possession, gold. Gold is reserve. Everything else builds on reserve. Everyone must own gold � everyone. Hold you gold in a fight for freedom of the truth.

Do not release that gold to save your life.

This must be done, the word must get out. The middle class must be told. The middle class is our only hope. People must be put in a position where they can vote with the backing of gold.

Suggestions?

David Linkley

(11/13/2005; 20:02:59 MDT - Msg ID: 137902)

Twilight of the Fed?

Given the explosion of money, debt, and derivatives over the past several decades plus the changing power structure among nations one wonders how much longer will the Fed be relevant? Greenspan has even commented that he's not sure what constitutes money anymore. "Printing money" in huge quantities seems to be the Feds primary goal these days as Greenspan has devalued the dollar beyond recognition. As the sleeping American Giant wakes up once more when it becomes obvious of the scam that has taken place, the Fed might find itself a primary target. Make no mistake, gold will return in some form to America's future soon. The system is too far gone and pressure from all of us will cause tremendous change. Gold is on the way in and the antichrist, the Fed is on the way out or to be hugely diminished.

phil288

(11/13/2005; 20:03:48 MDT - Msg ID: 137903)

flatliner

Welcome to our world. There are quite a few of us lurking and ocasionally posting around here. Your piece, perhaps a little over-dramatic, was neverthless an enjoyable read. Thank you.

PRITCHO

(11/13/2005; 20:27:02 MDT - Msg ID: 137904)

@Flatliner - - - What have you been smoking?

A very emotional wrap indeed and one that may appeal to a few die-hards. Without wanting to pick holes in your post, some statements you made really do cry out for a reality check.

For example -It is beyond reality that thousands of "small ants" will pool their GOLD into "trusted" "small Banks. Ha ha.It would NEVER happen so no point dreaming. GOLD held by small ants will NOT be discussed by those small ants -IF they want to hold & survive the experience.

For example - You will save the "middle" class if you NEVER sell your GOLD. What a ridiculous proposition.The so called "middle class" can save their own a$$ or not. They are mainly a spineless,gutless,greedy section of the community who don't give a damn about anyone or anything so long as they're doing all right.They are the ones who voted in the Neocons in America, the Howard Government in Australia & Blair in the UK. Stuff them as a group!

For example --NEVER sell your Gold. It's obvious that you need to do a bit more research. This is very personal and will depend on how much you have -- and on what you need to replace some or all of your GOLD with.A look back at the GOLD chart over the past 50 yrs will show you that GOLD only reached US$800+ for 2 DAYS! It was a spike that would have been impossible to time.(Frid 18th Jan $835 - -Mon 21st Jan $850 - -and 31st Jan $653!) In FACT the average POG for the whole of 1980 was $612.See this link:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.cgi

FWIW - -I believe in holding GOLD at this point of time & for a lot longer to come.There is no doubt in my mind that Gold will soar to much greater heights than many can imagine.Taking into account inflation, $500 in 1987 has the same buying power as $875 in 2005 dollars! GOLD is not even yet at $500!

http://data.bls.gov/cgi-bin/cpicalc.pl

As this is a US Department of Labour calculator it is no doubt slanted to the low side ! Rounding the current price of Gold to $470 it has the same purchasing power as $195 in 1980! --so we have a l o n g way to go to catch up.
------------------------------------------------------
However there WILL COME a time when it will be prudent to SELL some at least - -or watch it go back down in the NEXT cycle.

Goldilox

(11/13/2005; 20:56:25 MDT - Msg ID: 137905)

Middle Class

@ Flatliner,

"If you read about what has happened to other countries that have gone through hyper-inflation, you find that the middle class is robbed of its wealth."

Kinda redundant, as the poor usually have nothing to steal, and the robber barons need the support of their "cronies" to accomplish their con. Even Venezuela, that bastion of socialism, still has 90% of its land in the hands of few very wealthy families and corporations.

They come as "thieves in the night". The most important tactics of a confidence scheme are to fool the majority and overwhelm the few who see through them.

It's not the uneven distribution of wealth that makes the current situation so untenable. It's the utter lack of opportunity for any but those connected to the banksters. Companies are expected to start out in massive debt and bring themselves to profitability. Small businesses and individual proprietors face the worst uphill battle in the history of capitalism, as the deck is stacked against them by those with access to FIAT presses and the incredibly low interest rates they foster. Unfortunately, it's only the bankster middlemen who get the sub-prime rates.

Goldilox

(11/13/2005; 22:28:19 MDT - Msg ID: 137906)

Economics Nobel Prize winners see War as a Game

http://globalresearch.ca/index.php?context=viewArticle&code=MEY20051106&articleId=1189snip:

Thomas Schelling and Robert Aumann, the Nobel Prize winners who see war as a game

The two winners of the 2005 Nobel Economics Prize, Thomas C. Schelling and Robert J. Aumann, received the award for their contribution to the "Game Theory". In fact, Thomas C. Schelling was the theoretician of the military escalation during the Vi�t-Nam war and he currently justifies the US decision not to sign the Kyoto Protocol and to ignore the UN Millennium Objectives. Robert J. Aumann is an esoteric Talmudist who has theorized about the use of collective punishment to oppress Palestinians.

-Goldilox

As much as we rail against the apparently bumbling economists that create our system of hedonic BLS and FED fantasies, it is even more interesting to read the biographies of the Economic Prize winners named by the Bank of Sweden.

Game theory, eh what? The very existence of human population on the planet is denigrated to being "their game."

Caradoc

(11/13/2005; 22:56:24 MDT - Msg ID: 137907)

@ Flatliner

http://www.urbansurvival.com/You want to survive? Let's see: air, water, food, clothing, and shelter are a good start. Gold will give you a fresh start once we're past the worst of what's coming. Meanwhile, needles and thread, fishhooks and line, cigarets and booze will be better barter items than silver coins.

If there's a group of people you'd like to survive, consider some acreage with a good well, preferably more than two days walking distance from the nearest interstate highway. Just tell them where to join you.

Caradoc

Goldilox

(11/14/2005; 00:23:00 MDT - Msg ID: 137908)

M3 Discussion

http://urbansurvival.com/week.htmGeorge has an interesting discussion of the M3 question over at his daily update site. Rather than try to capture the essence in a snippet, head on over and check it out.

-G

Belgian

(11/14/2005; 03:05:21 MDT - Msg ID: 137909)

CNBC-Europe >>> FWIW !?

1/ THE OIL BULL IS DONE !? PoO going back sub$40.

2/ EURO DOLLAR BACK TO PARITY !? By june '06.

Belgian asks : HAS GOLD BEEN FORCED INTO FREEGOLD ?

TownCrier

(11/14/2005; 03:42:36 MDT - Msg ID: 137910)

Chinese demand

http://www.china.org.cn/english/BAT/148720.htmHEADLINE: Craze for Commemorative Bullions Drives up Gold Price

(excerpt) -- The price of gold has risen to a new record high in China as the craze for keeping gold bullions in commemoration of the 12 symbolic animals gains momentum in the country.

...The price of pure gold on the Shanghai Gold Exchange has been hovering around 120 yuan per gram in recent days, compared to 83.50 per gram when the exchange began operating in November 2001.

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

A savings program that's worth its weight in gold. Literally.

R.

Topaz

(11/14/2005; 03:46:46 MDT - Msg ID: 137911)

Curious!

http://www.freebuck.com/cot.shtmlCan anyone tell me WHY the COT reports didn't update on 11/11?
Highly irregular.

Flatliner:
I recall 6odd years ago thinking exactly as you are presently.
What has changed in the interim? ..9/11, Afghanistan, Iraq, IR's dive then retrace +.
Then as now the clear and present danger remains the same ...will we continue to fuddle along for another 6 Yr's? Somehow I don't think so.

TownCrier

(11/14/2005; 03:58:32 MDT - Msg ID: 137912)

Hard Currency

http://www.wbj.pl/?command=article&id=29285&type=lim(Warsaw Business Journal) -- Those who took their mortgages in a foreign currency are looking with horror at the havoc on the foreign-exchange market stirred by the latest political changes, and many home-owners now have one eye on interest rates and the other on currencies when it comes to picking a mortgage....

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

Whether you're in Poland or elsewhere, the word to the wise is to anticipate the 'Trail' ahead -- to make sensible use of your domestic currency (matching denomination of obligations with that of primary income whenever possible) and further choosing gold to safely consolidate your savings in the middleground, thus giving you the utmost in universal denominational flexibility as may be needed upon eventual dis-saving episodes in any time or place.

R.

TownCrier

(11/14/2005; 04:06:52 MDT - Msg ID: 137913)

Indian gold passes threshold of 'psychological' round number -- 7,000

http://us.rediff.com/money/2005/nov/14gold.htmHEADLINE: Gold prices soar over Rs 7,000

November 14, 2005

Gold prices opened with further gains and standard gold [.995 fine], for the first time, breached the Rs 7000 level and was quoted at a new peak of Rs 7015 per ten gram during the opening session on the bullion market in Mumbai on Monday.

Similarly, pure gold [.9999] also opened at a record level of Rs 7050 per 10 gram.

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

Speaking of round numbers, gold in Europe is again toying on the upside of EUR400 per ounce.

R.

Belgian

(11/14/2005; 05:17:46 MDT - Msg ID: 137914)

Just another thought...

Fractional reserve banking = Banking with the use of "credit" as a reserve !

The ECB (a CB) has gold as a reserve and marks tis reserve to the market's gold auction. Is this gold-reserve a credit !?

Boilermaker

(11/14/2005; 05:38:11 MDT - Msg ID: 137915)

GATA

http://www.gata.org/Chris,
I do understand that there is difference and separation between GATA and Bill Murphy's Le Metropole Cafe site. Having just visited GATA's website this is what I found that appears to be your mission statement;
"The Gold Anti-Trust Action Committee was organized in January 1999 as a Delaware corporation to advocate and undertake litigation against illegal collusion to control the price and supply of certain financial securities, particularly securities involving gold."

Litigation to date has not been very successful, Reg Howe's suit was found meritorious but without proper standing and the Blanchard suit seems to have been swept under the rug as well.

This was certainly the key objective for GATA at the outset of its existance but I believe you've already gone well beyond that narrow mission into the broader task of exposing the ongoing control of gold and its derivitives by financial and governmental interests.

Perhaps it is time to revisit your mission statement and broaden it to include your ongoing educational messages. It is becoming increasingly clear to me that gold will be freed not by the courts but only when overwhelming market-driven demand buries the collusionists.
Also, you may also want to consider looking into the future at the probable consequences of free gold and suggest a roadmap to guide your audience in ways to protect their assets.

Many thanks again for your exceptional work.

Arcticfox

(11/14/2005; 06:25:06 MDT - Msg ID: 137916)

cnbc guest

On air now talking about how refco will mark top of energy and commodities complex and that fed rate of 4% is 2 point above core rate of 2% and so therefore bad for commodities. He goes on to state how 90% rise in commodities is solely a monetary event and has nothing to do with demand out of the east...anyone else listening to this?..

Chris Powell

(11/14/2005; 06:56:27 MDT - Msg ID: 137917)

Beating the price fixers

Hi, Boilermaker....

Tahnks for your latest. Yes, while the Blanchard case is still under way and we have hopes that it will at least take Barrick out of the government arsenal against gold, we ARE concentrating on encouraging demand for gold. That is the conclusion to be drawn from our evidence. Our Gold Rush 21 conference at Dawson City, Yukon, in August made this point. It probably was made best there by Adam Fleming of Fleming Family & Partners, former chairman of Harmony Gold. Fleming said that investment demand could take the central banks out of their gold positions very quickly. We're working on putting the Gold Rush 21 proceedings on a DVD and posting them on the Internet and then offering them to mining companies and investment houses. I just spent three days with GATA's videographer in Vancouver on this project and I hope we'll have something to show for it in a couple of months. Thanks again.

mikal

(11/14/2005; 08:07:49 MDT - Msg ID: 137918)

Commentator links gold & Fed

http://www.marketwatch.com/news/story.asp?siteid=bigcharts&dist=news&guid=%7BE41A33BD%2D28D2%2D448C%2DB004%2D275D91CAADEB%7D Peter Brimelow: Gold grinds on, with Fed lending a helping hand - Mining and Metals - Natural Resources - Opinion - Commodities - 11/14

Chris Powell

(11/14/2005; 09:52:03 MDT - Msg ID: 137919)

South Africa central banker muses about increasing gold reserves

http://groups.yahoo.com/group/gata/message/3347Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

mikal

(11/14/2005; 10:04:40 MDT - Msg ID: 137920)

Greenspan fretting over "reserve currency", trade talks loom!

http://www.baltimoresun.com/business/investing/bal-greenspan1114,1,4991378.story?track=rss&ctrack=1&cset=trueGreenspan warns of trade deficit
Fed chief: Foreign investors 'will balk at further financing' bloated shortfalls
By Jeannine Aversa - The Associated Press
Originally published November 14, 2005, 11:00 AM EST
WASHINGTON // Snippits: "Foreign investors will likely tire of bankrolling the bloated U.S. trade deficit but the economy's flexibility should help temper any fallout, Federal Reserve Chairman Alan Greenspan said today...
The huge current account deficits the U.S. has been running up each year "cannot persist indefinitely" Greenspan warned in prepared remarks. "At some point, investors will balk at further financing," he said. The Fed chief didn't say when this might occur.
The current account deficit is considered the best measure of a country's international economic standing because it tracks not only goods and services but investment flows between countries...
Greenspan suggested that constraints on financing of the U.S. trade deficit are likely to come from "foreign investors' fears" of holding too large a share of their investment portfolios in U.S. stocks and bonds.
He suggested that this change could already be under way."

You will love the "Maestro's" deft comparison to Great Britain and references to reserve currencies, foreign investment, etc.
Also this article associates upcoming trade talks and likely outcomes with changed perceptions of America's trade deficit.

Flatliner

(11/14/2005; 10:06:58 MDT - Msg ID: 137921)

No suggestions?

I will continue to wait and refrain from smoking - if that is at all possible.

You all may find this very childish, but, I would like to pose the question: which is more valuable, the Dollar, Gold or Oil?

I'm sure you've all thought about this and have your own answers.

Now, ask someone on the street. They will not think about it and quickly say the dollar. The dollar trumps all. The dollar is king. It's obvious to them today that it's more valuable because they can go to any gas station and fill up their car using dollars � no questions asked. They can also buy all the gold that they want. As a matter of fact, they can buy anything that they want, anywhere in the world, provided they have enough dollars. With no doubt, dollar is king.

Now ask them, if inflation eats away at your dollar faster then you can make it, which of the three items are more valuable?

They will think about it for a little while and then they will respond - Oil. Why? Because, just like the dollar, they use oil everyday in everything that they do. Oil is used to fill their cars, heat their houses, build plastics, generate electricity, grow their food along with a full list of things that it does for them. By far, Oil would fill the gap, if the Dollar were not king.

Gold, it seems, gets little respect.

Now ask them: if you do not have dollars to buy Oil, which is most valuable? Remind them that the dollar is losing purchasing power faster then they can make it. They will think long on this. You buy everything with Dollars. They will not think of gold until you remind them that there were three choices in the beginning! Reluctantly, they will say, "Ok, Gold," with no heart.

It is clear to me that Oil is by far most valuable. If I had oil, I would have confidence, beyond a shadow of a doubt, that I would be able to sell all of it and anytime. People need oil like people need food and water.

Interesting? I ask, is there anything else more valuable to life? First, people must eat and drink. Second to that, people must have oil. You can hardly even grow food without oil. You probably could not even get water to it's destination without oil.

Without a dollar to buy oil, what will you use?

How will you survive?

Now ask them if they had to prepare to survive today, today, right now, what would they own, dollars, gold or oil?

�

The only feasible solution is to hold gold.

Ok, here comes a bit of insanity � some of you may want to look away at this point - How can the general public be made aware that without gold, they will have no way to buy oil?

mikal

(11/14/2005; 10:14:24 MDT - Msg ID: 137922)

@Chris Powell

Thank you for the update but your Yahoo link is to a September story.
This morning I have read a flurry of articles from the major news servces with slightly different slants on
German gold. Truly 'Much ado about nothing' is all I can say.

Chris Powell

(11/14/2005; 10:17:05 MDT - Msg ID: 137923)

Correcting the link: South African central banker muses about increasing gold reserves

http://groups.yahoo.com/group/gata/message/3447Sorry about that.

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Bulldog

(11/14/2005; 10:37:00 MDT - Msg ID: 137924)

Flatliner surviving with?

I expect that if financial turmoil happened today, your gold or oil would not be the best medium of exchange for your survival -- only cash would be king at least temporarily. Should you be in survival mode, one would certainly not want to be flashing gold coins around. You would be far better off developing a food storage program. Better yet, a non-urban retreat where you can grow your own food would be the best alternative. Accumulating P.M.'s would serve you well down the road when the next medium of exchange was introduced.

You have previously stated that we should never sell our gold. How do you profit from your diligence in acquiring precious metals over time? I have no intention of selling my P.M.'s, but at some point that may be a decision that I will have to make. My preference will be to pass them to my heirs, but if gold is trading at $5,000/oz.; I might wish to take some profits at that point.

The point is gold is but one asset in your arsenal.

(11/14/2005; 10:46:28 MDT - Msg ID: 137925)

Chris. . .

In reading the story on South Africa, I couldn't help but wonder how it would sound if we read a lead paragraph in the financial papers which went something like this:

"Gold rocketed higher today on rumors of central bank gold purchases. Gold tends to rise in value as paper currencies shrink.

Central banks shore up their gold reserves on corrections in the dollar price thus pressuring international prices to the upside.

John Galt, the new head of precious metals trading at Goldman Sachs, said that 'gold demand among the central banks will grow as they continue the trend to replace currency reserves with yellow metal.'"

Gee. . . that felt good! (The above is pure fiction, my fellow goldmeisters.)

(11/14/2005; 10:50:23 MDT - Msg ID: 137926)

Idle Musings

Fed shall stop reporting of M3 money aggregate by next March. May be we shall have a deflation scare till mid 2006, followed by so much money printing that it will not be fit for reporting. There used to be a kaboom theory (deflation scare followed by hyperinflation) at iTulip.com which foresaw such a development; however, the timing seems to have shifted.

Chris Powell

(11/14/2005; 11:03:07 MDT - Msg ID: 137927)

MK's not-so-fictional news story

Yes, MK, such a lead on a financial news story would mark the revolution. But maybe it's not so distant. After all, what could be more obvious? Do central banks want to hold ever-depreciating electronic digits that put them in thrall to a foreign power or something that's sure to hold its value and leaves them their independence? I imagine that this is going to be the world's bargain with the United States: They'll keep taking our dollars only if they can get some gold too, just like the oil producers. Maybe it's coming into the open now.

Belgian

(11/14/2005; 11:26:18 MDT - Msg ID: 137928)

@Flatliner

The general public always "follows" and never "leads".
This planet will continue to function with (practical) fiat digits (dollar included). It is everything that is "associated" with those fiat digits that is changing.

And to such extend that the gold-state South Afrika's CB even suggests it might accumulate more gold RESERVES (15%)?) in its vaults. Just remember Sir Sleeper (BIS) going to Pretoria explaining what MTM of CB gold, means.

The general public will be involved with gold at the appropiate moment in the appropiate way. Just like almost the entire planet has been dollarized.
Better not waste your precious energy on advocating gold to others and instead invest in your own gold understanding through positive communication.

Today's goldprice $467 is above the past 20 years average and the gold-dollar-index has some 25% upside potential...only to break even with the past 20 years of OFFICIAL gold devaluation.
This is happening without awakening the general public ! For good reasons, of course.

With Benjamin, King dollar has now full access to unlimited possibilities. TOTAL DOLLAR PAPERIZATION ...for the time being, to result in incredible control of financials and its crow bars ! ALL the dollar's privileges are going to be exploited full throttle. And most probably, this grand finale is going to meet very little resistance (judo theory).

No surprise that gold continues to move stealthly, whilst this is happening.
Lucky you being wakie wakie. Keep smoking, euh posting, Sir .

Topaz

(11/14/2005; 12:06:26 MDT - Msg ID: 137929)

alt-Gold ...and STILL no COT?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=If we take "management" out, 2005 has all the Alarm bells ringing for the Deflationary Event some of us have been anticipating for several years.

I'd anticipate, if they EVER update the CoT's, that all the RIGHT people are severely WRONG in Gold and Dollar here ....will this continue? Doubt it!

Bond/Oil/Dollar are humming along nicely in sync, with Bond again headed inexorably to parity.

We Watch!

TownCrier

(11/14/2005; 13:10:08 MDT - Msg ID: 137930)

Bulldog, here is a fun(?) question for consideration...

Based on your comment that if gold were trading at $5,000/oz you might wish to take profits, there might be some merit in evaluating the meaning of 'taking profits'.

To make the point, gold has already for a long time been trading at many hundreds of thousands (and even millions) per ounce in terms of various pesos, lira, bolivars, etc.

Has that not already inspired you to want to sell some metal for those colorful 'profits'?

If not (and rightly not), then are you really sure you would want to take green colored 'profits' at such a point as when the dollar currency looks like it is starting to imitate the sliding fate of those others?

To say it another way, does awareness of a new pricetag of $1 billion per ounce tell you anything significantly new about gold, or rather does it tell you something new (and troubling) about the purchasing power of the dollar?

Thus, unless you are a net DEBTOR whose constantly pressed into having a supply of dollars to meet your payment obligations, there's really no reason to have your thinking aligned in terms of using quantity of dollars (or likewise any other numerical currency unit) to be the expression of your net WEALTH ("anti-debt").

As people who have net wealth, that is, having savings instead of having net debt, try to form a healthy perspective and strike a balance of understanding between the role of gold holdings and dollar holdings, in the big picture they come around to seeing that the prudent goal is not to shift out of gold in the hollow name of 'taking profits' to have a larger numerical account of wimpy dollar digits, but rather to shift out of excess dollar digits in the rational act of 'consolidating' their momentary purchasing power into the tangible permanence of an incrementally larger heap of glowing savings.

R.

USAGOLD / Centennial Precious Metals, Inc.

(11/14/2005; 13:14:20 MDT - Msg ID: 137931)

A good treasure never fades, but shines with reliable value through time and space

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

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

TownCrier

(11/14/2005; 13:59:31 MDT - Msg ID: 137932)

Gold loan scheme will fail � Mintek

http://www.miningmx.com/gold_silver/555684.htm14Nov2005 -- Plans to install a gold loan scheme to encourage gold jewellery manufacturing in South Africa is doomed to failure because small to medium-sized gold jewellers were being ignored, said Mintek, a Government-backed research organisation.

AngloGold Ashanti and Gold Fields are part of a scheme to provide collateral to jewellers wishing to expand their businesses. In terms of the proposal, the jeweller supplies a third of the collateral with AngloGold and Gold Fields providing a third, and the balance by BAE/Saab.

At present, jewellers need to have 120% collateral for the gold that they borrow, in addition to paying interest on the loan. Most jewellers cannot afford this, and end up producing fewer products than they would have had gold loans been available, says Mintek president and CEO, Paul Jourdan.

...Commenting on the weaknesses of the present gold loan scheme, Jourdan said: "Other gold-loan schemes in South Africa, including one that involved Stanbic (a South African bank), have failed in the past, since it was felt that the risk profile of the jewellers was too high".

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

If the end goal is the straightforward business assistance being claimed here, then why not cut through the intrigue and simply arrive at credit concessions for a standard monetary loan???? That is, if credit is needed to support the business model, then why not simply seek to use currency-denominated credit rather than ounce denominated credit???

In this day and age, gold loans are a barbarous relic... a sinister obsession by those who would seem to prefer that gold's fair market value remain drowned under a permanent tide of wave upon wave of gold IOUs that mount ever higher in a flood of artificial supply.

R.

Ten Bears

(11/14/2005; 15:16:20 MDT - Msg ID: 137933)

A good read from the Professor Emeritus

http://www.safehaven.com/article-4112.htm
The reason why the U.S. government is so anxious to push gold out of the international monetary system is that the competition gold offers to irredeemable promises is too telling for comfort.

We are fully justified in looking for a hidden agenda. I do not pretend to know the real reason for this "negative gold rush". I can only speculate: central banks are desperately trying to prevent a melt-down.

This crisis is largely unknown to the public, even though it is potentially more damaging than any previous one in the 20 th century. It has to do with "naked" selling of call options on gold bullion and other forms of forward sales by banks. This activity has been officially encouraged by government as a way to finance the stock market and real estate bubble, the bursting of which would cause great damage to the world economy. Central bank gold sales are designed to bail out short interest in a futile effort to stave off a corner in gold.

The discriminating observer would look at gold not just as an investment the glitter of which can be tarnished by central bank gold sales. He would also look at it as an insurance against disaster caused by recklessness at the helm,

CoBra(too)

(11/14/2005; 15:17:02 MDT - Msg ID: 137934)

Gold and its Mines

I don't know and I may be a minority voice here and have been since A/FOA times.
Up to 2003 I've been right in some ways and made some more profits (to avoid the misnomer of money). Since I've been able to invest more into the real value of gold as in bullion.
Meantime, the 2 year sabattical of miners has brought on the pure money evangelists = gold only with a vengeance. Fine, as it should be in any endgame of fiat money systems.

True enough that gold has broken out against all other competing currencies and is still in its infancy of a very long term bull market. A bull market in gold and other real goods and rsources - checked by the necessity of global economies and markets to see gradual assimilation of (non-) valeurs to each other. Approximation of the weakest link - which happens to be the US Dollar even if its recent bout of strenght suggests more; It is just a side show in the overall equation.

So is the recent Barrick move to take over Placer Doom, another major gold short caught by circumstance. Remember the Ashanti (aka Alamo), now Anglo, scare of bank margin calls - No way, we can't have that now or ever. So we "imbed" our Placer shorts into the "evergreen" option bed of Barrick, a.k.a. JPMC et al and forever escape the margin. It's as easy as that and no miracle at all - though out there is still the problem of reserve replacement.

Even if some seem to deny it - over the centuries the growth in gold production was some 2.5% - a number which was congruent to the GDP growth over the 19th century - without any inflation, nor deflation.

The opinionated main stream gold buggers of today seem to sell (some even naked) the efforts of the few remaining well meaning geo's - same as in oil and gas and other resources - to keep up the standard, while the rest of their costs are skyrocketting.
What else is new? Well, the contrarians have left their cubicle and are lining up with the commercials. COT's is now the name of the decked game. And, of course naked shorts thanks to the electronic DTC watch dog, and computerized centralized accountant of sharehold-(ers)ings in any public corporation. A fine job they've done - as they seem to be the last resort issuer of company stock.

The IMF couldn't do worse than those guys; Destroying the roots of capitalism by sheer violation of their calling as accountants; So that's not new as the latest mega defaults are bearing witness to the general degradation of ethics and its jurisdiction, which in itself has degraded into a farce; Unfortunately spreading like cancer on a worldwide scale.

In the final analysis - free gold - smells, sounds, feels and may taste good - and it's great to have some as I do - as insurance - though your own little garden, your neighborhood contacts, the rest of your community may even be more of an insurance...
Once again - I'm sure TC will ignore my rant ... and that's ok since I ignore most of his, Belgians and several other celebrated pure free marketeers, including OvS, where I don't know which kantigen Kant er meint- "Wenn du zum Weibe gehst vergiss die Peitsche nicht!" - OK, thgat's Emanuel K. - not I (or should I say "me" for the verse) for the worse my dear (un- as it seems) friend!

cb2

USAGOLD Daily Market Report

(11/14/2005; 15:40:33 MDT - Msg ID: 137935)

Page Update!

TownCrier

(11/14/2005; 15:53:30 MDT - Msg ID: 137936)

S. Africa's gold output may drop to 80-year low

http://news.xinhuanet.com/english/2005-11/15/content_3780987.htmJOHANNESBURG, Nov. 14 (Xinhuanet) -- South Africa, the world's biggest gold producer and exporter, could see its 2005 gold output dropping to 300 tons from 346 tons in 2004, the lowest level since 1931, a gold analyst said on Monday.

In 2002, South Africa produced 400 tons of gold, said the report. The 2003 production dropped to 373 tons.

Between 2002 and 2004, South African gold mines saw a tremendous increase in costs ...hit by sharp increases in explosives, steel, fuel and water as well as other costs.

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

Without a supply of paper-gold to mitigate the market pressures imposed by investment/financial demand, the price would jump accordingly.

R.

R Powell

(11/14/2005; 16:28:08 MDT - Msg ID: 137937)

Some silver news

http://www.gfms.co.uk/Market%20Commentary/GFMS_Silver_Interim_2005.pdf This is in pdf form and loads slowly. Patience, grasshopper, patience.....

R Powell

(11/14/2005; 16:44:17 MDT - Msg ID: 137938)

Topaz....COT

Friday last was a holiday here in the states....Veterans Day...which was originally the day that WW1 ended but is now viewed as a day to remember veterans of all wars...just and unjust...won or lost. Maybe we should remember native Americans too but most don't.

Anyway, maybe the COT update was posponed until today due to the holiday. This also closed the bond market last Friday.

Usually our gold + silver markets react to lopsided positioning of the so-called commercial vs. large speculative traders. As a COT follower you might be interested in the recent few months commercial vs. specs in the copper market...very strange indeed...a demand driven bull? Interesting to watch as so many believe that gold and silver will be, someday, also demand driven bulls. Let us attempt to learn so that perhaps (just maybe?) we might spot that time when it occurs. Yes, I know, it has begun, silver is no longer $4.00 and gold is no longer under $300. but are either running like copper, steadily rising price with an almost unchanging balance in the COTs?? (actually a little spec selling!) Any thoughts?
rich

(11/14/2005; 16:48:02 MDT - Msg ID: 137939)

With thanks to Bill Murphy for this:

http://www.resourceinvestor.com/pebble.asp?relid=14588Top Economist Foresees Central Bank Gold Buying

By Tim Wood
14 Nov 2005 at 05:14 AM EST

JOHANNESBURG (ResourceInvestor.com) -- Kenneth Rogoff told delegates attending the 2005 LBMA Precious Metals Conference that he expects central bank gold sales to be reversed in time. The Professor of Economics at Harvard was also bearish on the American economy and the US dollar especially.

"There are less compelling reasons to sell gold in future," Rogoff told the bustling conference ongoing in Johannesburg.

He noted that central banks would continue to diversify reserve portfolios which are presently heavily dollar weighted.

He believes the uptake of euros will be limited for many of the same reasons the dollar is viewed less favourably, and that could provide room to buy gold.

Rogoff also said that low global inflation, which he expects to persist, provides an additional reason for central banks to own gold.

"It would make sense to reduce gold sales," he added�

goldfever

(11/14/2005; 16:51:41 MDT - Msg ID: 137940)

A Bibliography

Research, Reading, and Realizations for the Open-Minded,
A Bibliography

Reading Suggestions for the inquisitive, the concerned, the open-minded, and/or the bored.
Here are resources for the open-minded, concerned, or inquisitive. The well-informed sources herein, will return your investment of personal time, many fold over; of that I am absolutely certain. You can find, via these sources and resources � these giants upon our earth -- a multitude of insight and guidance --such that a wisdom will begin to grow-up within you, returning to you -- ten-fold, till running-over. And eventually, in your prospering, including your material well-being; and your freedom of choices, you will find a steady navigator within you, to guide you and those you love, in a world that is heading head-long into a bludgeoning, burdening era of darkness, want, bondage, and eventual re-birth..
The Sinking of Titanica--America,
and the Gold & Silver Lifeboats
of Financial Survival & of Wisdom's Opportunity
What follows is a practical, useful list of resources, for individual investors, and for world citizens, and this
Includes the na�ve and misinformed American people. These resources are for those who are aware that something is running "a-muck" in our world, and in our daily lives and livelihoods.
This information, these resources, are for those who are
genuinely working up a real sweat of new awareness and concern about their individual and collective futures, including the destiny of their country, and even the living-prospects for the world community of all humanity.
A list, a bibliography of sorts, follows: web-sites, books, newsletters. This listing includes research sources � resources -- including priceless web-sites, books, and newsletters -- that one may consider for background reading, until the reader awakens in an alarming realization that a first priority in one's life can be found in this information. For the sake of each freedom-loving individual and every world citizen yet willing to breathe life into this planet, my earnest hope is that you will use this information as a guide for your life, for those you love, and for your future.
Web-sites:
www.dowtheoryletters.com
www.cross-currents.net/charts.htm
www.the-privateer.com
www.decisionpoint.com
www.kitco.com
www.gold-eagle.com
www.sharelynx.com
www.financialsense.com
Books:
RUNNING ON EMPTY -- by Peter G. Peterson
THE SORROWS OF EMPIRE -- by Chalmers Johnson
PLANNED CHAOS -- by Ludwig von Mises
GREENSPAN�S FRAUD: � HOW TWO DECADES OF HIS POLICIES HAVE UNDERMINED THE WORLD ECONOMY -- by Ravi Batra
FOR THE NEW INTELLECTUAL -- by Ayn Rand
ECONOMICS 101 -- by Henry Hazlitt
THE MASS PSYCHOLOGY OF FASCISM -- by Wilhelm Reich
Newsletters:
Numerous newsletters are helpful, if selectively chosen.
Here are three sources, who may offer a few 'courtesy' sample issues,
for potential new subscribers. One suggestion is
to send a dollar or two with your written request for a few recent 'sample' issues.
Then consider the merits of subscribing, and gaining a deeper understanding
of what makes the economy tick �.. and why it is a ticking time-bomb..
Understanding is priceless. -- ("With all your getting, get wisdom.")

#1. "Dow Theory Letters" -- by Richard Russell;
La Jolla, CA. -- www.dowtheoryletters.com
Mr. Russell's newsletter is reported to be the longest continuing, and largest
personal, private subscription investment and economic newsletter in the world.
Dow Theory Letters, Inc.
P.O. Box 1759
La Jolla, CA 92038-1759
(858) 454 - 0481
#2. "Pictures of a Stock - Market Mania" -- by Alan Newman;
New York. info@cross-currents.net
Mr. Newman also maintains the following web-site:
www.cross-currents.net/charts.htm
Mr. Newman is frequently quoted in the financial media; his newsletter
and web-site growth in the last five years have been nothing short of exponential.
His "pictures" and graphs of the economic and investment world we are living in,
are truly worth a thousand words per 'picture', and perhaps thousands of dollars more
in one's thoughtful and wise investment planning decisions.
www.cross-currents.net/charts.htm
freetrial@cross-currents.net
#3. The International Harry Schultz Letter
HSL, PO Box 622, CH-1001 Lausanne, Switzerland
info@hsletter.com

There are other valuable, insightful and independent newsletters with respected track-records.
These choices here offered, are a good beginning.
You are welcome to contact me if I can assist you, or further direct you
to more focused information that might be helpful in your individual priorities and planning.
Remember that in your personal studies, and in your financial decisions and planning,
it will always be you who choose your own destiny; or else you will allow others to determine a fate for you.
Sincerely,
David Blair Macrory

melda laure

(11/14/2005; 16:55:00 MDT - Msg ID: 137941)

Loadmaster Bernake gears up for "Operation Rumbling Pallets"

http://www.safehaven.com/article-4108.htmWell they're going to have a lot of ink and paper to do it with!

And his helo is painted with statistical-absorbing paint.

Flatliner

(11/14/2005; 17:31:01 MDT - Msg ID: 137942)

@goldfever

http://www.gold-eagle.com/editorials_98/macrory020298.htmlFrom your very old posting...

"I've been visiting the Kitco site for about a year now; and it is evident from the discussions there, that most of us are still deluded by, and caught up in, the artificial Santa-Clause Economy built on the BIG LIE: money and credit created out of nothing. This insures an over-extended, artificial, seemingly benevolent "economic summer" that may last for generations. All the while the masses misperceptions grow, while the money-masters of power, in the world, in control of interest rates, of credit availability, and of the volume of money flooding the world�.they thus become economic dictators in hiding�.ruling over the ultimate value of the money you earn, spend, invest, and save for a 'rainy-day" or retirement, or the kids'' education."

Sure, it's been a half dozen years, but have your thoughts changed?

Thank you for the bibliography! New B's like myself will eat this up. Do not give up fighting for us. I'm sure, there is much for us to learn!

Flatliner

(11/14/2005; 17:41:09 MDT - Msg ID: 137943)

Is there someone with banking experience in the forum?

What constitutes a �reserve� to a bank?

What can a bank legally hold as the reserve?

Is it not true that upon this reserve, they issue currency in the form of loans? Can they not issue up to, say, 10 times upon this reserve?

Anyone able to point me in the proper direction?

Thank you for your time.

Chris Powell

(11/14/2005; 17:49:27 MDT - Msg ID: 137944)

London Times notes silver's potential, quotes Ted Butler at length

http://groups.yahoo.com/group/gata/message/3448Latest GATA dispatch.

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David Linkley

(11/14/2005; 18:52:48 MDT - Msg ID: 137945)

The end game approaches

Declining gold supply caused by lower mine output and reduced hedging combined with higher demand (including some CBs) spells much higher gold prices. Fade the media calls of a top in gold and commodities especially Jessica Cross's silly forecast today for an average price of $430 per ounce for 2006. Another call by a German politition for gold sales was slapped down quickly today and gives you a clue to how desperate the establishment has become. Barrick buying a very troubled Placer Dome is a stop gap attempt to keep the gold short derivative positons from imploding. The signs are everywhere and when the Fed stops the rate hikes, look for a dollar plunge if not sooner. What happens after that is anyones guess. Be prepared, the markets of the world, especially bonds will not like +$500 gold.

R Powell

(11/14/2005; 18:55:09 MDT - Msg ID: 137946)

London Times silver article

Thanks Chris for posting that.

Many of us had thought that remaining stores of silver have already been drawn down enough to tip the balance but every year it seems that the market finds enough to fill the deficit. Maybe an ETF would be the last straw, enough to spark the price again. Silver may a market ripe for a speculative mania, so small (market cap) compared to others.

Some have theorized that, with so much new film silver supply coming from recycled used film silver, the lower demand for conventional film may also produce less film to be recycled. In essence, recycled silver supply is tied in to film use, lower one and the other decreases. Most recycling is now done in China. Reports also opine that China's domestic silver demand may be approaching its annual supply so that further silver exports may not equal past numbers. Was last year's China silver export an ongoing occurance or a one year event?? Just opinions, I guess, but China's demand for raw materials has been growing. Why not silver too? Where will next year's extra silver come from to fill the deficit? Is there enough for an ETF to take off extra physical to back a demand available to stock fund buyers?

Is this current approach on the $8.00 price level the fourth one? Does this one break through?
rich

Max Rabbitz

(11/14/2005; 21:38:58 MDT - Msg ID: 137947)

Silver

Rich, from your article,

"The photographic industry accounts for 18% of global demand for silver, according to GFMS, a consultancy, but it is declining by about 10% to 15% a year. The metal is used to produce the film for traditional cameras, which are being replaced by digital models. While silver is still used in digital cameras' circuit boards, the volumes involved are much lower."

I'm conflicted a bit. I just increased my silver physical back up to just over a 1:1 ratio with gold, ounce to ounce. Not so hard to do. Silver does seem cheap and perhaps I should have been buying more a year ago. I'm trying to diversify. But I think that the major crisis we are facing is monetary. Unlimited and unknowable credit and derivative creation. Thus, I still think gold is the most undervalued "commodity" still available for sale. But I will try to maintain my 1:1 balance, ounce for ounce.

Pan

(11/14/2005; 21:48:00 MDT - Msg ID: 137948)

Bars tap gold's 'bull run'

http://www.bangkokpost.com/Business/15Nov2005_biz33.php"Albert Cheng, the World Gold Council's managing director for the Far East, said demand had risen as gold prices remained positive, at $468 an ounce yesterday."

"People want to buy gold because they are less confident in other types of assets, particularly in dollars and euros, and industries are replenishing their inventories.

"One indication that the bull-run gold market is happening is because of the rising price of gold in all currencies."

He said lack of gold exploration could cause demand to outstrip supply."

The CoinGuy

(11/14/2005; 23:01:52 MDT - Msg ID: 137949)

COT

http://www.softwarenorth.net/cot/current/charts/GC.pngHere ya go.

Best,

TCG

Belgian

(11/15/2005; 00:44:14 MDT - Msg ID: 137950)

Trail Guide - 8/26/2000 - msg#35549

Usagold poster Henri asks the following question : How high is OPEC prepared to take oil, to force the gold price freeing...?
Trail Guide answers : $75 to $100.
This was a question/answer in august-2000 : USDX=110 - PoG=$275 - �/$=80 - M3=7 Tril. - USTB-10yrs=6% - PoO=$30

2005 : PoO coming down from its ATH $71 and PoG up to an 18 year high.
This happened in a timespan of 5 years. Any conclusions ?

TownCrier

(11/15/2005; 01:02:37 MDT - Msg ID: 137951)

Belgian, "Any conclusions?"

Yes.

"In our lifetime," was well said. Five years and much non-catastrophic yet highly significant change surely seemed to go by in a 'blink'.

Looking forward to comparing notes with you after the next five.

R.

Topaz

(11/15/2005; 02:04:03 MDT - Msg ID: 137952)

Ag and Au.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=SI&a=D&z=610x300&d=LOW&b=LINE&st=The fundamentals are totally different but these two are running in sync for the moment.
Our updated CoT (tks Coin and Rich) shows OI in both on a divergent path which, to me indicates the Market "interest" in a "different" price level is stronger for Ag than Au.
I'd expect a price divergence shortly (relative Au down, Ag up would be my guess) as they both need to clear the decks on Dec over the next couple of weeks.
I can't shake the feeling Gold is coat-tailing Silver currently and a good argument could be put forward that inevitably it'll be Silver not Oil that will be the catalyst for the next Gold price upswing ....as a precursor to the BIG one!

The historical value ratio Silver:Gold was 16:1, which is roughly 1lb:1oz.
The volumetric ratio in Islamic Dirham:Dinar is 7:10

Belgian

(11/15/2005; 02:13:25 MDT - Msg ID: 137953)

Next...

Let's watch what happens to LBMA gold-contract (paper) volumes...when the PoG continues to rise.

Declining LBMA volumes mean that the $-paper-gold-market is in the process of being dismantled and gold-trade is forced towards PHYSICAL trade.
If this doesn't happen, $-PoO (-dollar oilprice-) will start rising again and twist some arms.

Just watching.

The Invisible Hand

(11/15/2005; 04:50:48 MDT - Msg ID: 137954)

In the meantime

The principles of the natural law can be attained by the human intellect in a natural way, even without any scientific study, as long as reason is used correctly (Mariano Artigas, "Introduction to Philosophy", Manila: Sinag-Tala Publisher, 1990 (first published in Spanish in Pamplona, Spain by the Ediciones Universidad de Navarra, 1984), pp. 4-5)
Philosophy is the knowledge of all things through their ultimate causes, acquired through the use of reason.(Artigas, op. cit., p. 9)

Goldilox

(11/15/2005; 05:18:54 MDT - Msg ID: 137955)

Natural Law

@ TIH,

Discovering "natural law" without the benefit of any supporting data sounds too much like "speculative edict" for comfort.

The human imagination is capable of many plausible, bur unsupportable theses.

Goldilox

(11/15/2005; 05:24:09 MDT - Msg ID: 137956)

Reserve bank may up gold reserves - Mboweni

http://www.engineeringnews.co.za/eng/news/today/?show=77427snip:

The central bank in South Africa - the world's largest producer of gold - might increase its gold reserves, its head said yesterday, but gave few details.

"As part of our reviews on composition of our gold holdings, we may even consider increasing our gold holdings," Reserve Bank Governor Tito Mboweni said in a prepared text of a speech at a precious metals conference in Johannesburg.

During delivery of the speech, he excluded those comments, but made other less specific comments during a question period.

In response to a question, Mboweni noted that the central bank has been increasing its foreign exchange reserves at a measured pace and there was no reason why it could not boost gold holdings.

"I don't see why we can't," he said, adding that South Africa would not be interested in increasing gold holdings to the high levels of China or Japan.

-Goldilox

I thought Japan had very little gold reserves. Am I missing something?

Knallgold

(11/15/2005; 06:44:46 MDT - Msg ID: 137957)

Deutsche has troubles with Gold derivatives

http://www.sdk.org/aktuell.php?id=386It devalues its options by 90%, overnight.paperGold troubles, here we come!

"Der SdK Schutzgemeinschaft der Kapitalanleger e.V. ist heute bekannt geworden, dass die Deutsche Bank offensichtlich erhebliche Probleme beim Handel mit Goldderivaten hat.
Dabei handelt es sich um die Papiere mit den Kennnummern DB6181, DB6183, DB6184, DB6185 und DB6187.
Diese Papiere sind sogenannte Long- bzw. Short-WAVE Knock-Out-Optionsscheine, die seit dem 04. Oktober 2005 an der B�rse Stuttgart und der B�rse Frankfurt gehandelt werden, und sich gem�� Prospekt vom 03. Oktober 2005 auf den Bezug bzw. den Verkauf einer Unze Gold zu unterschiedlichen Basispreisen beziehen. Aufgrund der gro�en Hebeleffekte � mit denen die Deutsche Bank f�r diese Produkte auch im Internet und in ihrer Printpublikation warb � waren diese Scheine bei Anlegern besonders beliebt. Erst letzte Woche hatte die SdK in einem �Gold Special" ihrer Publikation �SdK exclusiv" auf diese attraktiven Scheine der Deutschen Bank hingewiesen.
In einer �Nacht- und Nebelaktion" hat die Deutsche Bank heute versucht, die Prospektbedingungen dieser Scheine im nachhinein einseitig und gravierend zu Lasten der Anleger zu verschlechtern.
Demnach sollen die Bezugsverh�ltnisse von 1 Unze Gold je Schein auf 0,1 Uzen abgesenkt werden. F�r bereits investierte Anleger verschlechtern sich die Bedingungen um den Faktor 10. Der SdK ist ein derartiges Vorgehen bisher noch nicht bekannt. Sollten nachtr�gliche Prospekt�nderungen mit derart negativen Auswirkungen f�r Anleger m�glich sein, w�rde das die Glaubw�rdigkeit und das Vertrauen in den gesamten deutschen Options- und Derivatemarkt massiv besch�digen.

Die SdK hat daher die B�rse Stuttgart und die Deutsche Bank gebeten, bis zur Kl�rung des Sachverhalts den Handel in diesen Produkten einzustellen. "

White Rose

(11/15/2005; 07:44:17 MDT - Msg ID: 137958)

Direct Babel fish translation into "English"

"the SdK protective association of the capital investors e.V. is today admits become that the German bank has obviously substantial problems with the trade with gold derivatives. It concerns the papers with the knowing numbers DB6181, DB6183, DB6184, DB6185 and DB6187. These papers are so-called Long and/or Short WAVE of Knock Out knock-Out-Optionsscheine, which are acted since 04 October 2005 at the stock exchange Stuttgart and the stock exchange Frankfurt, refer and in accordance with folder from 03 October 2005 to the purchase and/or the sales of an ounce gold to different base prices. Due to the large lever effects - with those the German bank for these products also in the InterNet and in its print publication recruited - these lights were with investors particularly like. Only last week had referred the SdK in a "gold Special" of its publication "SdK exclusively" to these attractive lights of the German bank. In a "night and a nebula action" the German bank tried today to worsen the folder conditions of these lights on one side and seriously afterwards debited to the investors. Therefore reference conditions are to be lowered by 1 ounce gold for each light on 0,1 Uzen. For investors already invested the conditions worsen around the factor 10. The SdK is so far not yet well-known a such procedure. If additional changes of folder with such negative effects for investors should be possible, that would damage the reliability and the confidence in the entire German option and derivative market substantial.

The SdK asked therefore the stock exchange Stuttgart and the German bank to stop up to clarifying circumstances the trade in these products "

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

Jim Sinclair says that all gold derivatives are frauds since the foundational translactions were all frauds. INteresting.
-=

Goldilox

(11/15/2005; 07:49:03 MDT - Msg ID: 137959)

Russian Central Bank May Double Proportion of Gold Reserves

http://www.resourceinvestor.com/pebble.asp?relid=14636snip:

JOHANNESBURG (ResourceInvestor.com) -- Addressing delegates to the LBMA Precious Metals Conference on its last day, Russia's Head of External Reserves Management, Maria Guegina, said gold reserves as a proportion of all reserves may be doubled.

Noting that Russia presently has 5% of its national reserve portfolio invested in gold, Guegina said, "10% of gold in reserves would be appropriate".

She gave no time frame for the change.

Guegina said the change was part of an ongoing effort to optimize the composition of assets and reserves managed by the bank. The bank is also encouraging the development of the Russian domestic gold market to be a fully functioning financial market akin to bonds and currencies.

Russia presently has 500 tonnes (17.64moz) of gold in reserves which it segregates as monetary gold, allocated gold and term deposits.

The envisaged doubling of Russia's gold reserves as a proportion of all reserves at present values would consume all the country's annual gold output for around three years. Russia produced nearly 182 tonnes of gold in 2004 and is expected to mine and sell 183 tonnes this year.

-Goldilox

How interesting that two gold producing nations announce that they may increase gold reserves, while the non-producers continue to announce sales.

Perhaps its just more fuel for the speculation that CB announcements are but hot air anyway.

Henri

(11/15/2005; 07:54:20 MDT - Msg ID: 137960)

Powell's msgs 137..944 and 946 Silver from film

Perhaps the declines in traditional film usage are to some extent mitigated by the increase in x-ray film as more countries bring modern medicine to their fledgling nation states. X-ray film is very large and dwarfs the size of common photographic film. The majority of the silver from the development process of x-ray film is recovered and recycled. This has been done even by small users for at least half a century. I recall when I was but a child working in my Dad's veterinary hospital(circa 1962-4)that a man would come in and replace the x-ray development fluid in the dark room periodically.

I wonder if there are any historical distribution and volume numbers of x-ray film compiled and matched with silver recovery data?

Goldilox

(11/15/2005; 07:56:02 MDT - Msg ID: 137961)

Babelfish translation

@ White Rose,

Clear as mud!

But I wouldn't be surprised if the official announcement were not much clearer, given the "Babel" we have heard from professor Greenspeak for 18 years.

White Rose

(11/15/2005; 08:03:45 MDT - Msg ID: 137962)

I do know one thing

As an investor, you never want to read in the newspaper an article about your investments that uses the words "high leverage" and "loses". Its at that point you learn the difference between "return on your capital" and "return of your capital".

Goldilox

(11/15/2005; 08:04:50 MDT - Msg ID: 137963)

Holiday Shopping

CNBC is debating the consumer holiday predictions, with such predixctions as

1) Lower energy costs will fuel consumer spending
2) Tighter inventories will keep most retailers from across-the-board discounting
3) Credit bills from the holidays and winter heating bills will cause retreat in consumer spending in Feb-Mar.

Sounds like Babeling going on there, as well.

Goldilox

(11/15/2005; 08:06:57 MDT - Msg ID: 137964)

Not to mention . . .

@ White Rose,

return on your Capitol, or not.

Federal_Reserves

(11/15/2005; 08:35:59 MDT - Msg ID: 137965)

Hurricane "FISCAL"

A 'fiscal hurricane' on the horizon
By Richard Wolf, USA TODAY
WASHINGTON � The comptroller general of the United States is explaining over eggs how the nation's finances are going to hell.
"We face a demographic tsunami" that "will never recede," David Walker tells a group of reporters. He runs through a long list of fiscal challenges, led by the imminent retirement of the baby boomers, whose promised Medicare and Social Security benefits will swamp the federal budget in coming decades.

The breakfast conversation remains somber for most of an hour. Then one reporter smiles and asks, "Aren't you depressed in the morning?"

Sadly, it's no laughing matter. To hear Walker, the nation's top auditor, tell it, the United States can be likened to Rome before the fall of the empire. Its financial condition is "worse than advertised," he says. It has a "broken business model." It faces deficits in its budget, its balance of payments, its savings � and its leadership.

Walker's not the only one saying it. As Congress and the White House struggle to trim up to $50 billion from the federal budget over five years � just 3% of the $1.6 trillion in deficits projected for that period � budget experts say the nation soon could face its worst fiscal crisis since at least 1983, when Social Security bordered on bankruptcy.

Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion � nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon.

From the political left and right, budget watchdogs are warning of fiscal trouble:

� Douglas Holtz-Eakin, director of the non-partisan Congressional Budget Office, dispassionately arms 535 members of Congress with his agency's stark projections. Barring action, he admits to being "terrified" about the budget deficit in coming decades. That's when an aging population, health care inflation and advanced medical technology will create a perfect storm of spiraling costs.

� Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, sees a future of unfunded promises, trade imbalances, too few workers and too many retirees. She envisions a stock market dive, lost assets and a lower standard of living.

� Kent Conrad, a Democratic senator from North Dakota, points to the nation's $7.9 trillion debt, rising by about $600 billion a year. That, he notes, is before the baby boom retires. "We're not preparing for what we all know is to come," he says. "We're all sleepwalking through this period."

� Stuart Butler of the conservative Heritage Foundation projects a period from now until 2050 in which tax revenue stays stable as a share of the economy but Medicare, Medicaid and Social Security spending soars. To avoid big tax increases, he says the government has to "renegotiate" the social contracts it made with its citizens.

� Alice Rivlin and Isabel Sawhill of the centrist Brookings Institution put their pessimism into a book titled Restoring Fiscal Sanity. Rivlin, who became the first director of the Congressional Budget Office in 1974, says it will take an "economic scare" such as the 1987 stock market crash to spur action. Sawhill likens the growing gulf between what the government spends and takes in to a "Category 6 fiscal hurricane."

Henri

(11/15/2005; 08:41:47 MDT - Msg ID: 137966)

Belgian, Thank you for finding this discussion 8/26/00 msg 35584

It reminds me that I was much more prolific on this forum in that recent past than these days...I guess I am watching together with Trail Guide...:-)

The answer to my first question of msg 35549 by the Trail Guide may be very useful reading for our newbies and possibly refreshing the memories of some of us "oldies"

From Trail Guide Msg 35584
SNIP
Your post (Henri (08/26/00; 07:59:19MT - usagold.com msg#: 35549)----

-----------1) If $12 oil is incompatible with $320 gold, then $10 oil must have been extremely incompatible with $250 gold. To what extent was the recent explosion upward in oil prices a retaliation for continued downward manipulation of gold prices?----------------

Henri, most of this maneuvering took place prior to the Euro being secure. There was a lot at stake if the Euro fell apart at that time. Politically it went something like this:

a.(late 80s early to early 90s)

US and Europe worked together to bring gold prices down:
to make the dollar good in gold for oil and others
to allow some cheap physical purchases
to allow some long term contracts to be established
to allow the continued flow of oil at reasonable, economy supporting rates

paper gold had not inflated to anywhere near these current levels
so contracts were seen as supportable
so contracts and physical were seen on almost equal footing

b. (early 90s to mid 90s)
the supply of freegold on the official level was beginning to run short
so CBs sold openly mostly to each other to create gold selling impression
so mine forward selling was encouraged originally engaging mostly CB gold

major gold buyers were ready buyers with cash or lend able natural resources
so naked paper selling began to imitate CB supplied gold
so same naked paper selling supplied some mines forward sales contracts
so falling paper gold prices drew out old line/ non oil physical bullion in exchange for paper
so falling paper prices brought in cheap financiers to sell into this paper demand

market is flooded with new paper and begins to override it's original purpose
by now US knows the Euro will succeed and benefit from a rising physical gold price

c. (mid 90s to date)
US and Europe split,,,, BIS takes Euro side
US encourages London to join it in dollar support,,,, print more paper
Europe and BIS stand to enter the world physical markets if gold falls below $280 before Euro is born
Euro comes online
Oil gold buyers don't like paper gold inflation
Oil stands to raise dollar oil prices if gold markets stay below $280
Europe stands aside and watches knowing what rising oil will eventually do to US dollar / economy
Europe adopts policy of "Freegold" by quarterly marking to the market bullion prices
Europe and BIS stand aside and endorse a flood of paper gold
Eventual demise of dollar contract gold markets draws oil to Euro support
Oil and Europe force Washington Agreement
Oil begins to raise dollar oil prices in effort to crush paper gold markets with inflation induced physical gold demand

UNSNIP

Belgian

(11/15/2005; 08:47:59 MDT - Msg ID: 137967)

Russia - South Afrika

Why are both states, owners of underground gold, suggesting that their CBs have to increase their gold-reserves up to a certain level (specified tonnage) ?
Because the new IMS will have gold back into its system. Not as a sterile symbol but as an active wealth reserve that retains its purchasing power through MTM.
That's why each state needs the "appropiate" (think also redistribution) amount of the precious metal. Just like all private gold-wealth-owners need to judge how much wealth they wish to store as reserve.

Same story for China, also a state with underground gold !

Henri

(11/15/2005; 08:49:45 MDT - Msg ID: 137968)

The battle rages

The current and recent past administration are diehard Keynesians (sp?)

The answer to inflation is to first hide it. It reminds me of a story my wife told me while working in an elementary school cafeteria as an aide. Another aide came up and said "Johnny just puked in his lunchbox...what should we do?" My wife said "Close it, quick!"

The answer to deflation...just print more money.

Currently they wish us to believe that we are in a deflationary period (ergo the presses run) yet even the least educated among us can clearly see the truth.

Belgian

(11/15/2005; 09:17:14 MDT - Msg ID: 137969)

Right Henri,

And the reason why Germany launched a goldsale rumor again...is still for the same reason : Containment of the goldprice from the euro side is a measure to let the goldprice evolve orderly + gradually. Simply because there is too much UP-pressure on the goldprice coming from all those that are already prepared for the IMS transition + from those who are not ready yet.
That's why Germany "pr�"-announces eventual sales. How paradoxal. Who is as stupid as to shout about goldsales and knocking the price down !? How much of the (so called) Euro goldsales have been schuffled back and forward within EMU (and BIS) !? All for the same purpose of having a disciplined goldprice.

During the past 3 decades, oil got cheap goldmetal in exchange for cheap oil...now we will get cheap oil in exchange for freegold IN THE IMS !!!

Goldilox

(11/15/2005; 09:33:37 MDT - Msg ID: 137970)

Redistribution

@ Belgian,

"That's why each state needs the "appropiate" (think also redistribution) amount of the precious metal."

As Russia and SA are both net producers of gold, I would submit that this represents "keeping it home", rather than redistribution.

The net effect is similar, but the attitude reflected is more one of not sending it into the IMS system for their non-transparent redistribution.

Both of the named governments have the potential to acquire in local currency, avoiding the currency flipping middlemen.

Do you think this is significant?

Goldilox

(11/15/2005; 09:40:37 MDT - Msg ID: 137971)

'Global scramble for gold'

http://www.fin24.co.za/articles/economy/display_article.asp?Nav=ns&lvl2=econ&ArticleID=1518-25_1834813snip:

Johannesburg - Global gold production is set to decline dramatically over the next four years and this is set to generate a scramble for gold ounces, DRDGold chief executive officer Mark Wellesley-Wood said in the company's latest investor newsletter released on Tuesday.
"There are 29 new gold mines in the pipeline right now and even if all these are developed, it would require a further seven projects every year to make up the deficit," he added.

"The reality is that not all these 29 mines will get the go-ahead as cost inflation, especially capital cost inflation for resources projects, has increased by a great deal more than the gold price. So where are the ounces going to come from," Wellesley-Wood wrote.

"Well, not from the traditional source - exploration. Expenditure on exploration peaked in gold mining in 1997, and has been pretty flat since then.

"Not only are the geologists not there (as most have gone off to look for oil, nickel, copper, etc) but the geological terrain is getting tougher with most of the known prospective ground having been searched by now," he added.

-Goldilox

There's no rush like a gold rush!

Cavan Man

(11/15/2005; 09:53:15 MDT - Msg ID: 137972)

USA FISCAL HURRICANE Coming ashore.........

http://www.usatoday.com/news/washington/2005-11-14-fiscal-hurricane-cover_x.htm "Anybody who says you're going to grow your way out of this problem," Walker says, "would probably not pass math."

Ahoy mates...CM

(11/15/2005; 10:05:35 MDT - Msg ID: 137973)

Discontinuance of M3

http://www.federalreserve.gov/releases/h6/discm3.htmRelease Date: November 10, 2005
Release dates | Historical data | About
Discontinuance of M3

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

TownCrier

(11/15/2005; 10:47:38 MDT - Msg ID: 137974)

Merrill Lynch hammers gold hedging

http://www.miningmx.com/gold_silver/556565.htm14 Nov 2005 -- GOLD price hedging was costly, did not reduce risk for mining companies, and created "a culture of dependency", said Graham Birch who helps manage Merrill Lynch's $1bn Gold & General Fund. Instead, gold mining companies should just produce gold as cheaply as possible.

"All I want [people like] Bernard [Swanepoel, CEO of Harmony Gold] to do is mine his ore reserves as cheaply as possible because that's what adds most value to me," said Birch. "If I want gold price protection, I can do that myself and probably get keener terms."

Birch was speaking at the London Bullion Market Association (LBMA) conference which debated whether hedging had a role to play for the gold producing industry. A mixture of about 200 bankers, mining industry managers, and businesses in the downstream precious metals industry voted against Birch by a margin of 81% to 19%.

Birch and Swanepoel dealt out some hard criticism for bankers to whom the various hedging strategies were credited. "As soon as a company hedges, it takes away some option value from shareholders with bankers getting something in the middle," said Birch.

"Banks are like drug dealers hanging outside schools tempting children with crack cocaine," said Birch. "It creates a culture of dependency where all the profits come from hedging," he said.

"A shareholder has never once asked me to hedge, not in 10 years at Harmony. Only bankers have tried to get me to do it," said Swanepoel.

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

Amen.

R.

Flatliner

(11/15/2005; 11:07:09 MDT - Msg ID: 137975)

Still trying to figure out what reserves are...

Looks like there isn't anyone with banking experience willing to speak in the forum yet. But, no fear, I found a definition of reserve from Britannica.com. It states:

"Bank reserves consist of cash or assets that are easily converted to cash. Banks must always keep a cash balance on hand in order to pay depositors who may want money from their accounts or want to convert checks into cash. The keeping of reserves is one means by which confidence in the banking system is maintained. Reserves are of two kinds�primary and secondary."

Simple enough. Now, if I search for "fractional banking" (using Google, of course, like I use for just about every search.) I find that this site (http://wfhummel.cnchost.com/bankreserves.html). It states something slightly different. It reads:

"All depository institutions -- commercial banks and thrifts -- in the United States are subject to reserve requirements on customer deposits. The required reserve ratio depends on the amount of checkable deposits a bank holds. No reserves are required on the first $6.6 million. Between $6.6 million and $45.4 million, deposits are subject to a 3% reserve. Above $45.4 million they are subject to a 10% reserve. These breakpoints were effective in December 2003, and are adjusted annually in accordance with money supply growth. No reserves are required against time deposits or savings accounts.
[�] A bank may hold its reserves in any combination of vault cash and deposits at the Fed."

I also find this: (http://www.ny.frb.org/aboutthefed/fedpoint/fed45.html)

"Reserve Requirements and Money Creation
Reserve requirements affect the potential of the banking system to create transaction deposits. If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000). In contrast, with a 20% reserve requirement, the banking system would be able to expand the initial $100 deposit into a maximum of $500 ($100+$80+$64+$51.20+...=$500). Thus, higher reserve requirements should result in reduced money creation and, in turn, in reduced economic activity."

This is interesting. It seems that banks can get away with a lot with very little. Just think, if you wanted to start a bank all you need is a little reserve and you get lots of currency!

Lets keep looking to figure out this reserve thing.
In reading the above, I guess to search for something that looks interesting. It's "capital adequacy regulatory framework". I find this: (http://www.boj.or.jp/en/press/02/ko0207c.htm) from which I find:

"The Basel Committee on Banking Supervision, an international forum on banking supervision, is considering revising international bank capital adequacy requirements with a view to implementing the revised requirements from the end of 2006."

Anyone in the forum have more info on this? I wonder what this deadline is?

After digging a little further, I find this (http://www.newswithviews.com/Wood/patrick4.htm) which talks about the BIS.

After still more digging, I found this: (http://ming.tv/flemming2.php/__show_article/_a000010-000574.htm)

"The membership of this club is restricted to a handful of powerful men who determine daily the interest rate, the availability of credit, and the money supply of the banks in their own countries. They include the governors of the U.S. Federal Reserve, the Bank of England, the Bank of Japan, the Swiss National Bank, and the German Bundesbank. The club controls a bank with a $40 billion kitty in cash, government securities, and gold that constitutes about one tenth of the world's available foreign exchange. The profits earned just from renting out its hoard of gold (second only to that of Fort Knox in value) are more than sufficient to pay for the expenses of the entire organization. And the unabashed purpose of its elite monthly meetings is to coordinate and, if possible, to control all monetary activities in the industrialized world."

Conclusion: It seems to me that if the information provided above is reasonably accurate, the central bank of central banks uses "cash, government securities and gold" as reserve. From this, it lends to it's customers, central banks, which, I'm sure, use that as a reserve in order to create money � fractionally. It seems that the ratio is 10 to 1 (maybe, that's a guess).

This, leads me to believe that gold really is a reserve asset. Without gold, the central banks can not create money using anything other then "cash" and "government securities".

Any country that has a lot of debt or weak economy, it would seem, would have weak government securities. Also, if the cash is losing purchasing power, or going to lose purchasing power, it would seem that it would also been seen as weak.

Gold, on the other hand, seems strong. If the other two forms of reserve are � let's say� valueless, gold is the only thing that is left.

From this, I feel that I must surmise that gold is the only thing with real value that can be used to create money!

If this is true, it would seem that central banks around the world would race to gold as fast as possible? Anyone see this happening?

It would also lead me to the conclusion, that because banks can create money (and lots of it) from gold, gold will become very important moving forward. It's value goes way beyond it's current price. I mean, who would sell their gold to a central bank for 500 dollars an ounce if the bank can create 5000 dollars worth of money?

I'm sticking to what I said in an earlier post. Do not sell your gold. Become the banker.

Belgian

(11/15/2005; 11:12:50 MDT - Msg ID: 137976)

@Goldilox

It is evident that those nations that have underground gold-wealth, do stock their own metal in CB vaults .
It are those nations that haven't gold in their underground, that are redistributing small portions of CB-gold amongst each other.
Much gold has been moving for different opposite reasons. Gold for cheap oil...gold to become incorporated into the new IMS...gold for $-goldprice management...etc...

I wanted to emphasize that Russia/South Afrika mentioned "amounts" of gold ! Just like the WAG-I-II also agreed on tonnage. Remember the EMU discussion about the gold-wealth reserve percentage (15%--30%) that was an optimum !!!
If CBs start to agree on the (proportionate) optimum weight of gold-reserves in their vaults...that is evidence of a concerted action with a purpose, no !

And 10%-15% is double the amount of goldreserve that "was" advized as prudent in the past decades > 3% to 5%.
But that was under the $-gold-standard regime and now w're evolving towards Freegold, that still isn't understood by many who observe the whole game, daily.
Maybe it's because many have a very short memory and forget about past dots as to form the whole picture.

Flatliner

(11/15/2005; 11:17:43 MDT - Msg ID: 137977)

This M3 thing

Hey, if the Fed no longer reports how much money the government borrows, will we the people have to pay interest on money that we know nothing about?

It seems that the feds would not be able to charge the people of the US interest on all new money creation. That, it would seem would save us trillions of dollars in future years.

But this begs the question, why would a bank give up interest payments? I have never known a bank to do that unless someone defaulted on the loan.

Who, I'm sure in the US treasury, borrows this money from the Fed? If the Fed is planning on getting paid its interest, someone must keep a record. True?

If there is a record kept somewhere, I would only then question why every congress man and senator is not up in arms about this. I mean, if we the people are going to pay interest on money that is printed without us seeing the bill, I would expect that every elected official will lose their job in the next election.

Or, am I just two simple minded to see how this benefits everyone?

TownCrier

(11/15/2005; 11:55:11 MDT - Msg ID: 137978)

Flatliner, M3

It looks to me as if you've misinterpreted the meaning of the Fed's announcement on M3 and the related components.

On another topic, you asked yesterday, "What constitutes a �reserve� to a bank?"

The shortest, simplest (and therefore perhaps the most useful) answer is a reserve can be any of the inventory components present on the asset side of the bank's balance sheet. And to be sure, not all reserves are created equal. Some are much better (less value risk, greater liquidity, useful in foreign exchange, etc) than others.

R.

Belgian

(11/15/2005; 12:10:25 MDT - Msg ID: 137979)

@Flatliner

It are the CBs that run the IMS. This system is a "fiat-regime". How can Basel-accords I and II on bankreserves (8%-12%) be genuine reserves when it also is intrinsically worthless "fiat". The one and only "worth" of fiat is its "use" as a numeraire for trade settlement. Fiat reserves (reserve levels) are one tool out of many to "manage" (to steer) the IMS (fiat regime).

Gold-wealth, with an intrinsic worth, was gradually pushed out of the fiat regime as it grew (evolved). Today we need to bring back in the tangibility of gold as to continue managing the fiat regime.

To understand what the management function of the cluster of CBs is...means simply understanding what "fiat" currency is. Such a regime (IMS) is OK as long as all the players (users) keep on agreeing to use the system. That was no problem for as long as the Western hemesphere dominated the whole planet. This has changed and therefore demand a (fundamental) change of the (IM)system. One important basic element of the IMS' management is "reserves" in its function as a reference.

The dollar is losing its reserve-reference status because of the decades' long helicopter syndrome. All those Trillions of dollars created never disappeared and digitally flash with an ever growing speed and volume over screens, worldwide.

The gold-actions of the past decade is the CBs consortium, that manages the fiat regime, realizing that the reference-reserve has lost its status.

