http://www.europe2020.org/en/section_global/150206.htmSNIP
The Laboratoire europ�en d�Anticipation Politique Europe 2020 (LEAP/E2020) now estimates to over 80% the probability that the week of March 20-26, 2006 will be the beginning of the most significant political crisis the world has known since the Fall of the Iron Curtain in 1989, together with an economic and financial crisis of a scope comparable with that of 1929. This last week of March 2006 will be the turning-point of a number of critical developments, resulting in an acceleration of all the factors leading to a major crisis, disregard any American or Israeli military intervention against Iran. In case such an intervention is conducted, the probability of a major crisis to start rises up to 100%, according to LEAP/E2020
==
First there was Y2K, then there was Donald Duck, and finally the Iranian Oil Bourse and the final week of March 2006.
And there we are and still nobody is fixing "our" economic problems.
Anybody has a new idea not for a cause, but for a trigger?

Here's an Iranian article on Friday's oil market which doesn't mention the Bourse.
http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=41676&NewsKind=Current%20Affairs

Here's more interesting news from Iran
http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=41692&NewsKind=Current%20Affairs
Iran denies claims in withdrawal of Gold assets
Saturday, April 01, 2006 - �2005 IranMania.com
LONDON, April 1 (IranMania) - An informed source in Central Bank of Iran denied the news published in a Swiss daily on withdrawal of 250 tons of Iran's gold reserves from that country's Credit Bank. The Central Bank official, who spoke on condition of anonymity, told the Economy Desk at IRNA Head office in Tehran Desk, "The news published in the Thursday edition of the Bern-based daily Der Bund, on Iran's withdrawal of 250 tons of its gold reserves, worth five billion Swiss francs, and transferring them to Tehran is totally baseless." Der Bund had added in its story that apparently Iran has ever since last October withdrawn 700 tons of its gold reserves, worth sixteen billion Swiss franks, from various Western monetary funds and transferred them to other unknown destinations.

==
The Invisible Hand is still waiting for Armageddon.

@Thoreauly #142915 et al.,

Clearly, you are no novice when it comes to defining the pros and cons of investing.

Redrawing some equity from your house and placing it in gold has got to be about the most conservative "asset reallocation" imaginable in the present climate...

...and I agree, that it matters little if your house depreciates significanty, since you are debt-free and the price of gold is likely to make up any price-loss on the house...and, in any case, it seems to me that you are not going to be left penniless, no matter what.

My comments are not intended either to encourage or discourage your decision, just to provide alternative perspectives, as TC has said. Investing is a very personal thing. One needs guts to follow one's convictions in a big way...you probably know where your "pain threshold" is and will act accordingly.

You mention the disparity in pricing from urban/coastal to rural/heartland in the US... The same thing existed here in Australia a couple of years ago... When the word got out, so great was the rush that we had people (speculators) buying properties sight-unseen over the telephone in inland country towns. It has all settled down pretty-much now. Prices in my area (Canberra) have come off about 5-10% in the last six months. Where to from here????

Finally, with regard to Bernanke's helicopter finance contingency... There are many degrees-of-freedom in an economy. Money may be offered free, but still people may not accept it, and even if they do, they may not spend it. A deflationary spiral cannot be ruled out...as in Japan. Neither I, nor Choppa Ben, nor anyone else knows how things are going to pan-out going forward...

Uncertainty has always been with us and it comes in many forms.

Cheers

:-)

Before I start I must thank all that replied to my question a few days ago about purchasing a 'hedge' for a declining housing market. Seems it almost goes hand in hand with the lastest discussion.

Thoreauly,

A few years ago I believed in a runaway inflationary enviroment so I bought the biggest house I could find, I did lock into a low-rate mortgage and did borrow heavily against a line-of-credit to buy gold. The plan has worked "so far, so good". The house has appreciated by some 30% and gold has doubled.

Now comes the clincher. Are we near the point where the commodity 'bubble' needs to take a rest? Is the housing bubble about to burst? This is why I asked the forum last week about a hedge for a declining housing market.

The question that lingers in my mind is whether the runaway inflation will turn into a deflationary collapse. Believe me, the internet is FULL on opinion for both sides of the debate. This is where I believe Black Blade enters the scene. If we are headed into a deflationary collapse, cash is king, debt becomes larger. Does BB side on the deflation argument? I hope Mr. Blade does enlighten us on this thread.