And the present state of affairs is such that the old notion of infla/defla is dwarfed in significance/importance.
That's why we don't need IMS-stats anymore...or a USTB that runs for another 30 years.

mikal

(11/15/2005; 12:58:28 MDT - Msg ID: 137980)

Headlines and one-liners

Crude flat as mild weather persists - CBS Marketwatch (11/15/2005 8:08 AM)
Oil stocks turn session into a rally - CBS Marketwatch (11/15/2005 9:57 AM)
Bernanke Pledges Continuity With Greenspan, Inflation Goal - Bloomberg (11/15/2005 9:54 AM)
Producer Prices in U.S. Rise 0.7 Percent; Core Prices Fall 0.3 Percent - Bloomberg (11/15/2005 7:38 AM)
More rate hikes appropriate: Fed's Moskow - Reuters (11/15/2005 8:09 AM)
Natural Gas: Big Worry This Winter - NY Times (11/15/2005 5:20 AM)
'Broken' pension system in 'crying need' of a fix - USAToday (11/15/2005 5:32 AM)
Housing market cooling - CNN/Money (11/15/2005 8:31 AM)
Housing Market Shows Further Signs of Cooling - WSJ ($) (11/15/2005 7:39 AM)
Recycling the petrodollars - Economist (11/15/2005 8:52 AM)
RPT-Chinese trader goes missing, market asks what next? - Reuters (11/15/2005 8:10 AM)
Trade Deficits May Scare Off Foreign Cash - LA Times (11/15/2005 7:26 AM)
Awash in Petrodollars, Russia Frets About the Paradoxes of Bounty - NY Times (11/15/2005 5:20 AM)
China's industrial output up 16.1 percent in October - AFP (11/15/2005 5:27 AM)
European Economy Gathered Pace in Third Quarter - Bloomberg (11/15/2005 5:13 AM)
Unfolding Scandal Nears Finance Official in Brazil - NY Times (11/15/2005 5:21 AM)
German Economy Grows 1.3 Percent in 3Q - AP (11/15/2005 5:10 AM)
China must cut farming population, says OECD - FT (11/14/2005 8:54 PM)
GAO Finds Serious Flaws in IRS Controls - CFO.com (11/15/2005 8:29 AM)
U.S. fears it's losing ground to Asia in science and innovation - IHT (11/15/2005 5:30 AM)

Henri

(11/15/2005; 14:43:50 MDT - Msg ID: 137981)

cashing in

I am trying to imagine
what kind of word would support $5000/oz gold
what kind of word would support $30,000/oz gold
My precognitive process imagines it to be a world
where those who took steps to prepare for the collapse are not much further ahead than they were
but they are way further ahead then all those who lost all and have to start over.
like insurance to cover a loss, gold will serve this purpose if necessary
This will be a world of priceless bread and plentiful cheap real estate and assets being sold for a fraction of their previous worth just to eat and pay rent in the new digs.
If one has set aside enough pm's to survive and then laid aside some more, perhaps they will exchange for real estate
at the "new value" of gold for less than the old value of the real estate.

USAGOLD Daily Market Report

(11/15/2005; 15:04:13 MDT - Msg ID: 137982)

Page Update!

Chris Powell

(11/15/2005; 15:28:15 MDT - Msg ID: 137983)

Ted Butler's bull's-eye against the Silver Users Association

http://groups.yahoo.com/group/gata/message/3453Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

The Invisible Hand

(11/15/2005; 15:47:03 MDT - Msg ID: 137984)

Natural Law

Goldilox,
The Natural Law theses are supported by human nature and the nature of the objective world. There's nothing speculative in that. How else could the GoldTrail be outlined?

David Linkley

(11/15/2005; 16:31:05 MDT - Msg ID: 137985)

Good luck CBs

Now France wants to diversify out of a little gold and into those yummy depreciating forex reserves. Desperation is seeping through the economic cracks in the West.

Goldilox

(11/15/2005; 16:47:22 MDT - Msg ID: 137986)

Natural Laws

@ TIH,

I am skeptical of anyone who proposes "natural law" sans empirical evidence.

It reminds me too much of Galilleo and the Inquisition.

R Powell

(11/15/2005; 17:56:34 MDT - Msg ID: 137987)

"He who sells what.....

http://www.smh.com.au/news/business/trader-stiffs-china-on-c isn't his'en, must buy it back or go to prison"

Anyway, that's pretty close to the old quote.
With all the talk of selling more of an item (silver) than physically exists, I thought this might be interesting. Apparently one Chinese trader did just that, maybe appreciably more than exists in the main copper storage warehouses, worldwide, at this time. There are other links to the story. The price of copper was up again today with the spot price still higher than any future dated delivery time. Now we'll watch to see how this one plays out although I'm guessing that the copper market will continue as before. However, the settlement of this huge short position will transfer a mighty fortune from someone(s) to someone(s) else's account.

Now then, I had thought copper was a demand driven market, with warehouse stores severely drawn down + mine production no where near current demand. But, does the panic of short covering, occuring over some weeks' time, look just like a real demand shortage bull market?? I don't know but still suspect that some day both silver + gold may find themselves in a similar situation so I'll try to learn whatever I can from copper. I don't know if these Chinese shorts are in OTC markets or in the mainstream, either way it's just a papergame...a nightmare for somebody, but a paper one I believe. Those that need physical copper will not go without.

How could anyone have shorted any metal in the current environment? I guess Jimmy Roger's books are not yet available in Chinese.(g)
rich

R Powell

(11/15/2005; 17:58:58 MDT - Msg ID: 137988)

Okay then.....

http://news.bbc.co.uk/1/hi/business/4438160.stm maybe this one will work.

(11/15/2005; 19:56:50 MDT - Msg ID: 137989)

Scenario: Beginnings and ends quite often come at the same time

Foreword: I have received three calls over the past two days from people I consider to be important clients and friends asking me why I removed the following post from the forum over the weekend. I was encouraged to believe that even if it is imcomplete or lacking in detail, it is a starting point worth keeping before the public audience. If those three callers are an indicator, the short life of that post garnered more readers that I thought possible. My essential concern about the hopeful scenario outlined below is that the great trading nations of the world really have no real interest in giving up something small to gain something large. That would require vision. . .and risk. My worst instincts tell me that no matter what we are destined to play the current scenario out no matter what, and that is a disturbing conclusion. When I see the great trading nations of the world unable to reach even a minimal agreement on trade issues, I wonder how an agreement such as what's outlined below could become even a small blip on the world economy's troubled radar screen. Nevertheless, in my view, something along these lines is essential to overcoming what ails the world economy today. Short of such an agreement, I fear for the final scenario mentioned at the end of this essay, and admit reluctantly and after much forethought, that there is more reason to believe it the more likely final outcome than the hopeful forecast outlined herein. With that I leave these words to your judgement:

Not the euro, the yen, the pound or the franc will keep you whole, like gold, should the dollar suffer its demise. Gold is where you want to be as an individual, or as a nation state, simply because the repercussions in the system across the boards will be more than any of the attendant nation states can operatively handle. If the present system continues on the current course, it could end in a hyperinflationary, stagflationary or deflationary firestorm. Take your pick; pick your poison. Similarly, with respect to the individual investor not even the best managed stock and bond portfolio will do as well as simple ownership of physical yellow metal. Gold, which by its very nature remains detached from the state rises above the state. Because gold defies control, it is abhorred and treated as the enemy by the statists.

I am often asked where do I think the current trend in gold and the world's major currencies will end given the circumstances -- the "imbalances", the seeming one way road to a systemic smashup, the corporate excesses, the entrenched and intense self-interest exhibited by the great trading nations, the proliferation of derivative-based corruption and market manipulation worldwide etc. It all seems terminal, irreconcilable and unresolvable.

Let me for the first time attempt to lay out my thoughts on the beginnings of a solution -- a trial balloon if I may. I have spent a good portion of my life studying gold, the value of money, monetary and economic systems, the great philosophers and essayists on the subject of money, great (and not so great) economists, read histories of enormous insight and foolhardy political partisanship, and expositions of tremendous value and no value at all. I have written two books on gold (of some import I hope), countless essays and magazine articles, and talk nearly everyday with a wide variety of people about our collective economic future -- many of whom are important partitioners and players in their own field of endeavor. My experience is unique in that my intense interest in gold has been forged both in the furnace of academic interest and the crucible of the values and understandings expressed to me by the ordinary people who own it. Most of these I would label as men and women of action -- our businessmen and women; our physicians and attorneys; our clerics and military men; our government workers and working men and women. Their interests are not for the most part academic. Collectively, these people have been a great influence on me. It is with them in mind that I will try to be direct and to the point. Please keep in mind that this is a template. I am not an economist, a diplomat or policy maker and don't pretend to be. The details I will leave to other, more qualified, participants.

________________

I foresee a great economic conclave coming within the next five years where the dollar's epitaph (in current form) will be written and a new monetary system introduced. It will contain many of the earmarks of the system recommended at least inferentially by Nobel Prize laureate Robert Mundell -- a system where gold plays a central role as the "reserve of last resort." He has not written copiously about the matter, but he has written enough to make an important impact and give direction. A great number of words is no substitute for deep insight.

Gold will be revalued (as FOA and Another foresaw) at a very high dollar price in order to stabilize the system and start all the participants on an equal footing. However, gold's role will not be as the anchor in a gold standard system. That is impossible at this juncture given the computer (silicon) based nature of our economic and financial systems. That has been a great innovation and cannot be discarded. It will be as a reserve alternative drawing on its inherent strength as an asset detached from any single nation state and not subject to its price control. The IMF will return its gold to the contributors and the United States may be forced to part with a portion of its reserves in order to balance the system. This will come as a blow to the United States but it will recover quickly as its inherent economic strength is reasserted, the domestic mining industry restarts, environmental innovations are introduced, and gold production begins to flow again to the Treasury.

Central banks will not loan gold because it will be too valuable as a reserve asset to risk having it off the books, or hanging in the financial ether as a "receivable." It will come as part of the economic evolution and not through legal mandate. Bullion banks short gold will pay an dollar enormous price to balance their books. (It would be in their best interest to balance those books now and not wait for the revaluation.) Mining companies similarly short gold will be enslaved as gold producers producing for those to whom they owe their production. Those free of the forward sale burden will prosper. Central banks that have loaned out their gold will call it back. They will compete with everyone else for the available new gold supply. The price or value of gold will be the centerpiece around which all other values are arranged, and the value of gold will be returned to being set by the supply/demand function of the marketplace.

The issuance of any national debt will be strictly regulated at proscribed levels and most of the great nations will adopt legislation and constitutional guarantees outlawing deficit spending except at mutually agreed levels. The promise of the Merkel government announced this morning, that Germany would bring its budget imbalance in line to EU expectations, is the beginning of an important trend. The more solid your adherence to these principles the better your credit rating, and the United States will be forced to play under the same rules. The more gold by weight you own in this system the more able you will be to expand your economy as a nation state (or your own economic activities as an individual owner). There will be a value to latching onto mine production and the nation states will vie to secure that production from the mining companies. Nation states will gain gold by producing things of value -- goods and services -- and selling them overseas. They will lose gold by failing to produce for export and having to defend their currencies by selling first primary currency reserves and ultimately, if that doesn't remedy the situation, gold reserves. Failure to do so would ultimately cause a nation state's credit rating to drop until it could no longer borrow. Those who now feel that the United States would collapse under such an imposition have no understanding of the ability, tenacity and innovation of the American people. The United States will make the necessary adjustments and dominate this system like it has the last two.

The fractional reserve banking system will remain in place largely as it is. The imposition of a savings based society, rather than a consumer based society, will force a change in the way banks operate, but the system itself will look pretty much like the system we all use today. The various nation states will find it in their best interest to agree on a free-trade system in which no nation state holds an advantage over the other. The World Trade Organization will be scrapped as too cumbersome and an illusion of free trade. The United States will force a new agreement with the full understanding that if it doesn't, it will fail economically. There will be no such thing as a currency advantage. The various central banks will migrate more towards currency boards than activist practitioners of monetary policy, but retain their function as regulators and arbiters of the financial system. Nation states failing to adhere to strict standards of free and fair trade will be tried and if guilty fined heavily by a new international organization which will in turn deposit the funds collected to finance growth in other areas of the world which would ultimately rise up to challenge the offending nation state[s]. The distribution of the funds will be strictly policed to avoid corruption and fraud. All participants in the great conclave will agree by preamble to the notion that it is impossible for an international monetary system to remain robust in which one nation acts as the consumer of last resort (with its currency as the international reserve) and all others act as producers competitively devaluing their own currencies in order to make their products cheaper in stores and catalogues of the consumer nation.

In the end, gold simply will be re-recognized for what it has always been -- the most direct, liquid and purest form of wealth. It will be seen by individuals and nation states as wealth itself.

I do not think I have to go to great elaboration for most of the people reading this post as to the potential benefits for the gold owner under this scenario. I emphasize that given the situation as it is and the historical progression, I would think the chances of things unfolding more or less along these lines are very good. Why do I speak with such confidence? I do so because it is an equitable system and we are progressing along these lines even as you read this forecast.

________

Failure to adapt a system with these or similar characteristics would constitute a transformational failure of western civilization similar to what occurred just before, during and after the collapse of Rome. That is the period of history which most closely resembles our own. Gold ownership under such a collapse will be one of the only saving graces. I do not hope for this failure, but I do not discount it. It is patently clear that we, as an international civilization, cannot remain on the course we are currently navigating. It is heading for rocky shoals and destined for shipwreck. The time has come to steer a new course, for all nations to recognize that we cannot go on as before, and that it is time to abandon the past, alter direction, and strike out anew. History will record it as an act of courage and perhaps the saving grace of Western civilization.

_________

Sidenote:

Q. So why would Germany make noise about selling gold?

A. Because the new holders of the reins of state have been approached by the bullion banks. This does not mean that the central bank will react favorably, but the commercial bullion banks and financial firms will forever be ready to exert pressure wherever, whenever they can to get their hands on gold (which will ultimately go to repaying depositors.) Bundesbank's reaction to pressure earlier this year along the same lines shows that there are still some who approach the disposition of gold in their reserves ethically and with the best interests of the nation in mind. For that Germany owes Axel Weber a debt of gratitude.
________________

Sidenote 2:

Many of you will note that much of my analysis is in agreement with that brought here by FOA and Another years ago and advanced in recent months by Belgian. We have had many discussions here about who FOA and Another might have been. I still don't know who they are (were) but I believe their ideas are most closely aligned to those of Robert Mundell. I do not claim that either is Robert Mundell just that they have been influenced by Mundell or at least the matrix of ideas which gave rise to Mundell's thinking. Though we have had our disagreements, it is not on the fundamentals but in the intricacies (and, alas, in the politics). I thought it about time to bring these ideas forward and let them live or die on their own. My primary interest remains the business of gold more than its economics. Every once in awhile though, I feel the need to throw an idea or two into the wind and see if it will fly or fall with a thud.

Let me state finally and without reservation that under any of the scenarios I can envision, gold is the best solution for you and your family as the most reliable means to keeping your savings intact.

spikedog

(11/15/2005; 20:25:36 MDT - Msg ID: 137990)

MK message #137989

And I ask: where else can you acquire the shiny yellow AND get sage-like wisdom, FOR FREE! Bless you, Sir Michael, Bless you.

mikal

(11/15/2005; 22:18:18 MDT - Msg ID: 137991)

Central Banks careful to remove "market uncertainty"

Banks may extend gold sales agreement
November 16, 2005 - Eric Onstad - Reuters
Johannesburg - The European central banks' agreement to limit gold sales might be extended when it expired in 2009, an official of France's central bank said yesterday.
In September last year, the central banks' gold agreement was renewed for a second five-year term, limiting sales over the period to 2 500 tons.
"I think the spirit is there. I suppose it will go on, but we will have to see," said Isabelle Strauss-Kahn, the director of market operations for the Banque de France.
"The spirit of making less uncertainty for the market and being more transparent about central bank activities is there," she told the London Bullion Market Association's precious metals conference in Johannesburg.
Peter Zoellner, an executive director at Austria's central bank, said it was too early to say what might happen in 2009, but said central banks saw it as important to continue transparency. Analysts believe the 15 signatories to the accord disposed of 497 tons of the 500 ton allowance during the first year.
Strauss-Kahn said the fact that France's central bank was selling gold did not mean that it had changed its view of gold as key to its reserve holdings. France has said it planned to sell between 500 and 600 tons of gold during the current gold agreement.

Belgian

(11/15/2005; 23:30:54 MDT - Msg ID: 137992)

CB gold-reserves

What is the underlying significance of talking in 2005 about the possible renewel of gold-agreements in 2009 !?
And what does this has to do with "transparency" !?

Answer (same old one): The CB gold-actions of the past decade are, without any doubt, the pr�lude to a big fundamental change !

The CB gold-actions of the past decade are of another "nature" than the gold-actions before that. All these repetitive CB gold statements serve goldprice management but for another purpose.

Gold will not only remain an important monetary reserve...its very nature as reserve is changing.

Quite normal that this should be (re)communicated to the LBMA (institution) as remnant of the old $-gold regime (cfr.Rotschields).

Have been watching Bernanke and senators last night. Great "show"...SHOW ! I watched it with very mixed (sad)feelings. As if it was the expression of an end to an old and tired regime that permanently faked that historical dynamism w've all known (experienced) for so many decades.

Smeagol

(11/16/2005; 00:10:41 MDT - Msg ID: 137993)

Urgh! Get us out from under this mess!

The dynamism of the original jurisdiction America is sstill there, Ssir Belgian precious... buried, sstifled under a great burden of US corporate debt, dollars and over-regulation... waiting, like gold, for it's day in the Sun once again.

S.

Smeagol

(11/16/2005; 00:47:51 MDT - Msg ID: 137994)

Thought!-provoking post from our Host

(Smeagol mode off)

Sir MK, I too wondered what that post was about and I am glad you posted it again as I did not get to see it the first time. I certainly would have missed it if I did!

There are many things in your speech that I align with. You call it a trial balloon and the beginnings of a solution, and I accept it as such knowing that many details cannot be fleshed out in only a few paragraphs.

I am slowly coming to understand the way things are being set up and the puzzle is becoming clearer as more puzzle-pieces of world events assume their places.

Alas, there are some things I cannot let pass without comment and question (collective groan from around the Table ;-) ).

MK: "The issuance of any national debt will be strictly regulated at proscribed levels and most of the great nations will adopt legislation and constitutional guarantees outlawing deficit spending except at mutually agreed levels."

There are already laws on the books in many places outlawing deficit spending. This has not stopped deficit spending, because the same body that writes the law spends the money and they will not prosecute themselves. "Proscribed levels" can always be "temporarily suspended" or circumvented by bond issues, emergencies or some other back-door means.

Because they are placed in positions of trust, the penalty for deficit spending by those in government should be commensurate with the seriousness of holding that trust - the penalty needs to be HARD TIME.

I suggest that government spending outside of the most basic operating essentials be put to direct public vote, as in: "We need to borrow $XX,000,000,000,000 this year for ABC purposes. Your share of this, apportioned by census, is $XX,XXX. Your YES vote on this loan means you will have to pay $X,XXX additional tax this year to balance our budget."

That would make people sit up and take notice of where the money is going!

MK: "Nation states failing to adhere to strict standards of free and fair trade will be tried and if guilty fined heavily by a new international organization which will in turn deposit the funds collected to finance growth in other areas of the world which would ultimately rise up to challenge the offending nation state[s]."

By "nation states" do you mean the leaders and government officials will be tried? Excellent. Or do you mean the everyday people working in that nation, most of whom may not have a voice in policy will be tried? Not excellent. Will the leaders and government officials be held personally responsible for policies which violate the standards of free and fair trade, or will the common folk of said nation pay the fine through additional taxes until the government changes its ways... which may or may not happen? The problem of ensuring the neutrality of the policing organization over long time scales also needs to be solved.

MK" "The distribution of the funds will be strictly policed to avoid corruption and fraud."

Again, who will watch the watchers? So far I have seen not one shred of evidence that mankind, whether one or many, can handle such a great responsibility for very long before the balance tips - always to the side of corruption and fraud, if not a deleterious agenda. Historically it seems to be the opposite - the very bodies set up to do such "policing" come with corruption and fraud as part of the modus operandi.

I hate to beat this (dead?) horse once again, but as far as I have been able to determine, in all of the writings in the Archives, up through to your last post, nowhere as the "new and improved" world monetary system comes online is there any indication of gold being elevated to a status such that it is above the law as far as ownership and confiscation from citizens is concerned. Will "All participants in the great conclave" guarantee that? Without this guarantee in place I cannot consider it to be, as you state, "an equitable system". Since gold is to be the foundation, inviolability of its ownership must be the "First Amendment" of any "Monetary Constitution". Gold must be free to speak of the wealth-value of all other things.

The coming changes will influence everyone on the planet to some extent; in the new international economic system there MUST be checks put into place the will ENSURE that no more "Empires" can ever be built. This will not be easy but humanity has got to break that cycle. Otherwise, it's "meet the new boss, same as the old boss."

Thank you, Sir MK, for sharing your Thoughts! and for being willing to lay them here on the Table not knowing their ultimate fate. Bravo! to you. I very much appreciate the views and perspectives of the world as seen from behind your eyes and those of others here.

Smeagol

Knallgold

(11/16/2005; 01:10:59 MDT - Msg ID: 137995)

the magic #'s

After 400euro/oz has been breached,Gold now also crossed the 20'000sFr./kilo.The local coin dealer said to me recently that will wake up more people,his shop wasn't that crowded on the recent run-up.He gave also a comment on the availability of the Vrenelies,while overall volume has picked up,the balance seller/buyer is still about neutral.Though he might search a seller first to satisfy a bigger deal but this is modus operandi for a small shop.

Belgian

(11/16/2005; 02:28:27 MDT - Msg ID: 137996)

@Knallgold

Your goldcoin dealer >>> The balance of buyer/seller still neutral. Exactly Sir. It tells us that the goldprice behavior has VERY little to do with the (in)famous "market" logics ! Maybe a hint for those who still stick to the logic of >>> "the market".

This goldprice behavior is of another nature and serves the gold-positions that are already in place. Get your share of the metal before it is too late. Oh, and btw...look at the goldmine prices...

Also take into (book-keeping)account that w're almost at yearend.

contrarian

(11/16/2005; 05:06:20 MDT - Msg ID: 137997)

Confiscation and MK's excellent post

Smealgol--
I do agree and think that should MK scenario play out, confiscation, like in 1933, is inevitable. I would find it hard to believe that, should a tremendous revaluation occur, the Powers That Be would allow the citizenry to participate in the windfall, as per prior revaluation in 1933. Perhaps only those holding semi numismatic or numismatic coins would be immune, but I fear those holding bullion or bullion coins may be vulnerable...also, should this scenario play out, beware of safety deposit boxes, especially on the weekends! You may find an ugly surprise on Monday.

Arcticfox

(11/16/2005; 06:44:51 MDT - Msg ID: 137998)

Amazing watching that $6 rule in action..

hard to dispute so far again today..

Belgian

(11/16/2005; 07:48:54 MDT - Msg ID: 137999)

THERE WILL BE NO MORE GOLD CONFISCATION !!!

Because the $-IMS in general and the AA financial industry in particular, is now offered the choice between :

1/ Rising $-PoO + strong petro-euro !

or...

2/ FREEGOLD + Cheap oil in dollars !

There is not much in between.

contrarian

(11/16/2005; 08:35:12 MDT - Msg ID: 138000)

confiscation

Belgian--would be open to hearing your astute commentary re confiscation, and how you think it unlikely.

I'm definitely not an expert on this, rather am proceeding on a gut feeling, but have to ask, where has the Ft. Knox gold gone to, where is the accounting for it, why is this hidden, and if circumstances become desperate, they may require desperate action, so past becoming present would not surprise me, as this has happened before. Although it may not unfold in exactly the same way, and I'm not saying it's a given, but definitely something for the wise to consider.

If you look at the recent M3 shenanigans, you will see desperate people doing desperate things. It's like cornering a rat. You do not want to confront a cornered rat that's not attached to a glue trap!

I would be curious to hear more of your reasoning. Can't gold be free and confiscatable, that is to say, would not a free gold price of 4 digits require confiscation so as to back the trillions of funny money paper dollars manufactured since 1971, when the last brittle link to gold was severed--in order to counter the covert and possibly illegal removal of gold from Ft. Knox in that timeframe and be able to back the dollar with the tremendous quantity of physical required?

Goldilox

(11/16/2005; 08:47:34 MDT - Msg ID: 138001)

Confiscation

Confiscation as we have known it before is not likely. TPTB have enough knowledge of history to understand that new means of "control" are necessary as the methods fo circumvention of the old ones are too widely known.

How will gold be controlled in the future, especially that in the hands of Joe Average?

Through taxation and control of commerce.

Using RFIDs, limits, and electonic money, it will not be long before we reach a cashless society, wherein all buying and selling is completely monitored.

When so many posters suggest that gold be "above the law", they are right, but TPTB will not allow that as long as they possibly can. When the government cannot steal the entire stash, they invent ways to tax it and get a lion's portion. Watch for more taxes on gold sales, be they income taxes or transaction taxes. Watch also for elimination from "capital" status, so as to remove them from the lower taxes on capital gains. Also, FL has an "asset tax", that could be adopted by other states and even by the FEDs. There will be a number of efforts at confiscation of the value without actual confiscation of the physical. Most of these will act to crush day-to-day trading.

Joe Average will not want to own gold, because of the restrictions and tax burden. Even fewer true goldbugs will remain. This is not unlike the tactics to drive "weak hands" from other investments.

Thanks for the insights, MK. I applaud your optimism, but we have a lot of collective fear and superstition to overcome before "big changes" can evolve. The alternatives are, of course, successively ugly.

Goldilox

(11/16/2005; 08:48:52 MDT - Msg ID: 138002)

PoG and USDX

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 price of gold continues to defy US dollar strength.

Liberty Head

(11/16/2005; 08:54:26 MDT - Msg ID: 138003)

MK's Post

I think the international economic scenario suggested in post 137989 is likely to come about. The fact that it is not viable will be overlooked and supported.
There are no benevolent overlords to be found amongst the human population. Unfortunately, the human population is primarily a child in search of a non-existent parent. The only viable system would require individuals to become independent from the state and responsible human beings.
This is a great paradox of life and speaks volumes about the human condition.

Best Wishes

Belgian

(11/16/2005; 09:13:35 MDT - Msg ID: 138004)

@Contrarian

Your government has already confiscated all the underground gold on its territory !!! This has already been done in a rather subtle way by selling underground gold forward.
Further down the gold trail, underground gold will have to be sold to the state whilst private mine shareholders will have to accept the state's terms.

American gold was confiscated to serve the higher degree purpose of having the dollar internationalized and build (expand) the $-IMS. To give the (then called) eurodollar protocolar legal tender status. There is another currency now ! Free(priced)gold is worth a trillion times confiscated gold at yet another fixed price.

High time you realise that there will be no more $-gold-standard !!! Leave the past for what it was and look forward without panicking. These are modern times where gold-wealth is in the process of being modernized as well.
All the old archaic logics must be left behind. Don't panick with the idea of Freegold.

An IMS is a priori "INTERNATIONAL" and that includes the US ! And the new IMS with Freegold, wants to include the US. The senators who were grilling Bernanke yesterday, will become very pragmatic when the gradual pressure increases.
The transition might very well take place without a loss of face and without a total loss of prestige.

And when you fear gold confiscation, ask yourself what purpose it would serve under a freegold regime IMS ? Answer is : none.

There always is light at the end of the tunnel in which the US policies are driving at present. That's the purpose of "change". The resistance to this change will gradually fade away. That is the force of the acting non confrontational policies.

Bodman got the message in Ryad as Bush will get the message in Bejing. Look at the bright sight of life...with goldmetal in your possession.

Smeagol

(11/16/2005; 09:26:13 MDT - Msg ID: 138005)

Please explain to poor Smeagol...

...how gold can be the reserve par excellence, free to price the wealth of everything else... if it is taxed, which tax IS a control mechanism (leash) and can be changed at will. Or is gold only going to be for the bankers/New IMS, and not for the people?

S.

Belgian

(11/16/2005; 09:28:32 MDT - Msg ID: 138006)

@Goldolox

That fabricated, paralysing "collective fear", you mention, will be neutralized rather soon than later. Simply by "politically" exposing some selective (specific) truths.
Think deep about this and see what is already happening. America is not alone !

Smeagol

(11/16/2005; 09:46:45 MDT - Msg ID: 138007)

Strange values

Ssir Belgian: "American gold was confiscated to serve the higher degree purpose of having the dollar internationalized and build (expand) the $-IMS."

Ssss! "Higher degree purpose"??? Legalized plunder...THEFT... is thus justified/legitimized? Ssay it isn't so!

S.

TownCrier

(11/16/2005; 10:29:49 MDT - Msg ID: 138009)

A Scandinavian Extravaganza!

http://www.usagold.com/gold/special/nordic.htmlUSAGOLD-Centennial's November special involves the ever-elusive gold coins from Sweden (only 150 available) and Finland (only 115 available).

Click URL for more details, or phone in without further delay...
1-800-869-5115

R.

contrarian

(11/16/2005; 10:35:30 MDT - Msg ID: 138010)

confiscation

I have to admit I am having difficult seeing two things existing side by side--the complete freeing of gold (to hold, buy, and sell), AND the establishment of gold as the backing of a new monetary world order. It's just a gut feeling, but the two seem completely and mutually exclusionary. Either it's one or the other.

1. Either you have gold free like now, thereby trying to downplay its significance and draw attention from it, in order to prop up the paper dollar and establish paper as the "gold" standard. (because if you take control of gold, you risk it becoming "forbidden fruit" that steals the spotlight).

2. Or, you stop playing the game, admit that gold is real money and, as such, take the necessary steps you would need to assert full control of this now admitted real money yellow metal--assuming the powers that be will wish to continue to assert control, and I can't imagine them not wanting to, as that is the way of the world.

This is just gut feeling and perhaps a little history, not facts and figures, but additional fodder for discussion.l

Flatliner

(11/16/2005; 10:36:45 MDT - Msg ID: 138011)

@MK, most thanks for the suggestion!

Dear USAGold,

Could you, please, place a trail marker on MK's post? I have, and I apologize for taking up this space again, carried it forward into today's forum. I believe this concept is of the absolute highest priority for our civilization today. Unlike MK, my attempts at articulating the same thing came across as if spoken from a lunatic on a soapbox. I apologize to all, for I truly am a little Ant.

MK, This last weekend, I believe that I came to a very similar conclusion and have now found hope in a positive future for the US. The contested conclusion that some will remember is that I claimed that you will never sell gold again! Why? Because it will be too valuable to sell!

That concept is most confusing to an investor!

Dear investors (and all),

Banks give secured loans against assets, just like brokerage houses do for with margin accounts. You retain ownership of the asset, while trusted with servicing the debt. You, through the use of someone else, created money. (Money is not created until someone borrows it from a bank.)

Anyone can open a bank as long as you follow the banking rules. In order to participate in the fractional banking process, you must have �reserve� on the books. Thus, if you own reserve, you can create money. (Thus my questions publicly here about what constitutes a reserve.)

Banks can be owned by multiple individuals. For instance, 1,000 people (small Ants) could all get together contributing but a minor single coin and form the corporation. That corporation could be structured in a way where the only voting rights are held by the 1,000 people that built the company (bank). They outline the mission statement, they, collectively control the company! They, democratically, guide that company by setting up a board of directors that will �value� the wishes of the corporation. They, collectively get to share in the profits of their endeavors.

Is it a risk? Absolutely. Are there benefits? I believe that you will find many.

It seems to me that money is power and if the �little Ants� of the world act collectively the will build the foundation of a society that �votes� with its gold coins. Gold coins that you will not have to sell.

As much as there is a general dislike for the entire banking system, I believe that we are all going to witness a substantial change in the next for years that will give new meaning to "value" verses "price". The value that will be discovered will be that the right to create money will be distributed to those that can come up with the reserve for the banking system. Those that do, must not, at all costs, give it up to people that they do not trust. Be the bank, you create money that you can trust!

++++++++

MK (11/15/05; 19:56:50MT - usagold.com msg#: 137989)
Scenario: Beginnings and ends quite often come at the same time
Foreword: I have received three calls over the past two days from people I consider to be important clients and friends asking me why I removed the following post from the forum over the weekend. I was encouraged to believe that even if it is imcomplete or lacking in detail, it is a starting point worth keeping before the public audience. If those three callers are an indicator, the short life of that post garnered more readers that I thought possible. My essential concern about the hopeful scenario outlined below is that the great trading nations of the world really have no real interest in giving up something small to gain something large. That would require vision. . .and risk. My worst instincts tell me that no matter what we are destined to play the current scenario out no matter what, and that is a disturbing conclusion. When I see the great trading nations of the world unable to reach even a minimal agreement on trade issues, I wonder how an agreement such as what's outlined below could become even a small blip on the world economy's troubled radar screen. Nevertheless, in my view, something along these lines is essential to overcoming what ails the world economy today. Short of such an agreement, I fear for the final scenario mentioned at the end of this essay, and admit reluctantly and after much forethought, that there is more reason to believe it the more likely final outcome than the hopeful forecast outlined herein. With that I leave these words to your judgement:

Not the euro, the yen, the pound or the franc will keep you whole, like gold, should the dollar suffer its demise. Gold is where you want to be as an individual, or as a nation state, simply because the repercussions in the system across the boards will be more than any of the attendant nation states can operatively handle. If the present system continues on the current course, it could end in a hyperinflationary, stagflationary or deflationary firestorm. Take your pick; pick your poison. Similarly, with respect to the individual investor not even the best managed stock and bond portfolio will do as well as simple ownership of physical yellow metal. Gold, which by its very nature remains detached from the state rises above the state. Because gold defies control, it is abhorred and treated as the enemy by the statists.

I am often asked where do I think the current trend in gold and the world's major currencies will end given the circumstances -- the "imbalances", the seeming one way road to a systemic smashup, the corporate excesses, the entrenched and intense self-interest exhibited by the great trading nations, the proliferation of derivative-based corruption and market manipulation worldwide etc. It all seems terminal, irreconcilable and unresolvable.

Let me for the first time attempt to lay out my thoughts on the beginnings of a solution -- a trial balloon if I may. I have spent a good portion of my life studying gold, the value of money, monetary and economic systems, the great philosophers and essayists on the subject of money, great (and not so great) economists, read histories of enormous insight and foolhardy political partisanship, and expositions of tremendous value and no value at all. I have written two books on gold (of some import I hope), countless essays and magazine articles, and talk nearly everyday with a wide variety of people about our collective economic future -- many of whom are important partitioners and players in their own field of endeavor. My experience is unique in that my intense interest in gold has been forged both in the furnace of academic interest and the crucible of the values and understandings expressed to me by the ordinary people who own it. Most of these I would label as men and women of action -- our businessmen and women; our physicians and attorneys; our clerics and military men; our government workers and working men and women. Their interests are not for the most part academic. Collectively, these people have been a great influence on me. It is with them in mind that I will try to be direct and to the point. Please keep in mind that this is a template. I am not an economist, a diplomat or policy maker and don't pretend to be. The details I will leave to other, more qualified, participants.

________________

I foresee a great economic conclave coming within the next five years where the dollar's epitaph (in current form) will be written and a new monetary system introduced. It will contain many of the earmarks of the system recommended at least inferentially by Nobel Prize laureate Robert Mundell -- a system where gold plays a central role as the "reserve of last resort." He has not written copiously about the matter, but he has written enough to make an important impact and give direction. A great number of words is no substitute for deep insight.

Gold will be revalued (as FOA and Another foresaw) at a very high dollar price in order to stabilize the system and start all the participants on an equal footing. However, gold's role will not be as the anchor in a gold standard system. That is impossible at this juncture given the computer (silicon) based nature of our economic and financial systems. That has been a great innovation and cannot be discarded. It will be as a reserve alternative drawing on its inherent strength as an asset detached from any single nation state and not subject to its price control. The IMF will return its gold to the contributors and the United States may be forced to part with a portion of its reserves in order to balance the system. This will come as a blow to the United States but it will recover quickly as its inherent economic strength is reasserted, the domestic mining industry restarts, environmental innovations are introduced, and gold production begins to flow again to the Treasury.

Central banks will not loan gold because it will be too valuable as a reserve asset to risk having it off the books, or hanging in the financial ether as a "receivable." It will come as part of the economic evolution and not through legal mandate. Bullion banks short gold will pay an dollar enormous price to balance their books. (It would be in their best interest to balance those books now and not wait for the revaluation.) Mining companies similarly short gold will be enslaved as gold producers producing for those to whom they owe their production. Those free of the forward sale burden will prosper. Central banks that have loaned out their gold will call it back. They will compete with everyone else for the available new gold supply. The price or value of gold will be the centerpiece around which all other values are arranged, and the value of gold will be returned to being set by the supply/demand function of the marketplace.

The issuance of any national debt will be strictly regulated at proscribed levels and most of the great nations will adopt legislation and constitutional guarantees outlawing deficit spending except at mutually agreed levels. The promise of the Merkel government announced this morning, that Germany would bring its budget imbalance in line to EU expectations, is the beginning of an important trend. The more solid your adherence to these principles the better your credit rating, and the United States will be forced to play under the same rules. The more gold by weight you own in this system the more able you will be to expand your economy as a nation state (or your own economic activities as an individual owner). There will be a value to latching onto mine production and the nation states will vie to secure that production from the mining companies. Nation states will gain gold by producing things of value -- goods and services -- and selling them overseas. They will lose gold by failing to produce for export and having to defend their currencies by selling first primary currency reserves and ultimately, if that doesn't remedy the situation, gold reserves. Failure to do so would ultimately cause a nation state's credit rating to drop until it could no longer borrow. Those who now feel that the United States would collapse under such an imposition have no understanding of the ability, tenacity and innovation of the American people. The United States will make the necessary adjustments and dominate this system like it has the last two.

The fractional reserve banking system will remain in place largely as it is. The imposition of a savings based society, rather than a consumer based society, will force a change in the way banks operate, but the system itself will look pretty much like the system we all use today. The various nation states will find it in their best interest to agree on a free-trade system in which no nation state holds an advantage over the other. The World Trade Organization will be scrapped as too cumbersome and an illusion of free trade. The United States will force a new agreement with the full understanding that if it doesn't, it will fail economically. There will be no such thing as a currency advantage. The various central banks will migrate more towards currency boards than activist practitioners of monetary policy, but retain their function as regulators and arbiters of the financial system. Nation states failing to adhere to strict standards of free and fair trade will be tried and if guilty fined heavily by a new international organization which will in turn deposit the funds collected to finance growth in other areas of the world which would ultimately rise up to challenge the offending nation state[s]. The distribution of the funds will be strictly policed to avoid corruption and fraud. All participants in the great conclave will agree by preamble to the notion that it is impossible for an international monetary system to remain robust in which one nation acts as the consumer of last resort (with its currency as the international reserve) and all others act as producers competitively devaluing their own currencies in order to make their products cheaper in stores and catalogues of the consumer nation.

In the end, gold simply will be re-recognized for what it has always been -- the most direct, liquid and purest form of wealth. It will be seen by individuals and nation states as wealth itself.

I do not think I have to go to great elaboration for most of the people reading this post as to the potential benefits for the gold owner under this scenario. I emphasize that given the situation as it is and the historical progression, I would think the chances of things unfolding more or less along these lines are very good. Why do I speak with such confidence? I do so because it is an equitable system and we are progressing along these lines even as you read this forecast.

________

Failure to adapt a system with these or similar characteristics would constitute a transformational failure of western civilization similar to what occurred just before, during and after the collapse of Rome. That is the period of history which most closely resembles our own. Gold ownership under such a collapse will be one of the only saving graces. I do not hope for this failure, but I do not discount it. It is patently clear that we, as an international civilization, cannot remain on the course we are currently navigating. It is heading for rocky shoals and destined for shipwreck. The time has come to steer a new course, for all nations to recognize that we cannot go on as before, and that it is time to abandon the past, alter direction, and strike out anew. History will record it as an act of courage and perhaps the saving grace of Western civilization.

_________

Sidenote:

Q. So why would Germany make noise about selling gold?

A. Because the new holders of the reins of state have been approached by the bullion banks. This does not mean that the central bank will react favorably, but the commercial bullion banks and financial firms will forever be ready to exert pressure wherever, whenever they can to get their hands on gold (which will ultimately go to repaying depositors.) Bundesbank's reaction to pressure earlier this year along the same lines shows that there are still some who approach the disposition of gold in their reserves ethically and with the best interests of the nation in mind. For that Germany owes Axel Weber a debt of gratitude.
________________

Sidenote 2:

Many of you will note that much of my analysis is in agreement with that brought here by FOA and Another years ago and advanced in recent months by Belgian. We have had many discussions here about who FOA and Another might have been. I still don't know who they are (were) but I believe their ideas are most closely aligned to those of Robert Mundell. I do not claim that either is Robert Mundell just that they have been influenced by Mundell or at least the matrix of ideas which gave rise to Mundell's thinking. Though we have had our disagreements, it is not on the fundamentals but in the intricacies (and, alas, in the politics). I thought it about time to bring these ideas forward and let them live or die on their own. My primary interest remains the business of gold more than its economics. Every once in awhile though, I feel the need to throw an idea or two into the wind and see if it will fly or fall with a thud.

Let me state finally and without reservation that under any of the scenarios I can envision, gold is the best solution for you and your family as the most reliable means to keeping your savings intact.

++++++++

Belgian

(11/16/2005; 10:41:20 MDT - Msg ID: 138012)

@Smeagol

We often forget, there were TWO devastating world wars. It took a few decades to get all those exhausted fighting states back on their feet and running. These two specific periods, war and recovery, are now behind us. These two periods had their specific logics and dynamics. A new chapter has started and w're watching (experiencing) it.

Jump out of the straithjacket of linear thingking. Up to new horizons.

Let there first be Freegold before you start complaining about taxes.
Free Gold does not mean w're going back to the pony express times. An IMS has to be managed and taxes are part of that management. Currencies (fiat) will continue to float and there will be rich and poor. Make sure you chose for floating gold instead of betting on any floating currency as to consolidate that what "you" consider to be your wealth.

Absolute freedom is an illusion. Provide yourself with as much freedom as possible by making the right choices at the right moment. Life can be very simple. Don't complicate it unnescessary.

R Powell

(11/16/2005; 11:17:06 MDT - Msg ID: 138013)

Thoughts on MK's post....

Concerning MK's vision (should I call it such or something else?) of a monetary revision based upon gold and a worldwide trading scenario in which unencumbered trade florishes within deficit guidelines for all those either exporting or importing, I wonder under what circumstances just such an egalitarian system might develop?

Perhaps it is my cynical (I might justify as pragmatic) nature to doubt that such will evolve without a great deal of enticement (read force). Will an economic event of cataclysmic proportions be required to accomplish such a change or might it evolve from reforms over time? The 14th century's plagues + the simple resulting fact of massive reductions in the number of people who survived were one direct cause of the Renaissance. Will some such world altering event occur again? I remain cynical. Is there a scenario in which such change would benefit those who presently yield economic power so that they would work toward such reforms? Or perhaps it might transpire in a situation in which such a system evolves begrudgingly as one not fully wanted but necessary as an alternative to something considered (to those in power) even less desireable?? Either way, if it is to be, I'd guess its birth would be an extremely painful one in which there may be no place for anyone to hide...with the exception perhaps of the truely self-sufficient hermits of this world...those so far removed from society (and any dependence upon society) so as to be unaware of + uncaring about such worldly events. I almost chose such a life during my youth. Sometimes I wonder....and sometimes I think the gods must be crazy. Oh well, it is fun to watch it all unfold and I hold the assurance that I will leave it all behind one fine day. Sometimes I think my passing will be a blessing. Sometimes I think mankind's passing will be a great blessing for this tired old world. She has suffered so much abuse at our hand. But my thoughts have no value, bring on the new egalitarian age. One more chance again mankind, will you take it? Do we live in interesting times? I believe so, I'm greatly entertained!
rich

R Powell

(11/16/2005; 12:30:01 MDT - Msg ID: 138014)

Lease rates

I just checked again. Once again I'm reminded of the three certainties of life...death, taxes and Kittyco gnomes who love to display outrageously wrong numbers. Earlier, they were listed as up about 4 percentage points almost across the board...but with enough variations as to appear as possibly correct. Oh, well......

CoBra(too)

(11/16/2005; 12:44:19 MDT - Msg ID: 138015)

MK - Scenario

I have to admit that I foresee a something similar scenario as the past few years have already suggested. This will be the least "costly" or less devastating outcome - by arraignement of the major culprits. By whom? Well potentially by those who have the future sources of (outsourced)productivity, competitive labor forces and the will to succeed on their side.

I'm also aware that all of it may be wishful thinking if a rogue wave in the form of peak oil, derivative meltdown or any other debt induced earthquake will prematurely ignite the perfect storm hitting the shores of the Western industrialized world.

Guess, the US Dollar hegemony together with the western nations have exploited to much and too many of the globes "lesser developed" to even think about a smooth transition.

The chances of escaping this kind of Armageddon may then be reduced to the chances of Russian Roulette; Nothwithstanding your arms, gold, vegetable garden and your bunker in the middle of no-where.

While I'm hoping to see MK's solution(s)I'm not really giving credence to any of our western political leaders to bring off this kind of relatively begnign outcome.

Sorry for my pessimism - that's what old age may also bring along ... and finally gold bullion may even give you a fair chance to survive - and not only for wealth ... for bread!

OK, I hope we'll get away once more - I doubt it, though!
cb2

PS - off to the Munich Gold Show - I'm still "Wanted" - to deliver the opening remarks and some ...

Smeagol

(11/16/2005; 12:53:06 MDT - Msg ID: 138016)

@Ssir Belgian
Belgian:"We often forget, there were TWO devastating world wars."

We doesn't, precious... and we doesn't forget that those wars... were financed... sss...by central banks and governments.

Belgian: "Jump out of the straithjacket of linear thingking. Up to new horizons."

We aren't in one, thank you very much. and we do not jump into places that are shrouded in fogs of ssecrecy and
nontranssparency...like the current ssituation on both sides of the debate... whether it is "necessary" and no matter how well-intentioned.

Belgian: "Let there first be Freegold before you start complaining about taxes."

Eh? You mean wait until the concrete has set and there is no wiggle room? NEVER! O, no not us. You'll have to do better than that, precious.

Belgian: "Free Gold does not mean w're going back to the pony express times."

Yesss... there is no going back to the old gold standard.

Belgian: "An IMS has to be managed and taxes are part of that management....Absolute freedom is an illusion....Life can be very simple. Don't complicate it unnescessary."

Ssss... look up "free" in a dictionary, my friend. We doesn't ask for absolute freedom from taxes. Jusst so long as gold metal (not work done to or on It) is not taxed in the new IMS. How ssimple is that? One thing out of all the world's goods... not taxed. Give us that, or don't
call it Freegold.

S.

Goldilox

(11/16/2005; 13:05:29 MDT - Msg ID: 138017)

CNBC "bug"

CNBC's sceen bug now shows gold at $478 OFF 0.3, as they are measuring from today's COMEX close, not showing the $10 jump this morning.

They do not do that for afterhours stock quotes, so one has to wonder why they make this distinction for gold.

Hmmmm . . .

NEMO me impune lacessit

(11/16/2005; 14:18:30 MDT - Msg ID: 138018)

Smeagol

If one would like to serv You raw fish on silver plate and cold beer in golden cup - where would one find Your Cave of dwelling??

Nemo

TownCrier

(11/16/2005; 14:41:37 MDT - Msg ID: 138019)

Swedish coins have SOLD OUT, only 50 Finnish coins remain.

http://www.usagold.com/gold/special/nordic.htmlCall ASAP to express your interest.

1-800-869-5115

R.

TownCrier

(11/16/2005; 14:42:21 MDT - Msg ID: 138020)

Smart ones make a killing in gold

http://www.newindpress.com/NewsItems.asp?ID=IEB20051116110014&Page=B&Title=Business&Topic=0&November 17 2005 00:00 IST

CHENNAI: Prakash, an employee of a state-owned insurance company in the city withdrew one lakh rupee from his fixed deposit in bank and invested it in gold some six months ago. Recently, he sold his gold bars and gold coins when the price of the yellow metal hit an all time high, to reap a clean profit of around 30 percent.

Yes, gold is no longer a woman's preserve, and it has become an avenue for the smart investor seeking sizeable return. Prakash is not an exception: with gold prices fluctuating sharply in the market people are considering it as a safe haven for investment.

"Now people have accepted gold as a good form of investment. A new class has emerged from within the middle class, who buy gold as small coins and bars of 25 grams and 50 grams, purely as an investment proposition. They enter the market when the prices are low and reap a goldmine return of about 50-60 percent on their investment", says K Shivram, vice president, World Gold Council, India.

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

The best, most instructive line in the whole article is the following:

"Though India is the largest gold consuming country in the world, it is not able to control prices."

Think long and hard on that one.

R.

The Invisible Hand

(11/16/2005; 16:00:24 MDT - Msg ID: 138021)

Iran and the golden mean

http://www.countercurrents.org/rutledge161105.htmBelgianmanneke,

In msg#: 137999, you said that there is not much in between
- Rising $-PoO + strong petro-euro !
and
- FREEGOLD + Cheap oil in dollars !

Aristotle taught us that virtue consists in the mean.
Iran seems to be on that path with its Oil Bourse.

SNIP
If successful, the IOB [Iranian Oil Bourse] will provide Iran with concrete economic benefits especially if it invoices AT LEAST SOME [emphasis by The Invisible Hand] of its energy contracts in euros.
+
From an economic perspective, invoicing oil in euros would be logical for Iran as trade with the euro zone countries accounts for 45% of its total trade. More than a third of Iran's oil exports are destined for Europe, while oil exports to the United States are non existent.
The IOB could create a new euro denominated crude oil marker, which in turn would enable GCC nations to sell some of their oil for euros. The bourse should lead to greater levels of foreign direct investment in Iran's hydrocarbon sector and if it facilitates futures trading it will give regional investors an alternative to investing in their somewhat overvalued stock markets.
+
In the 1970s, not long after the collapse of the gold standard, the US agreed with Saudi Arabia that Opec oil should be traded in dollars in effect replacing the gold standard with the oil standard.

USAGOLD Daily Market Report

(11/16/2005; 16:30:12 MDT - Msg ID: 138022)

Page Update!

TownCrier

(11/16/2005; 16:59:03 MDT - Msg ID: 138023)

Sands shift under time-tried U.S.-Saudi oil link

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-11-16T135211Z_01_HO574825_RTRUKOC_0_US-ENERGY-USA-SAUDI.xmlWASHINGTON (Reuters) - At a recent U.S. Senate hearing, the head of Exxon Mobil Corp., the biggest U.S. oil company, was asked about oil prices, and his answer spoke volumes about the relationship between U.S. oil majors and Saudi Arabia.

..."I need to know from you," Republican Sen. Pete Domenici told Exxon Chief Executive Lee Raymond, fixing the powerful executive in a stare, "Tell me, from the time it comes out of the ground, how is the price set?"

"Probably the easiest place to talk about is Saudi Arabia," Raymond responded, explaining that the kingdom's month-ahead pricing process sets the global benchmark.

..."I think we are seeing somewhat of a transition of the relationship, perhaps to be one based on principle as well as the expediency of security and oil," said Robert Jordan, a partner at Baker Botts LLP in Texas and formerly the Bush administration's U.S. ambassador to Saudi Arabia.

There are also forces at play outside the U.S.-Saudi dialogue. Growing oil demand in China and India has turned heads in Riyadh and forced Saudi planners to rethink their priorities.

The Saudis "still need the United States, but they are hedging their bets."

In Riyadh, Saudi officials are expected to take U.S. and international economists to task for issuing long-term forecasts that assume massive production capacity expansions.

"We're really ticked off at those estimates, because we don't see them being very realistic. If we're going to 18 (million bpd), we're going to burn our fields," an official who advises the Saudi government on oil issues said, speaking on condition of anonymity.

"This is the most important element in any bilateral relationship that the U.S. has with any other countries -- the oil issue."

"Oil is the beginning and the end of it."

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

Coming to terms, sooner than later, with the asymmetric trade of real goods for IOUs.

R.

Henri

(11/16/2005; 17:32:52 MDT - Msg ID: 138024)

Jump Spot!

All metals up in NY Access/Sydney trading

Smeagol

(11/16/2005; 17:33:59 MDT - Msg ID: 138025)

(No Subject)

@ Ssir NEMO me impune lacessit, msg#: 138018)
To what would you ascribe such a high and worthy repasst for ones ssuch as us?

Our cave lies near the river Kern, which flows through lands that are now considered to be under the banner of the California Republic... (as opposed to... ssss... the (corporate) Sstate of California)... is thiss close enough, precious?

We thinks...ai, wistfully at that... that come that day when all is ssaid and done, we might all gather round a REAL Oaken Table for a feast to celebrate!

S.

P.S. looks like the wizard's Hounds have gotten hold of some roo... or your fissh! (cackle!)

Smeagol

(11/16/2005; 17:39:09 MDT - Msg ID: 138026)

Is that a Golden trebuchet we see?

Gold up, dollar up a lot... at thiss rate, what will be the result when the dollar drops? Good distance for It, wethinks!

S.

Smeagol

(11/16/2005; 17:59:15 MDT - Msg ID: 138027)

Coincidence?

These, taken together:

Ssnip from link posted by Sssir The Invisible Hand (11/16/05; 16:00:24MT - usagold.com msg#: 138021)

"The proposal to set up the IOB was first put forward in Iran's Third Development Plan (2000-2005). Mohammad Javad Assemipour, who heads the project, has said that the exchange will strive to make Iran the main hub for oil deals in the region and that it should be operational by March 2006."

...and the Fed:

"On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large time deposits, repurchase agreements (RPs), and Eurodollars. ..."

Hmmmmmmm.....

S.

Gandalf the White

(11/16/2005; 18:02:53 MDT - Msg ID: 138028)

WOWSERS !!!! <;-)

Good thing that we did not have the CONTEST in this time period with VOLATILITY like that of today !
JUMP SPOT, JUMP some more !
<;-)

slingshot

(11/16/2005; 18:15:31 MDT - Msg ID: 138029)

From the Archives Gold from $300 to $500

slingshot (5/9/02; 15:38:14MT - usagold.com msg#: 75284)
Siege Engine
Time Is Running Out.
The Lord of the Castle has burned the Midnight Oil with his Knights and has failed to comprise a viable battle plan.
All of strategies revolved in only the defense of his citidel and with the size of his garrison provided very little offensive capabilities.
The trebuchet has been effective as it relentlessly batters the wall below the tower.
It is morning and the first light of day begins to shine into the room and replaces the candlelight upon his maps.
Suddenly, there is an alarm for all to man the walls.
There is more excitement. As he ascends the stairs he can hear the comments of his men and he knowns fear when he hears it.

He looks out beyond the field and into the rising sun.
For a momment he is blinded but soon sees the open green field below and what now stands just in front of the treeline far away.

The Goldbugs have formed ranks. Three and four deep and the full lenght of the treeline. They are armed with shields and swords. Bows and maces. Standing shoulder to shoulder.
They begin to bang their shields and shout.
FREE GOLD, FREE GOLD, FREE GOLD.

The Lord of the castle turns and looks into the face of his Knight standing next to him.

slingshot

(11/16/2005; 18:37:23 MDT - Msg ID: 138030)

Who would have thought?

The Lord of the castle is Greenspan and the Knight next to him is Bernecke.
Slingshot-----------<>

Paper Avalanche

(11/16/2005; 18:59:08 MDT - Msg ID: 138031)

Just saw this....

"Fed Drops M3 Release
The Federal Reserve quietly announced last week that it will discontinue public release of M3 money supply data. No reason was given."

It's go time. The paper avalanche begins in earnest.

PA

specie-man

(11/16/2005; 19:21:25 MDT - Msg ID: 138032)

Gold confiscation

I posted something along these lines here a couple years ago. But I think perhaps it is time for a review.

The 1933 confiscation event set a precedence. But one has to look no further than the messages printed on US Federal Reserve notes for clues to the reasons behind the confiscation.

All small-size Federal Reserve Notes, printed prior to 1933 (series 1928) plainly stated on the bills: "Redeemable in gold on demand at the Unites States Treasury or in gold or lawful money at any Federal Reserve Bank".

But then after 1933, the series 1934 notes stated: "This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury or any Federal Reserve Bank".

Federal Reserve Notes printed from series 1963 onward simply state" "This note is legal tender for all debts, public and private.".

Note the progression from gold-backed money, to US Treasury-backed money, to nothing-backed money.

Large quantities of gold-redeemable Federal Reserve Notes were printed from 1914 to 1929. This swelling of the money supply was largely responsible for the "Roaring '20s". The problem, was that more notes were issued than there was gold to back them !

After the stock market collapsed, international banks (mainly in Europe) began presenting those Federal Reserve Notes, redeeeming them for gold.

The US Government was in a bind. It owed more gold than it had ! If US citizens were to start demanding gold for the notes, the fraud would be fully exposed. So before the US public got wise to the situation, the laws were changed. The US government short-changed it's citizens and confiscated their gold. As a result, the US was able to perform on it's gold obligations to the international banks. The extra gold in the US Treasury vaults also helped ease the fears of foreign dollar holders and teh "run" abated. American citizens got the shaft, but international banks did not.

Fast forward to today. The US Government's obligations to foreign interests is mostly in the form of un-backed dollars. Those dollars can be created at will (but not without some cost to the economy - as in inflation).

Would the government confiscate gold ? What about silver ? Platinum ? Copper ? Guns ?

Far more likely, the US Government would implement some sort of capital controls and/or taxes (or simply inflate,inflate,inflate) as a means to "confiscate" the dollars it needs to perform on it's obligations to foreign banks. And you can bet that, if given a choice, the US Government will attempt to put the interests of the banks ahead of those of the citizens.

In fact, some types of capitol controls are already pending. The deceptively-named "Patriot Act" has some onerous anti-money laundering provisions.

The day may come when cash is no good and only digital credits, *originating from approved sources*, is "lawful money".

Goldilox

(11/16/2005; 21:40:31 MDT - Msg ID: 138033)

POG

After-hours (non-US trading) POG has broken through $480 spot, on a day after a healthy rise.

Looking good for Gold-bugs!

Most HUI issues are up 3-6%, depending on their balance sheets.

Silver issues are rising in harmony!

monTROZ

(11/16/2005; 22:24:16 MDT - Msg ID: 138034)

Oncorhynchus mykiss aguabonita

http://home.pacbell.net/gtfund/page2.htmlSmeagol (11/16/05; 17:33:59MT - usagold.com msg#: 138025)

Sir Smeagol,
Living by the River Kern are you? You'll be dining on these golden fishes then? I've fished some of the high lakes in the Sierra and caught many of these little beauties. The other members at the round table may not have had the pleasure, so check out the pretty pictures. These fish are actually more spectacular than the photos show, taste good too.

I know it's a little off topic, but they are Golden Trout.

Thanks to MK for the great post, especially the humorous part.

MK (11/15/05; 19:56:50MT - usagold.com msg#: 137989)
"The distribution of the funds will be strictly policed to avoid corruption and fraud."
Yeah right, ROTFL
Where do I sign up for that job? 

mikal

(11/16/2005; 22:33:47 MDT - Msg ID: 138035)

@Goldilox

Asia's Godzilla is only practicing throwing her weight around. Wait until she really steps into it and gets into the swing of things. Do you think she'll get a good feel for (and handle on) the markets?

Smeagol

(11/16/2005; 23:00:37 MDT - Msg ID: 138036)

Near, not by...

...the River, Ssir monTROZ... but close enough that we know the marvelous Golden trout, O yess, precious!

S.

MarkeTalk

(11/17/2005; 00:37:40 MDT - Msg ID: 138037)

Knallgold message #137957; Babelfish translation of Deutsche Bank's gold derivatives problem

MK has asked me to translate from German into English the post made by Knallgold on 11/15/05. The mechanical translation attempted by Babelfish was dreadful and confusing. Because I majored in German (after having spent my junior year in college there) and because of my thorough acquaintance with the gold business in general, I will attempt a more sensible and understandable translation of this most important but least understood subject.

"Today it came to the attention of the SdK Investor Protection Association that apparently Deutsche Bank has considerable problems with its gold derivatives trade. What is of concern are the paper instruments known by identification numbers DB6181, DB6183, DB6184, DB6185, and DB6187. These paper instruments are the so-called Long as well as Short-WAVE Knock-Out Option Contracts, which have been trading on the Stuttgart and Frankfurt exchanges since 4 October 2005. According to the prospectus dated 3 October 2005, these refer to the sale of an ounce of gold at various strike prices. Due to the tremendous leverage provided by these products, which Deutsche Bank advertized on its website and in its printed publications, these option contracts were especially popular among investors. Just last week SdK referred to the attractiveness of these option contracts in a 'Gold Special' article in its publication entitled 'SdK Exclusive'. In a covert style action shrouded in mystery, Deutsche Bank attempted today by unilateral action to severely diminish the terms contained in the prospectus much to the detriment of investors.

Accordingly, the reference relationship is supposed to be reduced from one ounce of gold per contract to one-tenth ounce of gold per contract. For those investors who already own them, the terms have been reduced by a factor of ten. The SdK has never known this type of action to have taken place before. Should such changes in the prospectus with negative consequences to investors be possible, then the credibility and trust in the entire German options and derivatives market would be irreparably damaged.

For this reason the SdK has requested the Stuttgart exchange and Deutsche Bank to suspend the trading in these products until this matter is clarified."

GC

Belgian

(11/17/2005; 02:15:37 MDT - Msg ID: 138038)

@TIH

It is EMU + Oil + those that whish to alter the $-IMS, who want Freegold.
This also means that the US has to renounce(forsake) on its dollar-privileges. And that's what the big struggle is all about. Pressure and counter pressure.

All the action has to be properly framed towards the final goal >>> Change of the $-IMS.

All the goldmetal can stay where it is when the nature of those gold-wealth-reserves is changed from $-gold-standard to �-freegold. It is the whole planet that is concerned in this change/transition. ISM = INTERNATIONAL monetary system. A globalizing world is NOT a cluster of islands. It is an "integrating" world.

It is about floating currencies + fixed gold... towards floating currencies + floating gold !

The $-IMS is in confrontation with oil + euro + Asian wealth producers. A uniting front.

The Invisible Hand

(11/17/2005; 03:54:06 MDT - Msg ID: 138039)

Off topic - The ECB's power to introduce FreeGold

Belgian,

You demonstrated that the Goldtrail is about floating currencies + fixed gold... towards floating currencies + floating gold !

Let me quote two Hollanders, Kapteyn and VerLoren van Themaat, on p. 1005 of the third edition (Kluwer, 1998) of their book "Introduction to the law of the European Communities" concerning the external monetary policy or the exchange policy of the EU;
Prior to the implosion of the Bretton Woods system of fixed exchange rates, it was customary at national level to make a clear division of powers between internal and external monetary policy
(footnote: in Dutch law this was expressed on the one hand in the Bankwet 1948 and the Wet toezicht kredietwezen for internal monetary policy, and on the other hand in the Wet inzake de wisselkoers van de gulden in respect of external monetary policy)
For INTERNAL MONETARY POLICY the CENTRAL BANK was the primary competent authority,
whereas for EXTERNAL MONETARY POLICY primacy lay in the hands of POLITICAL AUTHORITIES.
The system of fluctuating exchange rates put an end to this separation, at least after the introduction of the European Monetary System (EMS), for exchange rate parities with third countries� currencies. A monetary policy aimed at national price stability will well nigh unavoidably lead to a relatively high currency in the international monetary context. Conversely, fluctuations in international exchange rate parities may effect the objective of price stability in the national context.

Are Kapteyn and VerLoren van Themaat not saying that with floating currencies, there is no more manoeuvering room for the politicians to introduce FreeGold as the internal monetary policy will determine the euro's exchange rate vis-�-vis non euro members?
On p. 1007, Kapteyn and VerLoren van Themaat write that the difference in Franco-German views over the respective power of the Council and ECB as to exchange rate policy in a system of floating exchange rates caused renewed discussions in the run-up to the European council in Amsterdam in June 1997.

Fortunately, there are not only Hollanders, there is also Koen Lenaerts, the Belgian judge in the European Court of Justice, who in section 275 of his (with Piet Van Nuffel) book "Europees Recht in Hoofdlijnen" (Maklu, 2003, 3rd rev.ed.) writes that the ECB is responsible for the development of an exchange rate system of the euro vis-�-vis non-community currencies
(Lenaerts refers to a 2002 article by W. Weiss, "Kompetenzverteilung in der W�hrungspolitik und Aussenvertretung des Euro" in the review "Europarecht". Also to a 2000 article by M. Seidel "Im Kompetenzkonflikt: Europ�isches System der Zentralbanken (ESZB) versus EZB" in the review "Europ�ische Zeitschrift f�r Wirtschafsrecht" )

Kapteyn and VerLoren van Themaat may have said in 1998 that there is no more manoeuvering room for the politicians to introduce FreeGold as the internal monetary policy will determine the euro's exchange rate vis-�-vis non euro members,
Seidel, Weiss and Lenaerts seem to have confirmed in 2000, 2002, and 2003 the ECB's power to do so.

Next (rhetorical)question: Can the ECB act on/upon political will?

Belgian

(11/17/2005; 05:20:55 MDT - Msg ID: 138040)

@TIH

http://www.gold-eagle.com/editorials_05/images/aden111605b.gifThese nice chaps do their talking in the context of EMU being an island. And you seem to think that the road to Freegold is an "enforced" one. Such a modus operandi is never going to bring the desired results.
It is by putting one's house in order (stability and growth)that brings in (supportive) quests.

The ECB (with its specific mandate) is far from being alone. They just send some nice folks to Egypt.
The ECB's (limited) internal mandate also vibrates outside EU's (EMU) borders.

And speaking about floating currency exchange rates...print the chart (link) and read : Period '94-'96 (pr� EMU) >>> The PoO - PoG were anticipating through price containment what was to follow in 1999 (EMU) >>> Oil started its price-pressure inflicting most of the "pain" on the US-$ through support of the � exchange rate (out of $ in �). With WAG I, the first phase of Freegold (floating goldprice) got started.

We will probably see some more of these phases in the ongoing process, where oil/gold/euro/dollar are interacting.

One can easely stay within one's mandate and at the same time let one's influence reach much beyond that mandate.

As a pro, you should know that there is the letter and the spirit of law (mandate). And the "real" politicians (and academics) are most of the time also the most invisible ones. These folks have very little to prove anymore. They are not to be found on the internet or any other publications.

The Hoople

(11/17/2005; 06:59:00 MDT - Msg ID: 138041)

Excellent job Marke Talk

Maybe a very significant story. This is a different gold climate now. Thanks for your German assistance.

Cavan Man

(11/17/2005; 07:40:20 MDT - Msg ID: 138042)

Significant Stories Indeed!

Public CB (SA and Russia) discussion of Gold BUYING...FED discontinuing publication of M3....Holy Cow Batman!

PS: Latest HSL says convert bullion coins to semi-rare/rare meaning confiscation is likely. In US that's called "eminent domain"...aka..for the public good. Don't think "it could't happen here".

contrarian

(11/17/2005; 08:04:29 MDT - Msg ID: 138043)

confiscation--specie-man post

Re your post about the significance of the dollar. Good points about what's printed on the dollar now versus the past, but I beg to differ your thoughts on the present situation, because if I understand you correctly, you are saying that in today's world, there is no need for confiscation of gold because it's now purely a paper game, and therefore, the game would now become about meeting foreign obligations by making a great effort to collect paper dollars from US citizens or print ad infinitum so as to transfer more paper to foreign banks.

And you are saying that foreign govts and banks would be happy to continue in this paper game, when they see that the cure is worse than the cold, and that the very paper they are collecting is rapidly depreciating in value due to an out of control printing press?

The idea that the government would implement further capital controls/taxes as a means of collecting money to buttress its balance sheet (ultimately to meet foreign obligations) does not make sense, when they can simply print away as they have done all along. And we're already bankrupt anyways, even Greenspan and Controller of the Currency admit. No new taxes, says Bush--but lets spend $200 billion for Katrina.

If there is any intrusion, it would be for its own reasons other than the balance sheet.

The US dollar is simply a confidence game, like at a casino. When the confidence is lost, it has nothing to stand on. So I say gold is still not out of the picture.

I'm not going to deny that there might be further controls implemented to prevent laundering, but I think the idea that gold is entirely out of the picture is inaccurate. And I do believe that the US govt will put the interests of the banks ahead of the interests of the population.

Thank you for your input and more fodder for discussion.

Here's your quote for reference:
Would the government confiscate gold ? What about silver ? Platinum ? Copper ? Guns ?
Far more likely, the US Government would implement some sort of capital controls and/or taxes (or simply inflate,inflate,inflate) as a means to "confiscate" the dollars it needs to perform on it's obligations to foreign banks. And you can bet that, if given a choice, the US Government will attempt to put the interests of the banks ahead of those of the citizens.
In fact, some types of capitol controls are already pending. The deceptively-named "Patriot Act" has some onerous anti-money laundering provisions.
The day may come when cash is no good and only digital credits, *originating from approved sources*, is "lawful money".

The Hoople

(11/17/2005; 08:32:11 MDT - Msg ID: 138044)

June 06 gold $500.00 bid

Looks good to see the 5 digit ahead of the zeros. According to CNBC we can thank the gold ETF's for our tremendous good fortune, along with Arab "gold is untraceable" crowd.

USAGOLD / Centennial Precious Metals, Inc.

(11/17/2005; 09:10:45 MDT - Msg ID: 138045)

Assets and Info to help you enter the gold market with grace and confidence...

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

TownCrier

(11/17/2005; 09:28:40 MDT - Msg ID: 138046)

NY gold stretches to new 18-year high

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh19947_2005-11-17_15-35-52_n17371323_newsmlNEW YORK, Nov 17 (Reuters) - Benchmark gold futures in New York powered to an 18-year high Thursday morning, as funds and speculators extended the recent buying which has driven the precious metals markets up dramatically this week.