Boilermaker did make a valid point on the "walk away" loan. I would be inclined to do that myself, but if I extracted my equity (almost a third of the house) I could not service the loan. This is why I look for the hedge. If one could bring down their equity to very little and buy gold I would have done it a long time ago.

So you have many things to consider. Best of luck to you and to all us homeowners (and gold-holders !!)

Have a golden day.

http://911research.wtc7.net/talks/wtc/squibs.htmlI would say if all else fails (even the supposed and entirely concocted war on "Terror", just look at the squibs on the collapsing WTC 1 and 2), you can count on derivatives, GM, or Fannie Mae at the end of the day to provide that last needed kick over the cliff to peel the rosy pancake off the white as a sheet, emaciated face in the casket, exposing it for the corpse it truly is!

http://www.federalreserve.gov/releases/h6/hist/h6hist1.txtInflation vs. Deflation vs. Stagflation

There has been some interesting debate lately on using one's home as a ready ATM to purchase Gold. All I can say is what I think is right for me and I certainly can't speak for anyone else. Ultimately it is a decision that we must make on our own. I can only speak for myself. If I were to have a primary residence on land that is free of debt (i.e. no mortgage) then I would not put it at risk regardless because I prefer to err on the side of safety. To tell the truth, I am as nervous as a virgin in a whorehouse when I am around bankers when discussing what to do with my money.

However, I would see no problem in the current environment putting secondary properties at risk if the odds favor a better return by putting cash to work in other hard assets like Gold and Silver. Maybe even taking a mortgage out on the vacation home would be a good move (although I think of isolated vacation property as an escape option if more urban settings become dangerous). Personally I would simply use the cash I would be paying on a monthly mortgage and use it to dollar-cost-average into a "portfolio insurance" position with Gold and Silver.

That said, I think that we are experiencing a similar economic environment as that of the 1970's to early 1980's. We are in a secular bull market for commodities and studies have consistently shown that these cycles run on average 18 years. We are only about 6-8 years into the current secular bull market when Gold and oil hit the lows in 1998 to 1999. Note that the last secular bear market for Gold was from January 1980 to June 1999. Curiously the secular bear market ended with the end of Chancellor Gordon Brown's disastrous Bank of England gold auctions � probably akin to the famous adage of getting out of the stock market when the shoeshine boy starts to give stock tips.

I suspect that the cycle could even be longer this time because the "twin deficits" and national debt have never been to such extremes as they are now. In fact I fear that we may have tripped the "tipping point" on the US Dollar. This could ultimately spin out of control leading to hyperinflation or the scuttling of the US Dollar as a currency and replaced with a "Super Dollar" similar to how Mexico dealt with the Peso several years ago. Of course those holding US debt such as foreign governments will probably get royally hosed.

Frankly I am amazed that the US Dollar has held up as well as it did over the last few years. The Clinton administration all but insured the demised of the dollar and the Bush administration just sealed its fate. The "Strong Dollar Policy" was and is a sick joke. The carnival barkers in the financial media often tout the "strong dollar" when in reality all currencies are failing. Even the mighty Swiss Franc that was once solidly backed by Gold is failing. The joke is that the US Dollar is only "strong" relative to "weaker" foreign currencies. Hell, smarter investors than me have taken positions against the US Dollar and in precious metals in one way or another (i.e. Warren Buffett, George Soros, Bill Gates, Paul Ballmer, etc.) and others have simply bought into a broad positions in commodities (i.e. Jim Rogers). For new Federal Reserve Chairman Ben Bernanke to keep the dollar currency from crashing in the current environment even with all the tools at his disposal is like herding cats. It just won't work.

The Bureau of Labor Statistics and the Federal Reserve have done a remarkable job in disguising the "real rate" of inflation. They are truly masters of the game. The statisticians they have in their employ are exceptionally adept at using "statistical massage" techniques to fool the American public, the monkeys in Congress, the buffoons on Wall Street, and the Carnival Barkers in the financial media. Personally I find it amusing that few even question the use of "hedonic deflators", "seasonality", "imputed income", "core rate", etc. rather than focus on the real data and the effects of a rapidly expanding money supply. However, a few such as New York Post's John Crudele or lone crusader Rep. Ron Paul (R-TX) do ask officials and economists the hard questions and get a stuttered response if they get one at all. Don't ever expect to see Joe Kernan or David Faber on CNBC pose such questions to Secretary of Labor Elaine Chou when she appears on her monthly visit to the CNBC studios for the monthly employment data release. It ain't gonna happen! It would be quite amusing though. If the Carnival Barkers turned and started to go "hard ball", poor Elaine would be as nervous as a long-tailed cat in a room full of rocking chairs.

Yep, the fun ain't over yet. Now the Federal Reserve simply "canceled" the M3 data report. Too much of an embarrassment I suppose. Notice that it is now conveniently missing in the latest report (see link). In other words, M3 tracks what the big boys are doing with the money. This includes US dollars held in banks in Canada and the UK (called Eurodollars) not to be confused with the Euro which is the standard currency of Europe. So why stop tracking M3? The reasons given are that 1) to save money and 2) all the money that it tracks is tracked by other indicators. Cute, but since when has the government ever been interested in "saving money"? That's a new one on me. I would also like to know what these "other indicators" are. I am curious but did anyone notice that the M3 went up an annualized 9.4% in the last three months and an annualized 17.2% in December alone? Gee Whiz, now the Federal Reserve wants to stop tracking it. Why face the evidence of soaring inflation growing at a 9.4% clip (Barring growth in the to counter balance that � and we know that the trade deficits have widened to all time record levels). Why leave a smoking gun lying about when you can wipe off the fingerprints, file off the serial numbers, and toss it into a deep abyss away from prying eyes.

Heck, the April 15th tax deadline is only two weeks away (actually it's the 17th this year). I plan to do my best to pay up using "hedonically deflated" dollars. Yesirreee� my dollars are better than old dollars. They are fresh and crisp and will hold up longer so the value must be greater. Hell, if that tripe is good enough for the government then why not for us peasants. Think they'll buy it? Yeah, I know, my CPA will bitch slap me for even bringing it up. And she's one mean little gray-haired old lady!

http://www.prisonplanet.com/articles/march2006/310306fearofmuslims.htmRe: Financial Armageddon and "Anybody have a new idea, not for a cause but for a trigger?"
The 'Fear Of Muslims' Conspiracy Theory
War on terror gives plenty of cover for extravagance past and future, increased centralization of power and wealth, destruction of middle class and former "rights".
Another 911 and war may also be in the cards- Link to follow

http://www.rense.com/general70/nuketx.htm NWO Master Plan - Nuke Texas? by Douglas Herman - 3/27
Cheney and Halliburton profited the most from the Iraq war. Here is a brief, gravely unsettling outline of a devilishly plausible crime possibly slated for 3/16/06- a special occult number. Includes one of the better links to the wild and reckless DU(depleted uranium) debauchery.

That should read "to occur on 4/16/06"

Your thoughts here.......

"Are we near the point where the commodity 'bubble' needs to take a rest? Is the housing bubble about to burst? This is why I asked the forum last week about a hedge for a declining housing market."

********

You seem to hold the opinion that both commodities and housing are in a bubble. Whether so or not I would not assume that a decline (bubble burst) in one will of necessity cause or mean a decline in the other.

As to whether commodities are in a bubble...defined loosely as priced higher primarily due to speculative buying, I would venture that there has been speculative buying but it has been induced by rising prices which were initially caused by the simpliest of causes, an change in the fundamentals of supply and demand. Speculation does not cause the bubble, but it may support or even enhance it. Also, unlike the dot coms + tech stocks of the 1990s, commodities are real tangible items, basic necessities of life. The demand may ease over time (many years) but will not burst. My own humble opinion is that commodity demand may not ease, to any great extent, in my lifetime or that of my children. There may still be years and years to go in the commodity bull in metals as demand is not abating and supply can only be marginally increased over time. I guess I'm opining that silver, gold and base metals (especially copper) are still cheap. Is this opinion a given. Of course not, but as long as demand overwhelms supply, the condition remains.

As to housing, I do not see a direct connection between house demand and commodity demand other than that both are subject to the general health of economic conditions in the broadest sense. Also, commodities are a global market, whereas housing is always a local (or perhaps national) market. Your appraised house value may soften while commodity prices are still raging in a run away global, bull market.

I guess like Hamilton and many others I am presently a confirmed commodity bull. Without the economic Armageddon that some believe will occur, I see no short term end to it.
I do believe there is only a small amount of political or economic Armageddon type risk priced into the POG....maybe $20.00 (a guess at best). This amount is added or retracted sometimes in response to daily news. Market noise, I call this. But POG is closer to $600 than the $300 we saw for so many years. What has caused such a rise? Maybe the same conditions that have lifted all commodity prices, monetary conditions to some extent and supply/demand balances. Jmho, of course.