Silver made a new 11-month high...

Dealers said investment funds were bidding gold higher on ideas that the yellow metal was primed to challenge the psychological level of $500, which now stood only $15 away.

Geoff Stanley, senior precious metals analyst at BMO Nesbitt Burns in New York, said a host of factors, both technical and fundamental, prompted investors' frenzied move into market-leader gold in the last few days.

Stanley noted recent comments by both South African and Russian authorities indicating that central banks may increase their holdings in gold, as well as new World Gold Council data on Thursday showing another quarter of increased gold demand.

Gold's usual inverse relationship to the dollar has changed this year to become only a part-time correlation, as both markets are rising together. Analysts see the change as due to a sharp rise in commodity prices as well as inflation fears creeping into the market.

John Kosar, president of Asbury Research, said gold's sharp breakout on Wednesday had reversed a previous bearish technical pattern and seemed to herald continued higher prices.

"Moreover the recent rally has caught commercial hedgers, who are typically the 'smart money,' holding a huge bearish position that has quickly turned into a loss," Kosar said in a note.

"Any further strength may force them to cover -- if they do, this could drive prices much higher, and quickly," he added.

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

Gold -- you either have (own) it, or you don't. There is no middle-ground. All else is merely a yellow promise of uncertain fate.

Call USAGOLD-Centennial to bring solid gold into your portfolio.
TOLL FREE: 1-800-869-5115

R.

Bizarro-Greenspan

(11/17/2005; 09:45:42 MDT - Msg ID: 138047)

A blast from the past

ORO (2/22/2001; 0:32:46MT - usagold.com msg#: 48702)
Journeyman, some answers

1. Does "the derivatives effect" exist and if so, is it's
magnitude significant?

Yes, there is a fiduciary instrument effect in the gold market, where a premium is (and should be) afforded a bonded and guaranteed gold note when issued on a 1:1.1 ratio of gold in reserve to notes. However, when fiduciary instruments expand far in excess of gold turnovers in the markets, they dominate the pricing of the metal in terms of other goods and other fiduciary instruments. Expansion continues until liquidity constraints are met, where reserves are drawn down, and some paper may become suspect. Once this point is reached, it is a matter of whether a central bank is functioning to provide liquidity to replace reserves (borrowed reserves) and/or gold is stolen from its owners by either the fiduciaries themselves from their clients, or by central banks from their peoples. Without these liquidity injections, the system would lose its more leveraged members in a "bank run", during which time, gold prices (in other goods) would rise. This is the classic deflationary scenario. With the added liquidity and "sales" the expansion would tend to continue till the risk limits of the central bankers and fiduciaries are reached, and they have a choice of either joining together to minimize overall obligations coming due, or fight each other for reserves."

Gandalf the White

(11/17/2005; 09:55:35 MDT - Msg ID: 138048)

Toto, we are not in Kansas anymore !

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=GJUMP SPOT, JUMP more.
<;-)

Smeagol

(11/17/2005; 10:25:05 MDT - Msg ID: 138049)

A riddle for Ssir Buongiorno

Can you hear It?

Ssir Buongiorno!
The gold haiku volcano
Rumbles restlessly

S.

968

(11/17/2005; 10:37:17 MDT - Msg ID: 138050)

OTC derivatives market activity in the first half of 2005

http://www.bis.org/publ/otc_hy0511.pdfActivity in the over-the-counter derivatives markets continued to grow during the first half of 2005, albeit at a somewhat slower pace than in the preceding six months. Notional amounts outstanding rose by 7% to $270 trillion at the end of June (Graph 1 and Table 1), after a 14% increase during the second half of 2004. Gross market values, which measure the cost of replacing all contracts and thus represent a better measure of risk at a given point in time than notional amounts, rose by 16% to $11
trillion.

Gandalf the White

(11/17/2005; 10:44:54 MDT - Msg ID: 138051)

ANOTHER look back in time ! <;-)

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1&sTimeframe=10Y&useSettings=0&showSettings=&sid=&hiddenTimeFrame=1&sOrdType=price&sScale=linear&sMarket=GLD.FX1&iType=1&sAv1=na&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=na&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=2&iInd2=na&iIndcount=1&sSettings=naREMEMBER what caused that SPIKE at the $252 number ?
<;-)

Rimh

(11/17/2005; 10:56:17 MDT - Msg ID: 138052)

Good call, Gandalf!

Yes, it was some discussion by some CBs not located in the US of A about gold, if I'm not mistaken. Only this time they are likely fully aware of the consequence of they're words....

Flatliner

(11/17/2005; 11:03:45 MDT - Msg ID: 138053)

Everything to loose, extending the confiscation�specie-man post

The specie-man wrote (11/16/05; 19:21:25MT - usagold.com msg#: 138032) under the title Gold confiscation:

(Start quote) "Would the government confiscate gold ? What about silver ? Platinum ? Copper ? Guns ?

Far more likely, the US Government would implement some sort of capital controls and/or taxes (or simply inflate,inflate,inflate) as a means to "confiscate" the dollars it needs to perform on it's obligations to foreign banks. And you can bet that, if given a choice, the US Government will attempt to put the interests of the banks ahead of those of the citizens.

In fact, some types of capitol controls are already pending. The deceptively-named "Patriot Act" has some onerous anti-money laundering provisions.

The day may come when cash is no good and only digital credits, *originating from approved sources*, is "lawful money"." (end quote)

The contrarian (11/17/05; 08:04:29MT - usagold.com msg#: 138043) followed the post under the title confiscation--specie-man post and wrote:

(Start quote) "The US dollar is simply a confidence game, like at a casino. When the confidence is lost, it has nothing to stand on. So I say gold is still not out of the picture.

I'm not going to deny that there might be further controls implemented to prevent laundering, but I think the idea that gold is entirely out of the picture is inaccurate. And I do believe that the US govt will put the interests of the banks ahead of the interests of the population." (End quote)

If I understand this correctly, you both believe that holding physical gold may be a very big risk to the holder. The reasoning being that it's unclear as to how confidence will be restored to the US dollar and its status as seen around the world.

I believe that those in charge (control) today of the US Dollar will do anything and everything in their power to retain the privileges that they have enjoyed for years. In the process, they well do all the wrong things and spin them as right - or patriotic. Who, my insane forum friends, controls the money supply? The government. The CB is just a means to creating it and they only reap the rewards if the interest payments have true value on a worldly scale. (Read, the Fed will be out of business if they don't protect their monopoly and, if they don't conform to the world demands, the money that they hold will have no buying power for them to really enjoy their monopoly.)

Unfortunately, I also believe that they (the CB) is in a loosing position. If they recommend that the government confiscate gold, there is not enough gold in the US to cover obligations. If they confiscate gold, a huge percentage will go into hiding or will be made unobtainable. Gold holders are not stupid. Gold holders will take their commodity underground and go into the exporting business. That's right, all physical gold will be exported. This gold will fall in the hands of the other CBs in the world. The act of confiscating gold will also show that the people in charge of the printing press are willing to stop printing money in an unbounded fashion (limit it to a gold ratio the world is adopting). Thus, they lose what they so truly love AND if they actually admit that they need gold - as every other country is currently admitting. No, the admission that gold is actually needed to restore the confidence in the currency will cause its rapid (extremely rapid) destruction.

Oh, but as we all know, it's a really bad thing to have huge unmanageable debt over the American population. So, if there is anything good to come of this, the printing press will run to eliminate all debts (private and public) first.

Here's my take. The government will not give up its right to print money anytime soon. The Fed (Central Bank) will do everything in its power to quietly gather gold - just like every other country in the world because they know that the money supply that they control is going to be deflated away. It's CB self preservation. Next, the government prints and prints. The average Joe on the street suffers through the redistribution of wealth that always happens in a hyperinflationary society. The government, at this time, will talk about national security and any form of wealth will be subject for the greater good. As soon as the US dollar is effectively worthless and our society is affectively dead, absolutely bankrupt, no US dollar is accepted anywhere in the world for anything, the CB will step up and save the day thus restoring their monopoly and insuring future interest payments.

At that point, we will be no worse then any other country in the world. We will have lost our reserve status and global trade will once again come back to life with the US (Canada, Mexico, Japan and I'm sure a few others).

At that point, when things get back to �normal� gold will come out of hiding. At that point, it will be openly discussed that gold is the key to the reserve in banks. All banks must hold gold in order to create money. At that point, banks will bid the price of gold to the point where it meets its true value.

Thus, do not sell your gold, hide it well and pray that you survive over the next few years!

mikal

(11/17/2005; 11:26:10 MDT - Msg ID: 138054)

Permanence vs promises

http://www.freemarketnews.com/Analysis/85/2929/2005-11-17.asp?wid=85∋d=2929Inflation Brewing and Gold is Shining - Aden Sisters - Nov 17
Excerpt: "A Secular Mega Uptrend

Gold, the precious metals, commodities and interest rates generally move together in major secular moves. The current bull market is five years old. This means it's just getting started, in spite of record highs in certain commodities. Secular bull markets tend to last 15-20 years on average and they tend to coincide with wars. In other words, we probably have more than a decade or so to go before this major move is over.

The road to good investing in the years ahead is going to be dominated by gold. Gold rises during economic and global uncertainty, and when the monetary system is unsound. It rises when the reserve currency of the world is burdened and when most countries don't want a strong currency in order to compete. Gold is basically a barometer for the economy and it's a safe haven. It's currently stronger than stocks or bonds and by all indications, this mega trend is going to stay intact. That is, gold will continue to outshine all other investment classes during the current secular bull market, despite normal ups and downs along the way."
Sometimes the hardest things are the simplest i.e. 'buy and hold'. But as many and as unlimited are the individual reasons for owning gold, are the creative uses of gold in the history of man.

Flatliner

(11/17/2005; 11:34:31 MDT - Msg ID: 138055)

Searching on "patriot act"

http://www.epic.org/privacy/terrorism/hr3162.htmlI found the associated link. It makes not mention to gold or silver, but it does have a section on coin and currency. The 300 sections seem to pertain to banking laws. Anyone studied these sections? Anyone willing to provide opinions on what these sections really mean for the precious metals holders of the US of A?

specie-man

(11/17/2005; 13:19:37 MDT - Msg ID: 138056)

gold confiscation

contrarian wrote:
>And you are saying that foreign govts and banks would be happy to continue in this paper game, when they see that the cure is worse than the cold, and that the very paper they are collecting is rapidly depreciating in value due to an out of control printing press?

Actually no. I'm saying that the banks won't be happy in such a scenario. After, that IS why gold is going up NOW. But the US public will be even less happy ! Their standard of living will decline as prices increase faster than incomes.

The "capitol controls", taxes, etc. that I speak of are tools the government might attempt to use to inflate the money supply drastically, while at the same time holding prices down. Remember Nixon's "wage and price controls" ?
Perhaps some similar ideas will be floated.

Flatliner wrote:
>If I understand this correctly, you both believe that holding physical gold may be a very big risk to the holder. The reasoning being that it's unclear as to how confidence will be restored to the US dollar and its status as seen around the world.

I'm saying that holding physical gold is NOT a major risk because it is unlikely to be confiscated. The government doesn't currently owe gold it doesn't have (unlike the situation back in 1933 when the government had more gold obligations than it could perform on).

However, the government may pass laws hindering capital flows to/from certain parties or assets. It may become more difficult (because of taxes, paperwork, etc) to sell gold in the future, but I see no risk in holding it.

Regarding the "Patriot" Act...

I'm not intimately familiar with the details. But apparently there are some anti-money laundering provisions whice are aimed at precious metals and gemstones. Any person whe buys and/or sells $50,000 worth of precious metal bullion in a year will have to keep detailed records including the social security number of the other party in the transaction. This law goes into affect in January, 2006. I do not know how eBay/Paypal will deal with this. It would seem that they have a sufficient paper trail to satisfy government eyes, but I don't know.

Any gold/silver/platinum/palladium coin that has 50% or more of it's value derived from the precious metal content is considered "bullion" by the law. So rare coins with a significant mark-up over bullion are exempt.

admin

(11/17/2005; 13:55:37 MDT - Msg ID: 138057)

specieman

There is nothing in the Patriot Act regulations that even remotely calls for what you suggest. We are intimately aware of the provisions pertaining to gold brokers and can tell you that the $50,000 threshold to which you refer has to do with the annual sales of the gold broker. It has nothing to do with client purchases and/or sales. If a gold broker has $50,000 in sales or more per year, it has to have a money-laundering compliance plan on file in its (not the Treasury Department's) office and appoint a compliance officer. The money laundering rules to which we must comply now are no different now than they have been in the past.

contrarian

(11/17/2005; 14:05:42 MDT - Msg ID: 138058)

flatliner and specieman--gold and confiscation

Thanks both for your excellent posts, adding to the discussion.

I don't mean to sound like I'm impugning gold--quite the opposite. I do think numis and semi-numis coins, just as before in 1933, would probably be exempt from confiscation. I'm not saying confiscation is a given, but nothing would surprise me. I'm curious about the Patriot act...that covers gold bullion only, not numis and semi-numis?

I have seen first hand the fealty and kow-towing given people from the Fed at a major investment bank--in an effort to hire them. The two work hand in hand so of course the banksters would be well taken care, while the people can go to pot.

I'm just saying be wary of those safety deposit boxes, etc., especially on weekends. You may have a nasty surprise on Monday. Not necessarily around the corner, but something to keep in mind.

Certainly the focus now will be to print like mad and inflate away. And I do agree with flatliner post that the dollar will have to be backed with gold to save it once this printing reaches desperation. I think you also have to consider the dropping dollar, and I posit that this is really the thing the Fed is trying to address by repeatedly hiking interest rates. They're deathly afraid of a dollar disaster, and the state of the US economy is only a secondary consideration--hence doing anything and everything to prop the dollar up.

And incidentally, once Euro CBs start raising interest rates soon, which there is talk of, it may make the dollar resume its downward path, which would of course have even more positive implications for gold, which has been following its own upward trajectory independent of the dollar as of late.

Another thing that shows where the banksters are coming from. Remember how if you had scads of pennies and wanted to get rid of them, you could take them to a machine at a supermarket, and turn them in for usable currency, charged a small fee, of course. Well, notice how now this service is free at certain banks? Know what they're doing and why is this all of a sudden free? (and I heard this from an inside source). Apparently, they're separating out the pre-1981 pennies, and selling them for the copper value, now that the price of copper is at an all time high. This is reminiscent of the pre-1965 days, when people collected and melted silver dimes, quarters, and half dollars for silver content. Thus, I would put nothing past the banks!

Thus I agree that the dollar ultimately will have to be defended with gold. And should confiscation occur, I do agree that it would drive gold into hiding, which would end up self-defeating. Unless the dollar is defended with gold backing, the writing on the wall is printing presses 24x7 and inflation, inflation, inflation. I can't see foreign banks and govts indefinitely accepting paper money ad infinitum. At some point in the next five years and probably sooner, the straw will break the camel's back and paper game over!

Certainly we would all hope confiscation won't occur, and good points made how confiscation could have reverse impact. Maybe the scenario will thus be to revalue gold to a tremendous price to back all the trillions of new dollars, and then impose controls on profit taking, and NO confiscation. In that case, maybe a drive to Canada may be in the cards! So with this in mind, maybe confiscation is unlikely. Both your arguments can fit this picture.

Thanks again both for your thoughts.

Flatliner

(11/17/2005; 14:50:35 MDT - Msg ID: 138059)

@ contrarian (11/17/05; 14:05:42MT - usagold.com msg#: 138058)

Well said.

You say: "I'm just saying be wary of those safety deposit boxes, etc., especially on weekends. You may have a nasty surprise on Monday."

The strongest support for this warning would come from the idea that gold will be �revalued� overnight. What happened before is that the government called in gold giving fair market value. Then, turned around and revalued against it thus causing everyone that they confiscated it from to participate in the revaluing process. That would be most unfortunate for the physical gold holder that sells their gold. (I'm sure you've hear me say do not sell your gold.)

You also point out "Maybe the scenario will thus be to revalue gold to a tremendous price to back all the trillions of new dollars, and then impose controls on profit taking, and NO confiscation. In that case, maybe a drive to Canada may be in the cards!"

Ah� the Canadian Maple Leaf is a good buy in the states. If the US government makes it hard for all the people holding Maple leafs, I'm sure the Canadian government will be more then willing to open its boarders.

Also, think about the words that you just written. If they impose controls on profit taking, that will only support my argument that people will organize, create banks and use their gold as the reserve for the bank that they create. In other words, these controls will feed into the rebuilding of the banking system. But, when it happens, the people that hold gold must retain the voting rights in the corporations that are created. This act, will put banks in the control of people rather then people in the control of banks. It will be a paradigm shift that will mean that people that buy gold today secure their voting rights in the future. This paradigm shift has huge political ramifications if anyone chooses to examine this possibility.

Do not sell your gold and have a nice day.

Kilo

(11/17/2005; 15:13:40 MDT - Msg ID: 138061)

Flatliner and Contrarian.....

Revalue gold to the upside, and then impose controls on profit taking ? In other words, remove the dollar backing from the gold ? Somehow would seem to defeat the whole purpose.

Kilo

specie-man

(11/17/2005; 15:23:18 MDT - Msg ID: 138062)

Patriot Act - money laundering laws

http://www.ictaonline.org/docs/Seminar%20in%20LB%20AML%20Plan%20Explan.pdfSee the link for more info.

Apperently, collecting the social security numbers of the other parties involved in transactions is not explicitly called for. But it might be a neccesary part of any "Policies and Procedures" plan which each firm or individual must put in place.

Flatliner

(11/17/2005; 15:41:25 MDT - Msg ID: 138063)

@Kilo (11/17/05; 15:13:40MT - usagold.com msg#: 138061)

Kilo, Please clarify.

After re-reading my post, I clearly understand how my words may have been interpreted two different ways. To clarify, I believe that gold will be revalued to the upside. Or, the value of the dollar will be reduced considerably. And, like the Contrarian, I to have a stinking feeling that it may happen overnight. And, like the Contrarian, I do believe that the government may go looking for easy to access locations that can be used to fill the treasury before the revaluing process. In other words, take gold for 500 bucks and call it your patriotic duty and then turn around and revalue at something like 56,000 bucks per ounce. (Those are brown numbers, if you know what I mean.)

The purpose, as I see it, is that in order for the US to trade internationally, we will need to follow the same rules as all the other countries. If they are backing their currencies at a rate of 56,000 to 1, (again, brown numbers) we will be forced to do that, or better. If we want a stronger currency, we will have to back our currency with more gold.

So, now I ask, what do you mean by both "remove the dollar backing from the gold" and "Somehow would seem to defeat the whole purpose." What truly is the purpose?

admin

(11/17/2005; 15:56:24 MDT - Msg ID: 138064)

specie-man

Once again, you are only partially correct. Social security numbers are required when certain specified items are sold under broker reporting regulations - Krugerrands, Maple Leafs and gold bars (25 ounces or more); silver bars (1000 ozs or more) and 90% silver coins ($1000 face value or more); platinum bars (25 ounces or more). Essentially, the dealer must fill out a 1099 form which requires obtaining the client's social security number when a client sells to a broker. This is no different than the 1099 form filed by your bank or brokerage firm.

THERE ARE NO OTHER REQUIREMENTS under the Patriot Act or anything else. If there is a requirement to obtain social security numbers beyond what's outlined above, or under some interpretation of the new regulations, it is news to us. We are very familiar with ICTA. Diane Piret is a long-time friend of the firm. ICTA to our knowledge has not issued anything that states that there is a new regulation, or interpretation of the regulations, with respect to social security numbers, and there certainly is not anything about social security numbers in the ICTA memorandum you link.

Kilo

(11/17/2005; 15:57:57 MDT - Msg ID: 138065)

Flatliner....

What I meant by "removing the dollar backing from the gold" is that simply revaluing gold to the higher level, and then making it "non-redeamable" (gold for dollars or "profit taking") would effectively defeat the purpose of using the gold as backing in the first place. It would be like backing a real estate loan with property on the moon. How exactly do you foreclose ? Unless there remains the freedom of redeamability from gold to dollars and dollars to gold, the "backing" is a moot point and just another form of deception for the sake of keeping the sham of paper alive.

Kilo

Flatliner

(11/17/2005; 16:10:56 MDT - Msg ID: 138066)

@Kilo (11/17/05; 15:57:57MT - usagold.com msg#: 138065)

I believe that we see the situation in the same light. Thank you for the clarification.

I believe that Gold will always be tradable. I also believe that the world is moving to international currencies that have gold as a reserve that can be sold in the open market to support the currency. Thus, in order for gold to support the US currency we must have mega millions of ounces in the treasury, or, gold will have to be revalued with respect to the US currency (to bring it in line with other world currencies).

The part that is a little scary is when this operation occurs, if it occurs. That is the point at which we all have to be patriotic and maybe, give up a little gold. Thus, the best defense is to make it out of site and out of mind.

USAGOLD - Centennial Precious Metals, Inc.

(11/17/2005; 16:42:55 MDT - Msg ID: 138067)

Addressing the confiscation risk

Please be advised that there is an effective, low-cost, low-profile strategy within the current rules of the game that greatly enhances your likelihood of surviving any potential confiscation with ownership of your gold intact.

Contact one of our knowledgeable brokers for a consultation.

1-800-869-5115

Buongiorno!

(11/17/2005; 16:59:58 MDT - Msg ID: 138068)

Sir Ssmeagol! (can you hear it?) only...

Buongiorno!

(11/17/2005; 17:05:25 MDT - Msg ID: 138069)

SSir Smeagol...

From tips of my toes,
To ends of my thinning hair!
Time to rock and roll!

(excuse posting error) New x's on the P & F charts--breakout! (psst! looks like 525) pass it on!

Chin-chin....Ting!
Buongiorno!

Chris Powell

(11/17/2005; 17:35:50 MDT - Msg ID: 138070)

Noticing that real gold costs more than paper, India expects $500 soon

http://groups.yahoo.com/group/gata/message/3459Latest GATA dispatch.

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Chris Powell

(11/17/2005; 17:53:47 MDT - Msg ID: 138071)

James Turk sees something 'fundamentally different' in gold's rise this week

http://groups.yahoo.com/group/gata/message/3460Another GATA dispatch.

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specie-man

(11/17/2005; 18:03:10 MDT - Msg ID: 138072)

gold confiscation - @admin

What I'm attempting to say is that the new Patriot Act requires bullion dealers to write and put into place a written "Policies and Procedures" plan. And *if* that plan calls for collecting social security numbers, then they will have to do so for every transaction.

Chris Powell

(11/17/2005; 18:04:08 MDT - Msg ID: 138073)

Copper trader throws market into confusion

http://groups.yahoo.com/group/gata/message/3458Will China pay up or force defaults?

Another GATA dispatch.

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USAGOLD Daily Market Report

(11/17/2005; 18:09:47 MDT - Msg ID: 138074)

Page Update!

White Hills

(11/17/2005; 18:28:01 MDT - Msg ID: 138075)

Currency reform

I have no doubt that any currency reform or revaluation will include Gold confiscation. It would also include making IT ILLEGAL TO OWN GOLD and nationalizing gold production. TPTB may call it something else but rest assured that is what it will be/ It is going to be a worldwide scramble to get as much Gold as possible. Nothing else makes any sense IMO.They will, of course, revalue AFTER CONFISCATION. White Hills

David Linkley

(11/17/2005; 18:48:25 MDT - Msg ID: 138076)

Powerful move underway

Take your pick of reasons why gold is suddenly moving higher. Less transparency at the Fed, Bush insulting the Chinese in public, short derivative positions blowing up (i.e. Refco), intense media campaign against gold, rumors of GM entering bankruptcy, the EURO being shredded by gold forcing the ECU to begin raising interest rates which will weaken the dollar? This is a very powerful move across the board in metals. Could it be that large financial interests are getting into hard assets quickly because they smell an economic event coming? Take your pick but gold is trading differently and time is short. Are you ready?

Goldilox

(11/17/2005; 19:02:33 MDT - Msg ID: 138077)

Money Laundering Controls

As described by admin, these have been in place for years, to support the IRS Corporation.

They are essentially no different than are imposed for buying a car or motorcycle with CASH.

Any single transaction over $10K is reportable. Any succession of transactions over $10K cumulative are supposed to be monitored by the receiver to see if they suspect money laundering.

If you want to escape this reporting, use a check. If you don't want the check to show in your personal account, use a teller's check.

At this point the rules are focused on cash transactions, not all transactions.

I once had my bank ask about 10 separate $5K deposits over a few months time. I told them I was playing cards at the casino on $5K buy-in tables, replacing my buy-in the next day. They said OK and I never heard anything more.

Smeagol

(11/17/2005; 19:06:18 MDT - Msg ID: 138078)

Trader eating his copper lunch (gaaak!)

... ssuch a fuss over copper... and for good reason, too! (cackle!) Will this draw eyes to the silver and gold markets? Sssurely this might insspire some to examine the short positions in those metals?

The "shorts" musst be ssquirming, at these prices.

Thank you Ssir Chris Powell for the (very entertaining and intriguing) sstory!

S.

PRITCHO

(11/17/2005; 19:28:05 MDT - Msg ID: 138079)

Sad News - - - - ( Non Gold News Flash)

Crawford, Texas --

A tragic fire this morning destroyed the personal library of President George W. Bush. The fire began in the presidential bathroom where both of the books were kept. Both of his books have been lost.

A presidential spokesman said the president was devistated
as he had almost finished coloring the second one.

DoubleEagle

(11/17/2005; 20:34:40 MDT - Msg ID: 138080)

Pennies from Heaven?

I was born too late to enjoy taking silver coinage from circulation. I've received exactly 4 silver coins in change over the years, a 40% half, 2 dimes, and a war nickle. So, when I heard that copper prices were getting high, and knowing that pre-1982 pennies were 95% copper, I started culling them from my coin jar everytime I roll. Maybe it's futile, but I find it's kind of fun. I'm getting about 10% to 15% pre-'82's in change. Anybody else having this kind of "fun?"

Maybe more importantly, the literature that came with a recent US Mint proof set show the current dime, quarter, and half-dollar are 91.67% CU, and the nickle is 75% CU. Anybody know how high CU would have to get to make the government consider altering the copper ratios in coinage?

Maybe it will never amount to anything, I just like saving change.

Also enjoying the recent price action in gold. A far cry from the $305 level where I started buying physical.

-DoubleEagle

Smeagol

(11/17/2005; 20:35:04 MDT - Msg ID: 138081)

The Creature Amongst Us

http://www.goldismoney.info/forums/showthread.php?s=783ee87e7725e174eb1e5b81e3c9022e&t=3993
ssnip:
"THE MANDRAKE MECHANISM...What is it? It is the method by which the Federal Reserve creates money out of nothing; the concept of usury as the payment of interest on pretended loans; the true cause of the hidden tax called inflation; the way in which the Fed creates boom-bust cycles. From Chapter 10, The Creature from Jekyll Island."
:unssnip

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(Ai, wouldn't we jusst LOVE to get our fingers on the out-takes!)

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Goldilox

(11/17/2005; 21:06:25 MDT - Msg ID: 138082)

USGS EQ News

http://earthquake.usgs.gov/recenteqsww/Quakes/usfnbd.htmAnother biggie in the mountains of Chile and Bolivia. The mining region, I believe.

Chris Powell

(11/17/2005; 21:07:45 MDT - Msg ID: 138083)

China may default on copper contracts, exchange's former lawyer says

http://groups.yahoo.com/group/gata/message/3461He who sells what isn't his'n
Buys it back or ... hides in Xi'an.

* * *

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Smeagol

(11/17/2005; 21:09:58 MDT - Msg ID: 138084)

@ Ssir Chris Powell:
ROFL!

S.

Smeagol

(11/17/2005; 21:39:02 MDT - Msg ID: 138085)

Captain Hook on the M3 issue

http://www.gold-eagle.com/editorials_05/captainhook111705.html
ssnips:

"In this regard, as this information is of importance to us, the primary concern is they are effectively removing all of our reliable tools to discern exactly what they are doing, where for all intents and purposes, they will be able to debase the Dollar at any rate they wish after March of next year, and nobody, including other governments, will be the wiser...
...you should know it will be impossible for currency traders to properly value the world's 'reserve currency' against it's counterparts after these changes are implemented, especially considering they will not be reporting on Eurodollars anymore. Therein, (ex)cept
for high-level currency traders, most do not realize the USD trades more off Eurodollar interest rate differentials than any other factor in the market, as these differentials
reflect relative currency debasement rates between Europe and the States, where the Euro comprises more than half of the USD Index."

S.

Chris Powell

(11/17/2005; 21:50:57 MDT - Msg ID: 138086)

London Telegraph: Gold's burst through $480 prompts covering by big shorts

http://groups.yahoo.com/group/gata/message/3462No resistance until $510?

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Chris Powell

(11/17/2005; 21:53:22 MDT - Msg ID: 138087)

Yikes! Even the Financial Times is starting to get it!

http://groups.yahoo.com/group/gata/message/3463Dishoarding by central banks has been
closing the gap between demand and
supply, but now other central banks
are becoming buyers.

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goldquest

(11/17/2005; 22:16:15 MDT - Msg ID: 138088)

M 3 Issue

"But to repeat, openness is an obligation of a central bank in a free and democratic society. U.S. elected leaders chose to vest the responsibility for setting monetary policy in an INDEPENDENT entity, the Federal Reserve.
Transparency of our activities is the means by which we make ourselves accountable to our fellow citizens to aid them in judging whether we are worthy of the task."
A portion of: Remarks by Chairman Alan Greenspan.
Transparency in Monetary Policy. October 11, 2001

Apparently, transparency is being, "Phased" out!

mikal

(11/17/2005; 22:23:39 MDT - Msg ID: 138089)

@CPowell

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/11/18/cngold18.xml&menuId=242&sSheet=/money/2005/11/18/ixcitytop.htmlThanks for this link in a GATA dispatch tonight:
Gold at 18-year high after Russia pledges to pile in - Ambrose Evans-Pritchard - November 18, 2005
Tantalizing clues near the end that fiat, at least to some, may not be all it's printed up to be. But then again, The
Telegraph and some other news outlets and economists, can talk about fiat and helicopters until their faces turn blue but still not be taken seriously... yet.

Druid

(11/17/2005; 22:43:21 MDT - Msg ID: 138090)

Future Fed Transparency or Lack Thereof...

Druid: Fed timing as always is impeccable. March of next year; let's see what big event might be taking place at about that time. Hmm, could it be the Iranian oil Bourse coming on-line. Naw, that would be too obvious. I don't think we're going to export democracy to Iran after all, the repercussions might be to uncontrollable, thus enter plan B. The day trading non-transparent Fed. Oh! Man, this pump is going to be bigger and better then the new economy one.

I don't know whether I dreamt it or not today, but, I could have sworn that some trader on television stated that he was predicting the dollar to go to 150 in the near future. Are we on our way to the dollar moonshot that FOA predicted would take place as gold and the dollar de-coupled?

Chris Powell

(11/17/2005; 22:49:56 MDT - Msg ID: 138091)

Derivatives dealing reaches record level

http://groups.yahoo.com/group/gata/message/3464Look at all that OTC junk. As good
as gold, or as good as a contract
to buy copper from China's State
Reserve Bureau?

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

gata-subscribe@yahoogroups.com

Sundeck

(11/17/2005; 23:35:18 MDT - Msg ID: 138092)

http://members.aol.com/gparrishjr/m3_inflation.htmlThe link provides a succinct discussion of the M3 issue accompanied by a helpful graph linking growth in M3 to real interest rates. (Don't think it hs been posted before...I have been away for the last week or two and I am still trying to catch up with events.) I am not sure if his analysis is rigorous, however???

Gold? Gold does not seem to be giving a tinker's cuss about the dollar's pretense at becoming "strong". Repatriatiation of overseas profits at favourable tax rates ends soon...that will probably slow dollar demand a bit. And then funds will probably reverse their momentum plays and start selling the dollar again. That should introduce another down-draught in the dollar. Repatriated funds have been sufficient to finance the growing deficits, but that will end with the year. FED will need to stand ready to monetize in the New Year. I wonder if Buffett is still holding his foreign currency position?

And yes, Sir Smeagol. Was it you who drew attention to the March 2006 coincidence of Iranian Oil Bourse start-up and cessation of M3 publication? I would imagine there to be some impact upon the volume of Eurodollars (major component of M3) needed to settle oil trades once invoicing in Euros becomes significant on the IOB. (But I don't really understand the dynamics.)

Good to see The Forum has been active...but difficult to catch up on all the discussion points. :-(

Cheers

mikal

(11/17/2005; 23:35:34 MDT - Msg ID: 138093)

@Druid

What we'd see with the dollar index @ "150":

*Dollar stores selling imported goods would change to 'half dollar' stores.
*Unemployment numbers would not be presented using hedonics, statistical filters or press releases. M3 redux.
*Trade partners could aim to normalize
export/import balances by switching partners.
*Dearer dollars means you get more gold for your dollar.
*'Floating currencies' would take on a whole different meaning.
*The dollar index might, like the Dow, Nasdaq and S & P, be changed to include obscure numeraires while dropping 'underperformers'.

mikal

(11/17/2005; 23:51:00 MDT - Msg ID: 138094)

@Sundeck, Smeagol

How likely that the Fed will NOT cease reporting of those monetary aggregates out of necessity or change of plans?
Or is the Fed instead 'buying time', tricking and appeasing certain (important) parties and plans to REVERSE its decision?
Will the Fed be FORCED to reconsider terminating monetary reporting and transparency?

Gandalf the White

(11/18/2005; 00:07:14 MDT - Msg ID: 138095)

BUT, Sir Sundeck --- one only needs to watch this link ! <;-)

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=G"TO the MOON, Alice !"
(note the new "Preliminary Bullish Price Objective" of this Double Top BREAKOUT !!)
<;-)

Sundeck

(11/18/2005; 02:39:52 MDT - Msg ID: 138096)

Sit back and watch, Sir Gandalf?

Yes...it is almost too easy at the moment...

Better still, I take my dog for a walk and watch him leap.

His name is not "Spot"...but he is named after a prominent, mid-tier Australian gold/silver explorer/producer with promising interests in Mexico.

A stray puppy who has proved to be quite a remarkable dog and companion...

;-)

Sundeck

(11/18/2005; 03:15:57 MDT - Msg ID: 138097)

FED "transparency"

@mikal, goldquest, Druid, et al.,

Is the FED playing games? Maybe.

One thing is for sure...when a modern State, or senior instrument of a state, asserts some noble aim or that it is going to act with high moral purpose that is almost a SURE SIGN that it has some scurrilous scheme in the wings. Great words accompanied by sly deeds...the mechanics of deceipt...just one of the slimy tools of the modern state...

The monetary web is becoming so tangled that it is even beginning to catch the spiders that weave it...God help we poor insects who try to navigate an honest course through life...

:-)

contrarian

(11/18/2005; 03:38:00 MDT - Msg ID: 138098)

confiscation

thanks everyone for a most illuminating discourse about confiscation...think I better know now what might occur (overnight perhaps, look what happened in Argentina et al): confiscation, revaluation at a higher gold price, replacement of gold with new paper dollars, backing of new currency with gold, new world monetary system, as for new legal controls, who knows, but to me sounds questionable to happen for gold reasons, as so few people own gold, perhaps for other reasons
To do: hold on to your gold as long as possible and beware of safety deposit boxes!

contrarian

(11/18/2005; 03:44:15 MDT - Msg ID: 138099)

confiscation

Also, look at the M3 shenanigans as a harbinger. If they're so nervy and bold as to do this now, when the surface is relatively calm (at least to the sheeple) imagine what they'll do when the S really hits the F! It's only a portent of things to come I fear. They'll fight to their last breath to keep the dollar status quo...and of course will ultimately lose...we are living in interesting times!

Smeagol

(11/18/2005; 08:28:11 MDT - Msg ID: 138102)

The making of things bullion into things not bullion has been mentioned before... we thinks it is a good way to further shield golden wealth... confisscation in the form of tax or other limits... sss...is pretty much unavoidable.

S.

Goldilox

(11/18/2005; 08:55:20 MDT - Msg ID: 138103)

World must tackle market downside risks-BOJ official

Reuters from trading account newsarticle:

November 18, 2005 10:40:45 (ET)

FRANKFURT, Nov 18 (Reuters) - The global economy must carefully handle downside risks and potential instability in financial markets, a senior official of the Bank of Japan said on Friday.

Eiji Hirano, Assistant Governor of the BOJ, told reporters after a banking conference in Frankfurt that Europe and Asia need structural reform and the regions have to gain more flexibility to absorb economic shocks.

"Financial forces benefit the global economy, financial system to a great degree. At the same time we've got to be very careful about potential instability of the market expectations which govern the market dynamics," Hirano said.

"That's the task for the public sector as well as market participants. If we properly handle the downside of the financial forces there is no reason for us to worry about."

Hirano referred to the Group of Seven statement calling for structural reforms in Japan and Europe and said the two regions may be lagging the United States.

"As the G7 statement clearly mentioned, both Europe and Japan need structural reform to beef up potential growth rate and to beef up domestic demand. That implies we may be lagging behind the U.S in this process," he said.

"It may be that we are lacking a sufficient degree of flexibility. That's the problem we share between Japan and Germany or Asia and Europe. The rest of Asian regions have shown great flexibility in absorbing shocks. We have to follow suit."

-Goldilox

It seems a lot of folks want to believe that what goes up must continue to go up in perpetuity.

Clink!

(11/18/2005; 09:43:09 MDT - Msg ID: 138104)

2c-worth @ DoubleEagle

You can't have seen, but I have been occasionally posting the metal value of old and new pennies for almost two years now. I'm neither looking at it from the point of view of significant value as savings nor as collectors items - even base Roman coins are still not worth that much to this day, and, sadly, I think the Clink! lineage and stash will have been dispersed to the four corners of the world long before the year 4000 (or whatever calendar is then in use).

I'm looking at it as a real-world test of Gresham's Law, where good money drives out bad. In this case we have good, worse and none in the form of pre-1982 pennies, post-1982 pennies and the point where a nickel is the smallest denomination in current use. (When that happens, which way do you think banks are going to write their rounding algorithms, hmmm ?)

My first calculation was just before Xmas '03, with the old penny at 0.744c and the new at 0.264c. Last Xmas was 1.016c and 0.358c respectively. Now, it stands at 1.313c and 0.423c. That's some rise over 2 years (lucky there's no inflation to go with that price rise !).

The last time I checked a bunch of coins (March '05), there were still the usual low-mid 20% of old pennies. I'll have to raid the jar my colleagues and I keep to do another count soon.

I think the disappearance of the penny will come when even new pennies are worth more for the metal content than the face value. I remember reading stories of the "retired" coinage from the European countries being sold as scrap to China. There, they were used as a direct input to steel smelters. After all, they had a very precisely known metal composition, so were ideal for alloying.

C!

PS. Just thought - doesn't China have an immediate need for large quantities of copper to cover those shorts ? Maybe the disappearance is more imminent than I believed !

USAGOLD / Centennial Precious Metals, Inc.

(11/18/2005; 10:29:18 MDT - Msg ID: 138105)

Proven Reliability, Longevity, Quality and Professionalism ---- Invest with Confidence!!

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

Smeagol

(11/18/2005; 11:15:27 MDT - Msg ID: 138106)

Fed independence

mikal (11/17/05; 23:51:00MT - usagold.com msg#: 138094)
"How likely that the Fed will NOT cease reporting of those monetary aggregates out of necessity or change of plans?...
Will the Fed be FORCED to reconsider terminating monetary reporting and transparency?"

Sss... wait a minute... is not the Fed a private corporation? They actually doesn't have to tell the public anything if they doesn't want to. Check us on this?

S.

TownCrier

(11/18/2005; 11:21:06 MDT - Msg ID: 138107)

Federal buys Treasuries outright, injects cash reserves

The Federal Reserve today took part in open market operations despite a fed funds market rate which was trading in line with the recent FOMC target directive.

In addition to a temporary $2 billion in three-day repos, the Fed more significantly bought Treasuries outright, targeting coupon maturities from June 2009 to April 2010, thus 'permanently' injecting a freshly-created $1.095 billion in cash reserves for use by the nation's banking system.

R.

TownCrier

(11/18/2005; 11:34:22 MDT - Msg ID: 138108)

Barrick reaches settlement with Blanchard

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh50982_2005-11-18_18-02-08_wnb1588_newsmlTORONTO, Nov 18 (Reuters) - Barrick Gold Corp. said on Friday it has reached a settlement with New Orleans precious metals dealer Blanchard & Co.

Barrick said it will not make any payment of damages in connection with the resolution of the Blanchard antitrust case.

The gold miner also said its libel suit against Blanchard has been settled and that it has received a payment. The amount of the payment was not disclosed.

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

Reaching a simple understanding, and then buying the cheap gold while having that properly aligned knowledge of affairs has always been the better path to enjoying a superior position in the final outcome.

R.

(11/18/2005; 11:42:33 MDT - Msg ID: 138109)

China to Default on Copper Contracts Amid Shortage

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a06N6xBoYZ.Q&refer=home.

Goldilox

(11/18/2005; 13:02:37 MDT - Msg ID: 138110)

Barrick-Blanchard

What a surprise that a "Settlement" has been reached with NO disclosure of the terms.

Anything to keep the news value minimal!

Survivor

(11/18/2005; 14:39:28 MDT - Msg ID: 138111)

Physical?

A very fascinating afternoon here in the northwest. Stopped in at a local coin shop to pick up a 1/4 gold eagle for a retirement gift here in the office. The owner was extremely animated about how he had no gold to sell at all and hadn't had any for a few days.

So, off to the other side of town where the shop always has at least a few coins if not a few tubes. This owner was even more animated. "I have a safe full of cash that my customers have left as a deposit against any bullion coins I may be able to get. Right now I can't get any at all." He also said that Canada has stopped selling maple leafs to the US market.

This has never happened here that I can remember. It is all very 'interesting', and even more notable in light of the gold futures being about the same price as over-the-counter physical right now.

- Survivor

Smeagol

(11/18/2005; 14:57:08 MDT - Msg ID: 138112)

Of fortunes and fortunes

We cracked open another one of those odd crackers they gave us at lunch today... sss... and the tiny paper inside had thiss insscription:

"Luck happens when preparation meets opportunity"

Get lucky, get IT and be ready.

S.

TownCrier

(11/18/2005; 14:59:22 MDT - Msg ID: 138113)

Trichet speech today on global financial imbalances

http://www.ecb.int/press/key/date/2005/html/sp051118.en.htmlExcerpts:

...given the reality of today's world economy ..... [it] requires solid institutional foundations and policies, which we often refer to as the 'international financial architecture'.

The series of financial crises that marked, in particular, the period 1994-2002 led the international community to recognise the need to strengthen financial architecture as a core priority.

I was myself the witness of this major structural change in the global financial architecture at the end of the 90's and beginning of the years 2000. I see four main principles at work:

--first, ... --second, ... [see url for full list]

--third, the understanding that any improvement of the institutional framework ... has to take account of the optimal governance of the global integrated economic and financial system that we have been ***progressively developing***;

--and fourth, ...

...One of the weaknesses identified during the financial crises of the 1990s was that there had been considerable information asymetries between local authorities, market participants and the international financial institutions. Since then, the IMF has made considerable progress...... As a result, yield spreads show investors� greater ability to distinguish between assets with different risk/return characteristics. This does not, of course, mean that there is no more room for improvement.

For instance, further progress still needs to be made with regard to the way in which countries report information to the IMF on official foreign exchange reserves. This is all the more important at a time when reserves have been building up at an unprecedented pace since 2002.

While all these new initiatives have significantly contributed to the strengthening of the international financial architecture, I should emphasise that in a constantly changing world we have to remain alert and ready to adapt our institutions and policies.

We are in a situation where the global economy is expanding at a comfortable pace but, at the same time, we face external imbalances which have been significantly widening in certain core economies since 2002. These imbalances represent a downside risk to the global economy, but the international community fortunately shares the diagnosis of the situation as illustrated, for example, by the G7 statements I have been signing in recent years...

But it is not enough for us to agree on the diagnosis of global imbalances and the initial measures to be taken to facilitate their adjustment. We all have to step up our efforts to FURTHER EXECUTE the agreed measures. I therefore call for the resolute implementation of these measures by all partners involved, and for the IMF to further strengthen its supporting role in monitoring such implementation.

I am pleased to observe that this analysis of the main challenges for the global economy is shared by our Asian friends. This was confirmed � just last week, here in Frankfurt � by our discussions during the second high-level seminar bringing together the central banks of the Asia-Pacific region and the euro area, an event now taking place once a year in order to foster policy dialogue between these two important regions of the world.

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

Additionally, Trichet signalled in today's speech that the ECB's Governing Council, perhaps as soon as December's meeting, "is ready to take a decision to move interest rates and to moderately augment the present level of intervention rates...... We will withdraw some of the accommodation, which is in the present monetary stance, while this policy would remain accommodative. This move would aim at coping with the inflationary risk."

With regard to the mention of the IMF, while it may have been most satisfactory to suggest that the Fund simply get stuffed, it was the "diplomatically correct" thing to do, to suggest an avenue for its future usefulness in the face of an otherwise fading relevance.

Choose gold and stay atop the turning, churning world.

R.

David Linkley

(11/18/2005; 16:29:13 MDT - Msg ID: 138114)

RIP and condolances to the COT

As the commercials get shorter to fight golds rise to $500 a thought came to mind. Look at the price rise of copper when a rumored short (China) is in trouble with short positions much, much smaller than those in gold. Imagine as more investors demand a position in gold with central bank supply drying up. Good luck COT, your life support system is now being disconnected and we thank you profusely for keeping the price of gold low enough so we can buy more of it.

USAGOLD Daily Market Report

(11/18/2005; 16:46:35 MDT - Msg ID: 138115)

Page Update!

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

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

FRIDAY Market Excerpts

Gold rests with $17 weekly gain

November 18 (from Reuters) -- The gold market paused after a speculative rally that has hoisted gold up by 4.3 percent since the end of last week on expectations that it could soon touch $500 an ounce.

"The market is still looking strong," said George Nickas, vice president of sales at FC Stone in New York. "Fundamentally, it hasn't changed."

Nickas said gold ran out of steam near midday, after trading in metals and petroleum at the New York Mercantile Exchange was shut for half an hour by a computer glitch.

"It was poor timing that it happened on a Friday in the middle of the day, but gold should rise next week," he said.

Benchmark December futures shot to a life-of-contract high at $489.60 an ounce in off-hours NYMEX ACCESS electronic trading, which marked the highest for futures since January 1988. The contract closed down 70 cents at $486.20, still above a session low of $484.30.

The COMEX gold price has climbed more than 13 percent this year on heightened concerns about the U.S. economy and geopolitics and on general commodities strength. "I don't think we ran out of gas. We were up $20 in two days, we were due for a pullback," one COMEX floor trader said.

Analysts have said the market has been supported by comments by Russian authorities indicating that the central bank might double its bullion reserves and seek another 500 tonnes.

Sentiment was also sweetened by a demand report from the industry-backed World Gold Council on Thursday showing a seventh straight quarterly rise, bolstered by strong investment interest, analysts said.

"The trend for gold remains steady, with funds and market participants seemingly convinced that prices would be higher by the year's end or early next year, with targets marked between $500 and $525," Standard Bank said in a note.

[[[Editor note: Dow Jones reported the glitch incident as follows --

"During Friday's session, trading was halted at the Nymex for about 30 minutes due to a technical glitch with the wallboard on the trading floor, which displays prices and news. Traders at Mitsubishi International Corp. said once the glitch was resolved, traders holding long positions were 'scared into selling' as the market shed about $3.00."

-- Frankly, when you realize that these contracts are merely paper instruments, you can't blame a trader for getting panicky at the first sign of irregularities within their house of cards. With the Chinese copper futures incident showing obvious shortcomings in a nearby system, one should indeed expect to see these paper contracts trading at a significant discount to prices quoted for spot purchases of the physical metal.]]]

---(see url for full news, 24-hr newswire, market quotes)---

Noble1

(11/18/2005; 18:32:28 MDT - Msg ID: 138116)

The Rains Have Come and the Sprouts Are Breaking Ground

@FOA aka Sir Douglas Re: msg#132 11/12/01---4 years ago

It is unmistakable. The seeds that you and others (Sir Aristotle, Sir Oro, Sir TC, King MK, Sir BB, Sir Belgian, +++++) have sewn are now coming to life. We are all standing at the edge of the farm, spade in hand, eager to be put to work. We will weed the field while you again forge the Trail ahead of us. It is, in fact, Another time. Please accept this invitation from myself and I'm sure others (Do I hear a a second?)to again be our Trail Guide.

Best Regards,

Noble1

LimitUp

(11/18/2005; 19:09:46 MDT - Msg ID: 138117)

GUIDANCE

My wishes to are for your return.......

PRITCHO

(11/18/2005; 19:26:01 MDT - Msg ID: 138118)

@Sundeck - -Re Your Puppy (138096)

IF his name is Bol or Nisi then I also claim a large part in his wellbeing - -- :) I expect a pat if I've guessed right.

Goldilox

(11/18/2005; 22:06:11 MDT - Msg ID: 138119)

Spade in hand

@ Noble1,

You can't fool us. That "spade in hand" is to bury your golden stash!

Goldendome

(11/18/2005; 22:58:02 MDT - Msg ID: 138120)

Rethinking Sir Thomas Gresham

Sir Clink: Re your mes. #138104, We get your point on the copper/non-copper pennies. However, you have Greshams law stated just Backasswards. Cases in point: No gold, silver, or as you argue -- neither will copper eventually circulate -- driven out by cheap replacements, carrying the same face value.

Belgian

(11/19/2005; 00:24:39 MDT - Msg ID: 138121)

Trichet-ECB

ECB will raise euro-IRs from its historical lows...REGARDLESS of what Rato (IMF) thinks is appropiate...REGARDLESS of what politicians or big business think as very convenient ! Trichet does what has to be done after having been extremely accomodative.

EMU now looks after itself as other blocks do and this results in less support for the troublesome $-IMS.

Russia will double its goldreserves with its own underground gold...Argentina whishes to leave the IMF advise for what it is and continues to build its goldreserves. South Afrikan CB also goes for goldreserves.

US sanktions to China are postponed, South Korea will pull troops out of Irak, Russia will deliver enriched uranium for Iran, China will invest in N.Korea...etc.

We see a rising trend of more autonomy, away from US-$ and $-IMS consensus. On CB level and political level.

Trichet wants to avoid that oilprice rises cause secondary price-inflation effects (wage rises). He wants as much price stability for the eurozone as possible. It is in this context that oilprices in � and $ + �/$ IRs, do evolve. Euro M3 must come down and any bubbles (housing) avoided.
�-PoO hasn't caused secondary price inflation (nor deficits) in eurozone.

And now we see the price of euro goldreserves starting to float and can be marked to the market accordingly. The �-$ exchange rate remains comfortable and isn't affecting Eurolands internal economy and exports.

Under these circumstances (balances and unbalances), we see a changing goldprice behavior that has broken its old links with the dynamics that reigned in the past 2 decades. Gold is becoming the wealth-reserve whilst USTreasury gold remains fixed at $42/ounce. An anachronism !

Whilst the total derivative volumes continue to increase, gold goes steadily for gold-wealth-reserve status. The reason why this happens steadily and gradually is for giving the old structures enough time and space to adapt to this new and irreversable fundamental. It all started 3 decades ago in 1976 : The IMF ratified THE JAMAICA ACCORDS. These accords formally recognized the ***managed*** floating currency system >>> for the time being ! But much more important >>> GOLD WAS DEMONETIZED AS A RESERVE ASSET !!! Meaning >>> Gold was NO LONGER ***BACKING*** the currencies as it did in the old $-gold exchange system.
Duisenberg repeated what was already agreed then (1976) : GOLD IS A RESERVE ASSET. A non-currency, real wealth, reserve asset ! Gold, in this accord, was set free to become a backing for any ***economy*** (Argentinian, European,Russian, Chinese (Asian)...)
And you all know what happened with goldprice from 1976 to 1980.

Now, 25 years later, we have some changes : Another currency (�) and Another oil context. This time, the gold revaluation is not going to stop pr�maturally as it did in 1980.

Sundeck

(11/19/2005; 02:18:26 MDT - Msg ID: 138122)

@PRITCHO...Silver Hound

Ahhh yes, Sir Pritcho...the dog is indeed called "Bolnisi", or "Bolli" for short...and when he is old he'll get just "Bol". (You get your pat.)

He is black with silver/white collar and tips and with distinct golden intrusions along his flanks...appropriate, wouldn't you say? He followed me home one cold Winter's day in July two years ago - a little flea-bitten puppy, all lonely and lost - on a day when I was awaiting a quarterly report/announcement from BSG. I didn't know what to call him, so I called him "Bolnisi"...wonderful dog!

Cheers

:-)

Henri

(11/19/2005; 07:52:58 MDT - Msg ID: 138123)

Noble1

Spade in hand or no, I second your invitation for the return of FOA as our Trail Guide...The trail however, was clearly laid out previously and congratulations to all who stayed upon it. For those of us who have strayed or taken perhaps some "sidetrips" to see the view from Another nearby peak before returning to the trail (dabbling in gold mining stocks as it were), of course, it is never to late to get back on the trail.

USAGOLD / Centennial Precious Metals, Inc.

(11/19/2005; 07:58:16 MDT - Msg ID: 138124)

A world of gold at your fingertips...

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

Goldilox

(11/19/2005; 08:05:29 MDT - Msg ID: 138125)

No gold for sale?

@ Survivor,

Maple Leaf prices do seem to be creeping up, as they used to be less than Eagles based on their vulnerability, but lately seem to have achieved parity. Scarcity? I don't really know.

Your local store situation is somewhat reflected by my local dealer. I do not deal with coins shops, per se, as I have been "turned on" to their local "wholesaler". The other day I stopped in while a man was selling him large bags of Ikes. I asked if the bags contained bulk silver coins and my dealer exclaimed, "No. If they were, I could make some serious deals."

Haven't heard him say the same about gold, although he rarely carries more than aout 30-40 odd Oz. in-safe. Maybe he calls CPM for larger orders?

I don't know if MK cares to share anything on scarcity of certain products, as he would likely feel that the info is proprietary, or be concerned he would be accused of "creating artificial demand".

I guess the real way to find out is call CPM, belly up to bar, and see if you get an excuse about why that product isn't available. Of course, if it is, you might just be expected to buy it, since that is their business.

(:^) Goldilox

P.S. No offense, MK and TC. Just messin' witcha.

Henri

(11/19/2005; 08:14:54 MDT - Msg ID: 138126)

The true lesson of gold must periodically be relearned

Ah the folly of mankind...believing that they can obtain something for nothing at the word of another. My apologies to those who believe they work very hard in passing investment advice to others. Sure an increase in fiat digitation does appear in the accounts of your clientele, but surely you have informed them that it is really only a prestidigitation. All gains are negated with the double edged sword of taxation and the printing press (and now a few keystrokes on a computer somewhere).

What is happening is a global acknowledgement of truth.

And what is truth? Truth is that quality of events or that does not change in nature even when viewed through the illusory glasses of time. It is said that one knows the truth immediately when one sees, hears or feels it.

Much like true love, or an act of random kindness toward another, gold cannot be transformed by the element of time. The only way to increase the amount of gold held is to add to it (the old fashioned way).

Fiat enjoys not this priviledge

The Invisible Hand

(11/19/2005; 08:55:57 MDT - Msg ID: 138127)

Thomas Aquinas and the Truth

some random quotes from Thomas himself and from commentators;

The ultimate appeal of any philosophy however will be
- NOT in terms of its originators or its teachers
- BUT in terms of its truth

studium philosophiae non est [instituta] ad hoc quod sciatur quid homines senserint, sed qualiter se habeat
(the study of philosophy has not been instituted in order that one knows what men think, but in order that one knows the truth)

Truth is the identification of the knower in act with the known in act

During apprehension, the mind does not yet know that the content of its representation is in conformity (or not) with reality; with the RES (the thing) ;
when it JUDGES, however, it does know

The intellect �in contrast to the senses � can know its conformity with intelligible things.
However, it does not perceive this conformity when it knows the essences of things,
but rather when it judges that the thing really IS the same as the form of the thing which it apprehends.

True knowledge, which is fully attained in judgment,
automatically involves the intellect's turning back upon itself, a REDITIO
By this reflection, which is present in any judgment, truth is known.
The intellect returns upon itself and, in the course of this reditio,
it reflects upon its own act,
not only in the sense of being aware of the act,
but also in that it knows the proportion of the act of knowing to the thing,
which implies knowledge of the nature of the intellect,
and of knowledge itself,
which consists in identifying oneself with things.

Noble1

(11/19/2005; 09:20:01 MDT - Msg ID: 138128)

Yesterday's Discussion msg#138116

sewn=sown

Henri

(11/19/2005; 09:26:15 MDT - Msg ID: 138129)

Critique of Aquinas

Invisible Hand,
While I have no issue with Sir Aquinas as a Philosopher of note, I disagree with him on truth.

From my perspective, which I fully admit may be fundamentally in non-alignment with those of others, the moment one passes judgement is moment one loses grasp of truth. The passage of judgement locks an event in time and may only be interpreted while in the context of the time of that moment.

Real truth transcends time or any attempt to lock its definition within.

Like water, truth flows freely and takes the shape of the container that seeks to hold it. We are now speaking of the mindset of the beholder of truth. When a dozen people are confronted with the truth they each interpret for the others differently. Why is this so? Because each of their containers (their experience base if you will) are of a different configuration some holding more of the truth than the others and therefore able to perceive it more readily and recognize its nature. This does not translate into an ability to interpret truth for another precisely because of the differences in individual experience basis.

Sir Aquinas has invoked intellect as a tool for interpretation and has thus thrust his sword way off the mark.

Thus, the only way to perceive truth is individually and this is best done in stages. For as we grasp at a definition, like water, the tighter we grasp the quicker the truth passes from our hands (figuratively speaking).
Seek not to define truth but only perceive its essence as it moves before you. The perception of truth once perceived must then be examined as to where it is inconsistant with one's experience base. Find the boundaries of thine own vessel and expand them to include the possibility that the way you perceive reality/truth is tainted by early life conditioning of response to stimuli.

When the walls of the vessel have been fully comprehended, shatter it!

Only then can truth be perceived. Without judgement

Like a warm bath it feels good...peaceful...

Ned

(11/19/2005; 10:28:47 MDT - Msg ID: 138130)

@ Belgian

Forgive me for I have fallen asleep, I do not recall some of things:

"US sanktions to China are postponed, South Korea will pull troops out of Irak, Russia will deliver enriched uranium for Iran, China will invest in N.Korea...etc. "

In particular, I don't ever remember hearing that Russia was to "deliver enriched uranium for Iran".

Where is this mentioned in the news?

TIA

The Invisible Hand

(11/19/2005; 10:31:55 MDT - Msg ID: 138131)

Natural Law and Truth

To continue the discussion of some days ago with Goldilox and returning to St. Thomas: To the natural law belong those things to which man is inclined naturally and among these it is proper to man to be inclined to act according to reason.

Reason or reality, not the container that seeks to hold it, is the standard of truth.

To repeat: Truth is the identification of the knower in act with the known in act

Yes, it's true that "Primo ... in conceptione intellectus cadit ens" � the first thing which falls in the intellect is being.
The realisation that there is (a) being does not necessitate the intervention of the intellect. But truth is IDENTIFICATION, said Thomas. For an identification, reason(-ing), the intellect, is required. The intellect is needed to establish the equivalence of the two sides of the equation, the equation between the knower and the thing known.

contrarian

(11/19/2005; 10:41:05 MDT - Msg ID: 138132)

what the H is happening to G?

Guided

(11/19/2005; 10:44:48 MDT - Msg ID: 138133)

Why INO chart here shows 499+ gold and 485+- at INO site

Very curious.......... what's the reason for this?

contrarian

(11/19/2005; 10:45:53 MDT - Msg ID: 138134)

shows $499 at INO site...refresh your browser

mikal

(11/19/2005; 10:52:19 MDT - Msg ID: 138135)

@contrarian, Guided

Access market? Glich? It remains to be see, but
whimsically I propose that gold is "identifying with the truth" of it's 'being'- a futile effort destined to
last as long as their is someone to see it, as "the truth"
is not bounded by names and forms (sensory perceptions and conceptions).

Guided

(11/19/2005; 10:57:04 MDT - Msg ID: 138136)

Ctrl+F5 (refresh) on both sites does not change the disparity

If this feed is from INO, what is going on? Why is this site showing a spike and others remain at 485.4?

contrarian

(11/19/2005; 11:00:56 MDT - Msg ID: 138137)

try clearing the cache in your browser, then closing down

your browser, and starting it up again.

We should be seeing the same thing. I'm definitely seeing $499. I suspect you're seeing a cached page.

Druid

(11/19/2005; 11:10:06 MDT - Msg ID: 138138)

(No Subject)

Druid: Is the Dubai Exchange open for business and is the Castle here picking up a feed from it?

Survivor

(11/19/2005; 11:15:19 MDT - Msg ID: 138139)

INO Price Display

@ Druid, Contrarian . . .

With a fresh boot-up this morning, the INO display on this page also shows 499 while the INO site itself shows 485. This is just a glitch in the technology I'm sure. The kitty-cat castle also shows 485.

- Survivor

Druid

(11/19/2005; 11:22:37 MDT - Msg ID: 138140)

Survivor (11/19/05; 11:15:19MT - usagold.com msg#: 138139)

Druid: Doesn't Hong Kong trade on Saturday morning? Could be our President is making a real showing on his Asian tour and the Hong Kong Market is reflecting their confidence. I don't know, my coffee is pretty strong this morning.

@Sundeck, everytime big brother gubmint and its surrogates are here to hep ya, grab your wallet and take the opposite side of the trade.

TownCrier

(11/19/2005; 11:29:45 MDT - Msg ID: 138141)

Could GM go bust?

http://www.canada.com/national/nationalpost/financialpost/story.html?id=cbe393f7-f4cf-4ce0-af88-0201b41ec1d1November 19, 2005 -- GM's cars once epitomized America's power and prosperity. With possible bankruptcy around the corner, the parallels between the company and the U.S. economy remain, but they're a little chilling.

"It is our view that bankruptcy protection for GM is increasingly looking like a reasonable way to properly address the company's retirement liabilities and job security benefits," says Ronald Tadross, a Bank of America Securities analyst.

GM blames soaring health care costs for its workers, which amount to about US$1,500 per car. It is paying US$5.6-billion a year, the majority to workers who are retired.

The famous slogan from the post-war economic boom, "What's good for General Motors is good for the country," is starting to sound ominous as economists worry about the potential damage in the United States and around the world.

The administration of George W. Bush has cranked up the current account deficit to US$666-billion and the federal government debt is more than US$8-trillion, two-thirds the size of the economy and growing at US$3.5-billion a day.

And the leading edge of the Baby Boomers are entering their sixties, meaning a growing number will be joining those on social security and Medicare.

^---(from 3-part article at url)---^

Don't entrust your retirement well-being to either corporate- or government-sponsored pension programs. It is too vulnerable for simple bankruptcies and debt-ridden dollar-depreciations to undermine any security you might currently believe to exist in such retirement programs.

Suffice to say, the state of your well-being is most properly upon your own shoulders, so have a care to size up your situation, and choose gold -- it'll be there for you when you need it with the sort of rock-solid purchasing power that you'll find in no other asset.

Give a call to one of the brokers at USAGOLD-Centennial Precious Metals this week, and let gold ownership be one of the many things you're thankful for over the coming Thankgiving holiday.

R.

Guided

(11/19/2005; 11:38:38 MDT - Msg ID: 138142)

Gold quote - not the browser - it's Live FOREX

Click on the INO link on the chart, then when on INO's home page, click on gold in the upper right listing box on the Gold link. This will take you to the active FOREX chart which is apparently what is fed here.

Very good CPM!

Active, international quotes.

Which brings me to another subject. Confiscation. Don't expect it! The world is not anything like it was in 1933. It is by design an international market as seen by the live quote here.

Toolie

(11/19/2005; 11:38:40 MDT - Msg ID: 138143)

Re: Townie -- GM, F

Greenspan may not stop the �motor of the world�. But DC/Fed has the �motor city� on its knees.

Survivor

(11/19/2005; 11:39:54 MDT - Msg ID: 138144)

Phinding Physical

@ Goldilox

Thanks for the additional information from your area.

The local shops are our only outlets without going for a long drive. In the past (1999 - 2004) these shops always had much more in stock than the local wholesale outlet you mention. Typically, I could choose among a nice selection of 10 and 20 lot tubes at either location.

More noticeable than the lack of stock is the excited and even agitated demeanor of the proprietors. These normally calm business folks seemed more than a little bit distracted by the apparent sea-change in this market.

It is one thing to read about CB manuevers half a world away. When the change comes to your local market, things do seem a lot more 'interesting'.

No apparent change in the availability of silver, though. (Yet.) The retirement gift ended up becoming a nice selection of silver eagles. I was pleased that my office peers went along with the PM idea. How many retirement gifts have a chance to appreciate instead of just catching dust? :)

- Survivor

Chris Powell

(11/19/2005; 11:48:08 MDT - Msg ID: 138145)

Gold seems to have won the Blanchard case

http://groups.yahoo.com/group/gata/message/3470Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

contrarian

(11/19/2005; 11:49:04 MDT - Msg ID: 138146)

Bankruptcy and GM

Bankruptcy is now the easiest way for companies weighed down by guaranteed benefits to reneg on their obligations...look at Delta, Northwestern, et al. Everyone's doin it! It's the latest craze!

Survivor

(11/19/2005; 11:54:37 MDT - Msg ID: 138147)

Will The REAL Live Gold Price Please Stand Up?

@ Druid -

Well well. Drill down to the live INO page as you suggest, and there certainly does seem to be some volatile Saturday trading in progess!

The technical glitch seems to be that the front pages of INO and kitty-castle are not updating.

Here's wishing a golden day to everyone here. Unless you want to quibble about the spread between Bid and Ask, THE MOMENT OF $500 PHYSICAL SEEMS TO HAVE ARRIVED!!!!

Now we can spend the rest of the weeking trying to decide if this is the good news or the bad news.

- Survivor

contrarian

(11/19/2005; 11:58:56 MDT - Msg ID: 138148)

Opening of Shanghai market

http://www.shanghaidaily.com/art/2005/11/18/215069/24_hour_gold_trading_comes_to_Shanghai.htmPerhaps spike is due to opening of Shanghai market today? That's just like the Chinese, they'll give you due warning if you have ears that hear, but when you least expect it they'll hit you with it, forewarned.

Guided

(11/19/2005; 12:05:50 MDT - Msg ID: 138149)

Live quotes

This is not a glitch as I first thought but just as it says if we take the time to read it carefully.

The 485.4 is the new York closing price.

the 499.9+- is the live Forex spot.

It's a good thing. How would it look for the US gov to try and confiscate citizens assets that they have had the same freedom to acquire over years.

To give your sons and daughters lives protecting the freedom of those in foreign states and rebuking other states for not abusing the freedoms of their citizens, only to turn around and take the freedom of your own would look very bad!

Goldendome

(11/19/2005; 12:11:40 MDT - Msg ID: 138150)

BMO Harris Weekly conference call to clients.

http://www.bmoharrisprivatebanking.com/webcast.aspThanks to Ned for first posting this site about a month ago. Since -- I have listened weekly to the conference call as recorded. This week they talk of Gold, copper, oil, and the economy. Don -the host- has in depth insight that you may find helpful in understanding today's metal and resource markets, if your computer can talk.

Guided

(11/19/2005; 12:16:51 MDT - Msg ID: 138151)

contrarian - I think you're right on

The Chinese will prey on our weakness. They are smart that way.

As I said, while we are rebuking them for their abuses of their peoples freedoms, we can hardly afford to confiscate our own peoples freedom. The Chinese and others would use the leverage of that act in a powerful way. That's what I mean when I say, this is not 1933. The world is a stage for all to see now.

contrarian

(11/19/2005; 12:24:27 MDT - Msg ID: 138152)

Guided...well put!

Yes, and the Chinese have and will give you the proverbial rope to hang yourself with, if you look at the condition of the American economy now! They don't really even have to make the scaffold or tighten the screws, they just let go of the rope!

compwiz4u

(11/19/2005; 12:38:46 MDT - Msg ID: 138153)

Silver is Up, Too

http://quotes.ino.com/chart/?s=FOREX_XAGUSDO&v=iSilver is up $0.25 today at INO to $8.28.
If this & gold's price are valid, next week should be fun.

specie-man

(11/19/2005; 12:40:00 MDT - Msg ID: 138154)

Saturday silver spot

Ino is also showing Saturday spot silver prices up 25 cents to $8.29

specie-man

(11/19/2005; 12:41:36 MDT - Msg ID: 138155)

Saturday platinum spot

... and Ino shows Saturday platinum spot at $1006 currently.

Goldendome

(11/19/2005; 12:54:19 MDT - Msg ID: 138156)

Gold near at $499.90 right now?

INO charts, again: Is gold really up $14.62 today? Up to $499.90? I didn't think these charts were active on Saturdays. Maybe someone can clarify?

specie-man

(11/19/2005; 12:57:21 MDT - Msg ID: 138157)

Saturday spots

Or perhaps, at close on Friday, spot (physical) decoupled from futures (paper) ?

The Invisible Hand

(11/19/2005; 13:03:02 MDT - Msg ID: 138158)

From last May

http://www.ameinfo.com/59593.htmlUnited Arab Emirates: Monday, May 09 - 2005 at 07:28
The Dubai Gold and Commodities Exchange is expected to go live later this year. Officials told Gulf News the exchange would allow gold trading on Saturdays and Sundays when global markets are closed. The DGCX will allow traders to hedge, manage inventories and predict strategy.