I could ask if you believe a stock market crash is necessarily a condition or outcome or companion to the housing crash you wish to hedge against. If so, there are ways to hedge against such an occurance. But, your physical gold has most likely already fufilled this purpose. That is, the POG increase that will probably accompany any housing price crash or other economic disaster is a hedge. One really nice characteristic of that hedge is that it is NOT a time wasting asset. In the paper hedging casino, there is more money made by selling hedges than there is by buying them. A true hedge is similar to the premium one pays for any insurance. Like homeowner's insurance, one buys the hedge hoping that the house does not burn down, and the premium returns nothing but peace of mind. So many commercial hedgers expect to lose money, it is a cost of business. This is one reason why the so-called "smart money" of the commercial category of the COT is NOT...NOT.. always positioned correctly in the markets. The market soothsayers + moneysnatchers would have us believe otherwise. The commercials are NOT the "smart money". They profit no more (maybe less) than the speculative money. But I'm off subject with that rant.

Perhaps if you are worried that your home value or ratio of debt to appraisal is in serious jeopardy, you might want to buy an investment vehicle against such an occurance. There are derivatives on almost everything, including the housing market and the weather. These are time wasting vehicles and you'd be betting on a "black swan" event (very long shot). Imho, you'd loose your money just as money paid for insurance not needed (known only in hindsight) is gone...pays no return. A hedge is more akin to a cost of insurance while an investment (gold in hand) remains as a store of wealth. Also it is an appreciating one now and in the foreseeable future. But, if you need peace of mind by buying such a hedge, buy a put option on the housing market, or the S+P or the Dow or lumber. But, consider it money spent on an insurance premium, not an investment.

Myself, I'd wonder if I should lower the risk by working more to pay down the debt or by maybe buying even more gold? Having been born with that which every child enters this world with, in lifetime sufficiency, namely greed, I'd probably do both. In fact, I have.
As always, these are just one man's opinions + thoughts. Appraise them as such.
happy weekend
rich

What constitutes a bubble anyway? Is it just speculative interest?

From what I've read, it seems that "bubble" is the term used for the effects of "excess liquidity" being funneled into a specific market, a la NASDAQ Y2K, or possibly RE 2002-2006. Think Tulip mania.

Anybody seen a bunch of "excess liquidity" heading for the PM markets? Other than the hullabaloo about Buffett's silver hedge (which has been so heavily editorialized, we're no longer sure of the facts), not much big money seems to be routed in the direction of PMs. In fact, a lot of "big money" is still try to maintain the impression that they are "dishoarding".

Even the CB announcements are tempered by the fact that no public market can accomodate their needs without huge speculative upheavals.

Commodity bubble? I think this can only be assumed if there is rampant hoarding going on. As long as these commodities are being actually consumed, it also doesn't fit the profile. Do SPRs count? Maybe, but probably not, since militaries sadly tend to use their stockpiles at some point.

Just my $0.04, inflation adjusted

Druid: By-in-large inflation will financially ruin most of the people with the exception of the super rich, while, deflation (especially a deflation of paper "assets") would seriously stress the banking system, what road do you think we're on? Or asked another way, who do you think the cartel of the Fed/Wall Street/Treasury are going to move heaven and earth to protect?

http://www.freemarketnews.com/Analysis/208/4345/2006-03-31.asp?wid=208∋d=4345The Fed Officially Kicks Off the Next Recession - Robert McHugh - March 31, 2006
Apt recent quotes from Bernanke woven into analysis of loans, commercial banking, the Fed, M3 and recession.

@ Druid,

Your exact scenario is why I believe that those who expect hyperinflation followed by deflation have it right. First, "inflate" the debt, followed by a massive revaluation of the perceived money, so that the "haves" win in both directions. This is exactly what occured in the 1920s bubbles and subsequent 1930s deflationary recession.

Here is an option to consider if you are age 62 or older...depending on the loan limits in your area of the country; you can convert your equity to cash, a line of credit, or simply pay of your existing encumbrances and live in your house for FREE (no debt service) as long as you live (6 months and 1 day of each year)in the property. AARP offers a complete guide: "Home Made Money, A Consumers Guide to Reverse Mortgages". I relieved myself of $1000.mo house payment and have a substantial line of credit that I can draw at will up to a specific limit...no payments required.
The mortgage balance accrues @6.25% on the actual amount you draw. One caveat, proprietary Reverse Mortgages offered by a number of banks and other lenders which are not HUD sponsored offer higher loan limits but include some "tricky language" in the loan documents which could trigger a default and result in foreclosure...investigate and choose carefully. Part of what was a house payment has been going for gold.

ALWAYS good to hear from you !
Still punching those natural gas holes ?
GW
<;-)

Well said. I agree that deflation in the money supply means bankers make less money, or better yet, bankers take large losses. (Un)fortunately, they have some really good tools (all digital) that will allow them to print money overnight if need be. There is no other conclusion to draw then the fact that there will be no shortage of paper money. If this makes sense, inflation is the obvious bet.

But, I would like to question how inflation can tell the difference between the super rich and everyone else? My studies have led me to believe that inflation will ravage the asset poor. Get yourself the assets you want now and for some time to come. Anything that you buy today, that can be used at some point in the future, will feel like gold in the hand. If someone told you that you could buy your daily supplies at 1/10th the cost, would you pass up the opportunity?

If you were an investor and someone told you about a hot stock, something that had been growing at 12% a year and was poised to break up, say 20-25% a year for the next five years, would you pass up the tip? Better yet, what if you could use the proceeds of the future sale tax free? Also, what if rather then depending on someone else to run the company, you ran it? This hot tip is inflation. All commodity prices are going up. Tax free commodities are those that you consume.

At one point in the future, you can count on the bankers changing all the rules in order to restore confidence. But, the game will be the same. They will maintain their privilege to print currency. Meanwhile, protect yourself until it's time to take advantage of a different investment opportunity.

For what it's worth, I'm a �glass half full� type of guy and I enjoy a good cup of coffee and conversation.

Just a few thoughts on this:-
I'd concur with BB on the Primary Residence position and in reality would go further and ensure my unencumbered title deeds were in my possession.
Paranoia?? well maybe.
Whilst most here extol the virtues of Physical Metal over it's paper substitute, we might like to reflect a moment on how we measure this Physical. Most do so in Dollars (Yen Euro or whatnot) ...so, to access our equity and buying PM's might be similar say to selling our spare light-bulbs to buy Candles.
Of course LB's are a far more efficient light source than are Candles, BUT they require a System (the Grid) to function ...Candles OTOH can and do suffice in a Blackout.
We would not want to find ourselves using Candles if, through a power surge, the System blew out all our Bulbs and we had none to replace them with when power returned to normal.
If the grid goes down completely and utterly, Candle-holders of course will be laughing but it won't be because they have "power", they will be able to provide "light".
Big difference ...and relevant to the void that separates Physical and Fiat, beware not to confuse the two.

FWIW.

@ Flatliner,

"But, I would like to question how inflation can tell the difference between the super rich and everyone else?"

1) someone who is just getting by is hurt a lot more by a 50% haircut than someone who has plenty of excess assets to fall back on.

2) Debt-based "worth" can be erased by smart money management during inflationary times. Not that everyone does it, but those who do are rewarded afterwards.

http://aslwww.cr.usgs.gov/Seismic_Data/telemetry_data/map_sta_eq.shtml
Size/Frequency been building steadily since the eclipse. Iranian 'quake kills seventy.

http://news.monstersandcritics.com/business/article_1151695.php/Iran_still_insisting_on_Persian_Gulf_oil_bourseApr 1, 2006, 13:16 GMT
SNIP
Tehran - Iran is still insisting on opening a Persian Gulf oil bourse with the southern Iranian island Kish as its base, state-television reported Saturday.

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

http://www.telegraph.co.uk/news/main.jhtml;jsessionid=BNGNLVFIZMQABQFIQMFSFFWAVCBQ0IV0?xml=/news/2006/04/02/wiran02.xml&sSheet=/portal/2006/04/02/ixportaltop.htmlBy Sean Rayment, Defence Correspondent
(Filed: 02/04/2006)
SNIP
The [UK] Government is to hold secret talks with defence chiefs tomorrow [Monday] to discuss possible military strikes against Iran.
==
Armegeddon again!

I can almost hear the riddle being asked in elementary school :-

When do 1 + 1 = 3 ? Answer : When they're pennies ! (Actually nearer 3.2cents as I type ....)

As with gold and silver, even pennies have more value if they are held physically (LOL) !

C!

Does an academic somewhere (i.e. some professor at a research university) have a theory claiming to link the price of oil to the price of gold?

thanks,
curious Lou

I can't help but to think, that the gold and silver breakout this week coinciding so closely with the Federal Reserve meeting, had something to do with that meeting. Though I have not heard or read anything claiming responsibility, it certainly seems that a ground shift in market sentiment occurred at that same time.