Toolie

(11/19/2005; 13:26:15 MDT - Msg ID: 138159)

DGCX

http://www.dgcx.ae/Dubai goes live Nov. 22

HOOSIER GOLDBUG

(11/19/2005; 13:45:21 MDT - Msg ID: 138160)

SETTLEMENT!!

Barrick agrees not to extend gold hedges for 10 years, but some agent of Barrick in the Carribean can sell all the contracts they desire?????? This is no valid settlement!

The Invisible Hand

(11/19/2005; 16:32:16 MDT - Msg ID: 138161)

D E R I V A T I V E S

http://www.ameinfo.com/72112.htmlDGCX granted market license by SCA
Emirates Security and Commodities Authority (SCA) granted Dubai Gold and Commodities Exchange (DGCX), a license to function as a commodities derivatives exchange.
United Arab Emirates: Saturday, November 19 - 2005 at 16:49 GMT+4

Clink!

(11/19/2005; 17:47:12 MDT - Msg ID: 138162)

@ Domengold

Well knock me down with a feather - did I really say that ?! Oops, yes.

Hangs head in shame.

Shuffles discretely offstage back right.......

Ned

(11/19/2005; 18:23:32 MDT - Msg ID: 138163)

@ Goldendome

You are welcome !

I have listened to Don Coxe for 2 or 3 years now. He has been bang on his calls, the drowning dollar, the oil and commodity bull.

Sensible, down to earth fellow. Glad you 'found' him.

Have a golden weekend.

Ned

(11/19/2005; 18:28:45 MDT - Msg ID: 138164)

$499.90 ?

Weird stuff. Opened the INO gold chart and opened a 1 day view. Does show Saturday the 19th, gold breaking up from 485 to 496 or show this afternoon.

What's up with that?

Not going to get too excited until tomorrow night though.

Chris Powell

(11/19/2005; 18:43:25 MDT - Msg ID: 138165)

Barron's interviews Tocqueville Gold Fund Manager John Hathaway

http://groups.yahoo.com/group/gata/message/3471Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Goldilox

(11/19/2005; 18:44:57 MDT - Msg ID: 138166)

St. Thomas

@ TIH,

While I have no personal quarrel with Thomas, I haven't read him since my freshman year in college in the 70's, and don't remember being that impressed with him then. Certainly a great thinker for his period of history, but those really were the "Dark Ages". Hopefully, our understanding of the universe has evolved beyond his theories, unless we're headed back into that "Dark Age" box.

The whole point of attempting to use emperical data to support "truth" is to remove it from "imagination" being its sole source. We must also remember that "data" is just data, so "truths" derived from it are far from axiomatic and always in flux, but "truths" derived from the imagination too quickly escape any semblence of what passes for reality as they are so skewed by "belief systems."

For my money, too many philosophers spend their entire career either justifying or vilifying TPTB, and not enough time trying to figure out why human society continues to support such vast disparities and spends well over half of its productivity destroying itself and labeling the rebuilding "progress."

Just my $0.03 (inflation adjusted)

Not something I want to invest a lot of time on in this forum, as I get too easily distracted from topic.

Goldilox

(11/19/2005; 18:48:09 MDT - Msg ID: 138167)

Breakout?

@ Ned,

I'm with you. Even if some smaller market trade WAS actually reported at $499, it will take support at a larger market open to validate it and hold the mark.

I've also seen too many wekkend "gliches" to trust them.

(11/19/2005; 18:55:47 MDT - Msg ID: 138168)

John Hathaway. . .A man after my own heart

Barron's: Are you surprised at the behavior of the euro?

Hathaway: Not really. It is a piece of garbage, really. There is no
national treasury that stands behind it, but a committee of
bureaucrats. Then there's the politics and social issues in Europe.
There's a big difference in the growth rate between the U.S. and
Europe, and there's a big differential in interest rates between the
U.S. and Europe. Gold is going to rise against the dollar and the
euro and the yen, which it has been doing for quite a while, but it
has been doing it quietly, so most people aren't even aware of it.

There are still a lot of skeptics on gold. It's been five years
since it's been in a bull market. Before that it had been in a bear
market for about 20.

These days, the generations are much shorter. Residual skepticism is
all over the place, and it is terrific because it gives the bull
case longevity. If everybody were on board the way they are with
energy, I would have to think of a new investment theme to work on.

Barron's: You have written about gold benefiting from a bubble in
the U.S. Treasuries market.

Hathaway: The bubble is a reflection of the lack of investment
alternatives. It is also a reflection of the perceptions of risk and
the notion that Treasuries are a safe haven so they should be priced
in a different way. There is so much money sloshing around the
system, to the extent it is risk-averse it goes into Treasuries. On
the other hand, you have negative real rates throughout the yield
curve. Latest 12-month inflation is running about 4.7 percent. An
investor has to go out almost 30 years on the yield curve just to
get even. There is so much paper around and returns on assets are so
hard to come by that it is driving money in this direction, and
that's created the bubble. But these conditions are very favorable
for gold.

(11/19/2005; 19:29:11 MDT - Msg ID: 138169)

Revisiting. . .

An old post made here in Feb, 2005 that received prominent redistribution:

Why is Gordon Brown obsessed with IMF gold?
by Michael J. Kosares

I don't completely understand this obsession Gordon Brown has with the IMF gold. Why does he always target gold in his third world debt schemes? He could just as easily call for a multi-nation bond issue or simply ask the various nations for a U.S. Treasuries donation to cover the third world debt.

I'm sorry, but I don't believe for a minute that the chancellor of the exchequer is motivated solely by his concern for Third World indebtedness. I think we all remember that the last time Brown stumped for IMF gold sales, he failed. The IMF opted for revaluation. The result was that the Bank of England let go of a good portion of the British people's gold reserve at cycle low prices. Now Brown is at it again.

What is really behind all this volley and thunder?

In my view Brown's activity now signals the same thing it signaled in 1999 -- the beginning of a major move upward in the gold price.

We should consider one of three possible scenarios:

1. One or more bullion banks are in trouble in London and gold must be found for the British government and central bank to fulfill as lender of last resort. (Brown is simply trying to get ahead of the curve.)

Or:

2. This is just another campaign (ala the Andy Smith scenario) in a larger war to keep the bullion banks supplied with enough metal to satisfy the needs of the huge gold carry trade (which goes on longer than I ever anticipated it would) and keep it from going bankrupt.

Or:

3. A combination of 1 and 2, in which case Brown sees himself as killing two birds with one stone.

Brown's hope in my view is that he can steamroll gold sales. The talk about revaluation is just camouflage. Many have claimed with some degree of justification that the Bank of England's sales were directed inventory placements -- not sales per se but bailouts camouflaged as sales. Further adding to the mystery surrounding those sales are unanswered questions as to why the Bank of England did not sign the most recent Central Bank Gold Accord in March, 2004.

In a long talk with the USAGOLD sitemaster, Randy Strauss, this afternoon on this subject, he pointed out to me that other members of the IMF might be very happy to receive their gold back in a restitution sales scheme, considering the gold to be of not much use to them sitting at the IMF. Still other members might get it back and be persuaded to sell. Seemingly this is the gold that Brown hopes will end up in the sales and leasing pool.

As a follow-up to the 1999 Central Bank Gold Agreement which did include the UK, the following Agreement was signed March 2004 by all the leading European central banks except the Bank of England:

"In the interest of clarifying their intentions with respect to their gold holdings, the undersigned institutions 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.

4. This agreement will be reviewed after five years."

At the time the agreement was penned, UK stated that its justification for not signing this time was that it currently had no plans to sell gold. That excuse doesn't wash because most signatories in the first agreement were not sellers, either. Apparently the United Kingdom wanted some extra wiggle room with respect item #3 -- particularly leasing operations, and that could be the reason why they didn't sign.

As for the London Bullion Market Association, I would not be surprised if this was nothing more than a machination to free up gold to meet the demand requirements being faced by the bullion banks.

This is not meant to be a comprehensive analysis of Brown's recurring obsession with the IMF gold but simply some groundwork to encourage discussion.

I would like to repeat a brilliant statement from the UK's Sir Henry Tapsell, which I have posted here before as well as in our newsletters and in my book, "The ABCs of Gold Investing":

"The whole point about gold, and the quality that makes it so special and almost mystical in its appeal, is that it is universal, eternal, and almost indestructible. The minister will agree that it is also beautiful. The most enduring brand slogan of all time is: 'As good as gold.' The scientists can clone sheep and may soon be able to clone humans but they are still a long way from being able to clone gold, although they have been trying to do so for 10,000 years.

"The chancellor may think that he has discovered a new Labour version of the alchemist's stone, but his dollars, yen, and euros will not always glitter in a storm, and they will never be mistaken for gold."

Tapsell made that statement in 1999, just before the Bank of England let go of Britain's gold at cyclically low prices ($250 to $300). My question is: What happens if Brown runs into a wall this time? What if the verdict is no sales, no revaluation. Then where will the price of gold go?

By the way, the chancellor Tapsell referred to was Gordon Brown.

_____________

Please note my interpretation of the Brown phenomena in the context of the Chinese copper trader wherein the LME (among others) are looking to China to supply the copper shorted by the so-called "rogue trader."

(11/19/2005; 19:34:00 MDT - Msg ID: 138170)

I should have added. . .

to the addendum in the post below:

How long before some "rogue" gold trader somewhere is blamed for igniting a systemic crisis in the gold market?

Caradoc

(11/19/2005; 20:21:57 MDT - Msg ID: 138171)

China to buy Boeing 737s

http://apnews.myway.com/article/20051119/D8DVINNG1.htmlSo China finds something to do with a fraction of the greenies that Walmart keeps sending them. Not only do they avoid appearing to have slapped the US by "dumping" those dollars; they actually contribute a one-time jink to early 2006 statistics so that 4th quarter deficit doesn't look as bad as it would have.

Funny thing is that when India did something similar several months ago (and made the statistics look better), nobody seemed to notice when they backed out of the sale.

Caradoc

goldquest

(11/19/2005; 21:03:37 MDT - Msg ID: 138172)

"Rouge" Trader

Nick Leeson is out of jail, perhaps Goldman Sachs will put him in charge of their gold operations!

mikal

(11/19/2005; 21:37:11 MDT - Msg ID: 138173)

Deceit, dissuasion, distraction

http://www.nexusmagazine.comOne night, probably in 1880, John Swinton, then the preeminent New York journalist, was the guest of honour at a banquet given him by the leaders of his craft. Someone who knew neither the press nor Swinton offered a toast to the independent press. Swinton outraged his colleagues by replying:
"There is no such thing, at this date of the world's history, in America, as an independent press. You know it and I know it.
There is not one of you who dares to write your honest opinions, and if you did, you know beforehand that it would never appear in print. I am paid weekly for keeping my honest opinion out of the paper I am connected with. Others of you are paid similar salaries for similar things, and any of you who would be so foolish as to write honest opinions would be out on the streets looking for another job. If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone.
"The business of the journalists is to destroy the truth, to lie outright, to pervert, to vilify, to fawn at the feet of mammon, and to sell his country and his race for his daily bread.
You know it and I know it, and what folly is this toasting an independent press?
We are the tools and vassals of rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men. We are intellectual prostitutes."
(Source: Labor's Untold Story, by Richard O. Boyer and Herbert M. Morais, published by United Electrical, Radio & Machine Workers of America, NY, 1955/1979.)

Goldilox

(11/19/2005; 21:49:04 MDT - Msg ID: 138174)

Chinese plane purchases, US $, and PMs

@ Caradoc,

When the Chinese came over to the US a year ago, buying goodies from Boeing, John Deere, and others, there was a fair amount of talk here on the forum that they were putting some of their excess $ stash to good use, even while they were still propping up the bond market with record purchases.

Their smart deals got bolder, turning first to mining purchases, and then into offers for US Asian oil assets, which were blocked by Congress as a "national security" issue.

I'm not the least bit surprised to see more "action" in the parlay of US $ assets for whatever hard assets and materiel foreign debt holders can get before the the dollar does its Acapulco cliff dive.

I don't know what "bugger thy neighbors' currency" policies will be put in place to try to stem the tide, but one thing we know for sure - they won't be "printing" any more physical gold any time soon.

contrarian

(11/19/2005; 21:54:10 MDT - Msg ID: 138175)

Gold's spike up to $499.90 today

Does anybody have a clue as to what happened today, when around noon Eastern time, gold spiked up to $499.90, and now about 12 hours later, it's back down to $485.40?

Caradoc

(11/20/2005; 02:29:08 MDT - Msg ID: 138176)

New York's clout to lessen

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2005/November/business_November367.xml§ion=business&col=The following paragraphs lifted from India's Khaleej Times provide a hint that POG will no longer be controlled from New York.
*******text follows*********
Giving a befitting tribute to Dubai's status as the 'City of Gold, the first contract to be listed for trading on DGCX will be six month gold futures. The DGCX will commence trading on November 22 with a 1-kilogram gold futures contract. "We estimate that we will have around 100 members trading on the DGCX markets on day one," said Pochara. From day one, members will be able to trade in six forward months for gold futures, and trading of silver futures and gold and silver options will be available during first quarter of 2006....

From day one, DGCX will offer uninterrupted trading for thirteen hours offering arbitrage opportunities against Far East, European and American markets. The exchange is confident that it will see wide participation from approved members from diverse backgrounds such as commodity traders, banks, brokerages and other financial institutions, who will trade and clear their obligations.

"We are located in a unique time zone as far as commodities exchanges are concerned. Once Tokyo closes, there is a time gap of more than 7 hours before the LME opens. We fill this gap and this gives traders the opportunity to engage in uninterrupted trade. With our long trading hours, our traders will get arbitrage opportunities with all leading markets around the world."

DGCX will offer fully dematerialised trading system. Although the trading will be margin based and settlements are done using Dubai Gold Receipts (the equivalent of cash in DGCX), the exchange also offers the option for traders to take delivery in physicals.

"World over, physical delivery constitutes less than 2 per cent of the total trade. However it is important to give the physical delivery option, as physicals are necessary to keep the stability in the spot market. In the absence of physical deliveries, speculators could drive the prices on the market," said Pochara.

..."While the spot market stability is an important motive in offering physical deliveries, we are also abiding by Islamic principles of commodities trading where an underlying real asset is a must for a valid contract," Khan added.
******end of text*******

At the risk of sounding like a Pollyanna, could it be that we're about to see honest pricing?

Caradoc

The Invisible Hand

(11/20/2005; 03:13:49 MDT - Msg ID: 138177)

The rogue trader & the lack of transparency

Two from London's Observer

http://observer.guardian.co.uk/business/story/0,6903,1646479,00.html
Snips
The credibility of China as a trading partner took a hammering last week. As turmoil engulfed copper futures markets and prices for copper hit a record $4,200 a tonne on the London Metal Exchange, there was only one topic of conversation: what was going on in Shanghai, and why had respected trader Liu Qibing disappeared?
It is Liu, a trader for the Chinese government, whose catastrophic 'short' bet on the copper market is said to have left his employer with a bill of up to $200 million, who lies behind the record rise. But traders were also encouraged to chase the price up as the State Reserve Bureau, the Chinese agency that employs Liu, denied that it had been caught short and changed its story with each new twist and turn.
While this incendiary mix reverberated through commodities markets, some are saying that it is merely one symptom of a wider malaise: a lack of transparency and trust between the world's great emerging economy and the markets through which it must find the commodities and capital to grow

http://observer.guardian.co.uk/business/story/0,6903,1646497,00.html
SNIPS
The State Reserve Bureau is said to have a short position of some 200,000 tonnes of copper. This means that Liu sold that amount ahead, betting that the price would fall from the level at which he signed the deals by the time the contract had to be honoured - thought to be 21 December
+
The other big question the SRB needs to answer is: what has happened to Liu? There are rumours that he is under house arrest. Will he reappear? Has he been fired? If he acted on his own, what does this say about controls over its Chinese state traders? If he did not, why have they tried to paint him as a rogue trader?

USAGOLD / Centennial Precious Metals, Inc.

(11/20/2005; 14:38:15 MDT - Msg ID: 138178)

Info and assets to get you started...

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

Ned

(11/20/2005; 17:56:58 MDT - Msg ID: 138179)

POG down 60 cents......

....life's a beachball....then you inflate one !

Looks like the $499.99.999999 thingy was a figment of someone's imagination..........until it wasn't !!

Here's to that BORING $500 POG business and the $600 POG "real value" business and the "4-digit" affair, how about gold at:

"...an oz. buys paradise for a month..."

What's that's "worth"?

contrarian

(11/20/2005; 19:05:02 MDT - Msg ID: 138180)

$499.9 Gold

http://c.moreover.com/click/here.pl?x425522883&f=7000000368534I think that was a legitimate trade, but it being the weekend, there wasn't enough activity to sustain it, but I can only think it's a harbinger of things to come, especially when the Dubai market opens on Tuesday.

I suspect the spike had something to do with the Shanghai market opening for the first time.

Liberty Head

(11/20/2005; 20:17:36 MDT - Msg ID: 138181)

Helicopter Ben at the Helm

snip
Sandurz: Prepare for light speed.
Bernanke: No, no, light speed is too slow.
Sandurz: Light speed too slow?
Bernanke: Yes, we'll have to go right to...Ludicrous speed!
Sandurz: Ludicrous speed! Sir, we've never gone that fast before. I don't think the printing presses can take it.
Bernanke: What's the matter, Colonel Sandurz...CHICKEN?!

Press Voice : This press will self destruct in twenty seconds. This is your last chance to push the cancellation button.
Sandurz : Cancellation button? Hurry.
Bernanke : Where is it? Where is it.
Sandurz: It's gotta be here.
[Sandurz opens a panel to the self-destruct cancellation
button.]
Sandurz : Out of order?
Bernanke : F--k.
--------
Woob woob woob
Nyuk Nyuk Nyuk

Get ready for blast off folks. The gold bull express is about to shift into hyperdrive.

Best Wishes

Smeagol

(11/20/2005; 23:09:46 MDT - Msg ID: 138182)

Sso much paper gold!

What's up with all the paper gold, precious? Shanghai, and now Dubai... is it getting sso bad, that they have to throw that much more paper at It to keep It down... is that what it takes now to sstave off the inevitable... and keep the price of It smoothly rising? Ach! How much longer can this go on?

No matter... FRN500 gold-price marker will go down ssoon, laid to resst under much hai-ku (grin, and a sidelong glance at Ssir Buongiorno!)

S.

Druid

(11/20/2005; 23:41:08 MDT - Msg ID: 138183)

China to LME: Come and get me, copper!

http://www.atimes.com/atimes/China_Business/GK19Cb05.html
By David M Lenard

"HUA HIN, Thailand - Copper prices on the London Metal Exchange (LME) continued to test new highs of US$4,580 per ton for three-month advance delivery on November 18, amid continuing uncertainty over whether China's State Reserve Bureau (SRB) held enough copper to deliver on trades made by disgraced "rogue trader" Liu Qibing.

Although copper prices on China's Shanghai-based domestic commodities market slid $36 per ton on November 17, following a recent sale of 20,000 tons of the metal by the SRB, Chinese traders predicted the relief would be short-lived."

Druid: What China needs is to come up with a copper ETF. This will go along way in taking some of the MOMO out of the transaction. Among other lessons, they also need one of our Bullion Bank boyz to fly on over and do a spiffy power point presentation on team building illustrating the finer points on how to put on a massively large paper position without ever having to come with the actual underlying commodity. Interesting article.

TownCrier

(11/21/2005; 01:12:49 MDT - Msg ID: 138184)

Sm�agol, Shanghai and Dubai paper gold

Everyone, and I do mean EVERYone, has to have their hands burned by the conflagration of paper gold at the SAME TIME for the lesson to be socially significant and to thereby ensure the international institution of market dynamics consistent with the physical-based "free gold" principle (physical pricing liberalization).

I find it infinitely fascinating that China is currently giving us a relatively benign modern lesson through demonstrating the fallibilities of the paper copper market which is reminiscient of the 1971 lesson Nixon gave us demonstrating the fallibility of the paper gold ("convertible" dollar/bond) market.

Which is to say, it is a fool's errand to put one's absolute faith and security in the performance of ephemeral contracts that purport to transcend international sovereign boundaries. There is no power on earth able to enforce and ensure Another's delivery into mere contracts when the overarching political willingness to do so is absent by that counterparty.

Amen.

R.

Knallgold

(11/21/2005; 01:30:43 MDT - Msg ID: 138185)

Gold/oil

Gold gets revalued Another step upwards (significantly so in euro) and oil corrects from 70$ to 52$.Hmmm...

Cavan Man

(11/21/2005; 07:07:47 MDT - Msg ID: 138186)

$490

Breached at Another site.

Knallgold

(11/21/2005; 09:24:51 MDT - Msg ID: 138187)

lease rates

Pardon my ignorance,but is there any meaning to the fact that all maturities in Gold lease rates are merging into the same interest of 0.11% ?

Gandalf the White

(11/21/2005; 10:40:29 MDT - Msg ID: 138188)

Sir Cavan Man --IS this the one ? (Speak German ?)

http://isht.comdirect.de/html/detail/main.html?sTab=chart&hist=1d&sSym=GLD.FX1<;-)

USAGOLD / Centennial Precious Metals, Inc.

(11/21/2005; 11:09:02 MDT - Msg ID: 138189)

FREE Gold Information Packet...

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

TownCrier

(11/21/2005; 11:35:17 MDT - Msg ID: 138190)

Delhi cabinet to reduce VAT on gold

http://www.manoramaonline.com/servlet/ContentServer?pagename=manorama/MmArticle/CommonFullStory&c=MmArticle&channel=News&cid=1132571161245&colid=1002258272843&count=10&p=1002366458822&WebLogicSession=Q4HiN9ff8rScSz2kZVBPjLv8T6UjFKOKilUSEptaa3x6qXz9fw21 NOV. New Delhi: The Delhi cabinet on Monday decided to reduce Value Added Tax on gold from one per cent to 0.1 per cent.

The decision to reduce VAT on the yellow metal was taken as bullion trade in the capital was shifting to neighbouring Rajasthan, Uttar Pradesh and even Gujarat, where the tax on gold was much less...

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

Proof that government CAN take steps in the right direction.

R.

Cavan Man

(11/21/2005; 11:54:27 MDT - Msg ID: 138191)

To the White Wizard

Yavole (apologies to frr et al) mine capitan!

Smeagol

(11/21/2005; 11:54:44 MDT - Msg ID: 138192)

On government taking the right steps...

...we thinks that is more determined by accident or random chance, precious! (grin)
No tax on It at all is what we yells... but we will take any reduction on the way. Yesss! Sssmart move on India's part.

S.

TownCrier

(11/21/2005; 11:57:39 MDT - Msg ID: 138193)

Gold sales up as Dubai Gold and Commodities Exchange set to open

http://www.albawaba.com/en/countries/UAE/19160421-11-2005 -- Gold sales in the UAE went up by�26 percent�to hit Dh1.4 billion in the third quarter of�2005 compared to the same period last year...
�
Gold consumption by weight posted a 15 per cent increase in the same period.

These figures were published as Dubai is set�to launch its first gold futures contract.

The Dubai Gold and Commodities Exchange (DGCX) will receive a 1kg gold futures contract when it opens on Tuesday.�It is reported that many gold dealers are�awaiting the DGCX's opening, which it is hoped will bolster Dubai's gold trade.

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

In Related news...

http://www.ameinfo.com/cgi-bin/cms/page.cgi?page=print;link=72287

Dubai Gold and Commodities Exchange will commence trading, November 22nd at 10am.

Prior to the launch of active trading senior figures from the Government of Dubai, regional business and financial leaders, market regulators, market participants and DGCX stakeholders will gather to mark the occasion in a spectacular event .... ceremony will be attended by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defence Minister.

Framroze Pochara, Chief Executive of DGCX said, 'November 22 will be a momentous day for Dubai, the global commodities trading community and the wider business community. Tomorrow, the world's newest exchange and the Middle East's first electronic derivatives exchange will be trading.'

From day one, DGCX will offer an uninterrupted trading window of thirteen hours and fill the time gap between Far East and Europe.

^----(from "copy and paste" url)----^

Back in mid-September while at $460, the head of the Dubai exchange had remarked that paper currencies have proven time and time again that they are not very reliable, causing gold to become an important investment vehicle, and predicted that gold would soon reach the $500 price level. And here we nearly are before anything has been launched.

R.

TownCrier

(11/21/2005; 12:10:34 MDT - Msg ID: 138194)

Gold May Rise to $500 for First Time Since 1987, Survey Says

http://www.bloomberg.com/apps/news?pid=10000081&sid=aqngaBjA._yY&refer=australiaNov. 21 (Bloomberg) -- Gold may rise to $500 an ounce for the first time since 1987 as investors purchase more bullion as a hedge against declining currencies, a Bloomberg survey shows.

``Gold is trading like a currency,'' said Fulinda Malone- Rouse, business-development manager in New York for EBS Dealing Resources, a London-based spot market that handles $120 billion in daily gold, silver and foreign currency transactions. Trading is up 30 percent this year, and ``we're seeing banks start to refocus on metals,'' Malone-Rouse said. ``We're also seeing foreign-exchange traders trade gold.''

Investors also are being drawn to gold as a haven because of the threat to financial markets from avian flu in Asia, the war in Iraq and the riots in France's suburbs, traders and analysts said. Demand for gold coins, bars and bullion-backed shares rose 56 percent in the third quarter from a year earlier, led by a 38 percent gain in purchases in the Middle East, the producer-funded World Gold Council said Nov. 17.

``They see holding large amounts of currency as high-risk,'' said William O'Neill, a partner at Logic Advisors LLC, a commodity-consulting company in Upper Saddle River, New Jersey. O'Neill said gold will trade between $520 and $525 for the rest of the year, a change from his previous forecast of $485 to $490. ``This is the day of the hard asset.''

``Inflation is real,'' said Kevin McArthur, CEO of mining company Glamis Gold Ltd. ``The flight to quality is to gold.''

``Gold will continue to climb higher over the coming months,'' said Stuart Flerlage, managing principal at Patronus Capital. ``Investors recognize that everything they spend money on has become more expensive.''

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

Call USAGOLD-Centennial today to speak with a broker about a diversification program that's right for you. By taking these easy steps, you can ensure that the security of gold ownership is among the many things you're thankful for during this holiday season.

TOLL FREE 1-800-869-5115

R.

TownCrier

(11/21/2005; 12:20:16 MDT - Msg ID: 138195)

Central Warehousing to store gold as well

http://www.business-standard.com/bsonline/storypage.php?&autono=206172Ahmedabad�November 22, 2005 -- The Central Warehosing Corporation (CWC) that is currently engaged in storing food and grain will have something more to offer. The government venture has decided to store gold in its facilities across the nation.
�
"We have decided to set up facilities at our godowns where gold can be deposited. We intend to have at least one to two warehouses in each state where gold can be stored. CWC will take the necessary steps to secure the precious metal with insurance and extra security measures. We are in a process of making arrangements where deposit receipt can be utilised as a negotiable instrument for the holder," said S K Tuteja, chairman, CWC that already handles silver.
�
Tuteja informed that the corporation has no plans for storing diamonds as of now due to lack of standards.

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

A step in the wrong direction if this is designed as, or evolves into, an unallocated accounting system used to facilitate an expansion of gold lending operations.

R.

TownCrier

(11/21/2005; 12:31:03 MDT - Msg ID: 138196)

Gold Charts Its Own Course

http://www.thestreet.com/pf/comment/nickgodt/10253892.htmlBy Nick Godt, Markets Reporter, 11/21/2005

...a successful breach of the key ($500) level should unleash greater upside potential.

"$500 gold is not a question of 'if' but 'when,'" Grandich says. "And this would be far more than a psychological breach. It would be the equivalent of the Dow breaking above 1000 in 1984, after which the sky was the limit."

What's powering gold, he says, is that it is still in a "win-win" situation as an investment vehicle. It moves higher whether the dollar gains or falls.

Several times this year, for instance, gold rose along with the dollar as inflation concerns mounted. Gold serves as a hedge against inflation, and the dollar has been supported by expectations of more rate hikes by the Federal Reserve.

...A key factor in gold's favor, which gets little press here, is an expectation among non-U.S. investors that the dollar is too high.

Right now, the dollar remains supported because the Fed is still hiking rates and there are few places as safe as the U.S. to invest in, he says.

"But a lot of people, especially outside of North America, are increasingly suspicious about the dollar. The current account deficit is still soaring, President Bush's popularity is slipping, and the dollar is still strong. In times like these, global investors want a hard asset to bet on."

Many strategists believe that the dollar should weaken next year, when the Fed signals that it is done raising interest rates. But a weaker dollar, the usual lever to propel gold prices higher, should only help gold on the way up.

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

Have you made your initial moves into gold?

R.

Buongiorno!

(11/21/2005; 12:47:28 MDT - Msg ID: 138197)

Haiku Smeagol and Townie's 138195

MY gold in gummint care?
Insured? Storage? Seems quite fair!
Where do I sign up?

(Hoo--Haaa, Hoo-ha) YGBSM!
Happy Turkey Day to all!
Buongiorno!

TownCrier

(11/21/2005; 13:39:34 MDT - Msg ID: 138198)

Fed study says hard to explain U.S. current account gap

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh02076_2005-11-21_18-36-11_n21191387_newsmlWASHINGTON, Nov 21 (Reuters) - The Asian financial crisis of the late 1990s can explain the emergence of large current account surpluses in the region, but fails to explain why the United States faces a deficit, a Federal Reserve study found.

Joseph Gruber and Steven Kamin, two researchers at the Fed's Washington-based board, said ... "The financial crises in developing Asia in the late 1990s apparently played a key role in promoting surpluses, both directly by restraining domestic spending, particularly investment, and, perhaps, indirectly by encouraging the authorities to take measures to keep their exchange rates competitive," they wrote in a paper recently posted on the Fed's Web site.

But they said the model fails to explain why the United States received so much of the capital that has flowed out of Asia, with two factors some analysts point to -- strong U.S. economic growth and market-friendly U.S. regulation and investor protections -- offering only a partial explanation.

"Our model fails to predict the substantial U.S. current account deficits of recent years, and still predicts a small surplus," Kamin and Gruber wrote.

"The financial crises in developing Asia in the late 1990s apparently played a key role in promoting surpluses, both directly by restraining domestic spending, particularly investment, and, perhaps, indirectly by encouraging the authorities to take measures to keep their exchange rates competitive," they wrote in a paper recently posted on the Fed's Web site.

But they said the model fails to explain why the United States received so much of the capital that has flowed out of Asia, with two factors some analysts point to -- strong U.S. economic growth and market-friendly U.S. regulation and investor protections -- offering only a partial explanation.

"Our model fails to predict the substantial U.S. current account deficits of recent years, and still predicts a small surplus," Kamin and Gruber wrote.

They speculated the failure of their model to explain the widening in the U.S. current account gap could be due to a failure to fully grasp the the interplay between growing budget gaps, strong economic growth and market-friendly institutions.

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

I can't believe those silly kids are so blinded by their little toy.

The asymmetric structure of the $-centric international monetary system is at the root of the imbalance. Completely absent in the current arrangement is a properly-devised self-serving mechanism as needed to provide for the 'automatic adjustment' fine-tuning of the monetary factors to ensure smaller departures from reasonable alignments of international trade balance.

The current structure, which provides CBs with an otherwise unreasonable and unbalanced purpose to accumulate dollars, clearly manifests itself in the witnessed asymmetry with respect to the flow of goods and balance of trade.

Change is coming.

R.

USAGOLD Daily Market Report

(11/21/2005; 14:17:23 MDT - Msg ID: 138199)

Page Update!

Druid

(11/21/2005; 15:37:25 MDT - Msg ID: 138200)

ANOTHER & FOA NAILED IT......

Druid: On Kudlow & Company right now, Gold and the dollar in a longterm bull market. At least this is one of the tidbits I heard as I was entering and leaving the room. Someone correct me if I'm wrong. John Hathaway is one of the guests, along with, Louise Yamada and Noah Blackstein.

Toolie

(11/21/2005; 15:39:14 MDT - Msg ID: 138201)

Current Account

Well� The Fed had best figure it out quickly � were runnin� out of autoplants to close.

One these days those boys at the fed are gonna wish for an economy with a little rigidity, after filleting the US manufacturing base we haven't the capacity reindustrialize if we wanted too. So where does that leave us? Purchasing several hundred plants abroad so that the repetitive work can be done here? And what will those plants be purchased with -- the all-mighty dollar?

Flexibility is a fine thing for worms, but unlikely to balance the current account or build manufacturing capacity.

There are some passengers that flew a Nike corporate jet today that are thankful the flight crew spent the life flying airplanes � not divided between flying airplane, delivering pizzas and selling mortgages. Those folks are thankful for economic rigidity.

Red Wigglers are fine bait for bass, but ya shouldn't base you economy on them.

(I see we broke $490 again)

mikal

(11/21/2005; 16:18:36 MDT - Msg ID: 138202)

@Invisible Hand

We're on approach to your standing POG call.
Best regards

goldquest

(11/21/2005; 18:58:08 MDT - Msg ID: 138203)

Sydney

might have the honor of escorting GOLD to the $500 suite tonight!!!!!!!!!

Ten Bears

(11/21/2005; 20:41:07 MDT - Msg ID: 138204)

good reads from Antal E. Fekete and C Reese and Henry C.K. Liu

http://www.safehaven.com/forums-15206.htm
"The truth is that the Gold Standard was destroyed through deliberate sabotage."

"The government has betrayed people in keeping them in ignorance. It is inexcusable that some self-styled advocates of sound money try to smuggle in their own petty agenda, derailing the orderly discussion of the main issue, the study of the operation of the gold standard in depth, including its clearing system, the bill market, and its signaling system, the discount rate."

"The gold standard shall, like the mythological bird Phoenix, rise from its ashes when the regime of irredeemable currency foisted upon the peoples of the world will self-destruct, as it must, after the time-bomb of ever-increasing unpaid and unpayable debt, having reached critical mass, goes off. The born-again international gold standard will be complete with its natural clearing system, the international bill market."

And from Reese; http://reese.kingonline.com/Reese_20051121/index.php

"History is a record of folly, war, tragedy and greed. It requires a dark sense of humor to get even a few laughs out of it. We humans have been defiling the planet ever since we arrived and are still doing it."

"but we should recognize that good and evil are permanent components of the human existence, and nothing we do will change that. What we can do is associate as much as humanly possible with the good and the beautiful, and avoid as much as possible evil and ugliness."

http://www.safehaven.com/forums-15206.htm

And finally," POST-KEYNESIAN THOUGHT Subject: Schumpeter and Creative Destruction" Henry C.K. Liu

Gandalf the White

(11/21/2005; 21:07:47 MDT - Msg ID: 138205)

VOLATILITY !! I LOVE IT ! <;-)

Item: Shelley Regency 4 saucers white w/gold trim (7366258239)Almost EVERYONE of the last CONTEST entries have been atop the HILL in the few weeks !
---
$$$$ $499.6 $$$$ Moegold (11/3/05; 21:02:28MT - usagold.com msg#: 137532)
$$$$ $496.5 $$$$ mikal (10/28/05; 06:33:00MT - usagold.com msg#: 137328)
$$$$ $492.5 $$$$ Beamer (11/3/05; 23:49:18MT - usagold.com msg#: 137540)
$$$ FRN492.1 $$$ Smeagol (10/28/05; 19:11:15MT - usagold.com msg#: 137354)
$$$$ $490.0 $$$$ Caradoc (10/29/05; 06:29:11MT - usagold.com msg#: 137358)
$$$$ $488.5 $$$$ Sundeck (10/27/05; 22:16:35MT - usagold.com msg#: 137325)
$$$$ $482.9 $$$$ osa104c (10/28/05; 22:18:13MT - usagold.com msg#: 137356)
$$$$ $480.0 $$$$ Liberty Head (10/30/05; 13:11:14MT - usagold.com msg#: 137397)
$$$$ $478.6 $$$$ Goldilox (10/27/05; 23:36:31MT - usagold.com msg#: 137326)
$$$$ $476.0 $$$$ Lothar of the Hill People (11/3/05; 09:45:56MT - usagold.com msg#: 137497)
$$$$ $474.4 $$$$ NEMO me impune lacessit (10/31/05; 10:04:59MT - usagold.com msg#: 137406)
$$$$ $473.7 $$$$ pilgrims_gold (10/31/05; 08:25:19MT - usagold.com msg#: 137404)
$$$$ $472.5 $$$$ Henri (10/31/05; 11:24:56MT - usagold.com msg#: 137410)
$$$$ $472.1 $$$$ goldquest (11/6/05; 11:25:27MT - usagold.com msg#: 137644)
$$$$ $471.0 $$$$ spikedog (11/5/05; 20:24:26MT - usagold.com msg#: 137614
$$$$ $470.0 $$$$ jenika (11/1/05; 07:14:53MT - usagold.com msg#: 137433)
$$$$ $468.8 $$$$ balzac (11/3/05; 19:02:56MT - usagold.com msg#: 137529)
$$$$ $467.1 $$$$ Black Blade (11/6/05; 10:06:42MT - usagold.com msg#: 137640)
$$$$ $466.7 $$$$ Rimh (11/4/05; 12:45:11MT - usagold.com msg#: 137561)
$$$$ $465.7 $$$$ Max Rabbitz (11/6/05; 11:08:10MT - usagold.com msg#: 137643)
$$$$ $464.8 $$$$ sabre (11/5/05; 22:43:04MT - usagold.com msg#: 137618)
$$$$ $464.5 $$$$ Camel (10/31/05; 08:32:42MT - usagold.com msg#: 137405)
$$$$ $463.1 $$$$ Whitewaterwoman (11/4/05; 15:32:38MT - usagold.com msg#: 137571)
$$$$ $463.0 $$$$ glockmaster19 (11/4/05; 13:58:46MT - usagold.com msg#: 137565)
$$$$ $462.4 $$$$ Federal_Reserves (10/31/05; 10:51:51MT - usagold.com msg#: 137408)
$$$$ $461.6 $$$$ Goldenera (11/5/05; 09:37:55MT - usagold.com msg#: 137596)
$$$$ $460.0 $$$$ Felix the Cat (11/5/05; 21:11:12MT - usagold.com msg#: 137615)
$$$$ $459.5 $$$$ spotlight (11/3/05; 21:05:28MT - usagold.com msg#: 137533)
$$$$ $458.8 $$$$ da2g (11/6/05; 05:14:32MT - usagold.com msg#: 137625)
$$$$ $458.7 $$$$ Guided (11/6/05; 11:56:57MT - usagold.com msg#: 137645)
$$$$ $457.9 $$$$ Rocky (11/5/05; 18:30:41MT - usagold.com msg#: 137613
$$$$ $457.7 $$$$ YGM (11/5/05; 22:25:13MT - usagold.com msg#: 137616)
$$$$ $456.7 $$$$ Tevye (11/5/05; 13:22:59MT - usagold.com msg#: 137602)
$$$$ $456.6 $$$$ Kev (11/6/05; 09:23:05MT - usagold.com msg#: 137633)
$$$$ $452.2 $$$$ phil288 (11/6/05; 09:12:05MT - usagold.com msg#: 137630)
$$$$ helicopter $449.7 $$$$ 2023 (11/5/05; 22:43:13MT - usagold.com msg#: 137619)
$$$$ $426.5 $$$$ Topaz (10/28/05; 00:13:49MT - usagold.com msg#: 137327)
---
"TO the MOON, Alice !"
<;-)

Gandalf the White

(11/21/2005; 21:10:05 MDT - Msg ID: 138206)

WRONG LINK ! <;-(

Item: Shelley Regency 4 saucers white w/gold trim (7366258239)BIG oops ! Now my wife will know what she is getting for Christmas !

Gandalf the White

(11/21/2005; 21:11:33 MDT - Msg ID: 138207)

LAST try !! Please use THIS LINK !!

http://isht.comdirect.de/html/detail/main.html?sTab=chart&hist=1d&sSym=GLD.FX1<;-(

Toolie

(11/21/2005; 21:28:07 MDT - Msg ID: 138208)

DGCX open at 10:00 AM.

http://www.timeanddate.com/worldclock/city.html?n=776Do you think that they'd like the publicity for pushing over $500

Gandalf, Dear Wizard: Are there any toads roaming the castle halls that answer to FOA?

Gandalf the White

(11/21/2005; 21:39:40 MDT - Msg ID: 138209)

Sir Toolie ---

I shall ask Sir Smeagol to assist me in the quest !
Do you think that an Black Wizard may have cast a spell upon him ?
<;-)

Toolie

(11/21/2005; 21:46:27 MDT - Msg ID: 138210)

And this from New Zealand�

http://www.nzherald.co.nz/section/story.cfm?c_id=1&ObjectID=10356445The Reserve Bank has warned the Government it is facing "particularly difficult" conditions.
�.
"Certainly, large across-the-board tax cuts of the kind National campaigned on would be explosive and irresponsible in the extreme," he said.

Gandalf: After the last few posts, I was thinking you might want to get your wand sighted in. ;-)

Smeagol

(11/21/2005; 21:54:54 MDT - Msg ID: 138211)

Toad search

O yess, we will help the Wizard White, for we also wants to find out what he turned Aristotle into... we will wait, though, until that Elvish draught wears off a bit!!!

S.

Smeagol

(11/21/2005; 22:03:16 MDT - Msg ID: 138212)

Of CBs troubles and new Paper-gold

Smeagol wonders... sss... we hears that Central Bankses are having trouble sselling more of It than they agreed, and putting themselves out on future delivery limbs... we assumes they are not able to control the price of It as they used to, by selling... could the opening of the Shanghai and Dubai paper-gold markets ssop up (divert) enough physical demand to take ssome of the heat off the Central Bankses?

S.

A few dollars more
The gold haiku volcano
Is ready to blow

Belgian

(11/21/2005; 22:14:05 MDT - Msg ID: 138213)

@Druid

http://www.usagold.com/goldtrail/archives/goldtrailone.htmlMay I suggest you (urgently) read FOA - 4/26/2000 - msg# 19 . Then "you" will understand what the "real" meaning of what you heard on CNBC (rising $-gold), is.

Today, Trichet emphasized that the rise in euro IRs will not nescessary be like the string of US-$ IR rises. A/FOA already nailed this "strategy" and its purpose, 5 years ago.
Facts, no theories !

What you are seeing now is the dollar losing its reserve status. Failing to realize this, means one sticks to the old gold perceptions under the dollar regime. A goldprice of $500-$600-$1,600/Oz is a price for those who remain convinced that the US-$ will never lose its reserve status. Most probably a costly mistake.

Remember (again) all the fuss with the IMF gold : This was about "total revaluation" of gold, either through straithforward sale of the metal (auction) or "official" price revaluation. The real reason nothing happened was to "hide" for the general public, the real value that gold would catch...the real price for physical gold, that would say that the dollar already lost its reserve status.

Caradoc discovered that the Dubai gold exchange has to keep the physical gold avenue, open. That's why the gold-refinary is for.

We will soon find out what the "politically induced shortage of deliverable gold" was for !!! The $-reserve-currency-system is failing. Today's perceptive dollar-strength is a "crisis-strength". Gold is on its way of - dollar reserve replacement value -.

Ask yourself the question : Can one trade (exchange) goldmetal for a currency that is losing its reserve status !?

Caradoc

(11/21/2005; 22:58:27 MDT - Msg ID: 138214)

@Belgian

http://www.igougo.com/photos/journal_photos/RiyadhGoldSuq420.jpgA bit more on Dubai... I'm no big fan of living under Sharia law (the mutaween -- self righteous old men with sticks -- whacking women on the shins for exposing their lower legs, whacking store windows to force them to close five times a day, etc.) but I have to admit that the prospect of an honest market for gold is a refreshing prospect. Yes, open 7 days per week and your choice of paper gold over the counter up front or back your lorry up to the loading dock and the forklift will deliver as many freshly poured bars as you can pay for.

The impact of an honest market cannot be overestimated. Most everybody is aware of the Sharia punishment for stealing, but many assume that the thief who gets his hand chopped off in the town's public square on a given Friday morning is either a pickpocket or a shoplifter. Yes, those individuals are in the mix, but the same punishment (drastic by western standards) applies to those who do their stealing by more sophisticated means.

I fully expect that the big Dubai gold market -- paper and physical -- will be as scrupulously honest as the typical one-man shop operating in Riyahd's gold suq. And for the same reason.

Note the legend at bottom of the linked photo.

Caradoc

Caradoc

(11/21/2005; 23:13:24 MDT - Msg ID: 138215)

Just because it's pretty

http://www.allposters.com/IMAGES/LPIPOD02/BN20048_34.jpgThe accompanying text reads "Window Display At Dubai Gold Suq, Dubai, United Arab Emirates."

In most of the Arab world, it's illegal to advertise as "gold" anything less than 18K. Most of what's available is 22K.

Wish I could have found a link to the incredible "wall of gold" effect that results from reel after reel of gold chain being mounted side by side on a multi-tiered rack like Home Depot uses to display rolls of carpet.

Caradoc

Druid

(11/21/2005; 23:58:42 MDT - Msg ID: 138216)

Belgian (11/21/05; 22:14:05MT - usagold.com msg#: 138213)

http://www.eco.utexas.edu/facstaff/Cleaver/357Lmoneychrono.html
Druid: Belgian thanks for the quick reference citation. I just couldn't believe what I was hearing on TV at that particular moment. It was along the same lines that I heard a currency trader talking about the dollar index going to 150 in the very near future. I thought at that moment as I did earlier today that the road to "freegold" is now being cleared by the status quo here in America.

I expected Trichet to stand pretty firm reference rates in Europe as that would only bolster the credibility of the ECB over the Fed. The currency traders are having their day right now with the Euro/Dollar exchange rate as they're trading based on interest rate differentials and not real value. I guess they don't quite comprehend the MTM concept behind the Euro/gold reserve design. If it were the ECB's intent to make the Euro APPEAR to be a stronger currency relative to the dollar, then I'm sure they could intervene just as much on behalf of the Euro as the dollar faction does for the dollar. This is what they do not want to do. Let gold rise slowly in either currency (all currencies for that matter) and then let the "market" recognize the value apart from the interest rate trade.

Click on the link and check out the info. There are a lot of interesting reads that can be mined from the chronology.

The Invisible Hand

(11/22/2005; 00:02:14 MDT - Msg ID: 138217)

DGCX

http://www.ameinfo.com/72336.htmlDubai would open today, Tuesday.
Here's a snip which says it opened yesterday, Monday. (Or what does inauguration mean?) So it could have been open last week-end.

SNIP
DGCX now open
United Arab Emirates: 3 hours, 17 minutes ago
Around 40 financial institutions have been approved to trade on the Dubai Gold and Commodities Exchange, which was inaugurated yesterday, with an additional 40 more awaiting approval. Trading hours will be from 10am to 11pm in a bid to attract US and European interest

The Invisible Hand

(11/22/2005; 00:44:19 MDT - Msg ID: 138218)

Dubai gold bourse opens

http://www.tradearabia.com/tanews/newsdetails_snCM_article96689.htmlDubai gold bourse opens Posted: Tuesday, November 22, 2005
Dubai
The key February gold futures contract on the Dubai Gold and Commodities Exchange (DGCX) made its debut trade at $495.00 an ounce today, in line with international spot prices.
The DGCX opened for business today at 10am local time (0600 GMT) and the first trade was conducted within minutes.
The exchange will initially be open Monday to Friday, from 10 am until 11pm local time (0600 to 1900 GMT) with a 1 kg gold futures contract. Seven-day trading will start in the first quarter of 2006.
The electronic exchange will operate on a T+1 settlement basis with a subsidiary, the Dubai Commodities Clearing Corporation, acting as the clearing house.
Contracts are identical in format to those on the London Metals Exchange and Nymex, traders said.
The DGCX has also signed a technical agreement with the Chicago Board of Trade, which launched its own gold futures contract just over a year ago

Belgian

(11/22/2005; 00:45:04 MDT - Msg ID: 138219)

@Druid

The sudden, in concert revaluation of gold against all currencies, can only be interpreted as follows : The currencies cannot remain a dollar-reserve-derivative, whilst the dollar loses its reserve status. All currencies (including the $) become gold-reserve-derivatives.

Gold is decoupling (severing its links) not only from the dollar, but from all currencies. Now you have the separation of 1/ the gold revaluation process (Freegold) and 2/ the currencies' processes. Later on one can chose in which currency one wishes to exchange his/her goldmetal for consumption...an inflated currency or an hyper-inflated one.

Now, there is only ONE thing that matters : Have your goldmetal wealth in possession...keep it for as long as you can during its revaluation process (wealth-reserve-status) and chose later the appropiate currency in which to exchange the precious.

The East is teaching us, the West, a lesson ! And learn we shall.

mikal

(11/22/2005; 00:55:17 MDT - Msg ID: 138220)

New exchange briefing

http://www.thehindubusinessline.com/2005/11/22/stories/2005112201090500.htm Address:http://www.thehindubusinessline.com/2005/11/22/stories/2005112201090500.htmThe Hindu Business Line : Dubai gold exchange to commence trading today - Vimala Vasan - Nov 22

mikal

(11/22/2005; 00:57:40 MDT - Msg ID: 138221)

Link haircut

http://www.thehindubusinessline.com/2005/11/22/stories/2005112201090500.htmTake 2

The Invisible Hand

(11/22/2005; 01:57:25 MDT - Msg ID: 138222)

Dubai open after New York closing-time?

Dubai is open 0600 to 1900 GMT.
7 pm GMT is 2 pm New York winter time, 3 pm New York summer time.
Since 9/11 New York closes at 1:30 pm, winter and summer time.
So Dubai stays open after New York?
Or am I wrong in my time "calculations"?
Let's see what happens tonite (eurh, this afternoon - no in Denver, the last half hour of the morning) in the last Dubai half hour.

Buongiorno!

(11/22/2005; 08:47:42 MDT - Msg ID: 138223)

Dubai exchange and Christmas gifts

Dubai trading open 13 hours, soon 7 days per week---hmmmm--anyone found links yet?

Any chance to secure some hi-carat(20-22) jewelry for my bride this Christmas? (MK, do you think American ladies are as smart as Indian ladies regarding what they may choose to wear?) Might do some business...
Cheers!
Buongiorno!

Gandalf the White

(11/22/2005; 09:48:36 MDT - Msg ID: 138224)

<;-) From the Wizard's archives ! Here is some DEEP thinking !

ORO+

02-06-2003 05:33 PM

The Sinclair Gold Reserve model --
Another thing that can't work

This actually is the "gold bubble" reserve system forecast by FOA. The various central banks accumulate gold and mark it to market and then book the value of the gold holdings as backing for the outstanding currency accounts at some reserve coverage ratio.

While the idea would seem positive for gold holders, it is destined to destroy the currencies and the gold market; and would require the gold holder to unload quickly when the bubble is bursting, as it certainly will, and put the money into productive real assets.

The main weaknesses in the idea that CBs buy gold to issue currency are that the currency is still issued without any built-in weighting of market needs for a market clearing interest rate, money supply, and gold price. The second point is that there is no mechanism to provide the market with a reason to hold currency when it is not convertible into gold but at the microsecond before making a currency payment. The currency, without a conversion into the gold supposedly backing it, would trade at a substantial discount to the gold holdings of the CBs issuing it.

In short: no one but central bankers cares how much gold is in the CB coffers so long as none of it is available for withdrawal at any parity level.

The other point is that so long as the metal is not a legal tender, the supply-demand balance for dollars, euro and any other currency would be separate, as would be the supply-demand balance for gold.

Thus, if the supply-demand balance for the dollar is globally negative as it had been in the 1996-2000 period (though it was domestically positive during late 98 - early 99 � hence the Fed's contribution to the bubble), this would require the CB to purchase gold, currency, or securities off the markets in order to increase the monetary base and partially plug the deficit in the supply-demand balance (thus decreasing currency interest rates while increasing gold interest rates and the POG) � and to sell gold and securities in order to absorb over-liquidity when the supply-demand balance is in excess (thus increasing currency interest rates while decreasing gold interest rates and the POG).

Of course, the CB does not know the supply demand balance till well after the fact. Furthermore, the political and business pressure would constantly be on the side of more currency, and thus would push the CB to buy more gold as the greater political expedient.

The end result remains an arbitrary short interest environment on the currency markets, just with the addition of an arbitrary interest rate in the gold credit/derivatives market. The CB remains without any guide to deciding interest rates or monetary growth targets. (Neither of which should be within a CB's jurisdictional capacity � meaning that the fact remains that an optimal monetary system and a central bank are mutually exclusive propositions. Since the claim is made as to there being an optimal monetary system it should be presented: a free, unregulated monetary system with freely issued money substitutes and an appropriate free market choice as to what constitutes money � which would probably not be just gold alone.)

It should be pointed out that I do not share the Chicago School � Monetarist belief that the money supply should grow at any particular rate, nor that the money supply should change at all, nor that it should remain fixed. Nor do I believe that it is entirely knowable what the money supply is at any time, much less have centralized decisions as to what it "should be" anything but arbitrary.

My point is that central banks are market interference systems, and their mere existence prevents the market from clearing interest rates for any maturity, nor does a CB allow the appropriate market discounting of gold (or anything else) to bank notes/accounts/bonds. I must also put forward the historical fact that central banks were instituted in the first place for the purpose of preventing the market from clearing interest rates and discounts of notes, particularly government notes - and to prevent the marketplace from discounting the liabilities of bad credits, particularly among the large politically significant groups of banks and corporations.

As for the function of a free monetary and banking system that evolved largely into the use of gold for money, I should point out that the key to its stability is the operation of financiers constantly on the lookout to raid bank's reserves in order to force them into selling assets at a discount, thus maintaining bank credit restraint and tying more closely the money supply to the real current economic output and accumulated resources, and through a volatile short term interest rate (caused by the gold liquidity constraint) restraining the markets from attempting to invest unavailable resources.

The intimate connection between the quantity of gold available for investment activity and the volatile short term interest rate act to restrict the financing of ventures for which resources are unavailable, and allows holders of gold to decide whether to hold on to their gold, spend it, or allocate it into investment. Thus if interest rates spike up due to the offering of an investment venture, the gold saver is urged to invest and save (refrain from spending) more gold, in order to clear the resources necessary for the investment.

There is another contributor to stability in the gold based system in the nature of gold uses outside of money and in the nature of gold deposits. Gold is used mostly for purposes in which the metal is not lost, thus allowing the market to respond to monetary gold shortages with the immediate offering of jewelry for melting. Since a gold shortage means higher gold purchasing power, gold mining becomes more profitable and output increases. Since gold mining and distribution involves the use of all technologies and the nature of gold deposits requires either consecutively higher real gold purchasing power to obtain new production, or an improvement in actually productive technology that lowers the cost of mining the gold as in all other productive endeavor. Over time, the outstanding quantity of monetary gold and pricing of items matches closely the developments of the real economy and thus eliminates the problem of over-investment and under-investment by causing rates to rise when too many investment projects are being financed without requisite savings, and to fall when resources are available for use. The degrees of freedom in the gold based monetary system (or generally commodity based monetary systems) allow multiple avenues for the markets to meet real economic and financial events. Fiat debt currencies have no automatic stabilization inherent in them and the central banks that are necessary to allow the debt currency to avoid perpetual cycles of rapid inflation and deflation. With a central bank, the cycles are smoothed out by the institution of perpetual inflation to bail out those caught overly in debt at end of the inflationary cycle.

A central bank necessarily prevents the process of short-term rates adjusting according to investment and savings volumes from occurring if it targets interest rates, nor can the process occur when the money supply is targeted. The necessary result is that if the central bank underestimated the clearing interest rate or overestimated the money supply needs, then the markets will attempt to make investments that use unavailable resources � only to find out after the investment is made that the input prices are too high and the product price is too low to provide the expected return. If it errs on the high side on interest rates or the low side on money supply, then markets will be restrained from putting to use available resources, which would remain unused or would be wasted. So long as a central bank exists, the market clearing set of interest rates, particularly short rates, the monetary base, and the purchasing power of the money, can not be set at the correct levels. If they are, it is solely due to chance.

A further problem with the Sinclair model is that it picks out the wrong figure for money supply for central bank purposes. M3 includes a heavy concentration (over 1/4) of floating value paper in money market accounts that is not related to the bank liabilities that the Fed backs. If money market accounts are included, then all other floating value financial instruments would have to be targeted as part of the money supply � including bonds and stocks.

Another point I want to make is that debt money systems do not clear. Meaning that at the end of each day of musical finance, liabilities further exceed assets and someone has no "chair". The deficit is either filled in by central bank monetary injections, or some liabilities are eventually "cancelled" through bankruptcy. The smaller the portion of the financial market taken by banks, the smaller the need for monetary injections. The less leveraged the banks, the less need there is for the central bank to maintain liquidity.

Furthermore, the issue of government spending, i.e. the effective tax rate and tax equivalent of the regulatory burden must be considered in making any estimate of a target for M3 or anything else the Fed might target. Roughly as Jude Wanniski claims, M3 and financial asset values in general should rise AND FALL in proportion to the effective tax rate. Thus if the GDP tax rate rises from 20% to 36% (roughly as it did during the Johnson-Carter era) money supply and financial asset values should drop by about 65% in order to avoid price inflation. An attempt to prevent this drop in money supply would simply cause a drop in the real value of floating value securities to compensate for the growth of the money supply � in other words, the FORCED growth of bank's market share in the financial markets. Thus a long bond yielding say 5% purchased in the mid 60s would have lost 81% in real terms (total return) by 1980.
The obverse is true as well. By choosing interest rates that are high enough so that M3 � or what have you - is NOT EXPANDING at the appropriate rate relative to taxation, the floating value portion of the financial markets would expand in real terms to compensate for the missed opportunities of banks that were prevented from making loans due to the Fed's artificially high interest rates. Thus the drop in GDP tax rates from 36% to 21-22% that occurred during the 80s and 90s (till the Congress went onto its pork barrel spending spree in 99-2000) should have brought REAL growth in M2, or whatever aggregate, by more than 65%. As the Fed was a little tight during most of the Volcker and Greenspan period, the actual real return on a long bond purchased in 1980 at a yield of 15% brought a total real return of 450%, 9% per annum (without reinvestment).
The funny thing to note is that prices did not fall due to the tight interest rates. What caused prices to rise was the portion of monetary demand that disappeared with each of the periodic bouts of mass bankruptcy that started with Volcker's early 80s "beat inflation at any cost" policy. As we see today, gold prices and the CRB are rising as the demand for money from over $3 trillion of defaulted, paid down, and debt to equity swapped emerging market debt and over $2/3 trillion of US defaults (so far since 2000) is permanently extinct, while the recovering Asian and other emerging economies and their foreign investors borrow dollars into existence like there is no tomorrow � thus skewing the global dollar supply-demand balance far forward and cratering the dollar beyond what would have happened if the fear of terrorist reprisals against economically significant targets in the US in the wake of a war against Iraq were the only factor of concern.

No theory, nor set of indicators, is at all possible that would allow the decision to be made centrally as to what the money supply, price level, and interest rates "should be". The advent of any such theory or set of indicators would rapidly be discounted into the marketplace, thus removing its usefulness for making the determination.

This is because the interest rate, the money supply (including the market choice of what constitutes money), and the price level, are all due to individual opinions and expectations as to the particular decision points at which money is spent (and on what to spend and at what price), saved, or invested. The existence of a widely accepted theory as to the relationship between these would be incorporated into these opinions and expectations, thus removing the theory's predictive power. Only those components of theory that are necessary consequences of actions taken due to the particular opinions and expectations can be permanent in their predictive powers. The prediction � or even the determination - of opinions and expectations can never be anything more than guess work, since the actual opinion of people in practice differs substantially from their stated opinions before the action, or before they are confronted with the actual environment in which action is taken. It is rare for us to be able to put our broad knowledge of a multitude of particulars and their complex interrelationships into lucid words � those of us that can are highly specialized scientists, technicians, businessmen, marketers, and philosophers. It is rare for any to be able to put forward a coherent view readily understandable by those outside our specializations.
===
Comments anyone ?
(I sure miss a number of old posters !)
<;-)

Survivor

(11/22/2005; 09:55:40 MDT - Msg ID: 138225)

Ladies Prefer Gold

@Buongiorno!

With a little help from the good folks here at CPM, my lady received an antique British Victoria Sovereign with antique gold bezel and chain last year at Christmas. (She is a British subject by birth in Canada.) Judging by the number of times she wears it, and the amount of attention and interest the necklace gets, I think it is safe to declare the gift a winner!

Come to think of it . . . I need to get busy on this year!

- Survivor

Gandalf the White

(11/22/2005; 10:10:29 MDT - Msg ID: 138226)

<;-) BTW, -----

the US$ has started a BEAUTIFUL waterfall just before Noon NY time ! Let's see if the Banksters can inflate it back above the 92 level. Can someone find me a daily chart ?
(I have lost mine !)
<;-)

Smeagol

(11/22/2005; 11:15:39 MDT - Msg ID: 138227)

Dollar waterfall

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sWill thiss one do, Ssir Gandalf?

S.

TownCrier

(11/22/2005; 11:16:54 MDT - Msg ID: 138228)

Survivor, Buongiorno!, etc., on the topic of gold coin pendants and similar gifts...

http://www.usagold-jewelry.com/pendants/gold.htmlMarie is a great resource to help take the hassles out of the gift-shopping process.

She can be reached at 1-800-869-5115 Ext. 106

R.

Flatliner

(11/22/2005; 11:48:34 MDT - Msg ID: 138229)

Looking for volume statistics

Hi all, Does anyone know how to figure out the volume with regards to contracts that trade in a market on a given day? Likewise, is there an easy what to determine open positions? Basically, I'm looking for answers to the following questions: How many contracts trade daily on the Chicago, New York, London and now Dubai exchanges? What are the open positions in each market?

Thanks much.

TownCrier

(11/22/2005; 12:00:34 MDT - Msg ID: 138230)

Belgian, LBMA clearing stats for October

http://www.lbma.org.uk/clearing_press.htmRELEASE DATE: Tuesday 22 November 2005

Gold clearing statistics were mostly higher for the third month in a row...

Ounces transferred in gold rose 5.1% to 18.4 million ounces [i.e., 572 tonnes daily], the highest level for the month of October since 2000 and the second highest level for the year.

Based on an average fixing of $469.90 - nearly $14 higher than September's level - value rose to a daily average of $8.7 billion.

The number of transfers was the only measure to show a decline, falling 1.9%, to an average of 947 a day [i.e., averaging 0.6 tonnes per transaction].

Measured year-on-year, gold statistics were again sharply higher across the board.

Ounces transferred rose 25.1% and value was 40.4% higher, due to the ongoing higher price averages from last year.

The number of transfers had the lowest rate of increase at 17.2%.

see charts at...
http://www.lbma.org.uk/clearing_charts.htm

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

Is it a reasonable assessment that this recent pickup in ounces transferred is related to unwinding/disentanglement activities? Or is it possible the LBMA has begun to find itself a new field of easy pickins among a ripe crop of bullion-banking believers -- such as hedge funds? Poor saps.

R.

TownCrier

(11/22/2005; 12:31:34 MDT - Msg ID: 138231)

Investment Bank Buying Strong In Comex Gold

http://www.futuresource.com/news/story.jsp?i=i4615472238410072128[Dow Jones] - Comex gold is holding steady while silver has turned
lower. Paul McLeod of Commerzbank in New York says investment bank buying is the main feature of the session and will continue to be as gold approaches $500 an ounce. The Dec gold contract reached $494.50 an ounce but has come off the level to trade up $2.10 at $491.60. McLeod adds that other players are buying
as necessary such as in the jewelry market.

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

The dollar, and part of the peril involved in holding it, is that it is itself part of a contract -- that being the loan contract through which the dollar sprang into existence.

In using these dollars to buy into COMEX's paper gold contracts, these investment bankers are not doing much to materially mitigate their exposure to counterparty risk -- they are merely taking unto themselves yet another layer of exposure to potential default.

Poor saps. To truly diversify from default risk, they must insist upon and acquire the tangible metal.

R.

TownCrier

(11/22/2005; 12:57:20 MDT - Msg ID: 138232)

Fed Printing Press Fueling Gold $500

http://www.wallstreetwindow.com/goldarticle112205.htm11/22/05 -- Times are quickly changing.� But no matter what the situation, if you have a firm grasp of what's going on around you and a little initiative, there's no reason you can't profit from it.

On Monday, General Motors announced that it is going to shut down nine plants and lay off 30,000 workers - all just in time for Christmas.� There is talk in the air of GM going bankrupt.� I hope not.

There was a time when General Motors represented the might of America. ... An old mantra of the stock market was "where GM goes so goes the country."

People don't think of GM like that anymore.� The United States is no longer a leading industrial power.� We import most of our goods and are now the world's largest debtor nation.� Since George Bush has been President our country has borrowed more money from foreign nations than was borrowed during all of the administrations that came before him combined!�� Bush didn't create this trend, but he has certainly helped accelerate it.

...The supply of money in the economy is growing in the face of interest rate increases because the Fed is lowering bank reserve requirements and buying up treasury bills to help keep the wheels of the debt engine running. Everyone knows that debt and credit are everywhere these days.� Banks are lending out money like mad thanks to the Fed.

...We live in an inflationary environment and it's only going to get worse when Ben Bernanke becomes the Fed Chairman and eventually puts an end to the current cycle of interest rates.� You can expect him to raise rates one last time in January just to give himself some inflation fighting credibility and then after that - no more rate hikes.

And those rate hikes are what has put a bid under the dollar all year.� When the Fed stops raising rates the dollar is going to crack.� Gold is already starting to rally up into this inevitability.

Bernanke has promised to "throw money out of helicopters" if the economy slows down and I believe him.� Money and debt are our country's greatest exports right now and will continue to be so as long as foreigners continue to lend us money without question.

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

The commentator goes on to preach investment in gold mining stocks, but that seems very ill-advised to my mind. After all, it was the very same Ben 'Helicopter' Bernanke who talked about the Fed's ability to take "unconventional" action in the acquisition of non-traditional assets, and with support from Congress, no mining company's land-locked body of gold ore can be deemed safe from what is effectively a 'hostile takeover' by the government.

To be one step safer from such a rude awakening as that, make sure your gold investment is in the portable kind of gold -- items like coins which you can move around from vault to vault.

Call USAGOLD-Centennial and load up.
1-800-869-5115

R.

968

(11/22/2005; 13:39:23 MDT - Msg ID: 138233)

CB should increase gold weighting in reserves - Putin

http://www.interfax.ru/e/B/politics/28.html?menu=1&id_issue=11424471MAGADAN. Nov 22 (Interfax) - The Central Bank should review its gold and forex reserves policy in favor of increasing the weighting of gold, Russian President Vladimir Putin said in Magadan.

"I think that the CB should pay more attention to precious metals on Russian territory when forming its gold and foreign-exchange reserves," Putin said at a gold industry conference in the city.

"The reserves are after all gold and forex reserves. Let's not be too restrained here," Putin said.
----------------------------------------------------------------------------------------------------------------------
Townie, any thoughts on this one ?

Belgian

(11/22/2005; 14:58:33 MDT - Msg ID: 138234)

LBMA clearing stats :

Up 3 months in a row : Most probably because an "orderly" (gradual) goldprice rise needs a higher volume of contracts.
Gold contracts have a goldprice dampening effect. And when less physical gold is traded (delivered), the goldprice rises in function of the goldtrade decline.

One can surely come up with a lot of plausable theories about the gradual/orderly goldprice behavior...but there can be only one that is the correct one.
Imo, the goldprice behavior must remain as such that the dollar's reserve status must remain percepted as still in voque. And the dollar maneuvers to keep its reserve status by adding to the stash and keep its IR differential positive versus the competitor (carry trades)(cfrFOA msg#19). An explosive goldprice rise would be devastating for the dollar's status.

And that is imo the catch 22 situation in wich the dollar has landed. And cause for the building imbalances. That's why those cries for �-$ parity and oilprice below $40 are heard so frequently.

Same theory for oilprices. That's why CBankers can state rather firmly that oilprices will remain high.

Let us not forget what happened in '99-'01 : PoG reached two times the extreme low of $253 divided by the WAG-I spike (+30%). I don't want to exclude that in the whole goldprice maneuvering (management) some parties holded very dangerous positions. But this are accidental consequences and not the real major cause for the goldprice management.

Of course, there is gold-demand-pressure for the known classic reasons...but there is also a very specific demand for goldmetal for higher purpose (gold-wealth-reserve) than the classic mantras (all inflas). Just as Trichet repeatedly states that oilprices rise due to higher demand (normal) and due to specific constraints in oilproduction (read > oil (pricing) independance).

The LBMA stats, for the time being, made me conclude that orderly/gradual goldprice rise is still on the order of the day. Doesn't surprises me at all given the whole context in which it is happening.

For the time being, Putin and others, whish to increase the metal in their reserves...tomorrow, they whish to say something about goldreserve's "pricing".

Druid's historical overvieuw strongly suggests that the goldprice behavior + goldactions of this decade is indeed for a major purpose and NOT the POG behavior w've known for the period 1980 > 1990. It matters less and less what the US thinks what the use of the dollar is worth...it is the non American world that is forming "its" opinion on the dollar's function (worth) and the dollar gold regime. Idem dito for the euro.

Time out for currencies being "BACKED" by gold ! Now there is gold and there are currencies.

R Powell

(11/22/2005; 15:58:20 MDT - Msg ID: 138235)

Flatliner // some trading info

Your question...........

"Hi all, Does anyone know how to figure out the volume with regards to contracts that trade in a market on a given day? Likewise, is there an easy what to determine open positions? Basically, I'm looking for answers to the following questions: How many contracts trade daily on the Chicago, New York, London and now Dubai exchanges? What are the open positions in each market?"

These numbers should be readily available at the exchange sites. As for open positions, the Investor's Business Daily or the WSJ usually lists the open interest for the different months (delivery dates) in all commodities that they cover. They cover four precious metals. The exchange sites will also list the important dates for each delivery month that a commodity trades, such as first + last notice and final trading days. Today was expiration day for december options in most of the metals. Don't confuse options, which usually expire before contracts, with contracts. Open interest, daily volume + the open, high, low + closing price of different option strike prices is also available. Be careful not to assume that closing prices are necessarily merket prices as there is always a bid-ask differential along with liquidity problems in either buying or selling options and sometimes contracts in certain future months. Different commodity brokers also offer this information, some for clients only but some for anyone interested. Gold and silver trade almost around the clock, in an electronic market when the Comex is not open.

R Powell

(11/22/2005; 16:33:04 MDT - Msg ID: 138236)

Demand driven markets...?

I've been watching copper lately trying to learn what I can of a demand driven market. This assumes that the huge copper price increase of the last couple of years has been the result of demand. I believe so (albeit aggravated certainly by rogue traders) based on the tremendous drawdown of copper stores worldwide. Supply and demand. I thought that maybe something could be learned and applied to our gold and silver markets when they became mainly demand driven markets.

Adam Hamilton's weekly article (last Friday) focused upon this same point, which he has been watching for for far longer than I. His main points are that the POG, if truely demand driven, will be influenced much more by the supply/demand equation than by the strength or weakness of the US dollar. This has been pointed out many times as the POG rising in all currencies. Hamilton opines that there is now no reason why the POG and the US dollar index can not both rise or fall together. The relationship has lost much of its cohesion and gold will no longer trade as much as a currency as a free market commodity priced by the invisible hand. Is this scenario, without the politics, akin to "free gold"? I don't know if Belgian would simplify all the way down to the most basic of market forces as Hamilton does. Is it that simple? I don't know as I never fully understood exactly what Belgian was trying to explain. My pragmatic (read simple) brain always tried to simplify and filter out the politics.

However, I believe it might be that simple. Real simple...there is more buying than there is production so a deficit exist which must be filled. Deficits also usually raise prices.

As for learning anything about real demand driven markets....they seem more volatile, with a steadily rising price. Downturns are sudden, severe and usually unexpected but often very short in duration with the price rallying back strongly. How does this differ from a speculative driven market? I'm not sure other than perhaps a real demand bull can remain "overbought" which will drive the technical traders nuts. Many of their price prediction indicators will simply not work. The bull will also last much longer than the technicians expect. I would guess it will last until those supply/demand fundamentals that created it have been once again balanced. This may take a long, long time. Is Hamilton right? Is the gold bull about to transform into a raging bull (much stronger!) I certainly hope so....Note also that none of this has anything to do with the stock market or the economy in general. Note also that silver may some fine day explode due to these same fundamentals. Sorry, I couldn't waste this much space without at least a mention of silver.
Thoughts...?
rich

mikal

(11/22/2005; 16:36:56 MDT - Msg ID: 138237)

Gold gains again called "consolidation"

http://today.reuters.com/investing/MarketReportArticle.aspx?type=goldMktRpt&storyID=URI:urn:newsml:reuters.com:20051122:MTFH31020_2005-11-22_20-02-44_N22535422:1NY Gold Ends off Highs in Consolidation below $500 - Reuters - Nov 22 - Excerpt: "The market is reacting exactly the way you would expect it to right now. I think now that we're in striking distance of $500 (an ounce), a lot of the market participants are trying to decide whether this is a good time to be long or short gold," said one gold dealer.
COMEX rollover from the most-active December contract into February was heating up, with delivery period to begin next week.
By rolling forward, speculative players reposition their holdings in futures to avoid taking actual physical delivery of gold when delivery begins Nov. 30.
Final estimated COMEX gold volume was a hefty 160,000 lots, with 25,711 switches.
Open interest grew 378 lots to 349,637 lots as of Nov. 21."

TownCrier

(11/22/2005; 16:39:42 MDT - Msg ID: 138238)

968, it's especially brilliant coming from the political top -- V. Putin

Last Tuesday's comments about doubling the percent (from 5% to 10%) of the national portfolio which is held in gold, as spoken by Maria Guegina, Russia's Head of External Reserves Management, were encouraging -- said to be part of an 'ongoing effort to optimize the composition of assets and reserves managed by the bank'. Also, key remarks were in regard to 'encouraging the development of the Russian domestic gold market to be a fully functioning financial market akin to bonds and currencies'.

Again, I like the sound of this as it is echoed soon after by Putin.

To put the right significance on this, can you imagine if such a similar gold-reserve endorsement were sounded by our own top fella, G. Bush? Instant freeze-up in the gold market!

Getting to the nuance, it is noteworthy that Putin put the emphasize on 'weight', which is NOT ambiguous and can be taken as nothing other than actual additional physical acquisition.

I emphasize this because Russian gold reserves are currently booked for balance sheet accounting purposes at the frozen price/value of $300/oz. Therefore, a mere adoption of the same MarkToMarket 'best practices' as demonstrated by the ECB would revalue gold to $500/oz and thereby nominally achieve a large part of the rather vague doubling (5% >>to>> 10%) of the proportion of Russian reserves existing in the form of gold.

Putin, by emphasizing weight, removes all doubt, and the CLEAREST signal is sent to the market that consequential pressures of demand and supply are to be expected. A signal of encouragement for higher prices yet to come.

Also, Putin's comments on the ROLE of gold are to be well marked, especially in conjunction with those of Ms. Guegina on development of a domestic market akin to bonds and currency.

With a subsequent adoption of the MTM policy of accounting, this leads Russia into alignment with a program of CB monetary policy vis � vis reserve management that I heartily endorse.

That is, in brief:
In comparison and contrast with the US Federal Reserve's open market operations of money/reserve management in which the Fed buys or sells (but mostly buys) DEBT instruments (specifically items such as US Treasuries) in order to influence monetary liquidity and most generally to increase the money supply to either fight cyclical forces of deflation or else to feed into the periods of economic growth, the Russian central bank would be poised to conduct superior operations. As follows.

In the good interest of conducting monetary policy and reserve management with open market operations of one kind or Another, instead of the LAME practice of a national CB buying its own government bonds, and instead of the next lamest practice of buying the bonds of a foreign government, the Russian Federation will have positioned itself for the opportunity to utilize open market operations in the FREE FLOATING gold market as the rock solid tool to influence monetary policy -- all while ensuring the best quality of non-defaultable reserve asset is ever on hand as the foundation for the base supply of the regional currency.

(The base currency supply is created through policy of the central bank, issued as liabilities on the balance sheet against the value of available assets. From that base onward, however, the money supply is further swelled by the standard practices of commercial banks -- the lending of deposits, the acceptance of lent money as additional deposits, and so on and so forth. Hence, it is truly a physical impracticality that should immediately halt anyone from ever entertaining an idea that a monetary system might nicely exist with a fixed convertibility among its currency units and gold, however, it should be equally apparent that freely floating gold can make for the best foundation of reserves.)

R.

USAGOLD Daily Market Report

(11/22/2005; 17:49:51 MDT - Msg ID: 138239)

Page Update!

TownCrier

(11/22/2005; 18:00:52 MDT - Msg ID: 138240)

Interesting notion...

http://www.marketwatch.com/news/print_story.asp?print=1&guid={3074AF32-3A22-42ED-9BE5-44F594033D57}&siteid=mktwMarketWatch reports that Thomson First Call research analyst David Dropsey said the gold rally may be finding support in concerns that the U.S. real-estate market is starting to cool.

"It could be that the disconnect between gold and the dollar is because of people getting out of major real-estate investments and using gold as a security investment before working out which is the next growth asset class," he said.

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

Hmmm... as if it hasn't yet dawned on these folks that gold IS "the next growth asset class".

R.

Chris Powell

(11/22/2005; 18:05:09 MDT - Msg ID: 138241)

Russians may know that gold is their liberation, and they've got plenty of it

http://groups.yahoo.com/group/gata/message/3479Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

jenika

(11/22/2005; 18:23:59 MDT - Msg ID: 138242)

melting down coins

Thanks to all who post here - love reading. Thought you might find this interesting:
Was talking to my gold dealer today here in oz and he told me they are melting down and refining sovereigns and kruggerands because those coins attract GST.

CoBra(too)

(11/22/2005; 18:42:56 MDT - Msg ID: 138243)

Bouna Notte and Gracias - usag and mk

Signing off for a while - as we're getting there - slowly - before taking off ...

As it looks like the Gold and Silver price is finally breaking out to new highs for the move ... don't expect the PTB to let it run - where it should run to - according to the BLS's hedonic accounting.

Well, that may just be part of the story as the real value of gold - and maybe silver - has broken out against all currencies.

I've been involved in a first major "Gold-Show" in Munich over the past weekend and moderated part of the event. I've been totally astonished by the turn-out of more than 2.000 interested participants in two days. This is going to be an annual event from here on.

The Austrian Mint is getting quotes by the day for the 16 1.000 oz Phyllies they've minted and sold starting at triple price - been in Munich and showing the product.

Oh, well I'm kind'a tired of statin' my believes for maybe more than 6 years ... and the pure an' free gold faction has the upper hand for now ...

MK - is the only one to explain its function - Insurance and nothing else -Free Gold is the same delusion as statistics within the BLS and now officially in the FED.

Signing off for a sabattical - while the POG is explosive and the US led geopolitics are imploding! ... as noone back home seems to see similar critical mass in labor et al unrest to ... sorry ... I'm gone for a while - at least ...

R Powell

(11/22/2005; 19:23:29 MDT - Msg ID: 138244)

CoBra 2

If by sabbatical you mean a vacation of sorts, let me wish you a good time. If by sabbatical you mean that we'll not hear from you for a while, let me say I hope it is a short while. I'm no match either for the "free-gold" group. When I ask simple questions to clarify questionable concepts, I get even more complicated explanations (claptrap?) and then I'm told that I "just don't get it". What I don't get are understandable explanations.

Translation of "you just don't get it" is I just don't buy the ever present and always sung party line. Like Gandolf, I miss some of the old crowd who thought for themselves and weren't afraid to disagree. Hopefully we can watch the show unfold higher without the physical only, all paper will burn, only when gold is set free, only when the economy crashes, only as Another + FOA predicted, only after the manipulation of the cabal is broken, etc. arguments ringing in our ears. As always, just one poor boy's opinion.... not always a popular one.
rich

Ned

(11/22/2005; 19:35:29 MDT - Msg ID: 138245)

FED leaks today that interest rate hikes may come to an end......

....sooner than later. Good-bye dollar !

Anyone have links?

Thanks

(11/22/2005; 19:35:59 MDT - Msg ID: 138246)

I appreciate your words, kind sir.

My words are not revolutionary, though there are those who would say they are. Certainly, not revolutionary from a political perspective, but revolutionary as in "soundly held."

I am the product of those great gold advocates who came before me, influenced me, and sustained my interest through thick and thin.

I could tell many stories, but here's one pertinent to the mind-set you raise:

Way back when -- in gold's stone age in the early 1970s -- I happened to find my self in a telephone conversation with Howard Segermark. Howard had been an aide to Senator Jesse Helms and therein cut his teeth on the gold movement. Howard, I understand from a friend recently, is still involved in the preservation of constitutional liberties (the bill of rights) as he was then, and gold.

In that conversation, HS told me about a panel discussion he considered to be extraordinary. I can't at this juncture remember who all was involved in that discusion, but I do remember that he wanted me to pay special note to the words of Nicholas Deak. Deak, I'm sure you know, was the founder of Deak Perrera, the gold firm, with connections to the old school going back to the founding of the 20th century gold business, and one of the grandfathers of sites like this one. He said he would send it to me. That was in the days before the fax and e-mail. Instantaneous meant the telephone rendition. For something substantial, you had to wait for the mail.

When it arrived, I set aside a portion of the afternoon, opened the envelope and relished the exchange among some of the best minds in the gold business. Deak made a very important point in that panel -- one that I have never forgotten. He said very simply that it didn't matter if there ever were a gold standard again. He said this before a panel where all the other participants were pushing the return of the gold standard (Yes, even then!). He said that the only important consideration was whether or not free citizens would be allowed to own gold. As long as they could own gold, he said, there was no need for a gold standard. Gold owners themselves would send the right message to the policy makers by whether or not they were prepared to exchange more currency for gold. I believe that this is a message Alan Greenspan took to heart and made a central aspect of his Fed chairmanship.

We have gone many years since then, but we haven't gone very far in reality. Gold has never been an investment. It has always been an insurance against the profligacy of the policy markers. In fact we know here at the gold brokerage firm that we've reached the END of any run in the gold price (short term and long term) when the callers are telling us they would like to buy gold to profit from the coming run-up. Conversely, we know that we are at the BEGINNING of a price run-up when the callers are telling us that they are buying to protect their assets against monetary dissimilation.

The more things change, the more they stay the same.

Chris Powell

(11/22/2005; 20:16:27 MDT - Msg ID: 138247)

Russia acts on what it has heard from GATA

http://groups.yahoo.com/group/gata/message/3480Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Gandalf the White

(11/22/2005; 20:32:22 MDT - Msg ID: 138248)

Thanks Sir Smeagol !

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sTHAT was what I had lost !
<;-)

Gandalf the White

(11/22/2005; 20:34:37 MDT - Msg ID: 138249)

PS: Sir Smeagol --- Nice 2 o'clock WATERFALL !

The US$ looks like the SAME OL'E $ again !
GO yellow !
<;-)

phil288

(11/22/2005; 20:53:16 MDT - Msg ID: 138250)

I have taped to my computer a saying attributed to George Orwell, one that may have come from this very site. "During times of unusual deceit, telling the truth becomes a revolutionary act." I think it is safe to say we are all there already. Regards. Got GOLD

David Linkley

(11/22/2005; 20:59:11 MDT - Msg ID: 138251)

Final chapter

The year 2006 will mark the beginning of the end of America as we know it. The Fed blinked today in terms of softening the language of future interest rate hikes and the dollar immediately took a dive off Niagra Falls. After decades of creeping socialism, treasonous politicions, severe money debasement, spin based media and an apathetic public, American is about to embark upon a new journey - enslavement! Enslavement to the enormous buildup of debt, an out of control Federal Government, and a moral crises of our own making. I pray tonight for this truely magnificant country of ours that we may all pull together and fight the evil forces now decending upon us.

David Linkley

(11/22/2005; 21:09:46 MDT - Msg ID: 138252)

Gold sales

The ECU is no better than America at present in managing their affairs as their brilliant idiot leaders sold over 17 tons of gold last week in a time of increasing world tensions and uncertainty. What terrific stewardship of an asset millions of people worked for to acquire and died to keep for future generations.

Cavan Man

(11/22/2005; 21:20:03 MDT - Msg ID: 138253)

And may I just add.......

..........to the banter this evening? Just sat throught the latest Potter flick with my kids to be the good Dad. Can't stand those over the top English accents bad acting and the whole schtick etc. Anyway, there is a line at the end of the movie recited by Dunbledore: "Dark times are ahead Harry; when we must choose between what is right and what is easy."

Well, that says it all as regards current events and trends yes?

Just completed a very satisfactory transactions with our gracious host. I encourage all to do the same. Heed the wisdom expressed in repeated concerns about eminent domain...er...confiscation.

To my friend CB2...I am a lucky man to know such a fine gentleman who has been graciopus enough to help me through the forest to see the trees! I will see you in Europe soon! As the Greeks say; "Prota O Theos". I say it too...adieu for awhile and good luck to all.

All the best (TOO)....CM

TownCrier

(11/23/2005; 02:02:24 MDT - Msg ID: 138254)

David Linkley, on the notion that "their brilliant idiot leaders sold over 17 tons of gold last week"

What if, in a rare vision of perfect omniscience, we could see the consequence of a world in which that gold had NOT been mobilized in such a manner. (Sort of like the premise of the Jimmy Stewart movie, "It's a Wonderful Life" in which he gets to see what the world would have been like had he NOT been born.)

It would probably be beneficial for your overall perspective to at least consider such an angle. In the same way that "a stitch in time saves nine", maybe it is the case that financial calamity would already be upon us were it not for some of the recent gold action, the very same gold activity that many tend to see only in the most superficially negative light.

I think it is a grave error to believe that this body of central bankers is idiotic, and graver still to believe that their actions have no deeper significance that a mere squandering of their most significant asset.

I will put it this way... if there is no deeper significance to these sales, then why O' why are they selling it? I suggest it is not for the love or want of money, after all, they can already print all that they might currently want or need "out of thin air", right???

Just food for thought to start to day as we roll hours closer to the bigger Thanksgiving meal -- the one that REALLY counts, complete with mounds of mashed potatoes and gravy. Yum!

R.

Belgian

(11/23/2005; 02:57:19 MDT - Msg ID: 138255)

The "old" gold school...

>>> " Gold has never been an investment " >>> " It has always been an insurance against the profligacy of the policy makers " !?

>>> " Gold owners themselves would send the right message to the policy makers (the profligacent ones, of course) by whether or not they were prepared to exchange more currency for gold " !?

>>> " The only important consideration was whether or not free citizens would be allowed to own gold " !?

-----> What is the purpose of holding gold-insurance against (fiat) profligacy when gold is never allowed to compensate for the disastrous results (loss of purchasing power) of profligacy ?

-----> What kind of protest can free citizens (hum) send to policy makers with holding gold that isn't doing its job as an insurance ?

-----> At what goldprice will policy makers admit that the gold insurance owners don't wish to exchange their gold for currency anymore ? What about the new goldowners that bought from the ones that cashed their gold insurance ?

If policy makers are supposed to change their policies, because the free citizens sended the signal with their gold insurance ownership....then we don't need that gold insurance anymore. But as we all know too well...policies will never change.

That's why gold as an insurance WAS a very convenient theory that WAS the perfect smokescreen for the policy makers. Now, gold is shifting from "insurance" to "reserve" status !!!

I don't want the "gold insurance company" anymore. I want to have my own - appropiate - reserves, when the house burns down. This is the "new" gold school.

968

(11/23/2005; 03:00:06 MDT - Msg ID: 138256)

@ Towncrier

Thanks for your excellent posts on Putin, and on the 17 tonnes sale by the ECB.

Ned

(11/23/2005; 04:24:35 MDT - Msg ID: 138257)

FED easing IR hiking rhetoric

http://www.theglobeandmail.com/servlet/story/RTGAM.20051122.wfedminutes1122/BNStory/Business/snip

"Still, rate decisions would be "increasingly sensitive to incoming economic data," the minutes said. "Some members cautioned that risks of going too far with the tightening process could also eventually emerge."

-end-

SM's took a jump at 2:00 yesterday afternoon in the eyes of the possible end of IR increases. The USDX took a dive on the announcement.

Belgian

(11/23/2005; 04:34:08 MDT - Msg ID: 138258)

Gold ensurance against profligate policy makers :

Indians continue to accumulate gold wealth (> 10,000 tonnes)
Are their policy makers more profligate than others ?

What about the different factions of policy makers in the $-IMS ? Are they all still in concert on profligacy ?

Is Putin a (profligate) politician and at the same time a gold insurance man...or has GATA converted him into a gold-reserve adept ?

Are the Euro CBs all ardent supporters of profligate policies and therefore sell their gold insurance for more profligate fiat dollar ? Then why all the efforts for having an as profligate euro as the dollar ? And why sell CB gold insurance whilst having very little gold left as to MTM ?

Was Greenspan ($ policy maker) knighted for making gold insurance as ineffective as possible ?

Who exactly are those free citizens with their gold ownership (insurance) that will say "stop" to which profligate policy makers ? The Google investment owners.

Is IMF gold allowed to function as an insurance ?

To who was Argentina signaling what ...with their new CB gold ?

Or,...have we come at the crossroad where we re-define what exactly profligate policies are and who exactly wants/doesn't want to change the systemic profligacy ? Arch conservatives or brilliant idiots ?

What exactly is so terribly difficult in understanding the fundamental difference between an insurance and a reserve ?
Insurance is an interpretable contract and reserve is a private property.

Think, why the private holders of gold ensurance never could claim to be compensated for the suffered consequences of the profligate policies.
Indian private gold reserve owners never had that problem...within their borders. Once they wanted to move into the dollar zone, their private gold reserves were worthless, degraded to fake insurance.

Putin holding a gold bar, is unmistakingly signalling what others yet not wish (find opportune) to signal. Read > The big change that is evolving. China (Asia), Dubai (ME) also send similar signals. Only the IMF keeps trying to remain a contrarian.

Don't expect the little private owner of gold rerserves ever being able to challenge the gold insurance company. Private gold reserve owners need the support of the State gold reserve owners !!! This coalition of gold reserve owning States is in progress.

Up to you on deciding if you wish to bet on gold insurance or gold reserve. You have the past 7 decades as reference.

(11/23/2005; 06:11:04 MDT - Msg ID: 138259)

Belgian: Here you go.

Indians continue to accumulate gold wealth (> 10,000 tonnes)
Are their policy makers more profligate than others ?

MK: Just because India has a cultural affinity for gold, doesn't mean that there are those who do not buy gold there as an insurance. Gold as an insurance is what drives the cultural affinity in the first place though all who participate don't know the origin. Too, you shouldn't attempt to superimpose the situation in India on the West. In the west, both in Europe and the United States, we have politicians who go to great lengths to hold onto the reins of power. That is where the profligacy comes from. Do you deny the existence the problems of government over-spending, rampant debt and money printing? Do you deny that governments are the source of the problem and that central banks accomodate them?
------

What about the different factions of policy makers in the $-IMS ? Are they all still in concert on profligacy?

MK: Yes, pretty much they are. They are all Keynsians now even if you refuse to accept it.
-------

Is Putin a (profligate) politician and at the same time a gold insurance man...or has GATA converted him into a gold-reserve adept ?

MK: Well, he may have become one. Sitting on one of the world's largest in-ground gold reserves tends to fuel an interest. Whether or not his government pursues inflationary policies is another matter. Would you like Putin better if he said he would start converting some of that gold into euros?
--------

Are the Euro CBs all ardent supporters of profligate policies and therefore sell their gold insurance for more profligate fiat dollar ?

MK: Yes. That about sums it up. They might also have an interest in keeping the gold market liquid so that their "investment" banks don't renege on their gold deposits.
--------

Then why all the efforts for having an as profligate euro as the dollar ?

MK: I don't understand this question. Fiat currencies are fiat currencies. I don't question why they exist, I just know I have to hedge them.
--------

And why sell CB gold insurance whilst having very little gold left as to MTM ?

MK: I can only surmise why the European central banks are such persistent gold sellers. You seem to think that the ECB's marking gold to market is the equivalent to some sort of magic wand. If the United States were to mark its gold to market would the dollar suddenly become a better currency? Would the deficits and potential for money printing suddenly vanish? Would the dollar become as good as gold again? Or good as the euro (in your eyes)? All the gold reserve represents is a third (fourth) currency detached from the other two or three. Let's not elevate to sainthood just yet.
-----------

Was Greenspan ($ policy maker) knighted for making gold insurance as ineffective as possible ?

MK: I don't know about knighthood. The queen makes those decisions not me. As for Greenspan, here's what he said on that subject:

"I do think there is a considerable amount of information
about the nature of a domestic currency
from observing its price in terms of gold. It is a
longer-term issue. It is an issue which I think is
relevant, and if you don't believe that, you always
have to ask the question why it is that central
banks hold so much gold which earns no interest
and which costs them money to store. The answer
is obvious: they consider it of significant value,
and, indeed, they consider it the ultimate means of
payment, one which does not require any form of
endorsement. There is something out there that is
terribly important that the gold price is telling us. I think that disregarding it is to fail to recognize certain crucial aspects of the value of currencies."

That is just one of many similar statements Greenspan has made on gold over the years -- one similar to that recently if memory serves. I think even Trichet has made comments along these lines. But maybe they are wrong and you're right. It's all just words anyway. Insurance. Reserve. It's all in the definition and the concept behind the words formed in the reader's mind. What is the difference between your definition of a "reserve" and mine of "insurance?" Are you saying that the central banks no longer see gold as an insurance policy against various risks? In your previous post, its seems you were arguing in circles. First you denounced the concept of gold as "insurance," then you finished by sayng you own gold for when the "house burns down." Sounds like insurance to me.

As for Greenspan being knighted for making gold insurance ineffective, I do not think he has that power. He may be a maestro but he is still a man, and gold is. . .well . . .gold. In some ways, Greenspan was one of gold's most eloquent spokesmen and I wouldn't be surprised to hear him speak favorably about gold as a portfolio insurance once he leaves the Fed.
_____

Who exactly are those free citizens with their gold ownership (insurance) that will say "stop" to which profligate policy makers ? The Google investment owners.

MK: You and me and anyone else who owns gold, assuming of course, you own it. You might believe that the EU's gold reserve is enough to protect you, even if the euro cbs keeps selling it. Do you have a problem with Google stock? I wish I would have been smart enough to buy some at the auction.
------

Is IMF gold allowed to function as an insurance ?

MK: Only insofar as that reserve belongs to the nation states that conributed it. If the nation states hadn't garnered it as an insurance in the first place, the IMF never would have received the contributions.

To who was Argentina signaling what ...with their new CB gold ?

MK: That they needed something in their treasury besides the dollar and euros. Is there a deeper reason I need to know about?
---------

Or,...have we come at the crossroad where we re-define what exactly profligate policies are and who exactly wants/doesn't want to change the systemic profligacy ? Arch conservatives or brilliant idiots ?

MK: I doubt that much is going to change and most gold owners aren't in the business of political change. There is an aura of hopelessness which hangs over the economic terrain in both Europe and the United States. Do you disagree with that?

What exactly is so terribly difficult in understanding the fundamental difference between an insurance and a reserve ?
Insurance is an interpretable contract and reserve is a private property.

MK: Interpretable contract is your definition of insurance. Gold is an insurance and in a sense an "interpretable contract" in that it makes a promise and it keeps it. Can gold be both an insurance AND a reserve? I don't understand why this is such an issue for you. Did I dump cold water on some open nerve I didn't know about?
---------

Think, why the private holders of gold ensurance never could claim to be compensated for the suffered consequences of the profligate policies.
Indian private gold reserve owners never had that problem...within their borders. Once they wanted to move into the dollar zone, their private gold reserves were worthless, degraded to fake insurance.

MK: I think gold has done very well in protecting individuals against the political profligacy, and I think it is on the verge of playing catch up now for the last round of debt and money printing. Who knows where that will take the price over the coming months and years. Do you know a better way to hedge your portfolio than gold? You're not going to tell me the euro, are you? If the Indians brought their gold out of India and wanted to convert to currency they could have and would have had approximately the same purchasing power here that it did in India. What am I missing here? Fake insurance? Don't understand that one.
-------

Putin holding a gold bar, is unmistakingly signalling what others yet not wish (find opportune) to signal. Read > The big change that is evolving. China (Asia), Dubai (ME) also send similar signals. Only the IMF keeps trying to remain a contrarian.

MK: It tells me that Putin recognizes that Russia with its huge in ground gold reserve can benefit from a strong gold price. I think if you asked Putin about Russia marking its gold reserve to market, he wouldn't understand the significance of the question.
-----------

Don't expect the little private owner of gold rerserves ever being able to challenge the gold insurance company.

MK: I don't know what you mean by the "gold insurance company." USAGOLD? You certainly have taken advantage of the facilities offered here to spread your message without too much of a deterrence.
---------

Private gold reserve owners need the support of the State gold reserve owners !!! This coalition of gold reserve owning States is in progress.

MK: You are absolutely right. I especially like the way the European banks (including the ECB) supports private gold owners with their continuous gold sales which in previous times acted to keep the price down. We are in a different market now, so the sales don't even matter except to provide some much needed physical for a very tight market. Thank you, Europe.
_________

Up to you on deciding if you wish to bet on gold insurance or gold reserve. You have the past 7 decades as reference.

MK: Uh huh. . . Are you saying that because Europe has gold reserves that it marks to market that indidvidual citizens don't need to own it?

YGM

(11/23/2005; 06:49:12 MDT - Msg ID: 138260)

A "Little" Gold 101..... For Us Uneducated Simple Folk

"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."

Gerald M. Loeb

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

"Even during the period when Rome lost much of her ancient prestige, an Indian traveler observed that trade all over the world was operated with the aid of Roman gold coins which were accepted and admired everywhere."

Paul Einzig

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise."

Jerome F. Smith

"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."

Antony C. Sutton

"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."

Hans F. Sennholz

"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne

"In a country whose currency is not convertible into gold, inflation leads to its continuous devaluation in terms of foreign currencies."

Michael A. Heilperin

"Until government administrators can so identify the interests of government with those of the people and refrain from defrauding the masses through the device of currency depreciation for the sake of remaining in office, the wiser ones will prefer to keep as much of their wealth in the most stable and marketable forms possible - forms which only the precious metals provide."

Elgin Groseclose

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

"America today has insufficient savings to finance both crucial investment and its consumption of imports."

James Dale Davidson

"The way I see it, gold is headed over $1000 an ounce, probably much higher. At anywhere near current prices, it's the lowest risk, highest potential investment I can think of."

Doug Casey

"In the long run, the gold price has to go up in relation to paper money. There is no other way. To what price, that depends on the scale of the inflation - and we know that inflation will continue."

Nicholas L. Deak

"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble

"The paper standard is self-destructive."

Hans F. Sennholz

"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F.A. von Hayak

"The history of paper money is an account of abuse, mismanagement, and financial disaster."

Richard M. Ebeling

"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."

Henry Hazlitt

"All of the government's monetary, economic and political power, as well as its extensive propaganda machinery, will be enlisted in a constant battle to drive down the price of gold - but in the absence of any fundamental change in the nation's monetary, fiscal, and economic direction, simply regard any major retreat in the price of gold as an unexpected buying opportunity."

Irwin A. Schiff

"If ever there was an area in which to do the exact opposite of that which government and the media urge you to do, that area is the purchasing of gold."

Robert Ringer

"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."

John Exter

"Public works are not accomplished by the miraculous power of a magic wand. They are paid for by funds taken away from the citizens."

Ludwig von Mises

"No other commodity enjoys as much universal acceptability and marketability as gold."

Hans F. Sennholz

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."

Daniel Webster

"If you don't trust gold, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"

Kenneth J. Gerbino

Lackluster

(11/23/2005; 06:59:31 MDT - Msg ID: 138261)

MK, your msg. No. 138246

"In fact we know here at the gold brokerage firm that we've reached the END of any run in the gold price (short term and long term) when the callers are telling us they would like to buy gold to profit from the coming run-up. Conversely, we know that we are at the BEGINNING of a price run-up when the callers are telling us that they are buying to protect their assets against monetary dissimilation."

So, what are the callers currently telling you?

Goldilox

(11/23/2005; 07:34:23 MDT - Msg ID: 138262)

Interchange

Great exchange of thoughts between Belgian and MK this morning.

I would like to add that governments, like FIAT currencies, are transitory. The Euro zone itself is only a few decades old as a "unified" group and even the US, whose Constitution seems now in jeopardy, is but a couple hundred years old, still a toddler by historical Empire standards.

When we witness the "transfer" of CB gold with no clue as to the recipients, we are, as likely as not, watching the wheels of power being greased without really knowing where. All the fluff from official announcements offer us unimportant theories to banter about, leaving the important questions unaddressed.

That, of course, is as typical of disinformation as it could be.

When MK says "Do you deny that governments are the source of the problem and that central banks accomodate them?", I respond that this is as much a "chicken and egg" question as exists in politics today.

Who funds expansionism, international "relations", wars, political campaigns, military campaigns, etc.?

Is it coincidence that the US joined in WWI right at the time JPM was about to lose his shirt on UK war loans. There was no demonic "Hitler" in that war, but the powers of yellow press journalism were whipped up quickly to inpire the war machine once the Lusitania was sunk - under the same cloud of intelligence enigma as the Maine, Pearl Harbor, Gulf of Tonkin, and the WTC. That's one tactic that never changes from war to war.

Saddam's timely demise upon demanding "Euros for oil" after decades of thwarting internal dissent with full CIA support is but a simple example that banks make a lot more political decisions that we ever would glean from the "official" stories.

While the conspiracy theorists still argue whether the JFK assassination was a coup d'etat, the real coup, exposed in "Creature form Jekyll Island" is mostly ignored.

Belgian

(11/23/2005; 07:49:20 MDT - Msg ID: 138263)

@ Sir M.Kosares

We are having a deaf men exchange of thoughts. Thanks for responding.

Au-some

(11/23/2005; 08:28:25 MDT - Msg ID: 138264)

@Goldilox

Barron's: Yet central banks have been selling gold.

Hathaway: Central bank selling fills the gap between supply and
demand. They have been selling at steady pace. What they have is an
arrangement so their selling is orderly and doesn't spook the
market. Under that arrangement, there is a quota system of 500
metric tons a year for five years. The selling is transparent, the
market knows it is there, and if the program wasn't in place, gold
could easily be $200 or $300 higher. We are in the second year of
that five-year agreement, and it is hard to imagine where all that
gold is going to come from.

Barron's: Who's buying?

Hathaway: They sell it into the market. We keep some of our gold in
Switzerland, and I went to the facility where we keep it and
basically it was a large refining company. They were melting down
bars from the Swiss central bank, and at the other end of the
production line there were semi-finished gold watch cases and
jewelry for China, the Persian Gulf and India. That's where it is
going. Central bankers are selling their best asset into the markets
and it is going into non-monetary forms, and they will never get it
back. They are just bureaucrats and not even held accountable for
what they do on a financial basis. It has been such a bad trade for
the last five years, you would think that at some point they would
begin to say maybe we should hang on to what we have. But again,
their general agenda is not to have gold as a monetary asset or at
least not talk about it if they have it, because what is still true
is that a rising price of gold is not a favorable reflection on
public financial policies, monetary and fiscal.

(11/23/2005; 08:36:55 MDT - Msg ID: 138265)

Sir Belgian

My apologies if I misunderstood your thoughts and intent. I appreciate your posting here, and hope our disagreements are not cause for deeper misunderstandings. I think we are both on the same page as far as gold ownership goes and that's the most important thing. We disagree on some of the details and I see that as healthy -- for this forum, you and me.

Belgian

(11/23/2005; 09:10:25 MDT - Msg ID: 138266)

@ Sir Kosares

I don't see any reason why you should apologise. Have no problems with disagreements on such an important issue as gold. But in my opinion, I think that I do understand your views (private + public) much better than you do on non American thinking.
Maybe it's time to let the evolving facts speak for themselves with less of our personal interpretations...endless repetitions of the same standpoints. Thanks.

Goldilox

(11/23/2005; 09:26:13 MDT - Msg ID: 138267)

Watches and fobs?

@ Au-some,

Interesting Barron's "quotes", sans source, detail, or analysis. Which refining company was that, and which market did they use to buy their bars, by the way?

Shouldn't we see a huge increase in some gold exchange's warehouse inventory when those massive CB sales occur, followed by a huge decrease at customer "delivery"?

The off-the-cuff statement that "some" bars found their way into a refinery isn't any better analysis than the "selling gold to feed the poor" fantasies.

Five hundred tonnes of watch cases and fobs? That's a lot of freakin' fobs!

R Powell

(11/23/2005; 10:05:38 MDT - Msg ID: 138268)

Insurance + potentially great investment......

MK, in regards to #138259, thanks.

I believe I understood it all, which means the banana I ate yesterday is working and also means you haven't lost your touch with words, well said!

My only dissention might be disagreeing with your opinion that gold is not an investment. Why can not gold possession be both insurance and an investment (with investment defined as something bought or sold short with the express intention of realizing a profit when the transaction is offset). The insurance aspect fills the greater need perhaps, but doesn't exclude the potential for significant profit, no? Insurance and an investment at the same time! Small matter, no need to respond to my greed which is always searching for trading profits.

Thanks again to you + Belgian and .....
happy turkey day to all!!
rich

P.S. please remember that eating on Thanksgiving is akin to voting....it should be done early and often.

R Powell

(11/23/2005; 10:11:16 MDT - Msg ID: 138269)

Au-some

Thanks for the Hathaway segment. It is part of a much longer article. Hathaway has been an excellent source of information + gold market interpretation for years now, quietly publishing his thoughts, albeit too infrequently. I am always interested in what he has to say. Thanks Mr. Hathaway!
rich

mikal

(11/23/2005; 10:22:11 MDT - Msg ID: 138270)

@Goldilox

Re: msg#138267 - You've nailed it again(and again).

Au-some

(11/23/2005; 10:41:19 MDT - Msg ID: 138271)

Hathaway interview

http://groups.yahoo.com/group/gata/message/3471Your welcome Mr. Powell. here is the link to the whole interview.

Smeagol

(11/23/2005; 11:16:21 MDT - Msg ID: 138272)

"We are having a deaf men exchange of thoughts."

We are all ears and we thanks you!

S.

Smeagol

(11/23/2005; 11:31:58 MDT - Msg ID: 138273)

Who's on first?

Which money powers/nations/CBs, sspecifically, are behind/favor the "MTM/Freegold" scheme, and which are "against" it, and are there any that are in neither camp?

S.

Goldilox

(11/23/2005; 12:01:43 MDT - Msg ID: 138274)

Hathaway interview

@ Au-some,

Thanks for posting the source. The entire text of the article offers a lot of good insights.

-G

(11/23/2005; 12:52:09 MDT - Msg ID: 138275)

Central Banking with the Benefit of Hindsight. Lecture by Jelle Zijlstra (1981)

http://www.perjacobsson.org/lectures/1981.pdfFound this one while searching the net after learning the name Jelle Zijlstra, here at this forum.

mikal

(11/23/2005; 13:05:02 MDT - Msg ID: 138276)

Russia rethinks resources

http://english.people.com.cn/200511/23/eng20051123_223365.htmlRussian Gold Output to Soar in Next Decade: Minister - Xinhua - November 23, 2005

Liberty Head

(11/23/2005; 13:39:42 MDT - Msg ID: 138277)

Shooting Fish In A Barrel

To Goldilocks astute observation, "governments, like FIAT currencies, are transitory" I would add there is nothing transitory to the underlying human folly that drives this condition.
The unshakeable constant of human folly is a core driver for holding gold bullion.
Holding physical gold while inflation rages is a bit like shooting fish in a barrel.
There is no need to feel bad when one understands the fish voluntarily put themselves in the barrel despite every effort to dissuade them from doing so.
These "fish" are helplessly addicted to the hypocrisy of spending other people's money, under threat of force.

Admittedly there is not much challenge in shooting fish in a barrel, but I do enjoy a nice filet of scoundrel.

Best Wishes

Federal_Reserves

(11/23/2005; 13:41:30 MDT - Msg ID: 138278)

US Bankruptcy watch.

http://www.fb.org/news/nr/nr2005/nr1117.htmlNote auctions

$20 billion today.

$34 billion on Monday!

In an interview with Reuters, Richmond Fed President Jeffrey Lacker helped bring investors back to
earth by reaffirming the central bank's inflation-fighting credentials.

"I think it is clear we're not done removing accommodation," Lacker said in the interview.

What about the government?

74 billion in additional debt so far this month...annualized that's nearly a trillion a year!

WOW!

Current Amount

11/22/2005 $8,089,004,553,905.72

Current
Month

11/21/2005 $8,084,858,891,735.31
11/18/2005 $8,082,848,241,050.02
11/17/2005 $8,083,374,482,184.25
11/16/2005 $8,063,591,365,642.68
11/15/2005 $8,066,143,318,410.41
11/14/2005 $8,052,330,154,252.81
11/10/2005 $8,050,739,770,455.58
11/09/2005 $8,034,610,660,541.64
11/08/2005 $8,036,664,225,238.54
11/07/2005 $8,031,589,402,361.42
11/04/2005 $8,028,449,101,487.38
11/03/2005 $8,028,204,675,510.52
11/02/2005 $8,021,480,952,298.81
11/01/2005 $8,015,272,000,177.94

Have a great Thanksgiving! Hope everyone can afford it as well as enjoy it.

USAGOLD / Centennial Precious Metals, Inc.

(11/23/2005; 14:44:31 MDT - Msg ID: 138279)

Wishing you comfort and good cheer

Flatliner

(11/23/2005; 14:58:17 MDT - Msg ID: 138280)

Happy pre-turkey day all

I've noticed that a number of people that use this forum use www.quotes.ino.com in order to track the current FOREX prices of gold (and silver). The last couple days, I've noticed a weird formation that occurs just after 1:30 (graph time). It's as if the High, of the five minute interval, tracks what is perceived to be the price while the Low is pegged at what appears to be spot close price. Visiting www.Kitco.com confirms the lower price in its daily gold chart graph (in the upper right). It's just a flat line. But, the graph seems to show that there is trading that is really going on.

Can anyone explain this?

If I were to guess, it would be that there is trading going on somewhere that is feeding the www.quotes.ino.com site while, somewhere, someone still believes that the market is closed (ie, the kitco graph). Is this simply a matter of the technology of these websites has not been updated to consider the new exchanges?

Thanks much.

TownCrier

(11/23/2005; 15:15:16 MDT - Msg ID: 138281)

Vietnam tax on imported gold reduced to 0.5%

http://english.vietnamnet.vn/biz/2005/11/514680/23/11/2005 -- Ministry of Finance reduces import tax on material gold to 0.5% in an attempt to help enterprises overcome difficulties caused by price hikes.

Global price hikes have pushed sale prices up to the highest levels over the last 18 years.

According to Quach Duc Phap, Director General of Tax Policy under the Ministry of Finance, gold tax reduction was to be considered at the end of the year, however, the decision on tax reduction was made earlier than scheduled due to unexpected global price fluctuations.

... (prices) are forecast for further increases, as Russian Central Bank has announced the purchase of more gold for its reserves.

^---(From url)---^

I hardly think they are being square with their excuse, that is, that they are lowering import taxes merely as means to help enterprises compensate for increases in price. If we were to buy that offered rationale, then apparently we should expect them to move tax rates into the negative as prices climb still higher in future days.

Ultimately, what it is is Another subtle sign in the shift toward greater official encouragement or endorsement for citizens to accumulate and gain the stabilizing power of gold ownership. What is good for the individuals is also good for the whole.

Please recall also Monday's news of the Delhi cabinet in India moving to reduce its VAT on gold to only 0.1 percent.

R.

TownCrier

(11/23/2005; 15:18:58 MDT - Msg ID: 138282)

Flatliner, gold price(s)

Maybe what you are seeing is nothing other than a manifestation of the spread between the market's BID price being represented on the low end and the ASK price on the upper.

R.

TownCrier

(11/23/2005; 15:36:29 MDT - Msg ID: 138283)

Speaking of India...

http://www.business-standard.com/smartinvestor/storypage.php?leftnm=lmnu6≤ftindx=6&lselect=11&chklogin=N&autono=206511Mumbai�November 24, 2005 -- Given the market scenario where gold prices have scaled to an all-time high, would it still be wise on your part to look at the precious yellow metal as a lucrative investment option?
�
Yes, say analysts. Gold � even at the current high levels � is still a good buy. At present, the metal is quoting at around Rs 7,300 per 10 grams ... an appreciation of more than Rs 1,000 in just over a month.

The prices are expected to climb up even further, led by a rise in physical demand for the yellow metal in India, China and West Asia. And the demand is poised to gather momentum, which, in turn, will fuel the prices.

The advantage that gold has over many other options is that the metal is accepted by all segments of consumers as a good investment avenue. It has the flexibility: as and when the prices move up, the gold coins can be encashed or converted into loans.
�
Even as gold prices are reaching newer peaks, banks are betting big on the retail gold business. State Bank of India (SBI) and ICICI Bank have been in the business for more than a year now, while players like Corporation Bank, HDFC Bank and IndusInd Bank are new entrants to the party. All these banks are jostling for a slice of the golden pie in the market.
�
Like other banks, HDFC Bank too sells 24 carat and 99.99% purity gold. All such coins are imported from the PAMP Refinery in Switzerland....

IndusInd Bank, too, has launched similar coins, which come in the 5-10 gm range with fineness of 99.9%. A customer can pick up the coins by paying cash of up to Rs 50,000 at one time. The larger 50-gm size is for the high networth individual....

With most banks' festival offers still on, buying gold from banks continues to be a profitable investment decision.

ICICI Bank is currently selling a small gold coin weighing 2 grams for close to Rs 1,500. SBI is also selling at around the same rate. Normally, purchase of gold coins from banks is at a price 5-10 per cent higher than the wholesale price.

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

When it comes to getting gold at excellent prices, you have found your place. Give USAGOLD-Centennial a call for a no-fuss consultation and again any time you're wanting to place an order for the world's most reliable asset. Gold.

R.

USAGOLD Daily Market Report

(11/23/2005; 16:38:50 MDT - Msg ID: 138284)

Page Update!

David Linkley

(11/23/2005; 16:41:16 MDT - Msg ID: 138285)

@TownCrier

The word I should have used for central bankers is idiocy not idiots. They are selling gold for anti-freemarket reasons no matter what their intentions. Either bailing out a short or shorts, or keeping the system functional (for a time as reality is never avoided), or in payment of some kind. I will make you a bet that they will be buying gold back at much higher prices. In the mean time the people who worked and paid for it are getting screwed bigtime. Good luck defending central bankers for any reason. They have brought nothing but poverty to nations throughout history. France is still paying the price for John Law.

TownCrier

(11/23/2005; 16:58:21 MDT - Msg ID: 138287)

Gold-manufacturing support (loan) scheme set for launch

http://www.miningweekly.co.za/components/print.asp?id=778332005/11/24 -- South Africa's long-awaited gold-advance scheme, which has been on the cards for a number of years, is to be launched today.

While the precise support mechanisms still need to be spelt out, the concept behind the scheme is to provide secure and cost-effective gold financing to the South African jewellery-manufacturing sector.

The scheme, previously referred to as the gold-loan scheme... is also linked to South Africa's defence-offset programme, which arose from the multibillion rand re-equipping of the airforce and the navy.

Aircraft suppliers BAE and Saab will include the scheme as part of their bigger suite of National Industrial Participation projects, which, at this stage, also comprises a fund for small start-up companies, carbon manufacturing, high-pressure die-casting and a new ferrochrome smelter.

Other roleplayers in the scheme include Gold Fields, AngloGold Ashanti and Standard Bank.

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

If the scheme grows and grows, will the central bank stand willing ready and able to serve in a lender-of-last-resort role in order to backstop any potential liquidity strains? Through history this has always been the Achilles' heel of various attempts at gold-lending networks.

R.

TownCrier

(11/23/2005; 17:12:39 MDT - Msg ID: 138288)

David Linkley,

Once in awhile a surgeon amputates a limb or removes tissue, and almost amazingly, the patient -- despite the loss -- will sometimes arrive at a comforting understanding that it was but a small sacrifice for the greater good.

I've a friend who suffered and raged very very little over the loss of a precious kidney in order to save his brother.

R.

OvS

(11/23/2005; 17:13:53 MDT - Msg ID: 138289)

M.Kosares, Hathaway, Sinclair, etc. vs. Belgian

I hope I'm not presumptious
trying to clarify misconsep-
tions between the parties.

H.& S. called the Euro "trash".
How can one be so simplistic?
The Euro was created as a
transition device to save the
world from the chaos of a falling
dollar, and, as Belgian proposes,
the Euro is also a device for a
transition to "free gold".

How could the MTM Euro gold be an
insurance for the Euro? Not quite
possible. As we all expect the
dollar to inflate or decompose,
the value of Euro's gold component
will increase, whereas the currency
basket(case) will decrease--first
to par with gold and then, proges-
sively towards zilch.

It seems more logical to say:
the Euro is an insurance for "gold".
Wealth is. Gold is. It needs no
"financial" insurance. That would
be rediculous. Yes, it needs good
and "safe/vaults" and enough "fire-
power" to keep the greedy world in
check. That's from the European/
Belgian perspective; our American
experience will slightly differ, but
in the end, with 8,000 tons waiting
to be "lifted", America will still
be one of the major powers, though
shaven of its "reserve of the world's
fiat". And good riddance. That kind
of privilege gets to the head of
whoever controls it. America is a
good place, and after some painful
readjustments, will be again a
wholesome force for the whole world.
Happy "Giving Thanks" to all of you.
OvS

R Powell

(11/23/2005; 18:45:40 MDT - Msg ID: 138290)

OVS

I don't doubt that the creation of the Euro intended to facilitate + enhanse trade among the members of the European countries that have converted their currencies to it but I don't think anyone voted for its use to save the world from a dollar fiat currency crisis as you state..

"The Euro was created as a
transition device to save the
world from the chaos of a falling
dollar, and, as Belgian proposes,
the Euro is also a device for a
transition to "free gold"."

It may be (remains yet to be seen?) a stronger currency than were the individual countries' currencies, especially if the member nations' economies strengthen + benefit by adopting this single currency. It should reduce the need for the US dollar as a mutually acceptable exchange medium by replacing that US dollar and may even rival the buck in the world-wide arena but I find it hard to believe that all those different countries gave up their previously loved currencies because someone convinced them that the US dollar was doomed. The buck trades against all world currencies + despite years of reports of its imminent demise, it is still with us, performing its function day in and day out. Might it's value inflate or deflate? Certainly, maybe drastically so, and deficit spending and credit (debt) creation will weaken it eventually, but it was never meant to be a store of wealth, just a convenient means of economic exchange. It has lost a great deal of its purchasing power just during my lifetime. My after highschool job paid me $1.25/hour. A cup of coffee then was a dime. Now, that $1.25 won't buy a cup of joe. So what? I don't work for $1.25/hour any more either. Money is a lousy place to save wealth when the money's purchasing power is declining.

How does the Euro differ as such? Is it not also a paper fiat money? And, how much of a currency's value is related to the economic strength or weakness of the country(ies) using that currency? Is the European economy outshining the USA's? I don't know but wonder instead if any world currencies are that much more valid than the dollar...flawed as it is. happy turkey day!

Liberty Head

(11/23/2005; 19:01:58 MDT - Msg ID: 138291)

Townie, Tell Me It Isn't So

Your not actually trying to say donating a kidney to ones brother is analogous to having ones lifeblood taken by force and/or fraud, then justifying the crime with a bogus,pompous claim of being for some unspecified "good", are you?

Suppose someone broke into your garage while you were not at home and took your brand new bicycle. Would it not still be theft even if the thief gave part of the bicycle to a needy child?

Inflation is theft. Taxation is theft. Any time the threat of force or fraud comes into the equation all claims for the greater good of humanity become null and void.

Best Wishes

David Linkley

(11/23/2005; 19:32:52 MDT - Msg ID: 138292)

@TownCrier & OvS

Because Western nation politicions have promised too much for too long to get elected, the central banks have had to print too much money to honor the promises. We now find ourselves in a form of NWO bankruptcy of which we are awaiting our final fate. Yes the Euro will rise vs. the dollar at some point but paper is paper when depreciating. Gold or some other form of reliable payment which can't be printed is the only answer. The producers of the world will not forever accept the bankrupt promises of the West to pay for their labors. This is why gold sales are so evil and done in the shadows. They hide the truth of the damage being done and gold is the only true monetary asset without a liability. Truth and objectivity are the first causalties of socialist governments. Neither the dollar or Euro will triumph in the end. The world socialists together with mulinational corporations will push for a one world government and currency as the answer when the current economic crises deepens. Without gold at the center of the world economic body, bankrupt nations may have little choice but to acquiesce to at least part of the proposals.

Smeagol

(11/23/2005; 19:33:46 MDT - Msg ID: 138293)

at Ssir Liberty Head, and all...

"Inflation is theft. Taxation is theft. Any time the threat of force or fraud comes into the equation all claims for the greater good of humanity become null and void."

THIS is why we says NO tax or restrictions on It whatsoever forever in the "new" IMS, or It cannot be considered "freegold", and we cannot name It that until It is. Until then It's "quasifreegold", no matter how nicely sung.

S.

TownCrier

(11/23/2005; 20:31:23 MDT - Msg ID: 138294)

David Linkley, "...This is why gold sales are so evil and done in the shadows..."

You pin it on 'gold sales', but it would ring truer in my ears if you had said "gold loans" instead.

Liberty Head,
Please identify for me which one(s) among the sold ounces of central bank gold was earmarked property of yours (or mine, for that matter), and then I will agree with you that the selling of it represents theft.

For my part, being aware of no effective claim personally on anything within their vault, I cannot see it as the theft you've espoused.

I do, however, sound an alarm when a systemmatic mob of gold-lending steps in and exercises a power to arrest the functioning of physical gold's rightful price discovery mechanism for periods lasting successive generations of human life.

If there is a crime worthy of your energies to investigate, I suggest you begin with that abduction and multi-generational obstruction of what would otherwise be a lofty and easy-to-see fair-market value of physical gold.

R.

Liberty Head

(11/23/2005; 21:25:55 MDT - Msg ID: 138295)

Towncrier

Central banks exist to expedite inflationary governmental finance and support fiat monopoly. They are intrinsically interventionist. They undermine personal responsibility. The gold is sold to provide inflationary liquidity and protect intrests from competeing fiat monopolies.

Best Wishes

TownCrier

(11/24/2005; 00:45:32 MDT - Msg ID: 138296)

Liberty Head, your latest

I'm happy to report that you and I, insofar as your latest missive is concerned, are in COMPLETE agreement. Bravo, and I tip my hat.

And equally happily, there is gold ownership for folks like us to look to as the best line of personal defense against the vagaries and abuses we must face over time from those meddlesome official quarters.

The beauty of democracy being what it is, however, I am willing to tolerate said meddling as a fact of life. But again, this is but a minor element that is easily diffused by a thinking man through ownership in unadulterated (unlent) physical gold.

Cheers,
R.

Bizarro-Greenspan

(11/24/2005; 02:26:51 MDT - Msg ID: 138297)

When I started,I hoped to find nothing,

So,I went looking for something,

And found nothing,

I had found what I was looking for,nothing.

Ya el oto--o se cierra con un oro sombr'o...

David Linkley

(11/24/2005; 07:26:18 MDT - Msg ID: 138298)

@TownCrier

Today there is no difference between gold loans and sales. Once the gold leaves the vaults it's coming back only at much higher prices or not at all. Bravo to Liberty Head who explained it much more eloquently than I. It is plain and simple currency debasement which cheats producers out of their just returns and is the staple of socialist governments everywhere.

Goldilox

(11/24/2005; 09:03:15 MDT - Msg ID: 138299)

Staple

@ DL,

You branded currency debasement as a "staple of socialist governments", but I don't see any non-socialist governments shunning the taxation/depreciation schemes.

It submit to you that is is really a "staple of governments", period.

The concern I have with the current band of so-called "conservatives" is that when they speak of "limited government", they mean "limited to serving their own private interests!"

Nobody in Congress has "skinned that bar" since Davy Crockett, Dr. Paul excepted! When the "Reagan Renaissance" starts to exhibit the "Crockett hatchet", they will get my notice, as Reagan loved to talk tough, but walked right in line with the corporate welfarists".

It seems to me the new definitions of liberal and conservative only define who gets preference in the welfare line, and closer examination of their actions blur those distinctions even more.

-G

Goldilox

(11/24/2005; 09:08:53 MDT - Msg ID: 138300)

Babelfish

@ B-G,

Babelfish translates your Spanish tag as "The autumn is already closed with a shady gold".

Sounds like they have been reading GATA's notices!

Goldilox

(11/24/2005; 09:23:01 MDT - Msg ID: 138301)

All that is "evil" is not "criminal"

@ TC and DL,

I am in sympathy with both of your positions, but might I interject that the reason many "government evils" are not "criminal" is based entirely in the powers of government to constantly redefine "criminal".

Remember, not too long ago, the US government forbade gold ownership by any but the banks and government itself, and we've heard thrreats from the US Treasury that they've not forgotten that they wield that hammer.

Even "trading with the enemy" acts have only sparingly been applied as political witch hunts, while the major violaters have always gotten a pass from "friends" in high places.

On this Thanksgiving Day, I am grateful to that great champion of the individual, Will Rogers, who quipped, "Be thankful that we don't get all the government we pay for!"

TownCrier

(11/24/2005; 10:49:14 MDT - Msg ID: 138302)

David Linkley, there IS a difference

If an entity has a tonne of gold, it can only sell it once. Whereas through lending, particularly within a network of like entities, the same tonne can be lent over and over and over again, greatly bloating the apparent supply of gold to satisfy demand. The result is a short circuiting of the normal forces upon the market-clearing mechanism of price discovery. I won't bore you with the details.

It's time to eat!

R.

968

(11/24/2005; 11:54:06 MDT - Msg ID: 138303)

Zhou Xiaochuan: Financial cooperation between China and Europe

http://www.bis.org/review/r051124d.pdfAddress by Zhou Xiaochuan, Governor of the People's Bank of China, at the First China-Europe Financial Services and Regulation Roundtable Conference, Shanghai, 28 October 2005.

"In the recent years, economic and trade relations between China and Europe have been strengthened gradually. The ancient "Silk Road" tied China and Europe closely more than 2000 years ago."

----FOA (10/26/01; 21:21:33MT - usagold.com msg#127) "In historical precedent, the orient express always headed to Europe"-----

----FOA (4/15/2000; 14:31:21MT - usagold.com msg#16)
"China is a wild card that uses the US for short term gain while not politically "supporting" the dollar system. Their historic trading ties face West to Europe, retracing the old Orient Express. Further, their attachment to gold is a natural draw that pulls them into the Euro faction. When the time is right and Euro trade deep enough, they like the oil producers will adopt the Euro as a reserve. That time may be very, very close!"----

"In 2004, the enlarged European Union became the largest trading partner of China, China became the second largest trading partner of the European Union and the bilateral trade volume reached over USD170 billion, increasing by 33.6 percent. As of end-December 2004, the European Union had nearly 20 thousand enterprises invested in China with the contractual value of capital reaching USD75.38 billion. China has benefited much from the EU in the process of economic cooperation in terms of capital, technology and advanced management experience. At the same time, the rapid development of Chinese economy also provided many chances for the EU countries."

"China and Europe have already set up bilateral financial services cooperation projects before, and the People's Bank of China as well as the China banking, securities and insurance regulatory authorities, have conducted and benefited from broad business exchange and collaboration with their European counterparts. In future, both sides will continue to strengthen exchange, understanding and cooperation to promote further development of their bilateral relations."

"In such an environment, we fully believe that the prospects of financial cooperation between China and Europe will be much brighter in the days to come."
----------------------------------------------------------------------------------------------------------------------
A co�ncidence ? Governor Xiaochuan uses the same expression as FOA more then 5 years ago used ?

Chris Powell

(11/24/2005; 12:16:54 MDT - Msg ID: 138304)

Chinese copper trader may have used infamous Baring Bank trader's strategy

http://groups.yahoo.com/group/gata/message/3486A GATA dispatch.

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Chris Powell

(11/24/2005; 12:18:36 MDT - Msg ID: 138305)

Russian central bank to buy gold 'on all markets,' foreign and domestic

http://groups.yahoo.com/group/gata/message/3487If they really do, that sure will be
interesting.

A GATA dispatch

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Belgian

(11/24/2005; 12:37:07 MDT - Msg ID: 138306)

Ge / TC

http://www.ecb.int/press/key/date/2005/html/sp051124.en.htmlJelle Zijlstra : Under the BW, gold was the ultimate *** RESERVE ***. Etc...

TC : A Trichet link for you ! -)(-

(11/24/2005; 12:56:54 MDT - Msg ID: 138308)

ALL - - - A Thanksgiving Note

From Chris Powell's link:

"First Deputy Chairman of the Central Bank Alexei Ulyukayev said the
bank would be purchasing gold 'on all markets on which it is
available,' meaning both domestic and foreign markets."

A few observations:

1. We should not forget that it was central bank buying which broke the back of the anti-gold cartel in the late 1960s early 1970s. This, in turn, paved the way for the massive bull market of the 1970s.

2. Ulyukayev is not talking about paper trading for speculative purposes. He's talking about buying physical gold and storing it in reserve as a long term asset.

3. This policy is a major, decisive and important departure for the G-8 in that one of its members will be exchanging currency reserves for gold -- and after a public disclosure. Russia is taking a large amount of foreign exchange for its oil and gas (this will not change for quite some time) probably in the form of dollars and euros. This looks like the first steps in a long-term program.

4. Russian gold buying will become a new element in the physical gold market likely to put even more pressure on those short the metal to cover now while its still cheap. (Assuming, as you imply, that Russia follows through. I can't see why they would announce such a plan without meaning it.) The first thing I looked for when I clicked over to your link was whether or not the announcement came from an official source. It did. The Russian central bank.

5. Altogether I rate this announcement by the Russian central bank the equivalent of the Washington Agreement in 1999 which kick started the current gold bull market. It amounts to a de jure action which could have a major impact on the gold market and comprise the primary driving force for the second leg of this bull market.

________________

Quite a Thanksgiving gift for the gold market.

By the way, best wishes to all with special thanks to our many friends and clients who support this firm and this special website. It has truly been a Very Good Year for all the goldmeisters. We have much to celebrate as we carve the turkey and partake in watching the Denver Broncos carve up the Dallas Cowboys -- Big D vs. Little D in about an hour.

Chris Powell

(11/24/2005; 15:02:44 MDT - Msg ID: 138309)

If Russia is serious, it's about to blow up the gold price suppression scheme

http://groups.yahoo.com/group/gata/message/3488Latest GATA dispatch.

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Ned

(11/24/2005; 19:02:12 MDT - Msg ID: 138310)

One thing I don't get........

....why announce that you are going to be a BIG buyer? Is the RCB not shooting itself in the foot?

Sort of inverse of the genius's over at the British CB announcing they would be BIG sellers.

Just curious.

Chris Powell

(11/24/2005; 19:24:31 MDT - Msg ID: 138311)

Why might Russia announce its plans to buy gold

Just speculating in reply to Ned ....

* Maybe Russia ALREADY has established a big
position in gold, ALREADY has bought a lot
of gold and gold futures and options.

* Maybe Russia is warning the gold and
commodity price-rigging central banks of the
West against messing with it.

* Maybe both.

mikal

(11/24/2005; 19:51:47 MDT - Msg ID: 138312)

Russia

http://www.iht.com/articles/2005/11/24/business/ruble.phpBankers Scramble to Tap into Russia's Boom - Bloomberg - Nov 24

Goldilox

(11/24/2005; 19:52:28 MDT - Msg ID: 138313)

Russian Gold announcements

@ Ned,

Given the Putin history in annexing the oligarchs' oil assets, it's not the same as the Brits pre-announcing sales.

If they "buy" from mines within their own borders, what or who will force them to buy at "market price"? Taxation is a very "flexible" shackle.

A lot of action takes place behind the curtain, so the "announcements" certainly do not tell the entire story!

(11/24/2005; 20:22:41 MDT - Msg ID: 138315)

Ned, Chris, Goldilox -- Russian announcement

Before Gorbachev, perestroika and the fall of the Berlin wall, Russia was the second largest gold producer in the world. The United States thereafter largely because of the Carlin trend in Nevada became the second largest producer, Australia three. South Africa is number one, but apparently fading fast. Russia slipped into the number six - seven range.

Russia, though, with large in-ground potential that hasn't been tapped yet, is destined to rise. In terms of potential for the future, I would put Russia near the top of the pack, and possibly even at the top. And don't forget most of these reserves have not been encumbered by forward sales and hedging.

Those of us who have been involved in the gold market have gotten used to the top producing nations and commercial banking and financial interests -- mostly in the old British empire -- working against the gold price. We are not used to the top producers actually doing something to help it. Russia's actions over the past several days are the way a nation state with large gold reserves should act. It should defend its domestic producing interests. It should be interested in rising, not falling, prices.

Russia sees an opportunity. That's why the bear went public. As I said earlier, I see it as a major event.

Goldilox

(11/24/2005; 20:39:52 MDT - Msg ID: 138316)

Free Press and spreading "democracy"

http://today.reuters.com/news/newsArticle.aspx?type=topNews&storyID=2005-11-23T200730Z_01_SIB357452_RTRUKOC_0_US-BRITAIN-USA-JAZEERA.xml&archived=Falsesnip:

LONDON (Reuters) - Britain has warned media organizations they are breaking the law if they publish details of a leaked document said to show U.S. President George W. Bush wanted to bomb Arabic television station Al Jazeera.

The government's top lawyer warned editors in a note after the Daily Mirror newspaper reported on Tuesday that a secret British government memo said British Prime Minister Tony Blair had talked Bush out of bombing the broadcaster in April last year.

Several British newspapers reported the attorney general's note on Wednesday and repeated the Mirror's allegations, which the White House said were "so outlandish" they did not merit a response. Blair's office declined to comment.

Al Jazeera, which has repeatedly denied U.S. accusations it sides with insurgents in Iraq, called on Britain and the United States to state quickly whether the report was accurate.

"If the report is correct then this would be both shocking and worrisome not only to Al Jazeera but to media organizations across the world," the Qatar-based station said in a statement.

The story would also be a shock for Qatar, a small Gulf state which cultivates good relations with Washington.

The Mirror said the memo came from Blair's Downing Street office and turned up in May last year at the local office of Tony Clarke, then a member of parliament for the town of Northampton. Clarke handed the document back to the government.

Leo O'Connor, who used to work for Clarke, and civil servant David Keogh were charged last Thursday under Britain's Official Secrets Act with making a "damaging disclosure of a document relating to international relations".

-Goldilox

While one might be surprised that the Brits are threatening their own media for revealing such "dirty American secrets", remember how quickly they quieted the Scotland Yard investigators who said the London train bombs blew "up through the train from underneath". Not only did such revelations bring their "kids with backpacks happy horse manu" into serious question, but it threatened the multi-billion$ no-bid contracts in both countries for more sophisticated public surveillance cameras.

In the NeoCon "War on Terror", it seems even friendly outposts like Qatar, who housed the Iraq Invasion HQ, are not necessarily safe from their "guest's" bombs. It certainly begs the question, if alternative press voices in friendly nations (remember, also, the anthrax letters whose contents were traced to US Weapons labs) are openly threatened, how safe are alternative markets like the Dubai Gold Exchange and Iran Oil Bourse from the shenanigans of "agent provocateurs"?

Goldilox

(11/24/2005; 20:51:42 MDT - Msg ID: 138317)

Russian Gold Announcement

@ MK,

While I do not mean to discount your encouragement, I still suspect, as Paul Harvey suggests, there remains "the rest of the story".

We will see how the events unfold. I certainly hope you're right, but as we all know, the more threatening an action like Putin's statement appears, the stronger the reaction it evokes from those who perceive it as a "real and present danger."

Interesting times, indeed!

Rook

(11/24/2005; 21:01:04 MDT - Msg ID: 138318)

Columbia

I was talking with a Columbian tonight at dinner. She said that all the production of Columbia, gets shipped out of the country, and the citizens get the lower grade products and leftovers. And the money goes to pay back debt. I dont know details beyond this limited input, but is this the case for third world countries?
Russia needs to buy things for its citizens, but facing a future of inflation globally, they should invest in something that holds its value and buying power. I read a MK report that said gold bought x many years ago, and gold will still buy x today. So the Russians are buying future purchaseing power right? Selling oil now when prices are high, and buying gold when prices are low.....is there a flaw in thier plan?

Gene

(11/24/2005; 21:05:14 MDT - Msg ID: 138319)

Goldilocks

We haven't seen a conservative gov't since JFK. Those who profess to be conservative today are just socialists arguing with other socialists.We won't get out of this mess until everyone votes Libertarian. I am so pissed at the gov't today, I'm beside myself. They do nothing that won't promote themselves. They care less about the USA or the people in it. They piss on the Constitution every day.
Never do they justify a law by saying what provision of the Constitution allows it. One of these days the sheeple will have had enough, then what? The gov't is spending us into bankruptsy. When the dollar won't buy a damned thing, what will we do? Then Congress will take their annual cost of living raise I guess.This is becoming a JOKE. We will all suffer when these damned liberals subject us to their "One World Gov't".

goldquest

(11/24/2005; 21:58:17 MDT - Msg ID: 138320)

Russian Gold announcement

I am highly suspicious of anyone or any country, that would announce in advance, their intentions to purchase gold.
you would want to go about this as inconspicuously as possible.
I have to go along with Chris Powells speculation. In my opinion, Russia has already accomplished what they set out to do.
Perhaps they have made a major discovery and have an abundance of gold they want to sell. So, hype the price by announcing that they are buying and then sell into the increased buying frenzy. Just another theory. Time will tell.

Goldilox

(11/24/2005; 22:42:35 MDT - Msg ID: 138321)

World Gov't - not really liberal or conservative

@ Gene,

Just for me, the slinging about of labels like "conservative" and "liberal" purely for media and/or voting block effect has so distorted their meaning that I tune out most repetitions of them, chalking them up to political divisiveness.

With the same angst you suggest at the antics of the global PTB, I am unable to separate "liberal" from "conservative", and see just too much unabashed power gluttony behind either mask.

phil288

(11/24/2005; 22:46:01 MDT - Msg ID: 138322)

Russian Gold Announcement

I find it interesting that this announcement should come on the first day of what amounts to a four day American holiday. I believe this announcement may have not so much to do with the Russians wanting to acquire more gold as to put pressure on the gold shorts and the dollar. Notice they said in all real markets. From their perspective,if ever rising oil reserve monies were to be used to buy gold openly, this would be the Western bullion banks worst nightmare, derivitves and all. It doesn't mattter who is doing the buying. I think this may be the opening shot in a currency war which the U.S. is ill equipped to fight at this time. Sort of like another nail in the coffin of the U.S. currency. They have not forgotten their economic disaster of 1989, even as the U.S. currency nears the edge of a cliff.

Gene

(11/24/2005; 22:59:52 MDT - Msg ID: 138323)

One World Gov't.

I've been thinking about this conspiricy theory about "One World Gov't." It occurs to me that neither China nor Russia would allow themselves to be governed by someone in Belgium'so far removed geographically and socially from home and all the local syndromes.Why in the world would our "OWG"people in DC think we would submit. They are absolutely power mad in my opinion. How can anyone with the proven lack of character of Teddy Kennedy presume to know what's best for me, or you??? Why in the world would Charles Schumer be so intent about taking our guns away?
Well, it's because he and his ilk cannot put into force the edicts they want as long as the American public is armed.
When in hell is the American public going to wake up???
Just look around people!!!

Goldilox

(11/24/2005; 23:06:23 MDT - Msg ID: 138324)

Bowie in line to play Nikola Tesla in 'Prestige'

http://pesn.com/2005/11/21/9600205_Bowie_as_Tesla/snip:

Rock idol David Bowie is in negotiations to play Nikola Tesla in Christopher Nolan's The Prestige. Other movies by director Christopher Nolan include Batman Begins, netting $205 million, and Insomnia, which netted $67 million.

The new Nolan movie being produced by Touchstone Pictures is a thriller set in the world of magic, featuring rival magicians in early 20th century London.

The Tesla character is based on the real-life Serbian-American inventor who discovered the rotating magnetic field . . .

Having Nikola Tesla featured like this is a major development in terms of giving significant stage presence to one of the most brilliant � and neglected � scientists this planet has ever seen. It reflects a trend toward greater esteem for a man who should have dominated the science history books, rather than being relegated to footnotes as he has been. As the inventor of AC power, radio, wireless transmission, etc., he is indisputably one of the most important inventors of the technological age.

-Goldilox

They've piqued my interest, although as a minor role, it may not be any more enlightening than seeing a "Mark Twain" character in a Star Trek episode.

YGM

(11/24/2005; 23:43:54 MDT - Msg ID: 138325)

Goldilox.....Tesla...

Well you may be right about the reality of Tesla being portrayed in this movie but the caption you included hits the nail on the head in terms of the "Man". His is a great study and story for those who have never read about him. The father of the first EMP weapon destroying a barn in 1912 I believe and so much more. Believing man could harness enough electricity from the earth's atmosphere to provide almost endless cheap power for the planet and setting about to prove it was his undoing orchestrated by the men behind the curtain of power. He is one of the greatest inventors the world has known.

Snip...Having Nikola Tesla featured like this is a major development in terms of giving significant stage presence to one of the most brilliant � and neglected � scientists this planet has ever seen. It reflects a trend toward greater esteem for a man who should have dominated the science history books, rather than being relegated to footnotes as he has been. As the inventor of AC power, radio, wireless transmission, etc., he is indisputably one of the most important inventors of the technological age.

TownCrier

(11/25/2005; 03:22:08 MDT - Msg ID: 138326)

SBV stays hands-off gold(!!!)

http://www.vneconomy.com.vn/eng/?param=article&catid=04&id=243770b602b507VNECONOMY; 25/11/2005 -- An overall hike in gold prices has made no impact on the national economy and the domestic market needs no State intervention, said Truong Van Phuoc, Director General of SBV's Forex Management.

According to Mr Phuoc, analysts anticipated the hikes based on political instability in several markets and a trend of increases in US interest rates. The central banks in Russia, Argentina and South Africa have decided to raise gold volumes in national reserves to 10%.

But gold supply is still decreasing in some places. In South Africa, the largest producer in the world, output has decreased by 3.5%.

The demand ... meanwhile, continues to increase in many countries ... leading to higher gold prices in both world and domestic markets.

Mr Phuoc saw no considerable negative impact on the national economy, saying that gold prices no longer much affect the domestic market. Gold is not listed among the basket of goods for CPI calculation and gold prices are merely for reference.

According to Mr Phuoc, the State Bank cares more whether the prices on the domestic market are compatible with world prices. It would become a problem only when domestic prices do not come in line with international prices. The State Bank would intervene only when there is a too large a gap between world and local prices. Intervention, if it happens, would aim to make prices compatible, not to isolate the domestic market, he added.

Domestic gold prices are currently VND15,000 per tael below international prices.

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

Brilliant!!!

Long ago in a chat about the ECB I heartily endorsed a policy orientation of keeping gold prices out of government CPI-type calculations and policy decisions.

I felt then (and continue to do so) that such a focus on gold price at this stage of the game, when a reserve transition and revaluation are called for, would inappropriately sway the policy-makers to either overreact in their monetary policy decisions with respect to goals of price stability or else tempt them to continue to fiddle in such a way to isolate and curb the price rise of gold.

With this express declaration by the State Bank of Vietnam, we can draw a reasonable assurance that the policy decision was not conceived nor to be implemented in isolation. When it comes to banks adopting these 'best practices' in solid gold reserve management and accounting, the more, the merrier.

We are surely "On the Road!"

R.

Belgian

(11/25/2005; 04:14:07 MDT - Msg ID: 138327)

@TC

Next step in line...no more VAT (20%) on Russian gold !?

TownCrier

(11/25/2005; 04:49:20 MDT - Msg ID: 138328)

Belgian, I fully agree.

Axing the VAT, similar to the Union-wide economic action taken by the Europeans, would certainly help Russia acheive its goal of 'encouraging the development of the Russian domestic gold market to be a fully functioning financial market akin to bonds and currencies' as was stated last week by Russia's Head of External Reserves Management, Maria Guegina.

These giant footsteps seem to be appearing more frequently and leaving a deeper impression these days, certainly making for an easier trail for us lilliputians to follow. (With that, I give a well-earned friendly nod to ANOTHER.)

R.

Goldilox

(11/25/2005; 09:13:06 MDT - Msg ID: 138329)

ECONOMIC AND MARKET PULSE

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

General Motors Corp. announced Monday that they will be closing 12 facilities in North America and cutting 30,000 jobs by 2008 due to declining sales and rising health care costs. This move would cut more than a fourth of its North American manufacturing jobs, which is 17% of its 173,000 hourly workforce (the average hourly worker is around 49 years old), with the move being called "devastating" by the United Auto Workers. GM is not alone as Ford Motor Co. announced last week that it plans to eliminate about 4,000 jobs in North America early next year in its own restructuring plan.

GM has been under pressure from Asian rivals as its US market share has fallen from 33% ten years ago to 26.2% currently. Moreover, GM has lost nearly $4 billion in the first three quarters of the year. Toyota could be passing GM in worldwide production as Toyota expects to produce 8.1 million vehicles this year while GM expects to produce 9 million.

GM is trying to cut costs and improve efficiency and said the plant closings will cut $7 billion off its $42 billion annual operations budget by the end of next year. The plant closings will decrease the number of vehicles made by GM in North America by 1 million a year by the end of 2008, down 30% from 2002. GM Chairman and Chief Executive Rick Wagoner said the plan would improve North American plants to run at 100% of their capacity compared to the current 85%.

To put things into perspective, it's no wonder Toyota has been soaring while GM has been falling with Toyota having the most productive plants in North America, operating at 107% capacity in 2004 according to Greg Gardner of Harbour Consulting, which measures manufacturing productivity.

These aren't the only troubling economic news coming out lately. The International Council of Shopping Centers (ICSC-UBS), which reports a weekly tally of store sales, said in a special consumer question that 59% of those polled said high gasoline prices are reducing their discretionary spending. Interestingly, this percentage is greater than the 54% level in late September when consumers were faced with gas prices at $3. High gas prices, shaky consumer confidence, and an uncertain jobs market are clouding the outlook for holiday sales.

Looking at leading economic indicators also points to an economic slowdown, troubling news for the stock market which typically peaks before the business cycle does. The October job growth proved disappointing as non-farm payrolls rose a much smaller-than-expected 56,000. The overall weakness was centered in service-producing jobs, which rose only 7,000. Retail trade declined 5,000 with a sharp 8,000 decline at auto dealers whose sales suffered badly in the month. Leisure jobs were especially hit hard, down 18,000.

-Goldilox

Interesting analysis of employment vs. general economy and SM performance over at FSO.

Chris Powell

(11/25/2005; 11:59:30 MDT - Msg ID: 138330)

Investor quandary: Buy gold or gold mining stocks?

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh99624_2005-11-25_16-47-20_n25496006_newsmlBy Steve James
Reuters
Friday, November 25, 2005

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?
duid=mtfh99624_2005-11-25_16-47-20_n25496006_newsml

NEW YORK -- With the price of gold inching toward $500 an ounce for the first time in 18 years, investors might be in a quandary: whether to buy gold bullion or shares in gold mining companies.

"We have done better owning gold than shares," said Jay Taylor, publisher of an industry newsletter, J Taylor's Gold & Technology Stocks.

"In the '70s there were dramatic profit margins -- a 10 percent move in the gold price would result in maybe 30 percent increase in share price," he said. "If anything, it's gone the other way and now there are shrinking margins."

However, Peter Spina, who operates GoldSeek.com, a gold industry Web site, said more investors appear to be getting into gold shares, attracted more by profits than the security that often comes with owning the precious metal.

"The Newmonts and Freeports will always attract institutional funds, the big money," he said. "Traditionally, stocks have led the gold price by three to six months. But recently we are seeing more
investment capital entering the market."

Shares in the so-called seniors -- the big companies that mine gold -- are at or near year highs. But there were mixed results in the third quarter as spiraling costs, especially for energy, nibbled at profits.

Denver-based Newmont Mining Corp., the world's biggest gold producer, reported a drop in profit, citing not only high energy costs but also a shortage of miners and environmental protests in Peru that delayed exploration.

And Placer Dome Inc., Canada's No. 2 gold producer, said it was hurt by higher energy costs and a loss on hedging against metal price fluctuations.

But Toronto-based Barrick Gold Corp. saw third-quarter profit more than triple, and Freeport-McMoRan Copper & Gold Inc. reported higher profit and forecast that fourth-quarter gold sales would more than double.

Newmont stock is trading at roughly 55 times estimated 2006 earnings -- above the sector average of 53. Barrick is at 51.5 and Placer Dome at 81, according to Reuters data. On Wednesday, Placer Dome rejected an unsolicited $9.2 billion takeover bid from Barrick.

Gold closed at $495.70/496.40 in London on Friday after hitting a fresh 18-year high of $496.75. U.S. gold markets were closed Thursday and Friday for the Thanksgiving holiday.

Asked if a rise in the gold price automatically attracted more stock investment, Taylor was skeptical. "It's not been the case in the last six months, as energy costs have gone up faster than the gold price. If there is a pullback in energy costs, then I would be more optimistic."

He said bullion and gold share investors were two distinct
groups. "The bullion guys are very sophisticated ... and American investors are clueless with respect to gold."

Frank Holmes, chairman and chief executive of U.S. Global Investors, which holds mining and gold company stocks, is bullish on mining company equities.

"The gold market is in deficit. Demand is greater than supply from the mines," he said. "It takes time to explore and develop mines, which would account for the takeovers in the industry. There is a scramble for assets now."

In the short term, Holmes sees a correction, with gold maybe passing through $500, then dropping back. "The real test will be if it goes through $520-$525, in which case it probably runs up to $650," Holmes said. "We're in a bull market for commodities, about one quarter the way through a 20-year cycle."

Taylor agreed that gold is in a bull market. Asked whether he would choose to invest in physical gold or gold company stocks, he said, "I would want some bullion for its pure wealth as it retains its value and is a means of liquidity.

"On stocks, if costs are not rising faster than the gold price, then you should start to see wider profit margins."

USAGOLD / Centennial Precious Metals, Inc.

(11/25/2005; 14:20:42 MDT - Msg ID: 138331)

For those new to gold, here are assets and info to help you get started!

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

Ringwind

(11/25/2005; 15:36:49 MDT - Msg ID: 138332)

Google: "Arrest Bush 41"

The FBI uses polygraphs to eliminate suspects.

Goldilox

(11/25/2005; 17:07:20 MDT - Msg ID: 138333)

Phony Wealth = Phony Power

http://www.financialsense.com/editorials/wallenwein/2005/1125.htmlsnip:

... and that makes the US a very vulnerable country.

America's formidable wealth is, deplorably, based on a lie - or at least it has been, since gold was defanged back in 1971. But, what its enemies don't realize is that this defanging occurred at a time when gold was still sporting its baby teeth.

After spending three decades in a rather toothless state (except for that brief moment in history when it jumped up to over $800 an ounce from less than $!00 in a few short years), gold's real fangs are only now beginning to show.

And they're starting to bite, as well.

They will sink deep into America's soft economic underbelly before long, courtesy of America's sworn enemies - and America's very own financial powers who exposed it to this potentially fatal threat.

America's foreign enemies are using gold as a weapon. China and the Muslim nations of the world - and now Russia as well - are stocking up on the yellow metal while the US is wasting its time by pushing a phony, shadow-of-its-former-self version of capitalism on the world which it calls "globalization."

Globalization has gutted Americans' former mattress linings in favor of home-equity lines of credit and a helpless addiction to cheap-a_ _ Chinese goods - built with pirated US technology and know-how, to boot.

Our dependence on foreign oil, and dependence on foreign consumer goods and capital, have left the US economy a walking corpse and have heaped riches on our enemies. The US economy may be a colossal corpse, bigger than the world has ever seen. It may have been feeding the world's other economies for the last two or three decades and it may still be able to outrun every other - but it's still a walking corpse.

Why? Because it's nothing but a deadly accident, waiting to happen.

The sworn enemies of anything resembling freedom are now using real wealth - gold - to kick the clay feet out from under America's tottering financial edifice. Witness Russia's announcement that it will double its official gold reserves.

How did this happen?

Easy. They had inside help.

The powers that crafted, and now make up, the financial architecture of the United States are responsible for removing gold as its foundation - and substituting themselves for it. Themselves - and their system of debt-based, computer keystroke-created windbag-money.

Their arrogance would not allow them to let something they themselves don't directly and immediately control operate as the foundation of the world's financial structure.

All kinds of reasons have been trotted out to explain away the gradual removal of gold from the world financial scene as "historically inevitable," but there are only two factors that could function as anything resembling an original cause for this: Human arrogance - and human laziness. The arrogance of the financiers, aided and abetted by the laziness of the common man - us.

The financiers removed any vestige of gold from financial public life, and Mr. Common Man went right along with it. After all, the "experts" have decided that this is better for all concerned (especially them), so who are we to say it's not? Right?

Deadeye

(11/25/2005; 18:02:29 MDT - Msg ID: 138334)

Long time lurker turns poster

I have been a lurker here as I posted on the other gold forum for many years. I am a retired Independent Petroleum Geologist who has been a long time Goldbug and gold and silver investor. I have bought Gold coins from USA Gold in the past.
I find that petroleum and precious metal exploration are similar. Reward vs risk evaluation and cash flow management are basis in both. The romance, politics and big companies vs small companies is also similar. Both look for that big payoff "pot of gold at end of rainbow".
I am more of a philosophical guy than a technical analysis. I am a big believer in fundamentals and the Big Picture. I come from the schools of Russell, Hamilton, Sinclair, Buffett and GATA. I have my money where my mouth is, in diversified gold and silver stocks and physical.
I am a hunter, fisherman, golfer, pilot and have a peach of of wife of 48 years. I am big on patriotism, Constitution, individual freedoms, NRA, smaller government
and honoring Veterans.
I hope to add a few comments of interest from time to time and find a new home here as I was booted off the other forum after many years for saying "I love Sinclair". Say a word for "fairness" as there was no stated rule against that since I didn't post his website as a non advertiser there. I hope that "I love Sinclair" is not an offense here?
Cheers to all, Deadeye ;)

Gandalf the White

(11/25/2005; 18:12:10 MDT - Msg ID: 138335)

WELCOME Sir Deadeye !

Happy to see you posting here now !
LOVE is never against the rules here.
<;-)

Ten Bears

(11/25/2005; 19:17:22 MDT - Msg ID: 138336)

Private Vs Public Control of Money

http://www.monetary.org/bromsgrovetalk04.htm
>"Thus the real question was whether it would be private banks or the government that would issue paper money. Will the immense power and profit of issuing currency go to the benefit of the whole nation, or to the private bankers? That's always been the real monetary question in America."

>"The money system is society's greatest dispenser of justice or injustice. A good one functions fairly, helping create values for life. A bad, unjust one obstructs the creation of values; gives special privileges to some and disadvantage to others causing unfair concentrations of wealth and power; leading to social strife and eventually warfare and a thousand unforeseen bad consequences � physical AND Spiritual."

>"SURELY GERMANY�S 1923 HYPERINFLATION condemns government money!! Sorry - But in fact that occurred under a privately owned and privately controlled Reichsbank. Furthermore the hyperinflation began the very month that all German governmental influence on the bank was removed and placed in private hands at the insistence of the occupation forces."

>"Free Market Worship shows itself to be more a religion to be obeyed, rather than an economic policy to be analyzed and critiqued. The market is held to be omnipotent, omniscient, and beneficial � the three attributes of a deity. A strange deity that abhors morality; Served by an Austrian/Libertarian priesthood that confuses Ayn Rand novels as historical evidence."

AMERICAN MONETARY INSTITUTE... monetary history, theory, and reform

Goldilox

(11/25/2005; 20:49:03 MDT - Msg ID: 138337)

Former Canadian Minister Of Defence Asks Canadian Parliament To Hold Hearings On Relations With Alien "ET" Civilizations

http://news.yahoo.com/s/prweb/20051124/bs_prweb/prweb314382_1snip:

On September 25, 2005, in a startling speech at the University of Toronto that caught the attention of mainstream newspapers and magazines, Paul Hellyer, Canada's Defence Minister from 1963-67 under Nobel Peace Prize Laureate Prime Minister Lester Pearson, publicly stated: "UFOs, are as real as the airplanes that fly over your head."

Mr. Hellyer went on to say, "I'm so concerned about what the consequences might be of starting an intergalactic war, that I just think I had to say something."

Hellyer revealed, "The secrecy involved in all matters pertaining to the Roswell incident was unparalled. The classification was, from the outset, above top secret, so the vast majority of U.S. officials and politicians, let alone a mere allied minister of defense, were never in-the-loop."

-Goldilox

Off-topic, but mainstream enough to be interesting. Maybe the Anunaki are still taking gold off-planet as "tribute" from CBs?

OvS

(11/25/2005; 21:19:31 MDT - Msg ID: 138338)

Goldilox.

What X-deputy Prime minister Hillyer
probably meant to say was: The UFO's
in my head are as real as the air-
planes flying over your head...Cheers.
OvS

OvS

(11/25/2005; 21:44:34 MDT - Msg ID: 138339)

Gold is where you find it.

Since 1998, while I'm sitting
on my precious pile, those
x-communistos Ruskies' stock-
market increased 25 fold....?!
Shocking...nicht wahr?
So, if those pieces of paper
can gain so much, just think
what the real money can and
will be worth down the road.OvS

OvS

(11/25/2005; 22:03:37 MDT - Msg ID: 138340)

Deadeye

When you see the name of
a new poster with the name
of Deadeye, you sit up and
take notice.
For those of you whose native
tongue is not English, and
we do have an international
group of knights posting and
lurking, before you get any
"fishy" ideas about deadeye,
may I clarify that deadeye
could mean either a nautical
term or: An Expert Marksman.
Welcome aboard, Deadeye. And
shoot your arrows dead-ahead.
OvS

Chris Powell

(11/25/2005; 22:15:14 MDT - Msg ID: 138341)

Gold price increase freezes Vietnam's real estate market

http://groups.yahoo.com/group/gata/message/3492In Vietnam, money is being diverted
from real estate into gold. Could it
happen elsewhere?

Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Liberty Head

(11/26/2005; 04:15:18 MDT - Msg ID: 138342)

Fairness - What's in a Word?

Ironically, the most malicious and dangerous economic policies are successfully proffered in the name of "fairness".
When "fairness" is used to promote some social system such as fair trade or fair market, a Pandora's box is being opened. The effect here is to legitimatize the preemptive use of force to enslave people. At the core is disrespect for the individual, disrespect for freedom.
Many advocates of fairness intend to be among the arbiters of what fairness is and selectors of whom their standards of fairness will be imposed upon. They have revealed themselves to be the enemies of freedom. They are the enablers and supporters of our Constitutions demise. They are to be resisted by any self-respecting individuals at every turn.

The ironic truth is, once one person's version of fairness is imposed upon another, the outcome can never be fair. When one person's self interest has been imposed upon another, this is the very definition of unfairness.
What could be more malicious then attempting to subjugate another person's self-interest, and take his essential will, his very nature?
Rather than replacing freedoms with doctrines of fairness, we should encourage individual freedom be balanced with individual responsibility.
One can demonstrate this by walking away from any situation that does not serve ones best interest and by running to the situations that do. Think gold!
What could be more fair, more responsible or more natural than that?

Best Wishes

Henri

(11/26/2005; 07:32:04 MDT - Msg ID: 138343)

Liberty Head

One need only examine the ethics and morality of the Native Americans to find an example of "...what could be more fair, more responsible or more natural than that?".

The Native American was not focused on the accumulation of wealth. Anything he could not himself carry was a burden to him and his tribe. Ownership of land was a completely alien concept. In their own agricultural community, a family would have claim to a certain patch of wild fare but if they staked out any more then they could personally consume, it was considered selfish. This practice would bring shame upon the entire tribe/villiage. The stakes upon the berry patch were for one season only. Each new spring all bets were off and the resources were reallocated to those who arrived first. If there was a scarcity of any foodstuff the family would share their plot without hesitation. The idea of commerce existed only for those items not found within their traditional native habitat (flint arrowheads etc). The aged/weak/widowed and visitors were all given equal share of a hunt though the entire village was starving.

Lewis Henry Morgan wrote in his "League of the Iroqois (1930)" "...In legislation, in eloquence, in fortitude, and in military sagacity, they [the Iroquois] had no equals. "Crimes and offenses were so infrequent, under their social system, that the Iroquois can scarcely be said to have had a criminal code."

They were for all intents and purposes an extremely advanced civilization.

David Linkley

(11/26/2005; 07:43:57 MDT - Msg ID: 138344)

The $500 strategy

It will be interesting to watch the stategic response from the western central bankers and gold shorts as the gold price moves to $500. Will they go all out and attack the price this week or wait for higher levels. Why is Russia suddenly promoting gold purchases while having Putin hold a bar of gold in a photo op this week? For the past 2 decades $500 has provided a formidable resistance level. Big time stakes are afoot in the world geopolitical chess game. What's next? We will have a facinating look at economic history over the couple of months.

Knallgold

(11/26/2005; 09:14:56 MDT - Msg ID: 138345)

Hello Deadeye,

and welcome here!Remember you well from the other castle,I also used to be there (as hugo).Wasn't booted but becoming tired to go through alot of nonsense chatter and the endless stock TA rituals/pumps.It started to appear more and more as a distraction for my search for the truth (I'm a truth junkie before anything else).At USAGold it gets right to the core of what moves the world.

Here's surely an arch conservative house (besides a few independant liberals adding colour) so you're right here with your background.But be warned here are also the physical-only sharks,always hungry to eat Gold paper...but I'm not worried on you as I remember you as a diehard realist.

Galearis

(11/26/2005; 09:15:26 MDT - Msg ID: 138346)

@ Henri

Happy "down there" Thanksgiving from a Canuck.

Upon reading your words on fairness the thought occured to me that most people would find it interesting that most tribal societies,,,hunters and gatherers,,,are purely communistic. Is that why they are so happily exterminated where they are found? But then again,,,it is arguable that communism for any technocracies would be too alien to work.

Just a thought.

One common (additional) point on this, however. These supposedly more primative (technologically speaking) societies are more socially complex than our own - after all their morays et al have to reach out and be all-encompasing while ours only deal with local to extended families (us "agin" the world thingy). As such these so called primitive societies are nonetheless usually stable ones that persist over the thousands of years, not a century or two as do our technologically "superior" ones.

Hmmmmm.
Best regards on a slow weekend,

Galearis

Deadeye

(11/26/2005; 11:09:25 MDT - Msg ID: 138347)

Thanks, already feels good here.

(Gandalf the White) You are a survivor I remember from way back. (OvS) Deadeye has multiple meaning. Yes I have a reputation of been a crack shot not crack pot to many. Also I have one eye with patch like another old pilot, Wiley Post. Also the cartoon character, Texas Deadeye, who had a patch, rode a swayback horse, was "hell for leather" but generally rode into a brick wall.
(Knallgold) Yes, Truth is hard to beat. I was raised swimming with the sharks so no problems. Besides I have about 25% in physical and the long stated goal to transfer my gold stocks to physical when the prices reaches about $600 to $700. In 79 the gold actually outperformed the gold stocks in the final blowoff stage. History may not repeat but it is still a good guide.
Cheers to all, Deadeye ;)

Chris Powell

(11/26/2005; 11:15:19 MDT - Msg ID: 138348)

GATA will participate in Vancouver conference in January

http://groups.yahoo.com/group/gata/message/3493Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Cometose

(11/26/2005; 11:44:26 MDT - Msg ID: 138349)

(No Subject)

happy thanksgiving one and all
go broncos

Goldilox

(11/26/2005; 11:53:39 MDT - Msg ID: 138350)

Primitive societies

@ Galearis,

Yes, even the primitive Christian church was formed as communal (Acts 2:44-46), before the Roman Emperors imposed their leadership to control the new "slave religion".

Once that occurred, secular politics became the a staple of "the church" as evidenced historically by the Vatican, the Crusades, Pat Robertson, and all the modern day tele-evangelist money machines.

Rumors still persist that Pope John Paul I may have met an early demise (33 days into his papacy) for threatening to open the Vatican Bank books to scrutiny over support of the Argentine Junta and laundering of South American drug money by the previous administration.

Another very unpopular goal of JP I was redistribution of some of the church's wealth to its poorer membership, as portrayed in the fictional "Shoes of the Fisherman" ten years earlier.

For a Pope elected as a political compromise, because he had no major political enemies, he sure racked them up quickly in his 33 days on the pulpit.

mikal

(11/26/2005; 12:41:02 MDT - Msg ID: 138351)

Veering off course...without brakes

http://www.prudentbear.com/creditbubblebulletin.aspCredit Bubble Bulletin - A Quickie on "Money" - Doug Noland - November 25, 2005 - Excerpts:
"I will loosely define contemporary "money" as financial claims perceived to be a highly safe and liquid store of nominal value."

"In summary, the M's no longer reflect either system Credit growth or system liquidity, and are prone to give erroneous signals at critical junctures (when Marketplace Risk Embracement is modulating). I have watched repeatedly over the past few years as analysts have pounced on any slowdown in the M's as an indicator of waning Credit growth and liquidity. This year, it was the stagnation of MZM that captured analysts� attention, notwithstanding that this development was largely related to continued disintermediation from the money fund complex and the shift to higher-yielding term deposits; Credit growth remained on record pace, and the Bubble economy carried on. Moreover, M3 is clearly not capturing the historic expansion in the securities-financing repurchase agreement ("repo") marketplace. While primary dealer "repo" positions have expanded $975 billion over the past two years, the M3 component bank net "repo" liability position has increased $27 billion. And while some "repo" positions are being captured in Money Funds holdings, there are enormous perceived "money" assets held in the ballooning securities financing arena outside the purview of the M's."

"These days, the defining feature of contemporary Wall Street finance is the amalgamation of financial sector intermediation, the proliferation of credit insurance, financial guarantees, derivatives, implied and explicit GSE and government guarantees, and myriad sophisticated risk-sharing structures that have created to this point unlimited capacity to issue perceived "precious" financial claims."

"If the Fed endeavored to shroud the extent of current monetary inflation, I suggest they stick with publishing M3. And it is inconceivable at this point to expect the Fed � or the economic community � to embrace a broad-based measure of monetary instruments that would include Wall Street marketable securities and "repos." Anyway, contemporary "money" is a moving target that changes at the whim of marketplace perceptions. And while I question the premise that the Fed has much to gain by eliminating M3, this nonetheless misses the much more salient point: The Fed has lost control of our nation's "money" and Credit creation processes. The Greenspan/Bernanke Fed can now only administer feeble attempts to remove accommodation, hoping that over time baby-steps makes some headway but without ever attempting to impede, interrupt or discipline Wall Street Monetary Processes."

"Today's securities finance Bubble � certainly including the massive "repo" market � is at a scope unlike any in history. And once a substantial component of a nation's (world's) "money" supply is wrapped up in financing market Bubbles � well, you have one hell of a predicament. On the one hand, such powerful Bubbles are (as we have witnessed) strongly self-sustaining. On the other, the consequences of popping the Bubble ensure policymaker timidity and ongoing accommodation. Dr. Bernanke certainly has no intention of administering any meaningful restraint. Yet, inevitably, financial Bubbles do burst and the downside of boom-time Perceived Moneyness and Marketplace Risk Embracement manifest in financial dislocation and a crisis of confidence."

Excellent "quickie on money" blending history, theory and
facts. If someone proposed today's financial assets and "financial sector intermediation, the proliferation of credit insurance, financial guarantees, derivatives, implied and explicit GSE and government guarantees[including debt and mortgage-backed securities], and myriad sophisticated risk-sharing structures" to a rational, educated Treasury Dept. in years past, they might be committed, deported, disbarred or blacklisted.

USAGOLD / Centennial Precious Metals, Inc.

(11/26/2005; 13:00:52 MDT - Msg ID: 138352)

A world of gold at your fingertips...

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

Liberty Head

(11/26/2005; 13:16:56 MDT - Msg ID: 138353)

Henri - Excellent Comment

A civilized person is one who understands his own self-interests do not exist apart from others. His self-interest is tempered with wisdom and understanding of the connectedness of all things. If native people thought otherwise, they would parish.

A civilized person would not dehumanize a fellow human being. To do so would be a contradiction. It is this very contradiction that leads to the demise of empires. Thankfully, empires are self limiting.

Fiat currencies are a tool of the uncivilized. Fiat currencies dehumanize and enslave. Can you imagine an early American Iroquois trading bearskins for fiat currency? They were far to wise for that.

Gold is a cornerstone of civilized society. Get some.

Best Wishes

TownCrier

(11/26/2005; 13:18:04 MDT - Msg ID: 138354)

Gold fever: metal hits 18-year high

http://www.theage.com.au/news/business/gold-fever-metal-hits-18year-high/2005/11/26/1132966002004.htmlNovember 27, 2005 -- Gold rose to its highest in almost 18 years in London, as Japanese investors bought the metal as a hedge against deflation.

Japan's Finance Minister, Sadakazu Tanigaki, said mild deflation "still persists" in the world's second-biggest economy and the central bank must cooperate with the government to end a seven-year bout of falling prices.

Deflation is a general drop in prices, often as part of a severe economic slowdown.

"If your assets are falling, it helps to maintain asset value by holding gold," James Moore, a British precious metals analyst with TheBullionDesk.com, said.

Gold for immediate delivery rose as much as 0.7 per cent to $US497.02 on Friday night, [gaining] 2.3 per cent last week, to finish its third straight weekly advance.

It's "inevitable" that gold will top $US500 an ounce as central banks contemplate buying more of the metal, David Gornall, the head of foreign exchange and bullion at Natexis Commodity Markets in London, said. He recommends investors buy bullion this week.

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

Deflation, inflation... no matter what ails your portfolio, gold is the rock-solid asset that won't disappoint.

R.

TownCrier

(11/26/2005; 13:33:37 MDT - Msg ID: 138355)

Gold zooms to scale new peak

http://www.deepikaglobal.com/ENG5_sub.asp?ccode=ENG5≠wscode=124299Mumbai, Nov 26 (UNI) Continuing their bullish trend, gold prices today spurted, climbing to a new peak of Rs 7,450 per ten gm ... aided by strong global advice and firm demand, traders at the bullion market here said.

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

Seems like only just yesterday that the price breached the Rs7,000 per ten gram level. Gold's price is moving right along in all markets; and that's a good thing because it should be. It's a small corner of the world that actually makes sense.

R.

Flatliner

(11/26/2005; 13:34:01 MDT - Msg ID: 138356)

@Private Vs Public Control of Money

Hi Ten Bears, Yesterday you posted a snippet from the American Monetary Institute with a follow-up link. I took the bait. Finding it much like a lite beer, I am left wanting a fine brew. I am wondering, if you have studied the AMI's teachings, would be willing to share your opinion here?

I must say that Stephen Zarlenga's welcoming video is encouraging, hinting that they have ideas to share, but the support video from Congressman Dennis Kucinich seemed like nothing but a typical political speech of non-committal words (I have to admit that I could not listen to more then maybe 10 minutes worth!). That speech turned me off. Hopefully, it is not the image that this institute wants to convey. It may be that I am just not reading their content correctly and I do not see exactly what it is that they have to offer.

I know that there are many that lurk in the background on this site and occasionally they speak, herding the forum one way or another. And, if you have read my postings, I have asked specifically for information along the lines of what it appears that this institute is also working towards.

With that said, let me set the background and ask for your help once again. This background is a personal one that I believe more then a couple others share. It goes like this: The US monetary policy is out of control. The creation of US currency has passed critical mass and now must be created in order to service itself. Passing this critical point is exactly what has triggered hyper-inflationary times with every other currency that has hyper-inflated. During the hyper-inflationary period, those that hold the currency lose confidence in that paper currency and are no longer willing to hold it as a store of any type of value. Thus, enters the strength of gold and the fall of paper contracts. Also, during this time, no country in the world will trade with the country that is hyper-inflating because they will not carry the paper. The US requires trade with all other countries for simple things like gasoline and heating oil. Who cares about the housing bubble, if we can't trade with other countries for oil, we're flat out dead in the water.

Also, with all other countries that hyper-inflate, there is some point at which things come under control again. Historically, it is when the debt of the country has been erased, the government has undergone radical changes (in order to reduce expenditures) and something backs the new money. Something that offers confidence to the entire world so they are willing to carry the governments currency once again.

So, seeing that there is a lot of information (even books) available in the AMI site, can you please summarize their stand? Do they offer a plausible solution to this coming crises? Do they offer a possible way of repairing the system? In your opinion, does any conclusion that they come to hold water, or is it just wishful thinking?

I look forward to seeing your postings or any posting from anyone that has studied the teaching at that site.

mikal

(11/26/2005; 13:37:36 MDT - Msg ID: 138357)

Voices of the angels

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=48869The Tyranny of the Living - Bill Bonner - Nov 25 - Excerpts:

"Each generation needs to learn the mistakes of their forefathers for themselves. Though happy to turn on an electric light invented by a dead man, the living - in love, war, and finance - believe nothing they haven't seen with their own eyes, except when they want to.
"Avoid foreign entanglements," cautioned the father of the country."
[Good reminders in these days of denial.]

"And what would our dead ancestors think of our mortgages?"
[Points that give pause.]
"And what would the old-timers think of our government debt? The unpaid liabilities and obligations, expressed as though they had to be paid today, come to about $44 trillion, depending on the source you choose to believe."

"And what about the millions of dead Americans who immigrated to the United States to find freedom; what do they think of the country now? They came believing that if they minded their own business, they would be left alone to do what they wanted. But now, every pettifogging Pecksniff with a government service (GS) rating is on their grandchildren's case.
And what about those millions of dead people who scrimped and saved - who got by on almost nothing - so their children and grandchildren might live free, prosperous, and independent lives? What would they think of their descendants, so deep in debt and so dependent on Asian lenders that they can barely pass a Chinese restaurant without bending over and kissing the pavement?"
[LOL, a bit of hyperbole as a way to emphasize one comi-tragic imbalance.]
"A dead man, Edmund Randolph of Virginia, attended the Constitutional Convention in Philadelphia in 1789. He explained why America needed a constitution: "The general object was to produce a cure for the evils under which the United States labored; that in tracing these evils to their origins, every man had found it in the turbulence and follies of democracy." Another dead man, James Madison, made it even clearer: "Democracies," he wrote, "have ever been spectacles of turbulence and contention; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their death." So, we leave you "a Republic, if you can keep it," added Ben Franklin. Well, we couldn't keep it. Now, we have a curious empire, with a constitution as flexible as its money."
[What use are emotional labels that seperate people and nations if they cannot define and maintain peaceful societies?]
"The trouble with the news is that it is impossible to know what is important when you must rely solely on the judgment of people who happen to be breathing. The living can imagine no problems more urgent than the ones they confront right now, and no opportunities greater than the ones right in front of them. We prefer the obituaries."
[Materialism, escapism, and pseudoprofessionalism cannot substitute for honest communication at the personal and 'professional' levels in the media, at work, at home, on the street.]

Liberty Head

(11/26/2005; 14:34:44 MDT - Msg ID: 138358)

Flatliner - Ten Bears

When one discusses private bank vs. public control of fiat money, the implication is that the question of centralized, controlled fiat vs. free market money is already a given.
Time and time again centralized controlled fiat money systems collapse. This may be a clue that the question of free market money vs. centralized controlled fiat money needs to be revisited in earnest. Perhaps this collapse is inherent to the centralization of control?

To the degree banks are regulated by anyone other then their customer base, they cease to be private. In other words, the only truly private control of money is achieved when the control is at the level of each individual, aka free-market money.

Best Wishes

YGM

(11/26/2005; 15:22:51 MDT - Msg ID: 138359)

Deadeye...

Your posts were sought out 'over there' and will be welcomed here. We swapped tales 'over there' a time or two. Glad to see you here. Also was booted a few times for posting GATA stuff over the years....YGM (Yukon Gold Miner, part time Alaskan :-)

Liberty Head

(11/26/2005; 15:46:42 MDT - Msg ID: 138360)

Wizards in Winter - Christmas Light Show

http://members.cox.net/transam57/lights.wmv
This is what you get when a lighting choreographer decorates his home for the holidays. Turn up the volume and stick with it for the grand finale.

Music - Wizards in Winter by the Trans-Siberian Orchestra.

PS If I'm challenged to make this post relevant to gold, I will. Otherwise just try to enjoy it, will ya? :-)

Best Wishes

YGM

(11/26/2005; 16:33:11 MDT - Msg ID: 138361)

Wizards in Winter

Pretty cool. Nice to send to friends ..thanks for that!

The Invisible Hand

(11/26/2005; 16:55:07 MDT - Msg ID: 138362)

Justice as Fairness

In his book "Justice as Fairness� A Restatement" (The Belknap Press of Harvard University Press, 2001), the great philosopher John Rawls (1921 � 2001) restated his conception of justice as justice as fairness. According to Justice as Fairness, the most reasonable principles of justice would be the object of mutual agreement (a social contract) by persons under fair conditions. People would, if they didn't know (under the veil of ignorance) what social position they would hold in society, affirm a broadly liberal conception of basic rights and liberties. They would only permit inequalities in wealth and income that would be to the advantage of the least well off, i.e. they would only allow inequalities in so far as the situation of the least well off is better under these rules of distribution than under any other rule of distribution. This last principle is known as the maximin rule.

Rawls then goes on to advocate the Welfare State of which he outlines the details, but he fails completely in giving the philosophical justification of the Welfare State.

Rawls also wants people to decide under the veil of ignorance what will be the rules of the Welfare State, but he forgets that if you don't know your identity, if you don't know who you are, you cannot possible determine the rules which should govern your behaviour.

Rawls also forgets that rights have a moral nature from the outset. As Robert Nozick points out, cooperation does not create the problem of distribution

Ayn Rand annuls the "maximin" rule by arguing that she would not opt for the result where the less well of are the least well of, but for the alternative where the best result will be superior to the best result of the others.

A return to honest money will however make the Welfare State impossible.

The Welfare State has no philosophical basis to support it. Other ideas have. Ideas result in actions, and actions result in changes. Wrong ideas lead to disasters. Other ideas, i.e., ideas which are supported by a philosophical basis, lead to better things.

What about advocating TRUTH and not justice as the ultimate value?

Ten Bears

(11/26/2005; 17:24:07 MDT - Msg ID: 138363)

Flatliner

Stephen Zarlenga's written material plus his selected links do provide a considerable base by which to evaluate his perspective. He would, I believe, note that it matters less what is used for money than who controls its creation and distribution. Perhaps DelMar said it best, " The surest sign of Sovereignty is whose name is on the coin."

Liberty Head

(11/26/2005; 18:52:30 MDT - Msg ID: 138364)

TRUTH

@ The Invisable Hand
I agree that TRUTH is worthy of our highest value.

I have observed, when it comes to valuing TRUTH, most folks limit themselves to half servings. The other half of truth is valued like flatulence in a crowded elevator.

In fact, the negative half of truth is equal in importance to the positive half. If one should doubt that, just try starting your car without the negative pole of the car battery connected to the circuit.

In essence, this is why our economic system is on the verge of collapse. It's a system based on convenient half-truths.

Gold can help restore the missing half of truth to our economic systems, but gold must be reconnected to the circuit and allowed full freedom of flow.

I say the sooner, the better.

Best Wishes

Goldilox

(11/26/2005; 19:25:57 MDT - Msg ID: 138365)

Sovereignty and coin

@ ten bears,

"The surest sign of Sovereignty is whose name is on the coin."

Perhaps,but when there are multiple engravings available, the more important feature may be the physical makeup of the coin itself, rather than the identity of the issuer.

By the way, just who are those other seven bears?

-Goldilox

PRITCHO

(11/26/2005; 19:51:53 MDT - Msg ID: 138366)

The Apollo Moon Landings - - - - (or not?)

Saw the following post at another forum (not quite as up-market as this one :) It raises questions that have puzzled me for a long time.I feel that the poster has raised some very legitamate questions. Does anyone here have any thoughts on the matter?
-----------------------------------------------------------
The Apollo Moon Landings Are Science Fiction

The Space Shuttle, so far, has killed fourteen people, merely trying to attain an orbit about two hundred fifty miles above the Earth. How is it then, that a third of a century ago, with less computing power in the entire rocket than in a present day twenty dollar Wal-Mart watch, NASA claims to have gone 100,000% farther, six different times between 1969 and 1972, landing on another celestial body and then returning, without ever killing anyone? How could they have powered air conditioning in two hundred fifty degree heat for three days with batteries? Why is the "second round" of "returning" to the moon estimated to be no earlier than half a century after the first? ( Would there be a fifty-year span between the first and second trips across the Atlantic in an airplane? )

If the moon landings were, as we believe, a government deception, then George Orwell's comment, "whoever controls the past, controls the future" is a scary wakeup call to insist that our government reform to the truthfulness of our founding father "who could not tell a lie." Otherwise, the powers that be will continue their addiction to deception and we all will be worse off for it.

The Invisible Hand

(11/26/2005; 20:08:31 MDT - Msg ID: 138367)

Russian gold producer and London Stock Exchange

Two artcles. Twice the name Evraz.

http://observer.guardian.co.uk/business/story/0,6903,1651435,00.html
Stock Exchange turns a deaf ear to Russian listing flaws
Lawyers say UK regulators show little interest in resolving a documentary discrepancy, reports Nick Kochan
Sunday November 27, 2005
The Observer
The London Stock Exchange and the Financial Services Authority stand accused of being so desperate to attract listings from top Russian companies that they are prepared to accept documentation of an inferior standard to that demanded of British companies. A serious inaccuracy has crept into the offering particulars for a Russian company listed on the LSE, say lawyers acting for a minority shareholder.
But the regulatory bodies have done no more than acknowledge the lawyers' letters. Neither appears to have investigated the claims. Documentation provided by EVRAZ Holdings, a Russian metals company that has listed on the main board of the LSE, needs to be be scrutinised by the FSA, according to Bruce Marks, an attorney with Philadelphia law firm Marks and Sokolov.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-10-31T101236Z_01_ALL136806_RTRIDST_0_OZABS-MINERALS-KAZAKHGOLD-IPO-20051031.XML
KazakhGold seeks 100 mln stg in London float
Mon Oct 31, 2005 12:12 PM GMT
LONDON (Reuters) - KazakhGold is aiming to raise about 100 million pounds by floating around a quarter of the company, a source close to the situation said on Monday as the firm announced it was seeking a London listing.
+
KazakhGold produced 26,272 ounces of gold in 2004, down from 36,182 ounces a year earlier, after the temporary shutdown of ore processing at two of its flotation plants.
+
The company is owned by the Assaubayev family and chaired by Peter Daresbury, who stepped down as Chairman of Russian gold miner Highland Gold Mining in April and who is a non-executive director of Russian steelmaker EVRAZ.
KazakhGold is the latest firm from the former Soviet Union to seek a London listing, and the second from Kazakhstan to have its primary listing on London's main exchange. A month ago copper miner Kazakhmys raised around 660 million pounds from its float to fund organic growth and acquisitions.
The company is expected to float in late November after a month-long roadshow, the source told Reuters.

The Invisible Hand

(11/26/2005; 20:28:31 MDT - Msg ID: 138368)

We're going to the moon! - gold, and its price, also XXXXX

http://www.stuffucanuse.com/fake_moon_landings/moon_landings.htmhttp://www.aynrand.org/site/News2?JServSessionIdr001=1cvg6u3q11.app5a&page=NewsArticle&id=7462≠ws_iv_ctrl=1221
Why the U.S. moon landing in 1969 was not the stepping stone to greater achievement, as many Americans had hoped.
After Neil Armstrong's first steps on the moon on July 20, 1969, American astronauts returned to the moon five more times. The last lunar mission, Apollo 17, was launched in 1972. Since then, Ralston notes, NASA has stepped back, focusing on sub-orbital manned missions like the Space Shuttle and the International Space Station, abandoning the solar system and deep space to unmanned spacecraft.
"The Apollo 11 flight was undeniable proof that man's achievements are boundless and that the entire universe is open to him," said Ralston. "Since then man has seemed tied and diminished. The best way to honor the pioneers of Apollo would be a renewed, private-enterprise-driven commitment to human achievement and grandeur."

http://www.samizdata.net/blog/archives/006383.html
iirefutable proof of the faking of the moon-landings can be found here
http://www.stuffucanuse.com/fake_moon_landings/moon_landings.htm

The Invisible Hand

(11/26/2005; 20:53:09 MDT - Msg ID: 138369)

Man's greatness

http://www.aynrand.org/site/PageServer?pagename=objectivism_apollo11Yes, if the moon-landings were fake, nothing remains of man. only Frustration, says Ayn Rand. Sounds familiar for goldbugs!

Apollo 11
The July 16, 1969 Launch: A Symbol of Man's Greatness
By Ayn Rand
Excerpted from "Apollo 11," The Objectivist, September, 1969

The fundamental significance of Apollo 11's triumph is not political; it is philosophical; specifically, moral-epistemological.
The meaning of the sight lay in the fact that when those dark red wings of fire flared open, one knew that one was not looking at a normal occurrence, but at a cataclysm which, if unleashed by nature, would have wiped man out of existence�and one knew also that this cataclysm was planned, unleashed, and controlled by man, that this unimaginable power was ruled by his power and, obediently serving his purpose, was making way for a slender, rising craft. One knew that this spectacle was not the product of inanimate nature, like some aurora borealis, or of chance, or of luck, that it was unmistakably human�with "human," for once, meaning grandeur�that a purpose and a long, sustained, disciplined effort had gone to achieve this series of moments, and that man was succeeding, succeeding, succeeding! For once, if only for seven minutes, the worst among those who saw it had to feel�not "How small is man by the side of the Grand Canyon!"�but "How great is man and how safe is nature when he conquers it!"

That we had seen a demonstration of man at his best, no one could doubt�this was the cause of the event's attraction and of the stunned numbed state in which it left us. And no one could doubt that we had seen an achievement of man in his capacity as a rational being�an achievement of reason, of logic, of mathematics, of total dedication to the absolutism of reality.

Frustration is the leitmotif in the lives of most men, particularly today�the frustration of inarticulate desires, with no knowledge of the means to achieve them. In the sight and hearing of a crumbling world, Apollo 11 enacted the story of an audacious purpose, its execution, its triumph, and the means that achieved it�the story and the demonstration of man's highest potential.

The Invisible Hand

(11/26/2005; 22:36:04 MDT - Msg ID: 138370)

There's hope � Pavlovian reactions to the BOE geniuses

http://www.zawya.com/story.cfm/sidZAWYA20051125103037

Dubai: City of Gold
25 November 2005

Dubai is a big centre for gold trading, Framrose Pochara, CEO of the DGCX, told OBG on the day. We needed a proper mechanism to facilitate this trade.
+
Dubai's history in this precious metal started early last century, when the Indian government imposed restrictions on gold imports - making Dubai a proxy market for Indian buyers. In the last 25 years, the emirate has begun to take advantage of the Indian trade, using its reputation as a gold centre to sow the seeds of its now famous retail industry.
+
Adding to the good news was gold's continued strong showing in the commodities markets, posting an 18-year peak of $500 per ounce on Tuesday. With gold expected to stay high, the market is sure to attract even more regional attention.
+
But the hope is that even products that are relatively new to Dubai will be able to flourish because of the emirate's traditional strength in trade, pushing through any small bumps along the way. Still, the successes of the DMCC - and particularly the DGCX - will be closely monitored in the coming year to see what kind of activity the market will show.

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2005/November/business_November607.xml§ion=business&col=.

GULF MONEY BY MATEIN KHALID
The DGCX and the Dubai gold trade
27 November 2005

While many analysts dismissed the gold rally above $270 as a Pavlovian market response to the dollar devaluations (the geniuses at the Bank of England actually dumped Her Majesty's gold reserves below $300 an ounce!), gold has now begun to rise in Euros, Yen and Swiss Francs.
+
If, the US dollar gold price is heading eventually into four-digit territory, the best thing about DGCX is the timing of its launch.

Goldilox

(11/26/2005; 23:18:29 MDT - Msg ID: 138371)

Moon Landing or not?

@ Pritcho,

The most "scientific" question, to me, is why is NASA just now offering a "prize" to whoever can figure out how to get a space craft safely through the van Allen belts, if they have already achieved that five times before?

The calculations I have seen suggest that five minutes in the radiation belt would deliver more than the maximum annual dose of ionizing radiation allowed by the NRC, and some of the declassified Soviet space documents reveal that a lot of cosmonauts suffered radiation illnesses and death.

In addition, being inside an enclosed metal container may shield occupants from particulate radiation, but like a cathode ray tube, it produces X-rays from those hull collisions, which can be more deadly than the exterior radiation.

Lead and gold are dense enough to provide some shielding, but both are too heavy to consider for hull lining.

From the Anunaki legends to today, gold has been held in high regard for its specific properties in outer space.

I wouldn't be surprised if the next attempted gold confiscation is billed as "necessary for the space program".

Goldilox

(11/26/2005; 23:33:41 MDT - Msg ID: 138372)

Proof site

@ TIH,

Now that's funny, in a weird, sort of British way!

My old friend, Doug Adams, rest his soul, would have loved it, although his characters were much more interesting.

The Invisible Hand

(11/27/2005; 00:08:29 MDT - Msg ID: 138373)

Proof site

Goldilox,
Twenty years ago, in my early twenties, I learnt in Exeter how to write (and also how to type � I still can't do the latter.)
Real life isn't as interesting as fiction. But it's more fun. Try to explain/copy/idealise real life in a drama. Are you sure it can be done?

specie-man

(11/27/2005; 00:42:51 MDT - Msg ID: 138374)

Moon Landings

I find many of the arguments given by the fake moon landing claimants to be idiotic and usually lacking in any sense of Physics. For example, they made a big deal about how there was no moon dust on the lander's feet and how there should have been. In reality, it is the opposite - there should be no dust if the landing was real. Thrust from the lander would blow the dust away, and with no atmosphere to slow down and scatter the dust, the dust particles would fly as fast and fall as fast as a hammer thrown through the air.

The Saturn 5 rocket was an amazing feat of engineering. When the political will to continue the missions abated, the teams (talent) that built the program dispersed, making it nearly impossible to ever assemble such a team again.

On the other hand, the compromised Space Shuttle design is an abomination of awkward geometries, incompatible engines, and overcomplexity.

Goldilox

(11/27/2005; 00:53:44 MDT - Msg ID: 138375)

Can life be reproduced in drama?

@ TIH,

It can be done, but I learned a great lesson having been intimately involved in the development of digitization tools for both word and music.

A powerful tool in the hand of an artist may increase his productivity, but not necessarily his creativity.

All the word processing and music composition SW in the world has never increased the number of Clemens or Mozarts in society as a whole. It has, rather, increased the quantity of average production one has to wade through to find real gems.

Goldilox

(11/27/2005; 01:15:56 MDT - Msg ID: 138376)

Holiday Sales Off to a Lukewarm Start

http://www.breitbart.com/news/2005/11/26/D8E4I1BG0.htmlsnip:

By ANNE D'INNOCENZIO
AP Business Writer

NEW YORK

The official holiday shopping season appears to have gotten off to a lukewarm start, according to results announced Saturday by a national research group that monitors retail sales. Wal-Mart Stores Inc. was one bright spot in the crowd, reporting its sales exceeded expectations.

According to ShopperTrak RCT Corp., which tracks total sales at more than 45,000 retail outlets, the overall sales on Friday were relatively unchanged compared to a year ago, despite heavier discounting and expanded hours that drew a surge of shoppers to stores in the early morning hours.

The Chicago-based research group reported total sales Friday at $8 billion, down 0.9 percent from a year ago.

"Although the Black Friday number is a bit flat, this may be misleading as we're comparing this to a very strong 2004 performance," said Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers, in a statement.

He added that while Black Friday _ so named because the post- Thanksgiving surge of shoppers supposedly pushes stores into profitability for the year _ is important to merchants, it's not always the best indicator of consumer shopping patterns for the remainder of the season.

In 2004, the Friday after Thanksgiving was the second busiest day of the holiday shopping season, according to ShopperTrak; the busiest day was the Saturday before Christmas.

In a challenging but improving economy, the nation's retailers plied shoppers Friday with heavier discounting and earlier openings than a year ago. There were also a number of newcomers to the early bird special scene, including Disney Stores and Wal-Mart's Sam's Clubs.

-Goldilox

Early concerns about a potentially weak retail shopping season.

Henri

(11/27/2005; 07:43:06 MDT - Msg ID: 138377)

Galearis msg 138346 - Compassion is not communism

"Primitive" social systems were not communistic in any sense.
Communism is where a political authority usurps and controls the means and fruits of production presumably for the benefit of all.

In a "primitive" social setting the people are the means of production whether it be skinning a buffalo for clothing or preparing meals. Here the family is the integral social unit with the tribe being a collection of such units which have banded together for their mutual benefit.

For example, what is given to another in need within the Native American culture is not given up by state mandate...it is just expected as the moral rule of what is right. These needy are not faceless masses in another district they are known faces, the widows orphans and elderly who each do what they can for the tribe within their ability range.

I quote from the Epilogue (The Redman's Message)of "The Gospel of the Redman"
1937 Seton and Seton. [This is just following or in the midst of the great depression in America] (bracketed notes are mine).

SNIP

"The Civilization of the Whiteman is a failure;it is crumbling around us. It has failed at every crucial test. No one who measures things by results can question this fundamental statement.

"Apparently the money-madness is the main cause of it all. We know that such a thing was unknown among the [Native American]Indians. The big menace was failure of the food supply, and against this they prepared by a storage plan that was effectual.

"What is Civilization? Literally, it is a system by which men can live in a large group (a city, or civitas) and enjoy all the benefits without suffering the evils that result from such an association.

"...But suppose one hundred families agree to live together in the same camp, and combine their efforts to solve more effectively the problems of hostile tribes, food failure, disease, social pleasures, [and] spiritual life. The men become cives. The resultant system evolved is a Civilization.

"How are we going to appraise the value of a Civilization? By certain yard measures that are founded on human nature, and which remorselessly investigate the fundamentals of the man-mind and the man-needs.

"First of these is: Does your civilization guarantee to you absolute freedom of action so long as you do not encroach on the equal right of your neighbor to do the same thing?
"Does your system work for the greatest happiness of the greatest number?
"Is your Civilization characterized by justice in the courts and gentleness in the streets?
"Are its largest efforts to relieve suffering and misery?
"Does your Civilization grant to every individual the force and rights of humanhood?
"Does your system guarantee absolute freedom of religion?
"Is everyone in your community guaranteed food, shelter, protection, dignity, so long as your group has these things in its gift?
"Does your system guarantee tribal control of tribal interests?
"Does your system guarantee to each man one vote; but so much influence as his character can command?
"Does your system guarantee to each man the product of his industry?
"Does your system accept the fact that material things are of doubtful or transient value, that the things of the Spirit are all that are enduring and worth while?
"Does your system set larger value on kindness than on rigorous justice?
"Does your system discourage large material possessions in one man?
"Does your system provide for the sick, the helpless, the weak, the old and the stranger?
"Does your system guarantee the integrity of the natural group called the family?
"Does your system recognize andfurther the fundamental thought that the chief duty of man is the attainment of manhood, which means the perfect and harmonious development of every part and power that goes to make a man; and the consecration of that manhood to the service of one's people?

"By every one of these tests, the White Civilization is a failure.
"How is it that we of the Whiteman's way have just as much food in the land as ever we had, just as much need for labour, just as much material of every kind, just as much readiness to work; and yet we are facing a breakdown because we cannot co-ordinate these things into effective action?
"Our system has broken down - our Civilization is a failure. Wherever pushed to a logical conclusion, it makes one millionaire and a million paupers. There is no complete happiness under it's blight.

"Men of the White race! We speak now as representative of the most heroic race the world has ever seen, the most physically perfect race the world has ever seen, the most Spiritual Civilization the world has ever seen. [no one ever accused the Redman of being unsure of themselves:-)]

"We offer you the Message of the Redman, the Creed of Manhood. We advocate his culture as an improvement on our own, if perchance by belated repentance, remorse, restitution, and justification, we may saveourselves from Divine vengeance and total destruction, as did the Ninevites in their final stance; so that we may have a chance to begin again with a better higher thought.

UNSNIP

Henri

(11/27/2005; 07:59:15 MDT - Msg ID: 138378)

Perspective on last post

At the time the "Message of the Redman" was written, the US was trying to extricate itself from a serious over indulgence in a pseudo-fiat experiment which was a replacement of gold money.

Are we entering a time of similar circumstance only this time in a globalized sense? No one would work unless there was payment and no one had the capacity to pay except the government and they only by stealing from the future.

Camel

(11/27/2005; 09:12:16 MDT - Msg ID: 138379)

Leviathan

Without wishing to belittle the Native American culture, the Indians in this part of the country were not quite so civilized as the Iroquois.

The Apache whose main abode was the Texas panhandle were known to have made annual raids on the Catto tribes in the Louisiana area, taking them as slaves , and selling them at the annual trade fare in Taos. All this before the advent of the horse.

Perhaps the Iroquois achieved some sort of a golden age of civilization , but further south the Mayan and Aztec were hardly choir boys. The picture that emerges though out the Americas was a state of perpetual warfare among the various tribes.

Mankind however has been able to extend his dominion beyond just the tribal level, something the great apes never managed to do.

"Homo homine lupus est." Every man a wolf to the other. Hobbes sure nailed it,and is often said to be the progenitor of the idea of the all powerful state,the Leviathan, keeping humanities evil tendencies in check.

Cynical ? No way . Jesus will prevail , even if through armed struggle. Maybe that's what we need to see. Dick Cheney carrying around a placard with a picture of Jesus on it.

The Invisible Hand

(11/27/2005; 09:48:07 MDT - Msg ID: 138380)

Plautus, not Hobbes, nailed it

http://www.english-literature.org/essays/jewish_writers.html
Footnote 1 Plautus (c. 250 - 184 bc). Asinaria l. 495. Lupus est homo homini, non homo, quom qualis sit non novit. (A man is a wolf rather than a man to another man, when he hasn't yet found out what he's like.)

http://www.foothilltech.org/rgeib/english/orwell/primary_sources/homo_homini_lupus.htmA
popular Roman proverb by Plautus (dead 184 B. C.), in his Asinaria. Thomas Hobbes later used it in his "De cive, Epistola dedicatoria", not in his "Leviathan".

David Linkley

(11/27/2005; 09:54:29 MDT - Msg ID: 138381)

Cross currents or clear sailing?

We are constantly told by the mainstream media that manufacturing doesn't matter anymore because in our new IT lead economy the consumer is approximately 2/3's of GDP. So now that many economists and money managers agree the consumer will at least slow down in 06' because of high oil prices, higher rates, lower refi's etc. what is their outlook for the US economy and stockmarket - BULLISH of course. Not that there aren't a few stray bears out there but the level of bullishness is very high. Thompson FC figures we're at least 30% undervalued. References to the 1995 stock bull are being touted by the major brokerage houses. Trial balloons (again) are being floated about large troop reductions from Iraq beginning next year, is this bullish because of less required spending or bearish because of increased middle eastern instability? Where are we really? IMO the current status will try and be maintained as the FED will continue to print, debt will continue to rise and gold will increasingly replace all currencies as a safehaven. Here comes $500 soon.

Chris Powell

(11/27/2005; 10:03:07 MDT - Msg ID: 138382)

Australia is cleaning out the gold vault

http://groups.yahoo.com/group/gata/message/3496Latest GATA dispatch.

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Galearis

(11/27/2005; 10:04:01 MDT - Msg ID: 138383)

@ Henri re the communism thread

Hmmmm,

I seem to have upset a little. Well, I never said compassion was communism. In fact one could not even describe those societies as I referred to as particularly compassionate at all times either. I just meant to get across the concept that in the hierarchies of societies that they were essentially communistic. Some of them even went as far as to kill unwanted babies,,,an activity that is quite frowned upon by our society. But that is beside the point,,,'societies do what they must to survive their conditions,,,,(of their own making and otherwise) and compassion (morality) or even understanding (in this particular case) has little to do with it � or should I say, that morality and compassion are defined by the social environment.

Neither does the assumption that these groups (all) did not have a government. Of course they did,,,,just not one that you would recognize or one with which you would agree(with sympathy?). The "government" was quite autocratic or even theocratic [odd that these societies were so persistent when our modern technocracies become both less stable (than they are already) � or at least in our case, our democratic institutions would be degraded by non-secular interests]. But they surely did enforce their cultural perspective on right and wrong. Oh, yes!

My apologies for the upset,,,but being exposed to some facts does leave this possibility. I doubt that my words will carry enough of my background in this area either. This is a pretty academic one.

But suffice it to say that we really are all connected,,,,and there really isn't much new in the world�Just old stuff dusted off, renamed,,,,and exploited. Our culture is particularly good at this.

Only awareness and knowledge will guard against injury as events and human "instincts" lead us down this certain road.
Perception, as always, is key! (smile)

And this is why I buy gold and silver.

And I do not fear communists any more than I fear fascists. A workable context for one is a reason for failure in another. Both systems do not (would not) denude the world of compassion, but either one,,,,ANY one,,,, can denude the individual of wealth or the right to live. To believe otherwise is to be the victim of propaganda and "polluted knowledge".

And Marx himself would likely be puzzled about what "they" (all) have done with his treatise. (Smile)

Perhaps only the so-called primitives have come close to his ideal.
We may never know.

Best regards,

G.

Goldilox

(11/27/2005; 10:09:37 MDT - Msg ID: 138384)

Dick Cheney and Jesus

@ Camel,

"Maybe that's what we need to see. Dick Cheney carrying around a placard with a picture of Jesus on it."

Now there's two names one would never expect to see in the same sentence.

The Jesus I read about said "Put away your sword", but who's listening to Him?

The history of human slavery certainly precedes the use of the horse, just as "bravery" precedes the use of cluster bombs on schools and hospitals to produce "shock and awe".

Isn't it ironic that banks and FIAT money were invented to protect against loss of physical assets to war and theft, only to find FIAT the greatest financier of death and destruction ever.

There are seldom any real fights for "freedom", only which military master we receive the privilege to bow down to. When the US founding fathers warned against "standing armies", I don't think they meant to keep them marching on foreign soil. As Fuller stated, when over 50% of production is dedicated to destruction, the scales are tipped toward disintegration of the society. The "rebuilding" and new invention process can never keep pace.

Raising the bar for individuals is the only real battle for "freedom". The rest is disinformation from the despots who want to "own" us all.

Ten Bears

(11/27/2005; 11:03:14 MDT - Msg ID: 138385)

Native American culture,

http://signup.aaanativearts.com/article640.htmlEpitah from the resting place of original Ten Bears

I will look upon the earth until my eyes close one final time
and I will revel in what I see. It is my heritage, my legacy,
my gift to my daughter, this earth. I pray she will respect it.
Everyone as you celebrate the season of Rebirth-
paint the days with your own colors, sing your own songs,
dance your own dances and leave your own legacies for future generations.

Goldilox message #138365

In these days, according to Col. Hugh Pickering's home office friend, many internet voices have multiple "handles" and are compensated for providing the "right"
perspective.

Ten bears; one name, one voice, no agenda other than to attempt to post research information in partial repayment to those generous posters who have shared their wisdom and information references at this site in the past.

Camel

(11/27/2005; 13:19:43 MDT - Msg ID: 138386)

Utopia

Sir IH-Thanks for the quote(you too Ten Bears,) though I doubt that Hobbes would ever have included the latter part of Plautus as Hobbes seems to have a decidedly gloomier view of human nature. Imagine if you will what the USA would be like if all the police powers of the state were suddenly disbanded and the officers sent home. I suspect it would be more like Mad Max than a utopia.The wolf would come out again in full force..Right on as usual Goldilox. Who's afraid of the big bad wolf.

Pan

(11/27/2005; 13:31:10 MDT - Msg ID: 138387)

PRECIOUS METALS: Finding the pot of gold

http://www.nationmultimedia.com/2005/11/28/business/index.php?news=business_19270384.htmlIf I were Bill Murphy, I should like at least this WGC guy!

***********************************************************

Albert Cheng, managing director of the Far East for the World Gold Council

"There is no longer a bear market in gold."

"The more relevant question is how big is this bull? Certainly, a range of analyst research suggests that it's going to last for some time," said Cheng.

"Cheng said central banks pick up some the difference betcween mine production and demand. European central banks under the "Washington Agreement on Gold" contribute about 500 tonnes per year. The rest of the supply comes from old gold scrap."

"This gap is not a new phenomenon, and it's widening. That's why the future of investment in gold looks bright."

USAGOLD / Centennial Precious Metals, Inc.

(11/27/2005; 14:51:53 MDT - Msg ID: 138388)

This year treat yourself to an early Christmas present -- the gift of golden knowledge!

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

R Powell

(11/27/2005; 17:22:57 MDT - Msg ID: 138389)

Washington Agreement vs. Russian gold buying

I'm wondering about MK's opinion that the announcement of substantial Russian gold buying might rival that price move that the first WA announcement caused. As I recall, that WA announcement lifted the POG from about the 280-290 level up to about 330 or so. A similar 15 percent advance might take the POG from roughly 490 to well over 550.

The WA price advance did not hold and the POG retracted the entire move. Might this happen again if..if the POG does indeed react to the idea of Russian buying? I would venture a guess that, although the POG will retract occasionally as any long term bull market does, if this is cause for a price rise, it may not fade this time. I guess this as I believe gold has been rising in price due to basic supply and demand fundamentals. Any increase in physical demand will further exaggerate the supply/demand deficit. Copper is a great example of a market, like gold, where the market price fell below production costs for a long enough time frame so as to totally discourage research + development. There are many such markets unfolding now that global demand has intensified. Basically, Rogers is being proven right in the assessment he outlines in "Hot Commodities". Others also predicted such and many still opine otherwise, thinking techology will continue to lower the cost of life's necessities. Supply vs. Demand. The WA was a political agreement made during a bear market when demand was easily covered by existing production + government dishoarding. How much more will Russia now want and how can we verify the buying??

I also noted that MK mentioned the fact that Russia may have the ulterior motive of wanting to benefit from her not-yet mined reserves of metal. And why not? It is not uncommon at all for a government to attempt to support the price of items produced by its people. The Brazilian government subsidizes the POcoffee by simply buying physical coffee beans to take them off the market. During this past year Brazil sold a great amount of stored beans, some as much as twenty years old. These beans had been accumulated over many years while the price of coffee received by farmers failed to cover production costs. Hopefully for the coffee bulls, there isn't too much of this left! We all know that most nations try to support the price of their exports through whatever means are at their disposal. What better way to support the POG than by simply removing some supply from the market? After all, gold doesn't spoil like grains and has an even longer shelf live than coffee beans.

I wonder too about the skeptical comments concerning the announcement itself. I would guess that there has been a great deal of accumulation already and perhaps Russia has done the bulk of her buying but, if her intention is to support the POG, then further buying may be necessary in the future, whenever the POG is in decline. Has this been happening already? Might this, in part, explain the price support that gold has seemed to benefit from ever since the last upside break of the 300 level?? I don't know but, as always, I wonder. I wonder too how the speculative (paper trading) money will react to this announcement. And, I wonder what just a little more physical demand will do in a market already reacting to a just now being perceived deficit. It may no longer matter how the US dollar trades against other paper, a supply deficit trumps the USdollar index number, just as three of a kind beats two pair. Just wondering as usual. Any other thoughts?
rich

The Invisible Hand

(11/27/2005; 17:35:25 MDT - Msg ID: 138390)

Ordered Anarchy: A Tale of the Woods

http://users.ugent.be/~frvandun/Texts/Articles/TaleWoods.pdfYes, its true, the roots of radical individualism go back to Hobbes. The Hobbesian monkey needs, however, to be thrown off the back of classical liberalism.

The basic problem with Hobbesian individualism appears to be that for Hobbes human beings are not linked with each other by a common nature.

This allows Hobbes to say:: But whatever is the object of every man's appetite or desire, that is which for his part calleth good: and the object of his hate and aversion, evil. ... For these words of good and evil are ever used in relation to the person that useth them; there being nothing simply and absolutely so; no easy common rule of good and evil.

For more, see the link where you'll find Dr. Frank van Dun's paper "Tales of the Woods � Ordered Anarchy in One-Shot Encounters between Strangers"
SNIP
The time: a bleak autumn day in the early seventeenth century. The place: the middle of a vast forest somewhere in England. The protagonists: two solitary travellers, each one a complete stranger to the other, carrying their weapons (say, a sword, a dagger and a pistol) and a few valuables (some food, some coins of silver and GOLD). They are making their way through the forest in opposite directions along a single desolate winding path. The action begins when those two men are about to meet. What will they do when suddenly they come in full view of (one) ANOTHER?

R Powell

(11/27/2005; 18:13:36 MDT - Msg ID: 138391)

Round numbers

Will tomorrow be the day platinum closes above $1,000, gold above $500 and copper above $2.00...?

goldquest

(11/27/2005; 18:50:37 MDT - Msg ID: 138392)

Rich, answer to your questions

Maybe, yes, maybe!

goldquest

(11/27/2005; 18:56:41 MDT - Msg ID: 138393)

And silver?

$8.50+!

David Linkley

(11/27/2005; 19:21:02 MDT - Msg ID: 138394)

@R Powell

Good questions which many of us have asked lately, why Russia and why now? I believe at the time of the first Washington agreement the gold pricing mechanisms were largely paper (Comex) and the current markets are much more physical. Large world liquidity flows are now seeking some safety as paper currencies have proven undependable as a store of value. Could Russia's move signal to the US to get out of influencing the old Soviet Republics?

Cavan Man

(11/27/2005; 19:24:05 MDT - Msg ID: 138395)

R Powell

I think the "accumulation period" (we've been watching) for so long now MIGHT be over or very near the end.

BTW, I just watched SAHARA with the family--definitely a good one with lots of AU.

All the best....CM

PS: The Russian announcement was also definitely timed to support the DUBAI Exchange opening.

Goldilox

(11/27/2005; 19:31:04 MDT - Msg ID: 138396)

Anarchy vs. Tyranny

@ Camel,

Not being terribly fond of either condition, I have no doubt that instant anarchy would be no better than the slave condition we seem to be racing to achieve.

When the cost of security exceeds total production, it's obvious that we are not creating a social environment where the majority are content with the staus quo.

Since the Reagan years, we have seen continual redistribution of assets and natural resources into fewer and fewer hands, while the death toll from hunger, disease, and civil unrest continue a parabolic ascent.

Healthy, well-fed peoples do not risk their security with revolution, and people who believe the staus quo offers them reasonable opportunity do press for its demise.

While the Cold War programmed us to believe the world's stresses were about Western vs. Eastern "philosophy", closer examination of the actual battlefields revealed that the conflicts are always more about "haves" vs. "have-nots".

Now that the Chinese have called our bluff and determined that US paper is useless for obtaining UnoCal's Asian oil properties, the stakes have nowhere to go but up! Even when they guaranteed to resell all non-Asian UnoCal resources, the deal was still snookered by a Congress who believed that the Chinese violated US "National Security" by attempting to purchase Asian assets from an American company.

One might suspect that the Chinese are testing all the fancy NeoCon rhetoric about "level playing fields," and might have some ideas of their own about "fairness".

(11/27/2005; 19:46:52 MDT - Msg ID: 138397)

David L. -- "A morality tale has to be told."

"Could Russia's move signal to the US to get out of influencing the old Soviet Republics?"

What you raise was a subject of interest in the most recent FT weekend edition. Putin is now cracking down on so-called 'non-governmental organizations' (NGOs) which he sees as fronts for the Central Intelligence Agency. The Orange Revolution in the Ukraine, the war in Yugoslavia and the revolution in Georgia are all viewed there as CIA instigated. Soros' Open Society Institute is targeted, along with Human Rights Watch and Amnesty International. What we are seeing here are the faint stirrings of a new Cold War. Iraq has been a disaster. We are seeing both the United States and Russia pulling inward and building a psychological mindset reminiscent of what existed after World War II. One wonders how this is all going to play out.

We also had at week's end the release by the new Polish government of (Russian) intelligence that both the United States and the old Soviet Union would have used nukes-- one (the Soviet Union) along a line from 'the Dutch coast to Strasbourg, wiping out cities in Belgium, the Netherlands and Germany'; the other (NATO) along the Vistula in Poland 'to prevent Russian reinforcements from reaching the front.' The files were released despite pressure from the Russian government to keep them secret. One wonders what our own State Department thinks of the revelations. Sikorski, the Polish defense minister said that: "We need to know our history. It's important for a democracy to know who was the hero and who was the villain. A morality tale has to be told."

There is concern that the new Polish government, according to FT, "is stoking tensions with Moscow." One wonders if its eyes are cast both East and West.

We are looking at a very complex scenario and gold, as you suggest, will weigh in the balance. We are not so far from the Cold War as we might have thought.

Cavan Man

(11/27/2005; 20:06:11 MDT - Msg ID: 138398)

The Poles...

.....at one time were Masters of Moscow. They're are a great culture only having the great misfortune to reside between Russia and Germany. Location...location...location!

Cavan Man

(11/27/2005; 20:08:20 MDT - Msg ID: 138399)

BTW, since it is still the weekend...

I think Sadaam Hussein has a brilliant defense going. Take a page from the OJ defense team too.

Waverider

(11/27/2005; 20:34:59 MDT - Msg ID: 138400)

Newmont Forecasts Gold to Rise Above $1,000 on Asian Demand

http://www.bloomberg.com/apps/news?pid=10000080&sid=aotpaNV5Qtpw&refer=asia"Newmont Mining Corp., the world's largest producer of gold, says the price of the precious metal may rise to more than $1,000 an ounce in the next five to seven years as demand growth driven by Asia outstrips global supply."

Waverider: No suprises for those here, but interesting to see as Bloomberg headlines!

Gandalf the White

(11/27/2005; 20:42:24 MDT - Msg ID: 138401)

LOOKING GOOD, Spot !

JUMP SPOT, JUMP!
Clear $500 before the NY boyz get a chance !
<;-)

Goldilox

(11/27/2005; 20:42:40 MDT - Msg ID: 138402)

Polish Intel revelation

@ MK,

I think this falls right in line with the threatened British publication of NeoCon plans to bomb Al Jazeera HW in Qatar. It seems that some parties are either stoking the old furnaces or trying to force transparency by public outcry.

One thing for sure, the "with us or agin' us" rhetoric is not working, if it ever really did.

Rook

(11/27/2005; 20:45:42 MDT - Msg ID: 138403)

Desert wind

Camel, "armed struggle"? Under what scenario would he approve it?

Goldilox

(11/27/2005; 21:03:51 MDT - Msg ID: 138404)

Asian Silver

Asian shorts took on silver for about $0.25, but the bark was worse than the bite, as it immediately rebounded.

Ten Bears

(11/27/2005; 21:11:55 MDT - Msg ID: 138405)

Henri

http://www.justiceplus.org/reform_principles.htmThanks for informative week end posts.

Referenced above is another site concerned with Economic Justice & Fairness.

>"A careful study of the fundamentals of our economic system and of the reforms proposed by scholars is a logical starting point."

contrarian

(11/27/2005; 21:32:01 MDT - Msg ID: 138406)

I think this is going to be an exciting week!

And watch out when new year rolls around, as the dollar repatriation scheme par excellence--the "American Jobs Creation Act"--ends December 31(which I think has largely been responsible for the dollar rally this year)...plus the anticipated rise in Euro interest rates, and combined with the eventual termination of Fed interest rate increases (due to the sagging housing market) probably in two or three months if not sooner...then see what the dollar and the stock market do...perhaps a bear trap?

Smeagol

(11/27/2005; 22:21:15 MDT - Msg ID: 138407)

Interessssting.....

http://www.sortweb.com/cwsimages/Miscfiles/2231_brenner.pdf
Title:

"The US Dollar and Prosperity: Accidents Waiting to Happen" Reuven Brenner
McGill University
(Please Do Not Quote Without Permission)
November 3, 2005.
Paper Prepared for Cato Institute 23rd Annual Monetary Conference "Monetary Institutions and Economic Development, November 3, 2005, Washington, D.C.

...we are sstill reading...and not quoting, though we wantss to...from what we have read sso far we thinks it worth a look.

S.

Goldilox

(11/27/2005; 22:43:17 MDT - Msg ID: 138408)

Justice Plus site

http://www.justiceplus.org/reform_principles.htm@ Ten Bears,

Thanks for the post. It supplied the numbers I was looking for earlier.

snip:

The number of unemployed people has grown rapidly around the world and was estimated by the International Labor Organization to be over one billion by 1994. In fact, the present debt-based monetary system inevitably results in vast accumulations of wealth in fewer and fewer hands, which necessitates extreme poverty for vast numbers of mankind. In 1997, 441 billionaires owned as much of the world's wealth as the poorer one-half (50%) of mankind (2.4 billion people).

-Goldilox

And these numbers have had 8-10 years of turmoil to be skewed even further by the tech-bubble (401K collapse), ensuing Enron and WorldCom stock debacles, pension failures, natural disasters, and 2005 record fuel profits.

Probably not a recipe for healthy social interaction. It's hard enough to achieve success under these conditions, but when western corporations bring along their own referees (the IMF-WB complex), the game is more heavily rigged in favor of the "house" than any casino. Resource rich countries are scrambling to defend their assets, while rapid growth economies (China and India in particular) want to guarantee the flow of energy needed to fuel their growth.

Trying to convince a billion hungry folks that God "ordained" 441 billionaires to control their very hope to feed their family is a hard sell indeed!

SteveH

(11/28/2005; 03:17:39 MDT - Msg ID: 138409)

Correlation?

Seems somewhat coincidental that the DOW, Duck, and Gold all appear to be highly positively correlated of late. Someone raid the shoe boxes and send it off to the markets?

SteveH

Goldilox

(11/28/2005; 04:30:13 MDT - Msg ID: 138410)

Congressman Ron Paul Reiterates Danger Of Foreign Troops Being Used For Martial Law

http://www.prisonplanet.com/articles/november2005/241105martiallaw.htmsnip:

Republican Congressman Ron Paul recently appeared on nationally syndicated radio and again reiterated his deep concern that foreign troops are mobilizing outside and inside America to be used as assets in a martial law takeover by the Bush administration.

"It's a horrible precedent and it's all part of the NAFTA scheme and globalization and world government," Paul told the Alex Jones Show.

"Obviously they shouldn't be permitted. What I'd like to see is that we don't have our troops in foreign countries and if we needed a national guard that they were back here at home, that's the bigger problem. Then if there were foreign troops on our soil maybe our state officials could deal with that with their own national guard."

Paul elaborated on his fear that after the next crisis the government, in line with their own public statements, will use military assets to police Americans on a regular basis.

"They're putting their back up against the wall and saying, if need be we're going to have martial law."

"We've heard all these statements by the President, by the administration, why they need more militarism at the federal government to keep people in check so nobody knows how this will turn out but I do know that the only thing we can do about it is try to alert the American people to what's going on so they can be prepared."

Paul offered his take on why the government seemed to be acting in a deranged and reckless manner on every issue.

"It's almost like they're going overboard that they lose their rationality and that's part of the reason why they usually fail too is they get overly bold and I think our government is overly bold thinking they are invincible and they feel invincible with their finances. Our government controls the reserve currency of the world, they literally have the ability to print gold."

-goldilox

As usual, he makes too much sense to be heeded,

OvS

(11/28/2005; 06:43:44 MDT - Msg ID: 138411)

Goldilox.

I doubt these were Asian shorts.
Western shorts acting through
their Asian accounts is more
likely. The Asians probably
jacked it up again and now, in
their hometown courts Western
(and we know who) accounts are
trying to smash silver (and gold)
again....?
Hometown court is a misnomer
because these fellows think (and
they are right) the world is
their playground...the question
is, can they keep it up and con-
solitate their grasp?
Row your boat, row your boat...or
Tow your boat, tow your boat..OvS

Chris Powell

(11/28/2005; 06:52:22 MDT - Msg ID: 138412)

Russian central banker says gold reserves may grow slowly

http://groups.yahoo.com/group/gata/message/3499Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

mikal

(11/28/2005; 08:31:32 MDT - Msg ID: 138413)

Asia and Middle East

http://economictimes.indiatimes.com/articleshow/1309896.cms India helps Dubai bridge the Gulf in gold futures- The Economic Times - Nov 28

Rook

(11/28/2005; 08:36:43 MDT - Msg ID: 138414)

(No Subject)

http://www.newscientist.com/data/images/ns/cms/dn8369/dn8369-1_500.jpgScientists are reading 680,000 year old ice, found that we now have 27% higher greenhouse gasses than any point in that length of time. Link shows picture of atmosphere trapped in ice. Dark bubbles are air.
How come other countries dont go mental when we just create 450 billion dollars for road work in one year, they provide the road work materials, and we dont send them a free dime? I dont have the brain power to figure that one out. I cant even touch it. Can anyone scratch the surface on that?

Goldilox

(11/28/2005; 09:16:00 MDT - Msg ID: 138415)

Asian Silver Shorts

@ OvS,

Agreed, What I meant was "shorts in the Asian market."

They were met by buyers quickly.

Goldilox

(11/28/2005; 09:23:06 MDT - Msg ID: 138416)

Gold's Move

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

There it goes again today, the price of gold going up. As we put bytes to phosphors and keys to clicks it's just 70-cents short of the $500 mark. Where will it stop? For a starting guess, you could put $800 in 1980 into the Minneapolis Federal Reserve Bank's handy inflation calculator (link down the left blue column a ways). What you come up with is $1,889.32. That said, don't forget the inflation calculator figures 3% for 2005, and we all know that it's running 3.9% year-to-date, so closer to $1,900 is our guess. Regardless of whether gold passes the mark today, tomorrow or next month, gold is not going up - not really. The purchasing power of your paper money is going down - that's the ugly truth that most economists dare not speak of openly. "Prices don't go UP, the purchasing power of money goes DOWN." Now you see why to keep the game going, economists just wink and nod at each other and talk about prices...

-Goldilox

Good commentary on inflafla over at Urbansurvival.com. George also quotes a Depression era economist who sites "installment spending" as a cause.

Also included is a discussion of the RE cycles and their importance to larger economic cycles.

Good read this morning.

contrarian

(11/28/2005; 09:42:41 MDT - Msg ID: 138417)

price of an ice cream cone and inflation

Over the holiday, I looked at a journal I kept as a child, and in 1972, I wrote down that I had bought a small ice cream cone at Friendly's for 20 cents (and the large was 30 cents)!

Can you believe it? If you were to say a small ice cream cone costs $2.50 now, then the price has gone up 12.5 times. 20 cents is 8 percent of $2.50, which means dollar has lost (100 - 8) = 92 percent of its ice cream purchasing value since 1972!

mikal

(11/28/2005; 10:07:15 MDT - Msg ID: 138418)

Russia ups reserves

http://www.neftegaz.ru/english/lenta/show.php?id=59927Russia's Central Bank To Buy More Gold
11.28.2005 - Snippit:
The Central Bank of Russia plans to increase the share of gold in Russia's gold and currency reserves, the bank's Chairman Sergei Ignatyev told journalists, RBC reported.
He commented that gold and currency reserves had advanced considerably recently, mainly thanks to the Central Bank's currency purchases. As such, the share of gold has fallen sharply and it will take several years to raise it, Ignatyev underscored.
In total, the gold and currency reserves contain 380 tons of gold at a market price of $16 per gram. This share costs $6bn, and all reserves cost approximately $165bn. The Central Bank plans to buy gold on the market, the official added.

Gandalf the White

(11/28/2005; 10:15:46 MDT - Msg ID: 138419)

WOWSERS -- check out the LINK ! <;-)

http://isht.comdirect.de/html/detail/main.html?sTab=chart&hist=1d&sSym=GLD.FX1Does anyone remember that SLAPSTICK movie with the name something like "It's a MAD MAD WORLD"
Look for the "W" !!
<;-)

Survivor

(11/28/2005; 10:29:14 MDT - Msg ID: 138420)

Contrarian #138417 - Inflation and Ice Cream

Yes, and while the cost of your ice cream cone went up 12.5 times, the pay for my position at work went up "only" 5 times.

If this trend were to continue for another generation or so, it would take more than martial law to maintain order in the streets.

Little wonder that the so-called news on TV is little more than a distraction designed for sheeple minds.

- Survivor

USAGOLD / Centennial Precious Metals, Inc.

(11/28/2005; 10:52:26 MDT - Msg ID: 138421)

FREE gold information packet -- immediately available by e-mail!

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

TownCrier

(11/28/2005; 11:21:06 MDT - Msg ID: 138422)

Japan life insurers stay cautious on foreign debt

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh15014_2005-11-28_08-24-49_t6944_newsmlTOKYO, Nov 28 (Reuters) - Most of Japan's big life insurers said on Monday they had no plans to raise their holdings of foreign debt in the six months to March...

...the industry holds 190 trillion yen ($1.588 trillion) of assets...

In recent years the top insurers have been whittling away their holdings of Japanese equities, but stocking up on foreign bonds to help make up for low returns on their staple investment, Japanese government bonds.

The rising cost of currency hedging has led some insurers to remove hedges from their investments this year. But while the dollar's sharp rally to 27-month highs against the yen has helped boost returns on unhedged U.S. debt, some insurers have doubts about the sustainability of the U.S. currency's strength.

"This is not the level to be buying at," said Takeshi Furuichi, director of financial and investment planning at top-ranked Nippon Life Insurance Co.

...Data from Japan's Finance Ministry shows that Japanese life insurers bought a net 268.6 billion yen of foreign debt in the April to September half, well below the 956 billion yen they bought in the same period a year earlier.

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

Round and round the cobbler's bench
The monkey chased the weasel...

(That's the way the money goes
POP! Blah blah blah blah)

Choose gold.

R.

Goldilox

(11/28/2005; 11:42:04 MDT - Msg ID: 138423)

Ice Cream Inflafla

@ Contrarian and Survivor,

At last we are discussing RELEVANT price concerns.

I no longer can afford to buy ice cream by the cone, but I still get two half-gallon boxes for about $6 from the grocer.

On less depressing days, that is good for about three servings each!

On really depressing days, I go for the five quart industrial size tub!

YGM

(11/28/2005; 11:45:17 MDT - Msg ID: 138424)

$502.50

http://www.netdania.com/QuoteList.asp a few min ago!!

Gandalf the White

(11/28/2005; 12:01:55 MDT - Msg ID: 138425)

Look at the LINK !

http://quotes.ino.com/chart/?s=NYBOT_DXY0BEAUTIFUL US$ Waterfall !
<;-)

Survivor

(11/28/2005; 12:06:45 MDT - Msg ID: 138426)

Infla By The Tubfull

@Goldilox -

For those who don't hold "precious" metal, the industrial size tub will need to be large enough to take a complete bath!

- Survivor :)

TownCrier

(11/28/2005; 13:14:13 MDT - Msg ID: 138427)

B-, thanks for the link

http://www.ecb.int/press/key/date/2005/html/sp051124.en.htmlThe part of the interview with Trichet that I, personally, found most significant was his reiteration of policy in the following exchange.

---
Q: How can we halt the deterioration in public finances now that the Stability and Growth Pact has failed to fulfil its role?
+
Trichet: We think that the Stability and Growth Pact is an essential element of Economic and Monetary Union. It compensates for the absence of a European government and federal budget and thus ensures cohesion within the area in which the single currency is used. This is why we insist that it should be rigorously applied. It is also in line with the wishes of people who today do not have a great deal of confidence in a number of budgetary policies. When confidence is lacking, people consume little for fear of future taxes, and businesses do not invest enough for the same reasons. Sound management of public finances over the medium term is reassuring and it boosts confidence, promotes growth and leads to more jobs.

...Q: Are you going to tighten your loan conditions for countries whose public debt is too large, as you are alleged to intend?
+
Trichet: I have previously re-stated our position regarding the bonds that we accept as collateral for our monetary operations. There has been no change in our behaviour since 1999. We only accept as collateral for our financial market activities private and public sector bonds with a rating that is equal to or higher than A (including A-).
---

Understandably he takes a firmer stand (in the public eye) than I would in our private conversation here regarding the Stability and Growth Pact. Certainly it is a worthy goal and beneficial when met, but insofar as the Bank's mandate is concerned I would suggest (only privately, of course) that it is a slight overstatement to characterize the Pact as an ESSENTIAL element to the EMU.

Please feel free to disagree, but in my estimation the collateral policy of the ECB, as stated by Trichet in answer to the second question above, serves as a good means to mitigate any ill-effects of debtor member-states by insulating the currency from questionable bonds. And in the grim event that ALL of the member's fiscal houses recklessly end up in the non-A alphabet soup, the ECB shall always have an Ace up its sleeve for the purposes of monetary policy operations -- that is to say, it has recourse to open market operations with solid gold.

In that way any given bond can theoretically be allowed to fail without it necessarily exerting a consequential drag upon the denominating currency. As it continues to evolve into place, investors will eventually understand that bonds carry an isolated risk of failure, that the currency itself is merely an isolated unit of denomination that only ever strives for stability in terms of price in the economy of real goods, and that gold metal (isolated from paper) has a very significant value due to its unique position (role) as the paramount reserve asset in the structure of the international monetary system.

R.

Goldilox

(11/28/2005; 13:21:56 MDT - Msg ID: 138428)

Ice Cream update

Oops, went to the grocer today, and my benchmark $6/gal ice cream deal was bumped to $7.

That, of course, is still a "sale" price.

I typically watch for "member" specials, and my historical card savings is about 33%. The last two trips have only netted me about 20%.

Not very scientific, but it suggests that discounting margins are shrinking.

osa104c

(11/28/2005; 13:35:29 MDT - Msg ID: 138429)

I DO......WOWSERS II

Smiler Grogan (played by Jimmy Durante) dying words were, "Look for the Big W"��.it's a mad, mad, mad, world��.November 7, 1963..
Grab all the physical you can�.....oUr attention span is SHORT�..the wOrLD is lONg on the PRECIOUS��..

Goldilox

(11/28/2005; 13:35:51 MDT - Msg ID: 138430)

Shakers: Merck chief is mum on reports of job cuts

http://www.iht.com/articles/2005/11/27/news/bxshake28.phpsnip:

The chief executive of Merck, Richard Clark, said Sunday that a statement would come soon on a restructuring plan he has worked on since taking the job in May, but he would not comment on a report that it would include thousands of job cuts.

Clark declined to comment on a report Saturday in The Wall Street Journal that Merck would cut jobs, close plants and trim research costs. He said he was "very unhappy" with the story and would not discuss it as "a matter of principle."

"The problem with an article like that is that we haven't had time to talk to employees," Clark said. "We're very unhappy. We want to tell our employees first."

The drug maker faces billions of dollars in liability from 6,400 lawsuits filed against it over its recalled Vioxx painkiller. The company, based in Whitehouse Station, New Jersey, is also preparing for declining sales of its Zocor cholesterol drug, which will lose patent protection next year, and Fosamax osteoporosis treatment, which has a patent that expires in 2008.
The Wall Street Journal reported that Merck board members were advised on details of the restructuring on Tuesday. Analysts had expected a restructuring announcement to come in December.

A company spokeswoman said Sunday that Merck was "engaged in a worldwide, large-scale review," and that it was "carefully considering a variety of options." She declined to comment further.

Merck's shares have declined 11 percent since May 5, when Clark replaced Raymond Gilmartin, who had led the company for 11 years

-Goldilox

Dem bones, dem bones, dem dry bones!

How long can the spinsters convince the consumer that massive jobs cuts at US manufacturers will not bleed into the mainstream servce industries like RE, food, and transportation?

Initial retail reports suggest that the post-Turkey day shopping winners were the discounters and high-end, with weakness in the malls and mid-level retailers.

What middle class?

TownCrier

(11/28/2005; 14:22:39 MDT - Msg ID: 138431)

BBC -- Rush to gold pushes prices higher

http://news.bbc.co.uk/2/hi/business/4478500.stm28 November 2005 -- The price of gold has continued its relentless climb and looks set to pass the $500-an-ounce level this week.

Analysts say that the gold price is likely to continue past the $500-an-ounce mark, even if some investors decide to take their profits at that price.

Check the latest gold price

"A lot of investors are just buying because the price is going up, then trying to find reasons to explain it," said Yingxi Yu, a precious metals analyst at Barclays Capital.

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

Stay tuned to USAGOLD and you'll KNOW the reason.

R.

Toolie

(11/28/2005; 14:29:07 MDT - Msg ID: 138432)

Smeagol � The unquotable Mr. Brenner

http://www.sortweb.com/cwsimages/Miscfiles/2231_brenner.pdfOh yes, worth a look.

I think it worth mentioning that Cato Institute was the group that did the heavy lifting in providing the intellectual ammo for the advancement of "free trade" in congress. They are the ones, IMHO that dolled up swine for the county fair. Not that free trade is a bad thing, but it was sold on less than honest terms. They still present arguments that persuade critics away from the core of the economic problems that confronts the US. For example; we will educate our way to higher productivity � as though the US can educate folks more economically than the rest of the world. It's a diversionary tactic. IMHO, "free trade" was the bait that hid the golden hook.

Also IMHO, the unquotable Mr. Brenner misses the mark on more than a few points. Intentionally perhaps (but don't quote me on that). For instance�

He asserts that the dollar will remain the world reserve currency because the euro is unfit to replace it. He ignores the freegold concept and the newfound willingness of other nations to keep the US at arms length � think Mercosur, FTAA. Perhaps it will not be one Rotwieler that takes the dollar down, but a pack of poodles.

The theme running just below the surface of TUMB's (the unquotable Mr. B) essay is that the world will loose confidence in the dollar unless inflation is restrained. Presumably, the Fed would give its solemn promise to regulate inflation by observing the gold price. So not only is the US dollar backed by the full faith and credit of the US government but now also a solemn promise � do ya feel warm all over? Not me.

TUMB seems to search for a precise point of no return for in a dollar value of the trade deficit. I suspect he looks in the wrong place. The Asians will alter their monetary policy when the last exportable factory has left the US � is that 10% or 20% of GDP? In my view it doesn't matter.

By offering shallow solutions this essay represents to me an advocacy of continuing on course to the bankruptsy of the US, where there will be no alternative to the reintroduction of gold in the money system. TUMB tells the lawmakers and policy wonks that attend the Cato conferences, to tell their constituents "go away kid, ya bother me", ya don't like our current batch of excuses, we'll make some new ones. At the same time he foreshadows the path to be taken once calamity strikes. Cato's policies are intended imho to precipitate an economic crises, for which gold is the only cure.

TownCrier

(11/28/2005; 14:37:54 MDT - Msg ID: 138433)

Brown's gold sale losses pile up as bullion price surges

http://business.scotsman.com/index.cfm?id=2313142005The Scotsman, 28 Nov 2005

...gold has systematically defied all attempts to expunge it from the vaults of the world's central banks and from its perch as a haven of last resort for millions of savers round the world.

Unlike many currencies, it is universally recognised as a store of value. It is readily accepted in exchange for goods and services. It is an excellent hedge in times of uncertainty and instability. And, again unlike currencies, gold cannot be printed to order to help debt-laden economies off the hook.

The latest surge is a reminder of gold's powerful global appeal. The recent price strength has been due to continued demand from India and China.

And it might also reflect, too, anxiety over coming instability in the world's currency markets. Many traders do not trust the burst of strength of the US dollar over the past year. The US currency was widely predicted to fall sharply. Instead, it has been hitting new two-year highs against the euro. Yet the twin deficits problem has not gone away.

***How strange that, despite all rhetorical declarations to drive out gold from the vaults of central banks, its presence persists and, indeed, looks set to increase in central banks vaults across Asia.(!!!)

[In fact, statistics show that] western governments still love gold -- euro area governments hold some 39 per cent of official gold holdings and the US 26 per cent.

Might the current era of a total acceptance of fiat money be drawing to a close?

Asian bankers may prove the key trigger as they seek to diversify out of the dollar. The excessive monetary printing that has already taken place looks set to drive the gold price higher, as are confiscatory, anti-wealth taxes by governments. This is one of the key reasons why gold remains so popular in continental Europe: it is an excellent means of storing wealth...

Modest forecasts suggest a 15-20 per cent gain by end 2006, or more than three times the UK's current government long bond yield. So some diversification into gold may start to appeal. "It is certainly less naive than the investment industry's present consensus that government IOUs are a risk-free investment."

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

And there you have it.

Call USAGOLD-Centennial to fulfill your gold diversification needs.
TOLL FREE, 1-800-869-5115

R.

TownCrier

(11/28/2005; 14:56:05 MDT - Msg ID: 138434)

Gold near US$500 as Japanese buy up

http://www.nzherald.co.nz/section/story.cfm?c_id=3&ObjectID=10357470TOKYO - Gold hit an 18-year high above US$498 ($715.62) an ounce in Asia yesterday as fund buying resumed in Japan...

Japanese investors are diversifying their assets into precious metals as an alternative to stocks, bonds and currencies to boost returns. A lower yen raises the value of yen-based gold and other commodity prices.

"Sentiment is extremely strong. We are seeing constant bargain-hunting even on minor falls," said Takashi Ogura, risk management section manager at Kanetsu Asset Management.

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

The universal savings asset. The "goodness" of gold is one among the few things that people of all walks can agree upon. The reserve structure of the monetary system is evolving to build on that premise, with an eye to leisurely stability instead of the constant battle fending off systemic risk.

R.

Cavan Man

(11/28/2005; 15:03:52 MDT - Msg ID: 138435)

Mexico & AG Resources

Should take a page from the Russian manual on how to exploit natural resources to monetary advantage.

Goldilox

(11/28/2005; 15:05:09 MDT - Msg ID: 138436)

GS Bonuses

To further underline disparity in the workforce, Larry Krudlow just announced that Goldman Sachs delivered employee bonuses averaging $500K per.

Not too shabby for a market that has not moved in three years!

TownCrier

(11/28/2005; 15:14:37 MDT - Msg ID: 138437)

Gold is hot, and it's likely to get hotter

http://www.chinapost.com.tw/business/detail.asp?ID=72699&GRP=ESYDNEY, 2005/11/28 -- Newmont Mining Corp., the world's largest producer of gold, says the price of the precious metal may rise to more than US$1,000 an ounce in the next five to seven years as demand growth driven by Asia outstrips global supply.

"By early next year you are going to see US$525 and down the road even a lot higher than that."

"Everybody thinks inflation is going to stay at 2 percent, I don't believe it," said Lassonde. "There has been way too much money printing in the world for that to happen."

...Gold may top a record US$873 during the next three years because the U.S. will be unable to check inflation caused by rapid growth in China and India, William Gary, a publisher of newsletters with subscribers that include hedge fund Tudor Investment Corp., forecast last month.

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

A high price can do you good only if you have the gold to back it up. Remember, purchasing power is manifested in the actual ownership of an item, not in the chatter of its price tag.

R.

TownCrier

(11/28/2005; 15:25:22 MDT - Msg ID: 138438)

Gold analysts say the real rally is just beginning

http://www.businessday.co.za/articles/mining.aspx?ID=BD4A119476SAN FRANCISCO - Day one of the Gold & Precious Metals Investment Conference in San Francisco heard many analysts, newsletter editors and brokers saying the same thing about gold -- the rally is just starting. With the price rapidly approaching $500/oz, investors paid heed.

Tim O�Brien of Tiger Financial News Network began the day by saying quite simply, "this thing is just starting."

In a series of charts, O�Brien measured gold against every major currency � the U.S. dollar, Canadian dollar, Australian dollar, euro, pound, yen and rand. Gold was defeating them all.

"These charts are unheard of," he said. "And this is a world-wide thing � not just the U.S."

Robert Bishop, editor and publisher of "Gold Mining Stock Report," picked up almost exactly where O�Brien left off.

"The reality is it's just getting started," Bishop said about the gold price.

Bishop noted that only in the last six months has gold really taken off as a bull market, but said it could last another five to ten years.

According to Bishop, any change in the market will involve foreign markets in China, India and Asia as a whole. He said central bank buying will definitely come into play � especially now that Russia and others have said they will look into expanding gold reserve holdings.

"Gold is going to continue to win on the larger market," he concluded. "It's tough to make an argument against gold right now."

Richard Sacks of Brick Capital Management couldn't have agreed more.

"Ask yourself, if gold is going up while the dollar is rising, what is gold going to do when the dollar falls?"

Will gold hit $500/oz tomorrow? Stay tuned.

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

Good introductory level stuff. Tell a friend.

R.

Belgian

(11/28/2005; 15:38:12 MDT - Msg ID: 138439)

@Towncrier

There is "more" (support) behind the Growth and Stability pact :
First there was the rise of the oilprice ('99 > $10 > $70) together with the (sweetening) rise of the �-$ exchange rate (80 > 1,36). Now phase II has started : The currency system that allows the goldprice to rise ... will get oil status (read: cheap oil).

-Putin and the Vietnam (China) satelite-statements. Put these in the right context of phase II.

This weekend, Dutch television (NOS-3) presented a simulation documentary titled : " The day the dollar falls".
The most frigthening aspect of this pseudo real docu TV, was that the whole (global) scenario is in the usagold archives.

Let's see if Trichet rises �-IR on thursday !?

Belgian

(11/28/2005; 15:54:45 MDT - Msg ID: 138440)

@TC

G.Brown (and part of the Swiss gold) has been hiding gold-reserves in BIS...waiting for "the" currency system that allows the goldprice to rise and see cheap oil...waiting for the right moment that the remaining gold-reserves can be marked to market.
This will even make the rouble a convertible currency !

Flatliner

(11/28/2005; 15:56:24 MDT - Msg ID: 138441)

@Belgian (11/28/05; 15:38:12MT - usagold.com msg#: 138439)

Belgian, Can you please remind the new-Bs, like myself here, exactly what is meant by the statement "The currency system that allows the goldprice to rise ... will get oil status (read: cheap oil)." Thanks much.

USAGOLD Daily Market Report

(11/28/2005; 15:57:44 MDT - Msg ID: 138442)

Page Update!

R Powell

(11/28/2005; 15:57:46 MDT - Msg ID: 138443)

Two out of three ain't bad

If you'll accept the settlement prices for the nearest future contract months...I know...these aren't really spot prices but

jan. platinum @1001.1
dec. copper @210.6
and dec. gold almost there @ 498.3

Maybe tonight or tomorrow. For COT watchers, the numbers due last friday were delayed until today due to the turkey day celebration. Leftovers anyone?
rich

R Powell

(11/28/2005; 16:00:32 MDT - Msg ID: 138444)

Sorry.....make that

201.6 for the dec. copper...not 210.6 which probably won't happen for a few more days.
Rumors are that a Chinese trader has some copper shorts to cover...hehehe

Belgian

(11/28/2005; 16:16:50 MDT - Msg ID: 138445)

@Flatliner

FOA (06/12/00 msg#26) Put your cards on the table...alinea 4.

Flatliner

(11/28/2005; 17:29:43 MDT - Msg ID: 138446)

@Belgian

Thanks Belgian,

From that message (http://www.usagold.com/goldtrail/archives/GoldTrailTwo.html), I found the following:

"This stampede out of "paper physical" by the "big boys" will first discount that medium as all the selling comes to play. Then the real buying of physical will ensue. It seems every Gold bug sees only half the trade and has great faith that contract law will favor a short squeeze. Yet, none of them see where it's the long that will be dumping and forcing the discount!"

I have this picture in my head that maybe wildly imaginative. I picture a bunch of bankers (years ago) sitting around a table talking about how they can make a killing in the gold market. They come up with the idea to sell billions of dollars worth of contracts into the market creating a situation where there gold is overcommitted by a huge factor. Say, 20-1 or something like that. While selling into this market, they know all along that they will be committed to buying back the contracts sometime in the future. Everyone knows that you want to buy low and sell high. People gobble up the paper contracts! All the while, the bankers gobble up physical gold on the market. Sense physical gold tracks the paper price it's cheap � really cheap! Meanwhile, all the paper gold holders wait anxiously for the short squeeze that they know is just around the corner. But, the bankers have a plan. They know that they don't have to give up anything but paper for the people that hold gold paper contracts. Meanwhile, in the background, the printing press for the US kicks into high gear. Inflation starts ripping away at the purchasing price of the dollar. The dollar, on the open market, tanks. Hyper-inflation ravages the US. Eventually one Euro buys 1,000,000+ dollars! *And* the physical gold market is dry! At this point, everyone holding a contract long in gold suddenly realizes that the US dollar that they are going to get for the contract is worthless. In a panic, they dump the contracts! The market if flooded with paper gold contracts. The �price� for these contracts plummet. Banks wait� wait� and close their positions at bargain prices. Everyone steps back and finally realizes the folly of holding a paper gold contract!

Hum� sometimes I think my imagination gets the best of me. Thanks for pointing me into the archives again. This made for a very �fun� reading.

goldquest

(11/28/2005; 17:36:50 MDT - Msg ID: 138447)

BINGO!

$500.00!!!!!!!!!!!

omegaman

(11/28/2005; 17:36:59 MDT - Msg ID: 138448)

Gold Now at $500 Bid On Spot Market!

Looks like $500 Gold spot has fallen.

omegaman

(11/28/2005; 17:38:41 MDT - Msg ID: 138449)

$500 Spot Call.

Goldquest... You Got ME!

Smeagol

(11/28/2005; 17:50:12 MDT - Msg ID: 138450)

500.20 at K-casstle

Nice going, Houndses!

S.

goldquest

(11/28/2005; 17:51:01 MDT - Msg ID: 138451)

@omegaman

Naa, we share and share alike on this great forum!
We are at a new starting line, gonna be a long run!
Best wishes to all. gq

slingshot

(11/28/2005; 17:52:43 MDT - Msg ID: 138452)

GOLD $500

You just have to believe.

Been a long time fellow Knights and Ladies.

Been a long time since I rocked and rolled
Been a long time.
Been a long time.
Been a long. lonely, lonely,lonely,lonely,time.
Led Zeppelin

Way to go, Sir M.K.

Chris Powell

(11/28/2005; 17:57:31 MDT - Msg ID: 138453)

Even China's tiny currency float is a fraud, researchers discover

http://groups.yahoo.com/group/gata/message/3500Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Smeagol

(11/28/2005; 18:00:24 MDT - Msg ID: 138454)

$>$>$>!FRN500.00!<$<$<$ Sssir BuongiooOOOOrnooo!... do you know what time it is?

As "The Mask" might shout,
"HOLD ON TO YOUR KRUGERRANDS,
IT'S GOLD HAIKU TIME!!!"

Buongiorno! (6/29/04, msg#: 122630), sssnip:
..."Can you save your little gems for us, then maybe show them all to celebrate $450 or $500 gold?"

ALL? (cackle!) Be careful what you wishes for, precious!! ~>8-)

"Four fifty!" I bid,
then I heard someone mutter,
"Dude, where have you been?"

Gracious Sir Buongiorno!, we remembered, O we certainly did!... and we saved the Hai-ku "gems" as you assked...

Some are old, some new,
some good, some happy, some sad
and some pretty bad!

...sss... and here they are, ALL of them we currently has, in (rather unremarkable) acknowledgment that it now takes 500 ever-shriveling US paper-IOU's to buy 31.1 grams of heavy, beautiful yellow Precious! Ach! Sssuch a deal, ssuch a ssteal! (grin)...

I burst out laughing
as they offer for my ounce
Hundreds of debt claims?!

In honor of the occasion and as it sstrikes uss, we have dedicated ssome to certain Knights and Ladies and others... but firsst, for all you Lurkers.... yesss...YOU:

What of YOUR wisdoms?
Voice those Thoughts and Questions
All will grow richer

For Physical Gold Advocates:

'Tis the gold season!
Load shotguns with magnum cash
Gold! Let's get us some!

Sham paper for Gold!
Who would believe it? Hush now.
Here come the players.

Fire both your barrels
when the paper-gold traders
lure the gold price down.

Bagging physical
while paper-gold contracts are
blown to confetti!

Poor paper traders!
It's almost unfair, you know.
They work hard for us.

For Paper-gold traders:

A hearty Thank You
for increasing my gold stash.
How's that paper feel?

over gold bonfires
traders toss their paper planes
short to and fro long

imagine selling that
which in truth you do not own
what's fraud among friends?

imagine buying that
which in truth you'll never own
I've a deal for you

For MK:

Laying in a course
by the North Star of Wealth
I sail confident.

For Town Crier:

How well this all works!
Sitesmith's work is never done
Kudos for TC!

Lo! What have ye done,
teaching Smeagol to haiku?
Reap now the whirlwind!

For Slingshot:

Goliath Dollar
never had a chance against
that ounce in my sling

For all the Hobbitses:

A bit o' lager
a bit o' food, fire an' gold
A bit o' heaven

For Sspot and Sspike:

They much prefer roo,
but they will jump for "It" too.
Hai! Release the Hounds!

For Gandalf the White:

meddling at peril
in the affairs of Wizards
Who let the Hounds out?

For the Banksters:

post-crash, what is the
penalty for yelling "GOLD!"
in a crowded bank?

For Clint Eastwood fans:

fistful of dollars
the gold, the bad, the ugly
do you feel lucky?

For Aristotle (where is he anyways?):

No gray area here;
fancy colored notes aside,
gold is black and white.

For Goldenpeace:

snow-clad mountain peak
millenial waters flow
nature pans her gold

For Belgian:

such a stressful game!
what strategies to survive?
gilt pawn smiles "Checkmate!"

For Melda Laure:

what is this nugget?
sunlight from a long lost age
seed of Laurelin

For Another and FOA:

prophets come and go;
a few listen and are saved,
most ignore, and pay.

For Black Blade:

it's a small world, no?
down at the foot of Oil Peak
I'll ask you again.

out of debt but not
food and water as storm falls
on my golden roof

For R Powell:

when golden sun hides
behind dark clouds then do
silver linings shine.

For Clink!:

hark! those golden coins
their unmistakeable ring!
pleasing chimes of wealth

For Henri:

gold comes from the earth
through life of joy, pain and death
there we all return.

For White Hills:

"No, keep the nuggets"
they said. "The discovering
is what we live for"

For Pritcho:

spelling-terrier
nipping at Dollar Bill's heels
why can't they be freinds?

For Dollar Bill:

in the daily news
there are truths to be found but
one must mine that gold

For Waverider:

seawater treasure
point one milligram per ton
out of sight not mined

For the Nations:

ponder its power
there's no quake like a goldquake
will you weather it?

For the Politicians:

whoever steals wealth
will be tried in the balance
and found to lack weight

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

flailing hopelessly
tattered currencies yield to
golden gravity

rustling in the wind
not worth the time to rake them
dead dollars blowing

Think on this awhile...
the marvel of finding It
in the wilderness.

To get through tough times,
just remember the five G's:
God, Grub, Gold, Guts, Guns.

New-made bread, honey,
autumn fire, a lover's hair,
gold is everywhere.

Shout in trading pits,
trumpet loud outside the walls:
"FOR DELIVERY"!

If you would deny
my freedom to trade my wealth
will you forfeit yours?

There's no guarantees
saving my wealth as I go
but no one owns me

When Gold buys the Dow
on a one for one basis
consider wisely!

In cold vaults sleeping
as the clock ticks away years
gold dreams of warm hands

Gold confiscation?
This is not rocket science
use it don't lose it!

Traders pump and dump
Bending the branches for us
we gather low fruit

[the following, previously posted, are scattered through the Archives; some have landed in the HoF alongside a great many wonderful verses by others]

---
Silver? Platinum??
NICE, yes !!.... BUT, there's just SOMETHING
about the YELLOW !!! <;-)
---

Manipulation
Expect the unexpected
Know the art of war

Manipulation
A prestidigitation
toward an outcome

Manipulation
Mistaken apprehension
Gold will always win

Gold and Silver price?
Let it fall! 'Til paper burns,
buy real metal - cheap!

GOLD, FWIW
IMHO,
WSHTF.

WSHTF?
IMHO,
GOLD. FWIW. (thank you Aristotle)

What sad alchemy
converts life's thoughtful savings
to war, death and loss.

For effect, gold is
second, plutonium third,
mass ignorance first.

My worth very small,
yet I walk with Giants tall,
for our wealth is Gold.

Kingdoms come and go,
water and sand in the pan.
Gold remains, amused.

...which smothers the rock
breaking blades that cut paper...
Gold prices them all

White Hills, bright nuggets
May your shovel shine with them,
and your pouch heavy.

BOOM!... (haul, pulverize,
pile, leach, pump, electrolyze,
cast, roll, punch, stamp)... GOLD!

Man, I gave you gold,
Not to plunder, not to hoard.
Trade and wear it well!

Richly and justly,
gold reflects the colors of
paper-money fire

Ach! Financial storm!
There! a Golden lighthouse beam
Steady as she goes

While Plungeteers play
we trades their fiat for It
one ounce at a time

hiss... beep >crackle<... beep...
"Gold, you are go for liftoff"...
"To the Moon, Houston!"

Tons, thousands of tons,
Won from stone, shaft, hill and stream
One ounce at a time

Those enchanted by
derivative delusions
wreck on worthless rocks

Collateral gold
Confiscated, borrowed, sold.
Do you have title?

Before bubbles pop,
leaving nasty clinging debt,
go get Gold Goo-Gone

What is that you say?
The Emperor has no clothes?
Trust him not with gold!!!

Gold sits there range-bound
as all else goes to the sky.
Don't just sit there, BUY!

Gold-chained, he said
to the man with silver bars,
"Need some help with those"?

The chemistry of
element seventy-nine
fills books, hearts and minds.

Use silver bullets
against were-creatures, gold ones
on money-monsters

Kicked-in doors swing
(while they search and find nothing)
on precious hinges

"Trade ya this fer that"
will be on everyone's lips
'round the money fire

They suck our wealth-blood
while we faint on their tread-mills
May they choke on gold

Digging precious things
only invites disaster.
Koyaanisqatsi.

And lasst but not least, for this Hall:

Crowd the Table Round!
Buying from USAGOLD
keeps this Tale-fire lit

S. ~8-)

-----

"Look at all this haiku, Sam. Kind of makes one want to try one's hand at it, doesn't it?" -F. Baggins
"Begging your pardon, Mr. Frodo, but he does make haiku 'trying", if you catch my drift." -S. Gamgee
"Ssss!... Let us ssee Sam-hobbit put his pen where his mouth is!" ~>8-( -Smeagol

Ned

(11/28/2005; 18:01:21 MDT - Msg ID: 138455)

Holy Smokes!!

http://www.BARtheDOOR-KATIE.comRed Alert....Red Alert!! Spot gold has busted 500 beans and is going VERTICAL !!

Beeeep....beeeep...beeep !!!

She's going to BLOW SCOTTY !!!BEEEEEP....BEEEEEP.....BEEEEP.

She has blown mates, BAR the DOOR KATIE for the love of Jupiter, BAR THE DOOR !!!!

BEEEEP.....BEEEEEEEP....BEEEEEP

contrarian

(11/28/2005; 18:04:45 MDT - Msg ID: 138456)

AMEN AMEN AMEN AMEN AMEN!!!!!!

and I repeat...
AMEN AMEN AMEN AMEN AMEN!!!!!!

Chris Powell

(11/28/2005; 18:24:54 MDT - Msg ID: 138457)

Even Russia has leased out most of its gold reserves

http://groups.yahoo.com/group/gata/message/3502James Turk's sharp analysis via a
GATA dispatch.

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

gata-subscribe@yahoogroups.com

OvS

(11/28/2005; 18:29:57 MDT - Msg ID: 138458)

LOL

Gata's Bill Murphy called
Jim Sinclair a wimp...!!!
Why? For saying that gold
will go up to $1,650.-OvS

David Linkley

(11/28/2005; 18:33:17 MDT - Msg ID: 138459)

@Belgian

Hi Belgian,
Good thoughts if we keep progressing in the same direction as currently constituted. The tricky part comes when the pain increases to a point which causes severe reactions by a large number of people to avoid it. In the case of oil if the price rises too high or is rationed people will change their behavior drastically. There are plenty of alternatives to oil at higher prices it will just take a spark to develop them quicker. The only thing lacking in the US at present is enough pain and political repression to wake the sleeping giant.

Buongiorno!

(11/28/2005; 19:06:01 MDT - Msg ID: 138461)

Sir Smeagol, Grazie! Tante Millie Grazie! (love those haikus)

For your (and others) steadfast good humor and insights -- knowledge, and will to win--thanks for helping us "bring it home" today. To our gracious hosts, break out the chianti--you deserve it!

It has been a long and difficult march (not over, yet, by any means)....but one remembers those who helped along the way.

To those assembled here, (long, low bow--hat swept to the ground) "May you live long and prosper"!
Chin-chin....ting!
Buongiorno!

R Powell

(11/28/2005; 19:07:05 MDT - Msg ID: 138462)

Over $500 for an ounce of gold....

you say? Doesn't it seem like just yesterday when that seemingly insurmountable 300 level was finally last seen in the rearview mirror. And what a grind climbing from 300 to 400. But then a mere two years (or so) to reach the half thousand mark. I suspect it won't take nearly that long to get to 600, but, what do I know?

I haven't heard or read any e-wavers predictions lately of sub 250. Have they revised their view? But many analysts still contend that gold is a lousy investment...after all, gold in hand pays no interest, you know. Now then, although I've never believed there has to be any set ratio or historical ratio mean between the POG and POS, yet there may be many reasons in common for a higher price of both. Maybe it's time for the metal of the moon to dazzle a few of those same analysts...seems those who frown on gold also dislike (for investment) silver too.

$500 for just one ounce of gold, you say. Why listen you young whippersnapper, I can remember when that kind of money would buy two! And we were so excited at $300...?
8>)

specie-man

(11/28/2005; 19:19:54 MDT - Msg ID: 138463)

$500 Gold Haiku

I was just cleaning up some old files on my computer and came across the text file below. I posted the short version here many months ago. But in honor of $500 gold, here it is in entirety:

Predictions from the Dark Side - April, 2004

Geologists say world oil production will soon peak and begin a long decline.

Economists and governments say world economic growth (and thus, oil consumption)
will continue expanding.
Danger ! � we're on a collusion course !

So you're one of the few countries left on Earth with oil to sell.
Who are you going to sell it to ?
The man typing zeroes on the computer ?
The man waving wads of paper ?
Or the man dropping solid gold bars at (but not on) your feet ?

Oil is purchased using USA/IMF gold.
No one will know� until a few gold billion turn up missing.

The Sitting Buck will finally get picked off.
Bonds away !!!

The Fed-Heads will not be grateful when the "Maestro" stops running the show.
The "Jobloss Recovery" will be seen for what it really is:
a prelude to hyper-stagflation.

Terrorism will continue unabated, and horrorism will grow unabashed.
The Middle Beast will rear it's ugly wellhead (again and again - but to no avail).
The House of Saud will be forced into exile in Texas
where they will start a "Howdy Arabia" ranch.
Ironically, their new spread will be perforated with
abandoned empty oil wells and Bushes.

And speaking of iron(y), Detroit will lose by default.

Japan will be in a no-gold situation.
Goldzilla will attack and destroy Tokyo unreal estate.

The Chinese will buy anything they can with their Federal Reserve NOTs.
Toro D�Oro will run rampant in the China shop.
They'll pull the peg on the Dollar - toilet paper investments will get flushed.
No one will want to buy US Tragedy Bonds.

Europe's "Growth vs. Stability Pact" will provide neither.
Britain, England, and the United Kingdom will never agree on anything.
Russia will be wooed by the United States, China, Europe, � and vodka.

When convicted of "GSE" (Government-Sponsored Embezzlement),
Freddie & Fannie executives will go directly to jail.
Do not pass gold.

Diesels will be scrapped in favor of donkeys. Donkey carts will be big.
Genetically-engineered donkeys will be able to pull 25% more than ever before.
But they'll be 50% more stubborn.

The Baby Doomers will not be able to retire on time (if at all).
Some will have to get jobs riding shotgun on donkey carts (or cleaning up after them).
American cities will smell like everyone is passing the gas (pumps).
"Road Rage" will take on a decidedly different atmosphere.

Citizens will finally realize that the Soylent Greenback is made out of people's debt.
And everyone will be forced to eat Soylent Greenspam for years to come.
But in the Gold Folks home they'll still eat real strawberry preserves -
which will cost $500 (or a couple small pieces of silver) per jar.

Cut off the supply of oil lubrication to an economic engine,
and it will grind to a destructive halt.
And when it does, all the financial TV stupor-stars will be left shaking in their mute.
All the really important economic facts will slip through the quacks.
Stock cheerleaders will choke on their pom-poms.
The S&P index will leave investors stranded & poor.
The NASDAQ will do the nasty, and the DOW will be dour.
The stock market bullish-it will hit the glass ceiling fan.
The dreaded margin calls will not be returned.

Interest rate derivatives will vaporize. Insurers will sue.
Counter-parties will counter-sue.
James Bond Vigilantes will compound the problem.
Junk bomb spreads will mushroom.

Checks will not be cashed. The issuance of cash will not be checked.

Trash will be burned in empty 55-gallon oil drums to generate heat for
increasing numbers living on the street.
The Snow job will just make it worse. Cash will be worth trash.
"Throw it all in the cash can".

"Socialist Security Privatization" is, and will always be,
a triple-dip whammy of an oxymoron.

The government-issued medium of exchange will grow by leaps and bounds (digitally).
But the new refrain in distant lands will be:
"your imperial credits are no good out here !".
Digital petrodollars will be about as popular as diesel fumes.

A nefarious mastermind will increase the cost of oil even further �
simply by not selling it.
The few remaining oil suppliers (including this "Oilfinger")
will desire something substantial for their crude �
like gold. Or platinum. Or palladium. Or silver. Or plutonium.

Talk of a renewed Gold Standard will increase. "Opportunity [Ft.] Knox !"
Some Gold Certificates will be issued (secretly).
Then too many will be issued (secretly).
Gold reserves will be mobilized to cover commitments.
Then the velocity of gold increases to hide the shortfall.
Velocities increase until the tangible world of gold collides with the
intangible world of digital credits.
Here stops the Buck.

Digital credits are like a static charge.
When they come up against a good economic conductor like gold,
they discharge into nothingness.

In the competition for scarce oil, the good (desired) money will push aside the bad.
The Argent at Arms will run the Fiat off a cliff.

Dislocation pressures are building, due to continued manipulations
of all markets in the name of "stability".
The result will be major instability.
The "Big One", when it comes, will rip like a perfect 10.0 on the San Andreas.
The debacle details will be covered up, whitewash-ington style.

Will we find that "deficits don't matter" ?
Try this phrase on for size: "shortages don't matter".
It just doesn't sound right (or even left).

A gold mind is never wasted.
He who has lots of "stuff" will prevail. Thing King will rule.
For he is the "Dude Uncommon" who now holds gold.

Liberty Head

(11/28/2005; 19:24:22 MDT - Msg ID: 138464)

Cheers!

I raise a glass of fine single malt with a tiny solitary ice cube on this occasion.
I offer a toast to the host for providing this forum for such a distinguished group of posters.

Best Wishes to one and all.

Smeagol

(11/28/2005; 19:33:16 MDT - Msg ID: 138465)

( It's not over yet....

...while we enjoys the sspirit of the moment (passing out virtual golden party hats to the sound of virtual corks popping), we thinks there is yet a seasonal dip in the Trail ahead that may yet give It a lasst dunking somewhat below FRN500 for a while... but right NOW (virtual )) YESSS!

S.

resting on the Trail
Smeagol all haiku'd out
the view is half grand

Smeagol

(11/28/2005; 19:37:38 MDT - Msg ID: 138466)

@ Ssir Specie-Man

Thank you for re-possting that... perfect for the occasion! We read it recently during a trip to the Record Hall... Two thumbses up! ~8-)

S.

Cavan Man

(11/28/2005; 19:37:49 MDT - Msg ID: 138467)

Hello Precious...

Methinks you're right. I've been watching too long! Maybe a little more up then down again. Keep powder dry.

Liberty Head

(11/28/2005; 20:00:40 MDT - Msg ID: 138468)

Glory Be

It just keeps getting better. As if gold passing $500 wasn't enough, a California Congressman quits in shame and Canada's gov't receives a vote of no confidence.
I wonder what the POG will be when Fox News goes off the air.
$501.4 works for me.

Best Wishes

Smeagol

(11/28/2005; 20:02:57 MDT - Msg ID: 138469)

Currencies bow to the King

It is currently rising againsst all lissted currencies at the other Casstle:

Australian Dollar
Brazilian Real
British Pound
Canadian Dollar
Chinese Yuan
Euro
Indian Rupee
Japanese Yen
Mexican Peso
Russian Ruble
S.African Rand
Swiss Franc

goldenpeace

(11/28/2005; 20:11:56 MDT - Msg ID: 138470)

to Honor Smeagol:

no Gollum he,
Friend Smeagol has great riches
to behold;merci!

Blessings to all for their efforts
and especially to Smeagol for his....
goldenpeace

mikal

(11/28/2005; 20:15:15 MDT - Msg ID: 138471)

@Smeagol, specieman

@Smeagol
Dream thoughts unlimited,
Smeagol loves gold with passion,
Like Shakespeare's sonnets.

@specieman
Little do we know
Of the clouds, the night, the abyss.
Reflections guide us.

David Linkley

(11/28/2005; 20:31:37 MDT - Msg ID: 138472)

Strong dollar?

The current dollar rally (always rising after a down day) reminds me of the bond rally of the past couple of years. Someone out there is pretty desperate. God help them when all of this finally falls apart.

Smeagol

(11/28/2005; 20:41:26 MDT - Msg ID: 138473)

Drat Ssir Town Crier for giving uss that hai-ku itch!

golden the peaceful
center around which storms swirl
challenging fiat

(blush)...thank you Ssirs Goldenpeace and Mikal. "Like Shakespeare's sonnets." now, now, precious, we KNOWS we aren't THAT good! (cackle)

S.

slingshot

(11/28/2005; 20:46:55 MDT - Msg ID: 138474)

Gut Feeling

Breaking through the $500 resistance level was a major VICTORY for GOLD. Very long in the tooth for some goldbugs but never the less sweet. Those at this Forum who refused to go short have had their day. Yes, it has been a grueling march with many disappointments. Only to have us retrench and begin anew. Today we look back at $254 as gold desended from $350 (when I first took Notice) and that, Would Of, Could Of, Should Of, sure bit me in my six o'clock. But I was a "NEWBIE", cautious and did not understand what gold was all about.That is water under the bridge. Now that gold has breached $500 maybe, just maybe it will turn heads but I think investment accompanied by recognition are still in the early stages when it comes to gold. The threat of diminishing wealth will force new hands, that being wealth presevation and wealth accumulation. One built upon each other. Tonight is a very significant passage and though we will cellebrate, it may be a good time to mull it over so to speak.
My Gut Feeling.
I think TPTB, still have many weapons at their disposal. Mainly the printing press and interest rate fluxuations as their tools. These they have under supreme control. They have exerted these powers upon an ignorant populace of the world in decieving them that Gold Was Dead and Fiat was Invincible. They created laws to remove gold from the people only to entrap themselves by greed. Could it be that since gold drew no interest was the opening gate to sell it on the open market and making it legal for the general public to buy? And in the face of bogus inflation numbers and a propped up stock market, thought Joe Sixpack was too stupid to realise the power of gold?
I will concede that there were few at first to see the value, but the times have changed. Unemployment, Gas prices, pension funds, Enron, Mortage defaults, Nafta Gaat and the Twin Deficets, each a piece of the puzzle that will eventually bring down the Fiat Empire. We know the smart money has already moved in on gold and they try to dislodge the price of gold to a lower value ( Not too Low).
This Golden Bull is going to BUCK and before (I believe) the Dow and Gold are One To One, will see many a volatile day to shake out the Weak Hands!
Ladies and Knights, we have brought to light many pieces of the puzzle, to say that we have be wrong in our quest. And yes, things that go up, must come down. But my gut tells me we are on the way up and it will be a long time before we go down.

Congradulations to those who stood the test of time and who shared information unselflessly so others could benfit.

None of this possible without the USAGOLD, FORUM.
Slingshot------------------<>

Ten Bears

(11/28/2005; 20:53:43 MDT - Msg ID: 138475)

"Meet the New Boss, Same as the Old Boss"

http://www.thewho.net/discography/songs/WontGetFooledAgain.html"Won't Get Fooled Again" The Who

"That $6 billion of Russian gold on term deposits is 377
tons, so 75 percent of Russia's gold has been lent out." gata

"People gobble up the paper contracts! All the while, the bankers gobble up physical gold on the market." Flatliner

"Cato's policies are intended imho to precipitate an economic crises, for which gold is the only cure." Toolie

Does anyone believe that those who engineered the debt money system will not own most of the gold before a new gold standard (in what ever form) is allowed to emerge?

slingshot

(11/28/2005; 20:58:31 MDT - Msg ID: 138476)

Smeagol in Overdrive. Msg. # 138454

Way to Go!
Thanks.
Slingshot-------<>

mikal

(11/28/2005; 21:09:20 MDT - Msg ID: 138477)

No inflation on NYMEX, none, nada

http://www.nymex.com/notice_to_member.aspx?id=ntm540&archive=2005Margin and Inter-Exchange Rate Spread Changes - November 28, 2005
"Effective November 30, 2005"

Waverider

(11/28/2005; 21:26:35 MDT - Msg ID: 138478)

Gold Rises to 22-Year High in Asia on Dollar, Demand

http://www.bloomberg.com/apps/news?pid=10000087&sid=aB3eQYpQHAPE&refer=top_world_news"Gold rose above $500 an ounce for the first time since February 1983 as a weaker dollar and accelerating inflation fueled demand for bullion as an alternative investment.

``The overall backdrop from currencies to inflation is supportive of gold prices,'' said Misha Collins, who holds gold mining stocks as part of the A$72 billion ($53 billion) managed by BT Financial Group, by telephone from Sydney.

``There has been a change in investors perspective on commodities as an investment class and gold is an attractive asset to get into. There's more buying for investment because people are worried about the dollar's direction and worried about inflation,'' Ng Cheng Thye, head of the precious metals market desk at Standard Bank Asia, Singapore.

Investors are buying the precious metal to spread the risk in their portfolios, with demand for gold coins, bars and bullion-backed shares rising 56 percent in the third quarter from a year ago, according to the World Gold Council...``We have recently seen new investment demand from the Middle East on the back of the oil price boom,'' Wrzesniok- Rossbach said. ``The fundamental picture is looking good, central banks are investing in gold again, and production is falling.''

Waverider: Nice article in Bloomberg (again) as Spot breaks $500.00!...and Smeagol...you outdid yourself!

Chris Powell

(11/28/2005; 23:14:56 MDT - Msg ID: 138479)

Treasury yield curve partially inverts, forecasting recession, lower rates

Treasury Yield Curve Partially Inverts;
Slow Housing-Market Data Help Create
Rare Situation; Watching for a Recession

By Mark Whitehouse
The Wall Street Journal
Tuesday, November 29, 2005

Bond investors, worried about slackening home sales, nudged the threat level on their economic early-warning system a notch higher yesterday.

In an unusual event known as a partial inversion of the yield curve, investors kept buying five-year Treasury notes until their yield, which reflects expectations of how the economy will fare over the next several years, fell below the yield on two-year notes, which tracks expectations of what the Federal Reserve will do with interest rates in the shorter term.

Investors typically demand higher returns on longer-term notes to compensate for the added risk of tying up money for longer periods. The fact that they stopped doing so yesterday, say bond-market professionals, suggests that they expect the Federal Reserve's interest-rate increases to hurt the housing market, forcing the central bank to bring rates back down to rescue a weakening economy.

"You're seeing the market beginning to perceive the Fed as closer to done [raising rates] than it did before," said Steve Rodosky, a Treasury portfolio manager at Pacific Investment Management Co., or Pimco, an asset-management firm based in Newport Beach, Calif.

The switch in two-year and five-year yields could signal a broader and more ominous reversal in interest rates. When, for example, 10-year yields have fallen below two-year yields, the economy has often gone into recession within a year or so, though Fed officials have argued this time could be different.

In midday trading, the five-year yield fell as much as 0.01 percentage point below the two-year yield, though the difference narrowed toward the end of the day. The 10-year note gained 6/32, or $1.875 per $1,000 face value, to yield 4.410% -- only 0.08 percentage point more than the 2-year note. The 30-year bond gained 18/32 to yield 4.625%.

Bond-market professionals attributed yesterday's moves in yields to a confluence of factors. First, existing-home sales for October proved weaker than economists had expected, suggesting that the Fed's campaign to raise short-term interest rates has started to hurt the housing market by making mortgages more expensive. Second, benchmark Treasury-bond indexes will include a larger share of longer-term bonds at the end of November, forcing fund managers who track the indexes to buy more long-term bonds, pushing their yields down. Finally, certain speculative investors, who bet on falling bond prices by borrowing and selling bonds, might be buying bonds to close out those bets before reporting their results at the end of the year.

"All sorts of issues are sort of coming together at the same time," said David Glocke, a Treasury portfolio manager at Vanguard Group, an asset-management firm based in Valley Forge, Pa. ...

Fed Chairman Alan Greenspan and other economists have argued that a yield-curve inversion need not presage a recession. Short-term rates are still low by historical standards, and analysts attribute low long-term rates to trends unrelated to gloomy expectations, such as heavy foreign buying of bonds and investors' increased faith in the Fed's ability to keep inflation low in the long run.

Even if the yield curve has lost its predictive powers, an inversion will cause pain. Financial institutions can see profits disappear as their borrowing rates rise above their return on long-term investments. Also, investors who have bet on rising long-term rates can suffer.

For some investors, though, inversion will be a boon. Mr. Glocke, for example, said he put on a "curve-flattening trade" -- which profits when long rates and short rates converge -- more than a year ago. Such a trade can continue to make money even after the curve inverts.

The $15 billion financing for the leveraged buyout of car-rental business Hertz Corp. -- currently an arm of Ford Motor Co. -- will include $2.8 billion of high-yield bonds, said sources familiar with the deal.

The private-equity firms buying out Hertz are Clayton Dubilier & Rice Inc., Carlyle Group and Merrill Lynch Global Private Equity.

The deal is lead-managed by Deutsche Bank AG, Lehman Brothers Holdings Inc., Merrill Lynch & Co., Goldman Sachs Group Inc., and J.P. Morgan Chase & Co.

Knallgold

(11/29/2005; 02:38:30 MDT - Msg ID: 138480)

That one is a bit too obvious

http://www.nymex.com/notice_to_member.aspx?id=ntm540&archive=2005Margins up on Gold...

Ned

(11/29/2005; 03:57:04 MDT - Msg ID: 138481)

Hall of Fame

I do believe Smeagol's 138454 has all the right stuff to be a 'Hall of Famer' in celebration of $500 being knocked down last night.

Hail to to Haiku King !!

Usul

(11/29/2005; 06:26:21 MDT - Msg ID: 138482)

The True Cost of 12 Days of Christmas

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11-28-2005/0004223269&EDATE="It all started 21 years ago as a way to engage clients and has since grown into one of PNC's most popular and anticipated economic reports: The Annual PNC Christmas Price Index"
(http://www.pncchristmaspriceindex.com/)

Five Gold Rings, USAGOLD readers will be interested to hear, are up 27.5% year-on-year.

Bird flu and "shipping and related hikes in fuel prices" have hit the bird-heavy index with geese-a-laying up 42.9%.

But the "Core" Christmas Price Index (which excludes volatile components) was up by only 3.1%.

Buongiorno!

(11/29/2005; 07:38:14 MDT - Msg ID: 138483)

Sir Ned's nomination

Happy to second Sir Ned's nomination of Sir Smeagol's 454, or...."One Hundred Yards of Golden Haiku"...to the Hall of Fame. Haiku is great--well-organized and to the point, but with elegent shadings.

Congratulations on a gracious presentation!
Cheers!
Buongiorno!

USAGOLD / Centennial Precious Metals, Inc.

(11/29/2005; 07:41:30 MDT - Msg ID: 138484)

A special selection of assets and info for those who are just getting started.

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

TownCrier

(11/29/2005; 07:54:05 MDT - Msg ID: 138485)

Interesting/unusual pairing of media's headline 'favorables'...

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh15633_2005-11-29_14-22-44_l29553081_newsmlGLOBAL MARKETS - Optimism lifts dollar, stocks as gold hits $500

LONDON, Nov 29 (Reuters) - Economic optimism was the thread running through global markets on Tuesday as gold prices briefly topped $500 an ounce for the first time since 1987 and as U.S. data gave European shares and U.S. equity futures a lift.

The dollar firmed after mixed figures for U.S. durable goods failed to dampen an optimistic mood ahead of U.S. consumer confidence data...

Gold and platinum prices were off their sessions highs but remained in favour as funds seized on creeping inflation and geopolitical worries and chased the market's long-term uptrend.

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

TownCrier

(11/29/2005; 08:03:04 MDT - Msg ID: 138486)

Gold rush as bullion tops $500

http://afr.com/articles/2005/11/29/1133026453821.htmlNov�29�-- Gold traded above $US500 on Tuesday for the first time in 18 years as the US dollar reversed course and investors, wary of geopolitical tensions and distrustful of paper assets, looked for an alternative place to park their cash.

...Commwealth Bank's commodities strategist David Thurtell said, "There's a bit of disenchantment creeping in with other assets... equities and bonds look a bit pricey - and a lot of people are getting out of oil and into gold."

Hedge funds and commodity trading accounts were aggressive sellers of the US dollar...

On another front, analysts say Middle East investors are recycling profits from the recent boom in oil into gold for fear that the US, contemplating its military exit from Iraq, might freeze some accounts as a security measure.

Morgan Stanley's chief global economist Stephen Roach, who just returned from Dubai, found investors there irked by the US Patriot Act, which requires extensive documentation of Middle East portfolio flows into US institutions.

"Post-9/11 security concerns are seriously hampering Middle Eastern capital flows into dollars," Roach said in his weekly web commentary. "At the same time, given the ongoing political turmoil in the region, many Middle East investors simply do not want to risk being exposed as pro-American in their asset allocation decisions."

Fundamental forces also support gold. A global shortage of gold for jewelery is encouraging Asian buyers to bid up prices. Demand for gold coins, bars and bullion-backed shares rose 56 per cent in the third quarter, the seventh consecutive quarter of growth.

Newmont, the world's largest gold miner, this week predicted that the price could rise to more than $1,000 in the next five to seven years as Asian-driven demand growth outstrips global supply.

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

Gold is the universal savings asset, a good foundation on which to build your portfolio.

R.

TownCrier

(11/29/2005; 08:16:17 MDT - Msg ID: 138487)

Gold penetrates $500; real run to begin

http://www.moneyweb.co.za/shares/traders_notes/631704.htm29 Nov 2005 Moneyweb -- The breakthrough gold bugs have been waiting for came at 2:30am last night. ...some regard the metal's penetration of $500 an ounce as a major event.

Those who claim to understand these things reckon the price will probably ease back into the $490s in the next few days but then explode sharply higher.

They say this will be our last chance to buy into a rocketing asset class because once gold really starts running, it's difficult to climb aboard.

Four years since he last graced our radio studio, technical analyst Issy Bacher emerged from hibernation last night to stick out his neck further than ever he'd risked previously.

Bacher's Cycle Trends computerized programme, an accurate predictor of gold prices during Bull Markets, is once again flashing all the green lights.

He believes investors can buy blindly into bullion, coins and equities � admitting his own equity portfolio is now 100% invested in gold shares. Bacher told our national radio audience the gold market is in the infant stage of a move only seen four times before in the quarter century he has followed the metal.

...Wealth being spread through strong economic growth in India, China and the Middle East is introducing millions of gold-obsessed people as first-time buyers. This provides the solid base that did not exist during those brief periods when gold traded above $500 in 1983 and 1987.

...One of the more interesting aspects of the latest surge by precious metals is that it has come during a period of US Dollar buoyancy and oil price weakness. Jessica Cross interprets this as proof that the strength is coming "internally" from the gold market itself, rather than being driven by the more speculative external factors.

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

By all means take action, but contrary to sentiment expressed in this article, don't just rush out and "buy blindly". Call USAGOLD-Centennial for an informed consultation on a diversification strategy that's well-suited to your financial goals.

TOLL FREE 1-800-869-5115

R.

Clink!

(11/29/2005; 08:18:26 MDT - Msg ID: 138488)

@ Sir S.

http://www.ss02.com/Goldfish_files/Fish_05.gifNiccccce haikusssss ! Have some goldfish on me !

C!

Clink!

(11/29/2005; 08:25:05 MDT - Msg ID: 138489)

A new handle ?

Now that they are making 1000oz Philharmonics, I was wondering what the sound of tapping a couple of them together was. Would it be Clank! or Thud! or even Do-o-o-o-ng! I had a look in my piggy bank, but, unfortunately, didn't have enough to buy two of them. So if anyone at the Forum happens to have a couple of them, could they do the experiment for me, please ?
Thanks in advance.
C!

Or would just the sight of two of those monsters together elicit more of an Ah! sound ?

TownCrier

(11/29/2005; 08:25:54 MDT - Msg ID: 138490)

Haikus -- gotta love 'em

Will do.

R.

Boilermaker

(11/29/2005; 08:27:39 MDT - Msg ID: 138491)

Today's Markets

I'm seeing some signs of strange market behavior (if you consider them unmanipulated). Yesterday's HUI signaled that the cartel sent a heads up to their associates regarding today's POG, ie., they would be out to snuff the $500 euphoria with a major assault today. Now we also see durable goods orders firing up the SM and the US$. I don't suppose this is all coincidental and that noone saw it coming.

As for the durable goods;
"Defense capital goods orders rose by 52.8 percent, the biggest gain since February 2002.
Demand for transportation equipment soared. Defense aircraft orders shot up 140.4 percent, while nondefense aircraft orders rocketed 50.4 percent higher. However, motor vehicles orders fell 2.2 percent."

Looks like US military is planning an air assault against OPEC and GOPEC (Gold Owners Protection and Empowerment Countries).

The Hoople

(11/29/2005; 09:55:31 MDT - Msg ID: 138492)

Knallgold

Yes, Comex raised margins 50% on gold's first notice day of the huge December contract. Those are clever little weasels aren't they? Could they be sniffing a replay of the Chinese copper short squeeze? Volatility? Not according to the charts of relentless $6 collars. The cabal boys put out the word there's a trouble brewin' down there in the pits. Can't have a fair game of financial wagering. Teach those upshot spec funds a lesson just like they did Bunky Hunt. Except maybe this time it won't work?

Smeagol

(11/29/2005; 10:09:41 MDT - Msg ID: 138493)

Margins...

...those with US paper-gold contractss are affected by that margin increasse...but with all the new gold markets opening lately... could there now be the possibility of "margin competition"... that will limit Comex's ability to...sss... control the metal marketses?

S.

Gandalf the White

(11/29/2005; 10:23:50 MDT - Msg ID: 138494)

<;-)

Just for the RECORD -- In case some partybooer thinks that there were not THREE seconds to the Haikus nomination to the HALL of FAME, I too (make that three)-- so Move !
Thanks Sir Smeagol.
<;-)

Gandalf the White

(11/29/2005; 10:35:30 MDT - Msg ID: 138495)

NEWS Alert from Forbes.com

http://www.forbes.com/2005/11/30/gold-etf-in_cd_1129soapbox_inl.html"Prescriptions For Gold Fever"
Timely announcement !
<;-)

Gandalf the White

(11/29/2005; 10:38:16 MDT - Msg ID: 138496)

Someone should advise Forbes that -----

"GOLDFEVER" is one word !
Like Ari often said "GET IT !"
<;-)

R Powell

(11/29/2005; 11:39:27 MDT - Msg ID: 138497)

Some silver news

http://www.silverinstitute.org/news/4q05.pdf This is in pdf form

mikal

(11/29/2005; 12:01:12 MDT - Msg ID: 138498)

U.S. Gold 'Price'

http://focus.squaregain.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1Nov 29 Spot Gold: + $1.46 Close $500.11

mikal

(11/29/2005; 12:04:13 MDT - Msg ID: 138499)

Correction

Make that just gold, not 'spot' gold per below quote. That 'price' may reflect the nearby futures month (contract) or the most active month(contract).

R Powell

(11/29/2005; 12:23:14 MDT - Msg ID: 138500)

Paper gold rule changes

Thanks Knallgold, for the heads-up on increased comex gold contract margins. The initial margin for small specs increased from $1350 to $2025.

This probably won't stop small players from investing in gold contracts, but might force them to buy the mini-contract. Small, underfunded players, in all likelihood, should not be involved with these paper contracts, as a volatile gold market can easily wipe out either of those margin numbers in a day or two. Silver once crashed $0.77 in overnight trading. That amounts to a $3850.00 loss on one long contract! I was holding the delta equivalent at that time of three contracts. Ouch!! Fortunately I lost house paper money (while I slept) but I still cried..8>(

Too small margins are similar to bucket shop tactics wherein a very small percentage move automatically closes (offsets) the investor's position. It can be reinstated again, but again with the same risk of being closed on just a very small price move. Btw, increasing margins in any volatile market is not unexpected or underhanded, it is necessary to insure some degree of solvency for those on the winning side of paper market moves. It's also necessary for those who underwrite or insure payouts to those who close profitable positions. There have been no exchange defaults that I'm aware of. Maybe money saved in pension funds is more at risk! But it probably is just one of a large number of unexpected occurances that your friendly local commodity broker forgot to mention when you filled out the stack of disclaimer papers necessary to open your account. Hey, he/she, in all likelihood, doesn't understand or anticipate these affairs any better than most, after all, if brokers could correctly play this game of huge leverage, they most certainly wouldn't need your commission money.

As for any small immediate market reaction, I doubt this will cause any. Most of the longs have nice paper profits even with todays' small pullback. It would be the shorts would were already underwater that are now further under. To get out, they must buy. So much for the paper game as I understand it. ??
rich

mikal

(11/29/2005; 12:27:51 MDT - Msg ID: 138501)

Squaregain Chart

I see now that the chart DOES say spot gold. A different price perspective is given and now the spot acess market is open so the chart gives that instead of spot NY close.
(Good to see gold up in NY however the short-term outcome IMO.)

USAGOLD Daily Market Report

(11/29/2005; 14:06:19 MDT - Msg ID: 138502)

Page Update!

TownCrier

(11/29/2005; 14:30:16 MDT - Msg ID: 138503)

VAT reduction a done deal, Delhi to emerge as gold hub

http://www.business-standard.com/bsonline/storypage.php?&autono=206959(New Delhi) November 30, 2005 -- Delhi is all set to emerge as the fourth hub for gold sales in the country after Ahmedabad, Mumbai and Agra, according to industry sources. This is following a cut in value-added tax (VAT) on gold to 0.1 per cent from 1 per cent, in keeping with the industry's demand.

The state government's decision came after neighbouring states like Uttar Pradesh and Rajasthan had allowed only 0.25 per cent VAT on gold vis-a-vis 1 per cent in Delhi.
�
It will, however, take another three-four days for the notification to reach the market, and only after this consumers will benefit from cheaper rates, especially in the current times when the domestic gold prices are hovering around a high of Rs 7,400 per 10 gm.

...The domestic gold prices are likely to remain higher also following the rupee weakening against the greenback, which has made gold imports into the country slightly expensive.

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

Those who have been buying the dollar during this window of time as the dollar has been pushed higher will surely wish that they had chosen gold instead at such time that the dollar reverses course. Given the size (and role) of both markets, gold will likely show impressively outsized gains (even more than currently enjoyed) as/when the dollar trends lower.

Call USAGOLD-Centennial today for a consultation to ensure that your diversification strategy is in good order.
1-800-869-5115

R.

Chris Powell

(11/29/2005; 15:54:17 MDT - Msg ID: 138504)

Even an establishment academic questions motive behind M3 data erasure

http://www.marketwatch.com/news/story.asp?guid=%7BFFDEA816%2DE11F%2D47A8%2DA66D%2DBDA8E32812DD%7D&siteid=mktwFed May Pause Too Soon

By Irwin Kellner
CBSMarketWatch.com
Tuesday, November 29, 2005

Is the Federal Reserve laying the groundwork for halting the extended rise in short-term interest rates? And, if so, why?

Those who make a living scrutinizing the entrails of the Federal Reserve are getting all excited. The reason: they think they have detected a number of signs that point to an early end to the long series of interest rate increases that began back in the middle of 2004.

To be sure, no one expects the Fed not to raise rates when its interest rate-setting Federal Open Market Committee meets on Dec. 13. And only a handful of financial market participants think the Fed will hold rates steady at the conclusion of the meeting that follows at the end of January, which will be the last one presided over by Fed chair Alan Greenspan before he retires.

But the financial markets have suddenly increased the odds that the Fed will stop raising rates, once the federal funds rate hits 4.50%, which it is likely to reach come Jan. 31. Previously, they were not looking for such a hiatus until funds got to 5%.

What kicked off this speculation that the Fed is almost finished tightening was the release of the minutes of the Federal Open Market Committee meeting of Nov. 1.

While most of these minutes was a boilerplate discussion of the economy and the need to remain vigilant against the threat of inflation, these heavily edited minutes contained a phrase suggesting that some members of the committee were becoming worried about raising interest rates too much.

The press and the pundits might have overlooked this phrase -- or, at least, taken it with a grain of salt -- had it not been for another interesting development.

On Nov. 10 the central bank issued a tersely worded statement that it was planning to discontinue publishing its widely followed M3 money supply data. This really set the conspiracy theorists buzzing.

Aside from its importance as a gauge of Fed policy, M3 has been expanding at an increasing pace. It's currently growing at a 7.5% annual rate, up from 5.6% at the end of last year. On the other hand, the growth rate of M2 money has slackened, from 5.6% last year to only 4% today.

To some, this smacks of setting the stage for faster money growth. I'm reminded of 1967, or thereabouts, when the government stopped publishing statistics on defense spending, ostensibly to hide the scope of the buildup in Vietnam.

Put these two items in the context of the yield curve, which is almost flat, and the fact that the real (inflation-adjusted) funds rate is now only a half-point away from its long-term average of 2.5% -- meaning that policy is rapidly approaching neutral -- and you can see why the buzz of an early end to Fed tightening is getting louder and louder.

But would this be a good thing?

If you're worried that a recession is nigh, you would certainly think so, since the Fed has tended to overdo its monetary tightening in the past.

But if you think that the battle against inflation is not over, and are concerned that the Fed may have to monetize the skein of budget deficits on the horizon, you might disagree.

You'd be in good company, judging by what's happening to prices of precious metals.

Gold is pushing $500 an ounce, its highest price in 20 years, while platinum has just equaled the record $1,000 an ounce set back in March 1980 -- when the rate of inflation was around 15%.

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

Irwin Kellner is chief economist for MarketWatch. He also is the Weller professor of economics at Hofstra University and chief economist for North Fork Bank.

-END-

Flatliner

(11/29/2005; 16:08:37 MDT - Msg ID: 138505)

Does Inflation lag gold by 14 months?

http://www.financialsense.com/fsu/editorials/2005/1129.htmlWhat an interesting concept. Thanks, Toni Straka.

What I find interesting here is that the US has exported inflation for many years to many different countries around the world. Now, they are all rushing out to buy gold. I wonder� if possibly� their buying gold will be the way they export inflation to the US? Could you just see a few central banks reshuffling their basket of currencies and, all of a sudden, surprise! Inflation in the US.

Even though the headlines are full of rosy articles today, it doesn't mean that things have turned back to how they once were.

Goldendome

(11/29/2005; 17:35:03 MDT - Msg ID: 138506)

Paul Harvey -- More correct than he knows!

At work, I often listen to Paul Harvey's noon-time news program. Years ago, I thought his the finest news program on radio. Now, I more often find him cheerleading the United States in some manner. Today was a case in point: Mr. Harvey marveled at how the consumer confidence numbers had rebounded over the prior month; then linked that growing confidence with the decline in gasoline prices during the previous month. He then effused wonder at the all time high number of new home purchases even in the face of rising interest rates. In a voice that knew economic nervana and it's source, Harvey finished this economic cheerleading with an ironic tribute: "We all owe Allan Greenspan a debt that we will never be able to repay."

*$#!! Wow! No kidding -- More ways than you can imagine -- Thought I.

David Linkley

(11/29/2005; 17:46:49 MDT - Msg ID: 138507)

Gold and the shorts

Two brilliant mastermind groups are busy fighting the gold bull market. Last week the ECU sold almost 12 tons and the COT added to their almost record short positions. With December being a delivery month and demand strong one has to wonder if this losing strategy is being backstopped by the Fed. Also factor in a COT record short position in the dollar and the waters become futher muddied. I will reiterate my position of the idiocy of central bank gold sales at this time of uncertainty no matter what their hidden purpose. The arrogance of these people is astounding. And TownCrier, I maintain there is absolutely no justification other than nation looting for these sales. Unelected officials selling the best ever monetary asset for depreciating paper is unforgivable.

TownCrier

(11/29/2005; 18:02:19 MDT - Msg ID: 138508)

David Linkley, "...I maintain there is absolutely no justification..."

I don't suppose you would entertain the possibility that there exists a subtle design on the big picture that you've failed to consider in all of this?

R.

melda laure

(11/29/2005; 18:15:31 MDT - Msg ID: 138509)

The man behind the curtain.

Sir Cliff Droke is wrong. If M3 is obsolete then it ought to be replaced with "M4". As no such thing is contemplated then the only reason for removing it is obfuscation. What exactly is meant by claiming: "M3 no longer has any meaning." Hmmm? Did the writer mean to say that it has NO meaning, or that it's meaning is MISLEADING, or that some new construction has a more PRACTICAL meaning?

But of course it cant be that some new "M4" category is comming, because it would be part of a monotonic series where M4 >> M3 and that wouldn't be nice, as M3 is quite big enough already. And of course it cant be that M4 is less than M3 because then the proper thing to do would be to re-define the contents of M3.

Regardless, since "M4" = M3 + other stuff. So perhaps what is needed is a sort of "M3 before one-time charges, anomalous repo-bulges and inexplicable hedge fund anomalies minus seasonal adjusted fudge factors and the chairman's blue plate special"

Now who would eat that? Perhaps the Fed has decided that rather than tell outrageous lies, they will just keep silent.

Goldendome

(11/29/2005; 18:31:19 MDT - Msg ID: 138510)

Dollars to Gold

Oh, Flatliner: What a delicious conspiracy you prepare: Central Banks selling dollars, buying gold. Intriguing also: you and I, and two hundred million other U.S. citizens sell some of our hoards of dollars to buy gold! Same effect? I think so.

"Don't cry for me Argentina; you were supposed to be immortal..... "

David Linkley

(11/29/2005; 18:43:32 MDT - Msg ID: 138511)

So predictable

As we speak gold has pulled back -$3.70 tonight as the establishment goes all out to attact. From CNBC today showing a 1987 gold chart tanking after reaching $500 to Dennis Gartman today telling subscribers to sell all gold positions, to various bullion bank analysts calling for lower gold prices in 06. Buy the dips gang, this should be a nice short correction to bail out the overextended and totally wrong commercials. I wouldn't wait too long however as physical demand will pickup this time of year worldwide on any good sized pullback. Remember with Bush having single handedly demolished the Republican Party and mid-term elections next year, there is a reason why "helicoper" Ben will be your new Fed chairman. Any chance of gold staying down for long with falling production, increasing demand and the world's reserve currency on it's last legs due to election demands is nill.

R Powell

(11/29/2005; 18:51:36 MDT - Msg ID: 138512)

COT numbers

http://www.cftc.gov/dea/futures/deacmxsf.htm Posted for those who might be interested.

Any thoughts on these? There are some traders who place great importance in these. I often keep tabs on them, the futures only numbers (add in options and the trading position strategies get complicated beyond comprehension), but have found no real definitive correlations to price prediction that I can attribute to something other than happenstance. I haven't put a lot of effort into this study. Curiousity. I suppose if enough traders believed that such and such a COT change predicted upside or downside moves, and then invested enough $$ accordingly, then that belief might become a self-fulling prophesy + gain more followers + thus become even more accurate as a predictive system until.....until too many used it and it no longer worked and then those followers would once again be seeking another holly grail. Oh well... Some analysts will look at these numbers and pronounce the gold market as "overbought" even though there are exactly the same number of shorts as longs. If enough believe so, the POG might "retract" to "consolidate gains" giving those not yet invested "an opportunity to buy".

If and when this happens, then the floor traders will "run the stops" and then the technicians will decide whether the bull is still intact....as in buying opportunity or "reversal"...as in time to sell. And so it goes, and so it goes. Supply and demand forces just sort of linger in the background, saying nothing, often unknown.
Thoughts?

David Linkley

(11/29/2005; 18:53:57 MDT - Msg ID: 138513)

@TownCrier

TownCrier, I appologize for my hasty writing mistake. I meant to add "no moral or economically objective and sound reasoning" for making these sales. Whatever the purpose, bailing out the shorts, keeping confidence in currencies, or a diabolical NWO plan, the reasoning is evil in nature as it seeks to obscure the truth from the people who sacrificed to acquire it.

R Powell

(11/29/2005; 18:54:15 MDT - Msg ID: 138514)

Holly grail?

And why not, it's getting close to Christmas! Make that holy, holy, holy......

TownCrier

(11/29/2005; 19:15:11 MDT - Msg ID: 138515)

M3 as a talking point

I'll use a good friend of mine as a generic example. (He died this past year, hence the past-tense references)

He was one of the wealthiest and most successfully self-made businessmen I've ever known. He was not one to stuff his dollars into cupboards or to fill up banks. He spent. And he spent. Both on personal purchases and on investments to enhance his businesses.

Our conversations would come around to economics more often than not. I think it is fair to say I knew his mind in that regard better than his various accountants and financial advisors.

This much I can assure with absolute certainty: M3 was completely meaningless to him, and by meaningless, my point is that M3 figures were as useless to him as moonrocks. Never once in his life did he consult M3 stats as a means to help him negotiate a bid when settling a price on a deal.

Do anyone know of anyone who does?

M3 stats... good riddance. Discontinuation of the figures represents no material loss to the good order of the real economy -- no loss, that is, except as pabulum for the frenzied legions of newsletter writers who would otherwise have it to spin significance out of cobwebs.

Is the money supply going to explode and prices hyperinflate? Well of course they are!!! BUT... we surely won't need official M3 stats to know whether or not it's happening around us! Nor would we have any use for the supply number anyway to materially affect our various transactions -- not then any moreso than our use of it now.

I offer this simple thought only because life is too short to fret so much over such a petty thing as M3 insofar as it is defined, measured, and published (or not).

A person would do better to spend this time looking to "MP", that is, their Personal money supply. Just one man's opinion.

R.

R Powell

(11/29/2005; 19:20:55 MDT - Msg ID: 138516)

Flatliner + cousin Chris

Thanks for the article links, they fit nicely together. I've always kind of assumed that our paper fiat would continue to depreciate in anything short of a paper is king type of deflation. The Fed's powers may be overrated but the Fed. and soon-to-be chairman Bennie B certainly do have the ability to flood us with paper so inflation, I guess, is more probable than a severe recession (which might be the only plausible trigger for a monetary deflation...?).

A thought on the theory that gold buying might be a form of reversing the USA's exportation of inflation: Wouldn't this only be true if it was USA metal leaving this country bought with formerly exported dollars returning to pay for the gold? The total market cap of gold isn't big enough to disturb the Force anyway but, US dollars abroad buying gold (or anything out of the USA) but still staying out of country leaves the formerly exported inflation ....still exported, no?
rich

David Linkley

(11/29/2005; 19:24:33 MDT - Msg ID: 138517)

@Flatliner

Great post. Reminds us of the endless ways banksters can play games using fiat. That's why gold has been the most moral money used in history, they can't print it.

David Linkley

(11/29/2005; 19:25:03 MDT - Msg ID: 138518)

@Flatliner

Great post. Reminds us of the endless ways banksters can play games using fiat. That's why gold has been the most moral money used in history, they can't print it.

TownCrier

(11/29/2005; 19:25:07 MDT - Msg ID: 138519)

David Linkley,

Again, I would politely submit to you that there might, just MIGHT, be an atom of a chance that you are not seeing the big picture for what it is.

I'm willing to blame it on bad lighting. Suggest we just wait until the sun comes around?

R.

R Powell

(11/29/2005; 19:29:36 MDT - Msg ID: 138520)

Townie

I'll agree with that. Money is just a means of exchange, with a price determined for that moment in time, not before or after as the value of the money varies as does the value of most items over which men haggle.

Your words gave the impression of a sense of loss as if you miss your friend. Please accept my condolences.
rich

Flaccus

(11/29/2005; 19:38:02 MDT - Msg ID: 138521)

A lot here still pertinent. . . .Starts with a note from Chris Powell. If I remember correctly this was posted to Cavan Man

Once again Michael Kosares, proprietor of Centennial. Precious Metals in Denver and its essential Internet site, www.USAGold.com, has casually tossed off the most timely and insightful commentary -- this time about the withdrawal of the Rothschild firm from the
London gold market. Kosares writes: "People talk about paradigm shifts all the time and throw the phrase around with casual aplomb, but let me say that this is the kind of paradigm shift all of us in the gold market have been waiting for. ...
�
And this is precisely what Rothschild is reacting to."Kosares isn't yet ready to release it as a formal essay, but you can find his commentary at USAGold's Forum here:
MK (04/15/04; 17:26:52MT - usagold.com msg#: 119988)

Acutally, my good friend,
http://www.thebulliondesk.com/content/reports/press/pa.pdf

you caught me during my afternoon quiet time when I remove myself forcefully from the office and head for a quieter place to work on things I like to work on - and posting on the forum happens to be one of the things I like to do.

You are correct. We are very busy these days, as we almost always are when the price drops, and the true-believers make their presences known. I find the type of client who calls during these down treks to be the most enjoyable of our clientele - people who know what they are doing and why they are doing it. The physical market is quite a different animal from the paper trade and the motivations of the participants are different, as I can see from my visits to the forum, where some of the paper traders find this a good place to grumble about their losses. But that leads me to your good question, and as always, it does not surprise me that you are the one here (among some others) who senses that the Rothschild move might be important.
�
As you know, I have been a student of the Rothschild dynasty for a good many years and I certainly appreciate them for what they are - one of the first and most significant investment banking houses. I also appreciate the long term role they've played in the gold market. After all they did start out as a simple purveyor in coins and bullion and transformed that humble beginning under the Red Shield thanks for the most part to a combination of brains and good fortune into a legendary financial business - one synonymous with banking and running parallel to much of European history. And through it all they managed to remain a private firm owned by the family - an achievement I admire. By the way the story, as I know it, is that Nathan Rothschild had carrier pigeons as a hobby and received information of Wellington's victory long before the rest of the market and therefore had the opportunity to buy cheap before his City competitors knew of Napoleon's defeat. But that's neither here nor there.......I am neither a defender nor a critic of the House of Rothschild, just an observer.
�
The press release from NMR to me was more revealing than the colorful journalism that accompanied the announcement and my reading of it was that Rothschild was leaving the "trading" aspect of the gold business, but that they would continue with lending end of things which is where the real money is made. I've linked the actual price release above which was provided this morning by our good friends at thebulliondesk.com. I wouldn't be surprised however if they slowly but surely unwound the gold lending business as well, in that the nature of the business itself has changed and the role of lender to the mining companies is diminishing on its own. With Rothschild the motivation is the lack of returns on the simple commission gold business - which trades at very thin margins. The bigger profit gold carry trade business - which included loans and hedging operations (and all the management fees attached) - is dying, if not already dead, as mine companies go to the demand side of the gold fundamentals ledger. It signals the future of gold. The death of the gold carry trade/mine hedging businesses has come to fruition as I predicted a long time ago with the Rothschild retirement from the Fix being a final and highly symbolic milestone. Others will follow, as they go on to what they deem to be more lucrative businesses.
�
But what is the City's loss will be the physical owners gain because what the Rothschild withdrawal signifies is a reduced role for the banking functions - the operations as Aragorn and FOA pointed out here long ago that became anathema to higher prices. What is ironic about the whole thing is that the seeds of Rothschild's self-styled withdrawal as the lead firm in the London trade were planted a few years back by the firm itself when it pushed hard for more transparency in the gold market. NMR played lead dog in an effort that ultimately led to the first Washington Agreement and the beginning of the end for the gold carry trade and mine company hedging programs. That effort was led by a friend of a mutual friend of ours who posts under the CoBra handle - Guy...............(can't remember his last name) perhaps CoBra can help us.
�
I accept what NMR is saying at face value. I do believe that they do not do enough business on what they call the "commodity" end of things to support the infrastructure required to do it right. I note that they were careful to let their mine company clientele know that they would not be abandoning the business completely, and I'll tell you why I believe they went to those lengths: The trend now is for miners to buy back their hedges. Over the last few months I have been doing a great deal of research for the publication of the updated version of The ABCs of Gold Investing, and I can tell you, unequivocably that the most important development over the last few years is the swing by the mining companies from the sell side of the fundamentals ledger to the demand side - a swing of between 500 to 600 tonnes on the average (using GFMS' conservative numbers). That is a very big number. (I read with interest the comments here the other day about various writers picking up things and running with them. Wait til this little observation sinks in.) Rothschild is aware of the number. The hedge funds are aware of that number and that is why they are now net long the gold market.
�
People talk about paradigm shifts all the time and throw the phrase around with casual aplomb, but let me say that this is the kind of paradigm shift all of us in the gold market have been waiting for. (And now I've given you a glimpse of the theme of the new book - just recently accepted for editing by my publishing house). And this is precisely what Rothschild is reacting to.
�
I would not be surprised to see that firm end up in this market as an investor, as opposed to a broker - a move in keeping with their long history of exploiting major opportunity. There is more money to be made as an investor in gold these days, than in brokering it. Rothschild has no interest in the retail business, and that's the only place money can be made with regularity in today's gold business - they have always been essentially a wholesaler and syndicator of financial opportunities, and I couldn't think of a better opportunity at the moment than gold. However, I believe they will keep it to themselves just exactly how they will go about exploiting that opportunity.
�
Now here's the last part of what I have to say on this for the moment and now the groundwork is there to tell you why I believe Rothschild was so careful in their announcement today to let their mine company clientele know they would be there for them. Since the trend among mining companies is to buy back metal and settle their hedgebooks, how would you feel if you ran a mining company and one of your chief bullion banks told you they were cutting and running in toto? Your first question would be: "Well, how will I go about settling my book? I thought you would be here to buy for me if I needed it." That's the one thing I find unsettling about this whole withdrawal. If Rothschild had announced that they were completely out of the business, I think several mine company executives would have had to have been peeled from the ceiling. As it is, they say they are not dropping their lending business. Does that include assuring their clientele that they will be buying gold for them? Let's turn the coin over. Maybe, it is precisely because they have to buy for their clientele that they no longer want in on the London fix and the daily trade AS THE KEY PLAYER!
�
There is much to think about here, and I assure you there will not be a lack of players to fill the Rothschild gap (at least with respect to the prestige associated with the London fix), but the remaining question on the table is who is going to be the main player in the physical gold business now that NMR, at least on the surface has withdrawn. Can the market find the physical? And who's going to get it?
�
All of this dovetails with Aragorn's earlier post on the French/German situation and I would like to say a few words on that, then try to pull this all together into some kind of sensible framework. Aragorn you talk about misplaced sentiments and your points are well taken. It is even more convenient to misplace the role of the central bank which is not as a quasi-hedge fund, but as a steward of the nation's money and protector of the banking system. The function of a reserve asset is not to make a central bank returns, but to give the nation a fall-back position should it need to defend its currency or raise capital in the event of a national emergency. The folly of casting central bankers as portfolio managers for the nation's assets can be most readily seen in the Bank of England's botching of its gold sales - all accomplished at cyclical lows in the $250 range. But I do not see that trend reversing itself.
�
The problem with the modern central banker is that he is no longer content to play the traditional role of steward of the nation's money and banking system. In order to emulate his colleague on the commercial side, he would rather trade the markets. Such thinking, in the age of the day trader, has become epidemic. Central banking used to be a conservative profession whose masters were drawn from the desks of the oldest and most influential banks, steeped in the tradition of making a sound loan, and providing an atmosphere which encouraged deposits. You could rely on these people. Now you had better know how to trade the markets and find the best returns if you want to call yourself a central banker and the Welteke affair, in this light, becomes a bit more understandable. My, how times have changed....... Next Europe will draw its central bank governors from the commodity trading pits and the hedge funds. But who am I to defend the old ways, humble Denver-based gold broker that I am? Better to sit back, watch the show, and help our clientele to weather the uncertainties such perfidy engenders.
�
In the end though, we all know that this business of selling off the national gold has something more behind it than simply garnering a better return on assets, don't we? All of which explains the full court press to bring the French and German gold reserves to the table - two of the largest remaining gold hoards on earth - in some quarters, it would seem, better achieved now at $400 per ounce then months and years from now at double or triple that price.
�
So it all ties neatly together. All signposts pointing somewhere the geography of which can be ascertained but not clearly described.
I'll leave this in the air......and a subject for discussion......at this highly visited, well read, and perfectly positioned Table Round.
�

R Powell

(11/29/2005; 19:42:13 MDT - Msg ID: 138522)

Townie

I should have been more specific in that I was agreeing with you in your disdain of M3 numbers. Actually, wouldn't the whole game of accumulating wealth in this earthly world be more fun if no one knew exactly how many dollars were in the game? Just a crazy thought. What's that buck really worth anyway? During my life, a tenspot loan when flat broke was often much more appreciated than a quick, easy hundred added to an already flush wallet.

What was the line from that old Joanie Mitchell tune, "money can't back your youth when you're old, or a friend when you're lonely or a heart that's grown cold....but one thing's for certain, when it comes my time, I'll leave this old world with a satisfied mind."

(11/29/2005; 20:39:18 MDT - Msg ID: 138523)

The Book Of Salt

from the wonderful novel "the book of salt" by Monique Truong: "I did not learn until many days at sea that I had been resting my head on a pouch filled with gold leaf, one sunlit layer on top of another. Lighter and more valuable than its paper counterpart, gold is worth that is of the earth, my mother knows, and has to be honored anywhere upon its curving surface. Paper money gets its values from those who print it and therefore often suffers, finds itself totally degraded, when transported and removed from familiar surroundings. Perishable, like a fish out of water, or imagine a man on the open seas."

David Linkley

(11/29/2005; 20:45:46 MDT - Msg ID: 138524)

@TownCrier

You're missing the point. We arrived at this place because fiat was substituted for gold (100% a historical disaster) and now these same unelected officials are trying to cure the patient with more of they same. You have terrific posts so please enlighten me on what I'm missing because without sound money (truest of evils)we are all but slaves to the people who create the money.

Druid

(11/29/2005; 23:38:10 MDT - Msg ID: 138525)

@DL

Druid: If I might interject for a moment concerning your "slaves" comment. Your real wealth is your combined health, knowledge and labor and history has shown us that the best way to preserve that combination is through the ownership of gold and silver bullion regardless of whether the government sanctions it or not. We are all FREE to own bullion in this country to date just as we are all FREE to understand the difference between both what a fiat currency represents and what gold ownership does. We lease fiat currencies and have the FREEDOM to convert that act into true ownership of gold bullion. The rest is marketing and ignorance. On both ends of the spectrum, the banksters and bullion owners understand the game, it's those in the middle that might get caught up in a real learning experience of what value really is. On a personal note, I arrived at this castle some 5 1/2 yrs. ago becasue I lost what I perceived was "money". It's been my best investment loss ever.

TownCrier

(11/30/2005; 01:02:42 MDT - Msg ID: 138526)

David Linkley, please believe my sincerity when I say I'm ardently striving here for common ground

In your latest you've now introduced the concept of "sound money", and have done so in close proximity to comments about fiat substituting for gold. Attempting to connect the dots as I believe you have intended, I take these points together to deduce that you believe a monetary system to be "sound" when it is built upon fixed-convertibility of the monetary unit into standard weights of gold coinage currency (as was a common practice one century ago).

I will try to relate the conventional activity that occurred under that "sound" system so as to let you judge for yourself any actual (not merely fanciful) merit as further compared or contrasted with (your perceptions of) the activity that is apparently occurring regarding the current specter of sales of European gold.

UNDER THE (SO-CALLED) "SOUND" SYSTEM

Miners and international merchants get their hands on gold and present it to the domestic monetary authorities for minting into standard coinage.

This gold currency then circulates in the national economy, and eventually folks having an excess beyond their immediate needs put it into bank accounts for safekeeping and for the convenience of checkable deposits or the interest on savings deposits. (In essence these people are spending/selling their gold currency to "buy" an account at the bank.)

It is fully understood by all parties that the commercial banks will lend a goodly share of these deposit back into the economy, thereby substituting the resultant loan contracts in place of gold coinage as a component of the asset side of the bank's balance sheet. (In essence the bank has spent/sold the currency to "buy" the loan contracts.) The lent money eventually finds its way into another bank deposit, where it may further fuel the lending process.

In consequence, the effective money supply is expanded, and the proportion of the money supply that is directly convertible on demand into the original gold currency coinage shifts from 100 percent on day one to a mere fraction as time marches on. Effectively and without any sinister intent, the original "sound" money supply thus evolves into a predominantly ledger-based money supply. That is to say, the bulk of the functioning money supply exists in name only on paper, on the banks' collective balance sheets. It continues to circulate effeciently in the economy in the form of checks, bank drafts, wire transfers, and yes, even paper currency for convenience sake. Each dollar of which -- including the totality of the deposit accounts from which they spring -- are "technically" (if not 100% actually when tested) redeemable into standard gold currency at the officially fixed convertibility rate as set forth earlier.

If collective confidence of the depositors is shaken, and a bank run is perceived as a likely event, the participants in this "sound" system flock to the bank to demand convertibility of their paper money supply (their notes on hand and especially their ledger deposits within the bank) into portable gold currency.

In such an event, the besieged bank is incapable of fulfilling the depositors demand for full convertibility of accounts into gold currency.

Does that sound like "sound" money to you?

In the brief period prior to failure as the bank tries to weather the storm of withdrawals, in essence it is now "selling" its remaining limited supply of vaulted gold currency at the standard fixed convertibility rate in what often proves to be a futile effort to redeem (i.e., buy back) the checking and savings accounts it had previously sold to its depositors.

Skipping ahead briefly, I note that you (along with a few others) have generally likened (your perceptions of) current European "sales" (at floating/rising exchage rates(price) of paper) as though it were a shameful or even criminal activity.

Skipping back to where we were, are you similarly inclined or prepared to label it shameful or crimimal when these besieged old-fashioned banks under the sound system "sell" (at a fixed exchange rate of "paper" dollars) every last remaining ounce of gold currency in their vaults on their road to bankruptcy?

If I have done nothing else here, I hope I have at least planted the seed of doubt that your so-called "sound" system is not so very "sound" after all.

In covering this ground alone, this post has grown longer than the patience of most readers, or so I would think. I will therefore only return to the topic of the CURRENT European "sales" activity long enough to say that the comparison in this post was done only as a matter of convenience in bringing forth hopefully appreciation for alternative (non-evil) perspectives on the nature of "sales" and whatnot.

To be sure, the actual nature of the current European gold activity bears little, if any, resemblance to this historical account of a bank under obligation to "sell" gold for questionable paper.

One does not so lightly fritter away a goodly stock of gold capital in this modern era without ensuring that, at a minimum, progress to a heightened state-of-being is being achieved in the overall process.

Good night, and good luck.

R.

Liberty Head

(11/30/2005; 01:30:21 MDT - Msg ID: 138527)

@Druid

If I may chime in, I agree with your comments to DL. We do have some freedoms to be sure. Having the freedom to exchange fiat for gold ranks high on the list of cherished freedoms.
I have higher aims though. I want to remove more of the shackles. I want the freedom to use gold in long term legal business contracts. The unpredictable inflationary risks associated with fiat currencies would no longer be of concern. There would also be less motivation for hedging and other paper games.

Converting gold to fiat isn't so bad for buying immediate term consumables. Using gold as the basis for long-term contracts makes more sense. Now we're talkin'.

Best Wishes

Belgian

(11/30/2005; 02:04:38 MDT - Msg ID: 138528)

and belgian adds...

That "free-gold" (freely priced gold) is a 100% "reserve", whilst -fixed-gold- (fixed or controlled priced gold) is a -fractional reserve- (an insurance policy that never ever covers the permanent loses).

The "system" that is setting gold free will be embraced by those who are organizing themselves to see their wealth consolidated properly.

"TOO much paper" is no problem at all once gold can freely and permanently be auctioned as a 100% reserve.

Who (which system) is profiting from the present rigged gold auction and who (which system) is already prepared to introduce the (ongoing) free gold auuction !?

Simply remember that one cannot be a little bit pregnant. Faites vos jeux, messieurs, dames.

Goldilox

(11/30/2005; 02:06:32 MDT - Msg ID: 138529)

Sound Money or Sound Banking

@ TC,

In your response to David Lindley, you seem to make a rather drastic jump from discussing sound money theory to some rather unsound banking practice, implying that all banking must operate on unlimited fractional reserve.

I don't know if this was your intent, but I think in the process you tied together two processes that are only related by the fact that banks control the currency creation process, in my opinion.

Though many may argue that bank failures still occured when reserve requirements were actually regulated, I would counter that single bank failures are less systemically damaging than tying the entire system to regulated inflation and taxpayer bailout, as the current schemes do.

The idea of absorbing losses has been perverted by the current FED to "covering losses" by issuing even more "credit" instead of enduring a few of those losses. This only futher skews the balances in favor of the banks and against the depositors, who pay twice for the insurance - once in interest margins, and a second time in taxation.

Even GM, whose business is now 90% finance is showing that there needs to be limits on debt creation.

My personal belief is that resting fairly unlimited control of both currency and debt financing in the same hands is a big reason we are in the turmoil we face, as the FOX is watching the hen house.

TownCrier

(11/30/2005; 02:08:44 MDT - Msg ID: 138530)

DL, to put a finishing point on it...

What's an ounce of gold worth... does anybody REALLY know it value? $250? $300? $500? We've seen "the market" attempt to give us all of these prices as the correct answer during the past five years.

Ultimately, the answer is that gold, as with most other things, is worth what the market will render unto you in exchange for it on any given day.

Getting to the point, how is it possible to see the European gold activity as sinister, or even merely wasteful, when, on the whole, only a very small fraction of their total weightwealth in gold has been mobilized off of their books. Whereas in return for this initiative, A PARADIGM SHIFT HAS BEEN SET INTO MOTION which has, thus far, provided compensation upon the remaining body of gold in the form of market pricing that has adjusted from a lowly 1999-era EUR 250 per ounce to present-day value of EUR 420. This represents a 70% increase in utility per on-book ounce, achieved at the low "cost" of mobilizing a far far lesser percent in terms of actual weight.

If someone told me that there was a new-fangled reserve system with a foundation capable of providing for greater monetary stability, and as a precursor of that system each ounce of gold would be revalued by a magnitude of 20x or more, and that I could single-handedly set it all into motion on the conditionality that I help level playing field by parting with a mere 25% (for example) of my physical goldweight, the answer would be in a heartbeat.

Yes, seeing that it wasn't a cheap parlor trick, I would not resist an end result that increased the net utility of my gold vault from an original market value on my original gold vault of 1x100% (100 utes) to a vastly improved market value (20x) on a somewhat smaller remaining vault of 75%, yielding 1500 utes.

The best (selfish) news is that none of us need to diminish the size of our own gold vaults to bring this about. We actually have the good fortune of being able to INCREASE our holdings if we so desire, thereby further increasing our total future utility (= greater value per oz times a larger vault) as we ride Another's coattails,,, or walk in the footsteps of giants; phrase it as you like.

R.

Goldilox

(11/30/2005; 02:11:57 MDT - Msg ID: 138531)

Three day POG action

http://quotes.ino.com/chart/?s=FOREX_XAUUSDONice Head and Shoulders

TownCrier

(11/30/2005; 02:56:31 MDT - Msg ID: 138532)

Goldilox, in response to your opening paragraph

You'll be forever chasing your own tail until you own up to the reality that the nature of money is defined by what the banking system does to it.

It was precisely my intent (and thankyou, you have confirmed that I succeeded) to demonstrate that it is actually a matter of the "soundness" of the banking system which is ultimately at the root of the issue. It does no good to expect any modicum of "soundness" out of a gold currency unless one has the good wits to simultaneously insist on an economic structure that disavows any financial network which attempts to facilitate the lending and borrowing thereof.

Absent the borrowing/lending, what you're left with purely and simply is portable property, an opportunity to own pure unadulterated wealth. Some call this physical orientation "free gold". Is that so hard to grasp? Why do so many people want to call it money and subsequently get the modern banks involved to muck up that graceful state of elegance?

Bottom line: boys will be boys. So let's stop fretting and let banks be banks -- under the one condition that they keep their hands off the yellow metal in order to let gold be gold and thereby giving us each easy recourse to an avenue of savings (gold ownership) which only in this fashion can itself be as good as itself. In other words, whenever gold is put in the hands of banks to serve as currency, sadly, it ceases to be as good as gold and starts behaving and depreciating like any other questionable paper in oversupply. Good savings such as gold ownership, to be truly as gold as gold can be, must be kept OUTSIDE of the traditional banking system.

R.

Belgian

(11/30/2005; 06:41:17 MDT - Msg ID: 138533)

LET GOLD BE....GOLD !!!

http://www.gold-eagle.com/gold_digest_05/images/droke112905.gifLink : The surprising consequences of a global savings glut.

Not only the savings...but all the digital units ever created, will continue to search and find a 100% reserve that is representative. Today, not even a tiny fraction of the obsolete surplus of these digital units can be transformed/exchanged in tangibles. W're talking about $ TRILLIONS !
US consumers multiplied their credit card debt by 4 ($200 Billion in '95 to $800 Billion '05). Housing (a tangible) is encumbered with 50% debt (and rising) due to taking out equity. $ 7 Trillion flashes on the screens, daily (forex + repos). Etc...

Under these circumstances, one should NOT be surprised that a very particular political will is building around FREEGOLD. The aboveground gold, freely priced, and function as a 100% reserve, would "mobilize" a lot of these digital units back into productive economic activity. Very highly priced Freegold (in appropiate numeraire) would become the globe's REAL WEALTH.

Simply having higher priced and UNFREE gold is changing nothing to the present monetary regime and will definitely NOT break anyone even for the permanent currencies' depreciation.

The ever further rising fiat stash will certainly desintegrate in a panic stampede when only an infinitesimal fraction of these digital units wants delivery of any tangible. The entire global ruling classes KNOW this...and already for a long time. But they are all still doing the best they can as to let us interprete all the gold-facts of the past decade, dead wrongly. They even continue to manage gold's evolution into FREEGOLD WEALTH RESERVE (throug price management). That's why we still can't agree on this forum about the real genuine significance of the words (notions) > freegold-wealth and reserve ! That's why we better follow those gold giants' trail...hidden behind the very confusing behavior of gold through its managed price and gold actions.

Free Gold shall become the wealth reserve as to change one's considerations about fiat. Gold and fiat shall become...gold and fiat...each with its very appropiate, clearly separated function (utility). Simply because the old "fiat-gold" system isn't gone work much longer.

This will be understood much more clearly, when the goldprice reaches a certain pricelevel where the old classic goldprice rise-blablablas are NOT making any sense anymore to the general public. We are not there, yet. And the ruling cartels can still make the general public believe exactly what they want you to believe. Still an extremely convenient situation for all, fiat (goldprice) managers and gold giants (metal accumulators) as well.

And finally think about...THERE IS NOT ENOUGH GOLD, BECAUSE ITS PRICE IS OBSCENELY LOW !

OvS

(11/30/2005; 09:39:27 MDT - Msg ID: 138534)

Goldilox.

Your head and right shoulder
looks like a descending channel
to me.
I'm not much of a chartman and
keep things "very" simple. Look
at the 5 & 10 yr chart. That's
the gold bull run manifest.
Those wiggles in between mean
nothing to me and should the
pricing of gold go down to the
460's that would be just a normal
correction. We are not yet at
the blow-off stage and although
many get excited about 500 that's
just a small step up the ladder.
Relax and tend your garden and
keep us entertained with your
posts and wide-ranging thoughts.
You are a mainstay of this forum.
Thanks and ... cheers ... OvS

OvS

(11/30/2005; 09:46:37 MDT - Msg ID: 138535)

Belgian

Your amazingly consistent
pharmaceutical concoctions
have an amazingly soothing
effect; so please keep your
comments coming--each new
rephrase gives a new twist
and always if refreshing to
our not so consistent souls.
Cheers. OvS

Flatliner

(11/30/2005; 10:15:02 MDT - Msg ID: 138536)

Are we slaves to the people that create money?

http://www.wealth4freedom.com/creature_Chapter_10.htmIn yesterday's post, I find the following: "You have terrific posts so please enlighten me on what I'm missing because without sound money (truest of evils)we are all but slaves to the people who create the money." In today's postings, I see that someone touched on �sound money�. I would like to touch on �we are all but slaves to the people who create the money."

Did you really mean to say this? It's not that it's really bad or anything, but who really creates money?

A while back, I came across a very disturbing book. You can find it on amazon.com: "The Creature from Jekyll Island : A Second Look at the Federal Reserve (Paperback)
by G. Edward Griffin" On one hand, that book left me extremely shaken with a deep mistrust of everything. I was left with a deep rooted sense of fear of the financial community and fiat currency. But, there were some bright points. It had a very clear presentation of the Mandrake Mechanism. Hey, wouldn't you know, this chapter is now on the web: http://www.wealth4freedom.com/creature_Chapter_10.htm. Search for "start with..." if you don't want to read it all.

End result (if this information is true): People create money when they go in debt. So, who are we enslaved too? If we create money by going into debt, then we must be enslaving ourselves.

I believe that this is one of the biggest arguments for freedom. Can one truly be free if they are in debt? Free yourself, get out of debt! When you do, the only thing you've have to fight is taxes!

This might also help shed light on �sound money�. What is sound money? I would contend (without any real proof) that it is the ability to trade with others without personally going into debt.

mikal

(11/30/2005; 10:17:33 MDT - Msg ID: 138537)

Seasons Greetings

It is most gratifying to see this Christmas holiday season is starting off so well, for at least some retailers anyway, with no major tragedies in the west such as hurricanes(although there is a storm in the Atlantic- Epsilon), earthquakes, or more riots.
What seems to stand out the most is persistent rallying in world equities, especially the Dow invincibles, er Industrials and 'comeback kid' Nasdaq, like some crown jewels of Christian capitalism. This 'sparkling performance' has most everyone convinced, this trend of physical into paper is not just a year-end holiday phenomenon.
So too have I been so overcome by what can only be taken as an Act of the Supreme Being, and in keeping with the (sacred) holiday spirit, I now wait daily in line at the coin shop greeting (what I assume are) other gold sellers like this:
"After you sir!", "No problem, be MY guest.", "Are you sure, I'M in no hurry!", "Absolutely, Merry Christmas!",
"First come, first served.", "Ah, you are too kind, after YOU!", "But I INSIST, it's my pleasure.", "Excuse me, I must go make a phome call..."
Just the same(notwithstanding), MERRY CHRISTMAS to all.

Smeagol

(11/30/2005; 10:44:51 MDT - Msg ID: 138538)

"we are all but slaves to the people who create the money."

Then a lender, not a borrower be, precious... for the "money", and the debt-bond (masster-sslave relationship) is created by borrowing in the firsst place...hence borrowers willingly enslave themselfs.

S.

Flatliner

(11/30/2005; 10:47:13 MDT - Msg ID: 138539)

Money supply must expand

http://www.financialsense.com/fsu/editorials/gnazzo/2005/1129.htmlThe Financial Sense website is a wonderful source.

Thank you Douglas V. Gnazzo for your article yesterday.

What I find most interesting is the statement that "Money supply must expand by the amount of interest owed on the debt." Which is followed by "If it didn't, the debt would not be able to be serviced."

This, was very enlightening to me, and, hopefully, it will help someone else that visits this forum.

Simply put, any money system that builds on an interest system will, by it's very nature, be one in which the money supply must be expanded. If new money is not created, where will the money come from to pay the interest? In very simple terms, loan 100 bucks @5% interest. After one year, the loan is 105 bucks. If the system consisted of exactly 100 bucks at the start, where would the additional 5 bucks come from? Well, it would be impossible to find, thus the person that took out the loan would be in default.

Scale this up. Now consider all the new loans that have been created over the last few years. Trillions of new dollars have been created that all need to be serviced. Is there enough money in existence to service these loans? I would guess not. I would guess that the Federal Reserve knows this and they will have to go on a huge spending spree in order to keep the liquidity in the market just so everyone can service their loans. The bad news if that if people can't service their loans, they default by filing bankruptcy and that money is erased from the books. If the number of bankruptcies go up, the amount of money in circulation goes down thus making it even harder for all the debt to be serviced. Thus, when loans are forgiven the fed must work even harder to pump money into the system. For every loan that goes bad, they must create that much money plus the money needed to service the loan.

Ah! If people and corporations don't borrow money the government will. It must be done.

The worst part about this is that the system has a built in deflationary affect on the currency in use. Because more money is being created, there will eventually be a lot of money casing a fixed number of goods thus causing the price to go up. Thus, the common Joe gets inflation. This is compounded if fewer widgets are available to buy.

How does all this relate to gold? Not sure. But, I'm sure that if there were a money system that did not force the creation of more money to service the interest, that system would probably be pretty stable.

Flatliner

(11/30/2005; 11:43:47 MDT - Msg ID: 138540)

What if?

Letting my imagination run, (Sorry if you find it a waist of time) I'm dreaming of a money system that is as good as gold (that might tie this dream into this site).

As we know, if you build a money system on debt that must be serviced, the money supply must be expanded in order for the system to work. If one entity has the sole right of creating that one money, then it seems that they have a monopoly in the market. They create it, they deal in it and the value of it either is worth less or worth more over time based on how fast the monopoly creates the new money.

Later, a bank comes along. It uses this money as a reserve. They have now taken on risk. The new bank is subject to the will of the monopoly and how it handles the money supply. Basically, if the new bank loans money and the monopoly stops filling the channel, the person taking out the loan has a higher probability if defaulting. This is not good news to the new bank. Also, if the monopoly creates lots of new money, the customers of the new bank will be looking for much larger loans then the new bank can handle. In this case, because the new bank is a debtor in a commodity that is losing value, the bank is stuck in a losing position. This is also bad news because the bank needs to make loans and maintain its value and grow its reserve.

What if the bank put something on reserve that had value and something that was widely available, say gold. This gold, valued in the open market, covered the liabilities of the bank 100% (or even more). Then, the customer comes in to take out a loan. When they do, the bank loans them the asset that they need in order to conduct their business. If that's money, great, the bank trades a little gold on the open market acquiring money for the business and the loan now exists on the books. In return for the loan, the customer agrees to replace the reserve at the bank along with a little something (whatever that is) for the banker's trouble (new car, coffee every morning, or maybe a gold coin).

At this point, the risk in this system is directly between the banker and the customer and the value of the reserve is also not subject to the will of the monopoly. Is such a system possible? Is such a system one in which everyone could profit?

It seems like a plausible scenario.

I also have to wonder if this is anything close to the Freegold concept that some people here keep harping about. Only time will tell. If this concept held water, it would make me not want to sell my gold and look into being the banker of the future.

Goldilox

(11/30/2005; 12:07:01 MDT - Msg ID: 138541)

HS Chart pattern

@ OvS,

I know only enough to recognize the oulines (more like cloud gazing than chart reading), so thanks for the commentary and the encouragement.

Also, Thanks to TC for the clarification, as I don't think I "got it" in his initial response to Flatliner.

Belgian

(11/30/2005; 12:28:22 MDT - Msg ID: 138542)

Anger at US inaction on the yuan

http://www.atimes.com/atimes/China_Business/GLO1Cb02.html$700 Billion, probably growing to $1Trillion in '06, of excess dollars in one Asian nation's hands.
At today's POG, the total aboveground stash of 155,000 tonnes is priced 2.3 Trillion dollars.
At the end of '06, chinese dollar-reserves might (!!!) reach the equivalent of almost half the 5,000 years accumulated aboveground stash of gold.

It speaks for itself that no nation will ever be able to buy 77,000 tonnes of gold-metal.

I only wish to emphazise how much $-1-Trillion is in goldmetal terms, at today's virtual goldprice and PRICING.

How reserve-relevant is the purchasing power of this $1Trillion, when during the past decade, the USDX fluctuated between 80 and 120 ? How stable/reliable is the possession of this growing $-profit ? What can the chinese acquire with this ever (systemic) rising stash of excess dollars ?
The answer is : very little. So, there is another reason why this accumulation of excess dollars continues : Global Export trade in dollars. And wonder oh wonder,...the yuan is now officially(?) quoted as a non-manipulated currency.

How should we interprete China's gold liberalization in this context ? Including the CB of China, accumulating gold-reserves on top of the growing mountain of dollar reserves ? Is here a political will growing as to switch to a freegold system, when the existing $-reserve regime starts detoriating ? Then the remaining purchasing power of the dollar reserves can finally be used for productive purposes, whilst the freegold reserves do their job as real reserves should do (conserve original purchasing power for the state and its citizens individually).

Question : Has the yuan floating been left alone for reasons of a rising goldprice (think giants)?

melda laure

(11/30/2005; 13:01:40 MDT - Msg ID: 138543)

(No Subject)

Unless they re-write the laws of physics....
(that's been done over the years, men don't know everything...)

USAGOLD Daily Market Report

(11/30/2005; 16:27:43 MDT - Msg ID: 138544)

Page Update!

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

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WEDNESDAY Market Excerpts

Gold down for day, up 6% for month

November 30 (from MarketWatch, Reuters) -- Gold futures fell over $4 an ounce Wednesday, but still logged 6% gain for the month with the front-month contract hitting the key $500 level twice this week in overnight trading sessions.

COMEX December gold closed at $494.60, down $4.50. The contract closed up $27.70 from its end-of-October level.

"You've had end-of-the-month profit taking," said George Gero, senior vice president at Legg Mason Wood Walker. "Whenever you make new highs, you always have folks who want to take profits, and $500 is a psychological barrier."

December gold, the most active COMEX futures contract before Wednesday, rose as high as $502.30 on Tuesday in NYMEX off-hours electronic trade, the loftiest for benchmark futures since late 1987.

(Today's new) benchmark February contract shed $4.80 to $498.70, after trading between $504.40 and a low of $496.

Trading was choppy this week with speculative players busy transferring holdings out of December gold into February futures before December metal delivery begins Thursday.

NYMEX was raising the margins on its gold and silver futures contracts as of the close of business Wednesday.

Dealers said a period of consolidation around current levels was likely, as players await the next move from the big funds that have fueled the metal's 14 percent rise this year.

"I don't think that the rally is over," said Frank Aburto, a broker at Rosenthal-Collins Group in New York. "Now that we have hit the $500 mark, chances are that we may just continue to move on the upside, as far as the funds can take it."

Gold has found favor with hedge funds diversifying into commodities to enhance returns, along with its classic role as a hedge against inflation and a weak dollar. It also has drawn new interest amid geopolitical unease and on expectations that Russia, Argentina and South Africa are friendly to boosting the amount of gold in their reserves, analysts said.

---(see url for full news, 24-hr newswire, market quotes)---

The Invisible Hand

(11/30/2005; 17:37:08 MDT - Msg ID: 138545)

Belgian's link and Melda Laure's rewriting of the laws of physics

http://news.google.com/news?hl=en≠d=us&q=Anger+at+US+inaction+on+the+yuan&btnG=Search+NewsIf Belgian's link doesn't work, try this one.
http://news.google.com/news?hl=en≠d=us&q=Anger+at+US+inaction+on+the+yuan&btnG=Search+News
SNIP
Chinese officials have countered that a rise in the price of Chinese exports could hurt millions of people at home who depend on the country's exports boom, not to mention harming the interests of US consumers, who have become accustomed to inexpensive Chinese-made clothing and household goods.
END OF SNIP

As Harry Hazlitt said: The art of good economic consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

As to the rewriting of the laws of physics, it remains a deep puzzle why mathematical laws should apply to the world with such phenomenal precision (Roger Penrose).

Frederick Copleston, S.J., regards the whole tendency to pan-mathematisation as unfortunate.
That the real is rational is a presupposition of all dogmatic philosophy,
but it does not follow that the whole of reality can be rationalised by us.
The attempt to reduce all reality to mathematics is not only an attempt to rationalise all reality � which the task of philosophy, it may be said �
but presupposes that all reality can be rationalised BY US, which is an assumption

And TRUTH shall prevail (and justice by the same token).

R Powell

(11/30/2005; 18:13:12 MDT - Msg ID: 138546)

Article mentioning the gold market .....

http://www.bis.org/review/r051130f.pdf .....as an investment. Does investment imply profit?? This is not your father's gold as insurance only market anymore.

Wondering....if MK, George or someone from the firm might let us know if the volume (number) of gold buyers has increased in response to gold's newfound newsworthiness OR is the general public still pretty much unaware? Also, is gold in various forms still readily available on the wholesale level? Thanks...
rich

Henri

(11/30/2005; 18:41:51 MDT - Msg ID: 138547)

Galearis msg 138383 et al

@Galearis...Not upset in the least...no worries. With the possible exception of pre-horsetoric Apache (Thank you Camel for that peak back)who were pretty much the last to be subdued that allegedly engaged in "slave-trade...I only meant that the Native Americans appeared more Spiritual and compassionate toward their own than those who supplanted them in locale

@Camel...Of the Apache, a scout by the name of Neil Erickson under General Crook and again under General Miles during the two campaigns against Victorio and Geronimo said during an interview in 1935 "If I had known then what I know now about Indian character, I would have desrted the from the American Army and joined up with the Apaches."

In 1885-86 Geronimo, the Apache Chief, with only 35 men and no base of supplies, fought off 5000 regular United States troops, 500 Indian auxiliaries, and a company of Border Scouts for 18 months, during which time he lost only 6 warriors, but killed a couple hundred of his enemy.

Buffalo Bill Cody stated in an interview in 1915 "I never led an expedition against the Indians but I was ashamed of myself, ashamed of my government, and ashamed of my flag; for they were always in the right and we were always in the wrong. They never broke a treaty and we never kept one."

As for the Mayans evidence has surfaced that the collapse of their civilization was at the hands of their own leadership who had become corrupt and drunk with power. The people abandoned their cities in search of a plain sane and pastoral life where they did not fear their own leadership. We can only hope that this is not the final chapter of our own history.

On your portrayal of Cheney carrying a poster of Jesus...Dubya did mention that he was carrying on a "crusade" in the middle east...he really does know how to get under the skin of his supposed adversaries...is it possible he really doesn't know how deeply he offends?

@Ten Bears...Thank you for that passage and the link to the full epitath of Ten Bears

@Goldilox Your "...Raising the bar for individuals is the only real battle for "freedom"..." is in agreement with my hoped for intent of my post back to Galearis.

An adolescent "Brave" is most brave when he finally confronts his own self...as an adult "warrior" the battle with the self continues into the Spiritual plane. For such men the Earth herself weeps in the absense thereof...

David Linkley

(11/30/2005; 19:34:19 MDT - Msg ID: 138548)

@Flatliner & Smeagol

My comments regarding debt were not aimed at individuals so much as nations (specifically the US). My rant against the politicions and banksters comes from the discarding of a moral, sound, objective system of money to the paper blizzard of today. Few people realize that the trillions of dollars created by the Fed under Greenspan to pay for our current consumption binge are debts. The money in your wallet is debt and the collateral is or homes, businesses, national treasures, etc. We did not vote or OK the right to create the mountain of these obligations. Any President even contemplating a return to a more Constitutionalist based sound money policy has met a severe fate. (Reagan @ Kennedy) I do not advocate a return to exchanging gold coins as money in an information age but a sound money backed by gold which limits the government's ability to print.

I too read The Creature From Jeckal Island many years ago. Some of the book is factual and some areas are incorrect. It does highlight the immorality of banks overextending themselves and the desire of shifting the risk to the taxpayers. The shareholders of the Fed want higher deficits because they make more money. They create billions out of thin air and then charge US citizens interest. Now wonder our Founding Fathers warned of money not issued from our Treasury.

TownCrier, I don't need lessons on how banks work. From approximately 1870 til 1920 the US dollar lost basically no purchasing power under a gold standard. If politicions messed with the money people exchanged dollars for gold and told the polititions to shape up. The evil and immorality of fiat currencies is self evident with history providing many examples. Outside of natural disasters (1906 San Francisco earthquake) bank's over extension of credit obligations caused the short depressions which occured. You are a very thoughtful writer and I pray that you and your family won't be too impacted by the evil of which I speak. I hope there might be an atom of doubt in you that the creators of this current system might not have your and my best interests at heart.

captain

(11/30/2005; 19:43:13 MDT - Msg ID: 138549)

Silver Hedging

Hi all! My first post in years....I imagine silver using industries will eventually compete for supply. Given that, I'm here to say I would be willing to hedge a percentage of my bullion now, for $100.00 an oz.......I hope this doesn't make me a traitor to the cause....All my best, captain

Ten Bears

(11/30/2005; 20:08:16 MDT - Msg ID: 138550)

Liberating Sovereign Credit for Domestic Development - Part I: The Curse of Dollar Hegemony

http://www.safehaven.com/showarticle.cfm?id=4176&pv=1Henry C. K. Liu
(definitely not an apologist for the status quo, and at the top of his game in this commentary)

Snips;
"Neoliberals promote market fundamentalism as the sole, indispensable path for national economic growth, despite ample evidence in the past two decades that trade globalization tends to distort balanced domestic development in ways that hurt not only the less developed, but also the developed economies"

"Unregulated markets lead naturally to monopolistic centralization and abuses in corporate governance and finance."

"The world's interlinked economies no longer trade to capture Ricardian comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to stabilize the value of their currencies in world currency markets."

"A vibrant economy is one in which there is persistent labor shortages that push up wages to reduce overcapacity".

"Sovereign debt is a pretend game to make private monetary debts denominated in fiat money tradable."

"Thus dollar hegemony is objectionable not only because the dollar, as a fiat currency, usurps a role it does not deserve, but also because its effect on the world community is devoid of moral goodness, because it destroys the ability of sovereign governments beside the US to use sovereign credit to finance the development their domestic economies, and forces them to export to earn dollar reserves to maintain the exchange value of their own currencies."

"The issuing of credit creates debt on the part of the counterparty; but debt is not money, credit is. Debt is negative money, a form of financial antimatter."

"Worker pension funds, in search of highest return on investment from transnational corporations that maximize their profit from cross-border wage arbitrage, are unwittingly depriving the future pensioners of their high-wage jobs, pushing them into early involuntary retirement with reduced annuity"

"The only jobs that will not be outsourced will be those that are location-tied, such as cooking and serving meals, caring for the sick, the young and the aged, vacuuming carpets, cleaning toilets and picking fruits. Such jobs do not pay a living wage in the US turbo economy, and to fill them the US imports illegal immigrants."

Smeagol

(11/30/2005; 21:14:32 MDT - Msg ID: 138551)

On Sound Money

(Smeagol mode off)

Sir David Linkley: "I do not advocate a return to exchanging gold coins as money in an information age but a sound money backed by gold which limits the government's ability to print...
I hope there might be an atom of doubt in you that the creators of this current system might not have your and my best interests at heart."

You share a skeptical bone with me. I'll run with those Thoughts and see where it leads.

In this particular age it may not be feasible to limit monetary exchange solely to gold, but the >option< of exchanging gold for anything else, as in any other age, must never be infringed.

The only way governments/banks ability to print money honestly for any length of time can ever happen, is to neutralize the potential for abuse with one currency that can be printed by ALL governments/banks - or NONE of them.

In the former case, no country could gain advantage over another by overprinting or reserve-currency hegemony. We are talking a one-world currency here. Gold would be the referee, marked to market and unrestricted in any way.

In the latter, the paper-money printing power would still rest with governments/banks. Each country/government would continue to print their own currency, the exchange of which for any other currency would be unrestricted in any way. Gold would be the master-currency, marked to market and again, unrestricted in any way.

In both cases, gold IS the reference currency that must have no peer. Marking the gold price freely to market in all currencies allows the money supply with its perceived value to rise and fall as it may. A major problem with the money system today stems from the fact that gold is/can still be controlled by fiat(decree), and we are still in the fallout zone working out the aftermath of the old metal standards.

This is why I have said in previous posts that gold must irrevocably be placed outside/above all law, and be possessed only by human beings - not corporations. Monetary policy power must be distributed in a way that can never allow it to concentrate in the hands of a few. Mark my words, all - outside of these conditions no money system that Man can ever devise, not even "FreeGold", will work equally (beneficially) for all, for very long. Someone WILL find a way to abuse it.

In reality I don't think we will ever have sound money... we will have to do the best we can with the coming "QuasiFreeGold". But I ever hope. And watch.

Enjoying your posts and the replies,

Smeagol

Sundeck

(11/30/2005; 21:37:08 MDT - Msg ID: 138552)

A brief summary of warnings...

http://www.howestreet.com/mainartcl.php?ArticleId=1758...for those who have not already memorised the sayings of the Great Man...here is some Greenspanesque.

;-)

Chris Powell

(11/30/2005; 21:49:12 MDT - Msg ID: 138553)

Latin American Parliament ponders Mexican silver coin proposal

http://groups.yahoo.com/group/gata/message/3514Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Smeagol

(11/30/2005; 21:53:22 MDT - Msg ID: 138554)

Hahahaha! O, tell uss another!

(The following is posted for entertainment value only)

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S.

Chris Powell

(11/30/2005; 22:19:10 MDT - Msg ID: 138555)

Blanchard statement on Barrick settlement cites end of hedging

http://groups.yahoo.com/group/gata/message/3515Latest GATA dispatch.

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

gata-subscribe@yahoogroups.com

Goldilox

(11/30/2005; 22:21:56 MDT - Msg ID: 138556)

Certificate

@ Sir Smeagol,

I only want the certificate if it is "made of gold"!

That might be pretty!

Liberty Head

(11/30/2005; 22:22:42 MDT - Msg ID: 138557)

Credit Without Monetary Expansion

Monetary expansion can be avoided by accepting goods and services as the interest portion of a loan.

Best Wishes

Caradoc

(11/30/2005; 22:46:47 MDT - Msg ID: 138558)

A break for holders of mining claims?

http://sf.indymedia.org/news/2005/11/1722404.php The linked article (although a bit from the left) indicates some chance that the US federal government may once again allow holders of unpatented mining claims (mining and mineral rights only) to actually take title to the underlying real estate ("patent" their claim) at a nominal price per acre. This provision was in the House version of the FY 2006 budget reconciliation bill passed a week ago and must now be reconciled with the Senate version which doesn't address this issue at all.

Doesn't matter much whether one thinks it's terrible to reduce the amount of federally owned (so-called "protected") land while letting mining companies make out like bandits or whether one thinks it's a great idea to let the feds raise money and let development of resort housing take place while local governments increase their tax base. My hunch is that when the feds start trying to pay for prescriptions and baby boomer social security checks, they'll perceive the need to raise cash. Could happen sooner if China and Japan stop buying our debt. In any event, some probability that advantage may accrue to holders of mining claims either in 2006 or some future year.

Mulling over how to take advantage of this situation, it occurred to me that I didn't have any mining claims. That was two days ago. Since then, I confirmed that no technique or site makes looking for pickers, flakes, and dust an easy task, but relatively speaking the easiest approach is to find a stream in the right area where the water has worn its way down to bedrock and formed lots of pockets and potholes. Like these babies...
http://www.goldengirlminingcompany.com/sitebuilder/images/GL17-600x450.jpg

...photo taken at my Sierra claim where I'll be getting a lot of wholesome fresh air and exercise over the next few years while maybe stashing a few extra ounces.

Yes, if you ever hear me complaining about a broken ankle, you've probably seen the reason why. Meanwhile, the contiguous claim downstream has the same bedrock bottom and is available. If you're still spry enough and would like to play, just go to everybody's favorite auction site and do search for "California gold mining" with those three words inside quotation marks.

Caradoc

Gandalf the White

(11/30/2005; 23:26:38 MDT - Msg ID: 138559)

BEAUTIFUL Bedrock !

Thanks, Sir Caradoc !
Got water rights ?
<;-)

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