You recall, we were thinking, ugh, as gold dropped nearly eight dollars in the first twelve or so hours after the interest rate increase. Then, the market pulled itself off the floor and staged one of the grandest two day rallies that we've seen. Rallying twenty-seven or so dollars over the next two days. What was the reason? Some reverse twist of the old market adage: Buy the rumor- sell the news? Perhaps for the metals markets in this case it was: Sell the meeting- buy the results. Was this then just a huge short cover rally? I don't know, but it seems too large simply for that.

Was there something in the Fed language about concern for high commodity prices, perhaps leading to more future rate hikes, that in fact, spooked the metals markets higher? The threat of killing the economy to kill commodity prices, leading to credit defaults? Credit defaults: the increasing risk to General Motors and Delphi this week, could that cause the metals push?

How about...foreign holders of dollars, deciding that quarter point hikes in interest were no longer cutting the mustard. Did they decide under the cover of a Fed meeting, to sell dollars for gold? Them, thinking that the natural dip in metals markets after an interest rate increase, would cover or neutralize their actions in the market. Well, hallelujah! If someone thought that, they were wrong!

Was there some subtle shift in Fed posture--or was it, a no shift in posture that triggered the buying spree? How about, Iran? or Iraq? or Oil prices? I don't know. But when someone figures it out, I hope that they'll let the rest of us in on the secret of what caused the huge rally right after last weeks Fed meeting.

Technically, the smallest-denomination US coins are not "pennies". They are "cents". "Pennies" (or "Pence") is a term originating in England for a denomination that was first made out of gold, then later changed to silver, followed by large-size copper, then small-size copper, and now today they are small-size copper plated. Imagine that. Pennies used to be made out of solid gold, and now they aren't even solid copper any more ! HaHaHa !

Note that the US Cents that are presently worth more than face value in copper are the ones dated 1981 and older, along with some dated 1982. Part way through the 1982 production run, the US Mint changed the cents from a solid bronze composition to a copper-plated zinc composition. Only the solid-bronze version is presently worth more than the vace value in "melt" value.

Recently I went to the bank and bought $40 worth of one-cent coin rolls to look through, to see what percentage were the pre-'82 bronze type (I also needed some solid bronze pieces to use for deburring media in my vibrating tumbler). Approximately 10% of the total were solid bronze. Among those, I was surprised to find about 50 of the older "Wheat-Back" cents, mostly from the 1940s and 1950s (1958 was the last year for the Wheat cents). But there was also a 1937, 1937-D, 1925-S, 1919, and 1919-D in the group.

PS: Note that in 1943, US cents were generally made of zinc-coated steel so that more copper would be available for making ammunition. 1942 and 1944 cents were generally bronze. But by accident, a few 1943 bronze cents, and a few 1944 steel cents, were made in error. Only a few are known and they are generally worth tens of thousands of dollars each. But don't get fooled by a fake copper-plated 1943 steel cent, or a fake zinc-plated 1944 bronze cent (a simple test is to apply a magnet). I've also seen a 1948 bronze cent with the date engraved (altered) to look like "1943".

http://globalresearch.ca/index.php?context=viewArticle&code=EVA20060318&articleId=2128snip:

One by one, the eurozone, the Swedes, the Swiss and now even the Japanese, are turning off the tap of ultra-cheap credit that has flushed the global system for the past year, keeping the ageing asset boom alive.

The "carry trade" - as it is known - is a near limitless cash machine for banks and hedge funds. They can borrow at near zero interest rates in Japan, or 1pc in Switzerland, to re-lend anywhere in the world that offers higher yields, whether Argentine notes or US mortgage securities.

Arguably, it has prolonged asset bubbles everywhere, blunting the efforts of the US and other central banks to restrain over-heating in their own countries.

The Bank of International Settlements last year estimated the turnover in exchange and interest rates derivatives markets at $2,400bn a day.

"The carry trade has pervaded every single instrument imaginable, credit spreads, bond spreads: everything is poisoned," said David Bloom, currency analyst at HSBC. "It's going to come to an end later this year and it's going to be ugly, even if we haven't reached the shake-out just yet," he said.

"People have a Panglossian belief in the march of global capitalism but that will change as soon as attention switches back to US financial imbalances," he said.

There were early signs of panic this week when the Icelandic krone crashed 8pc in two days, setting off dominoes in high-yielding currencies of New Zealand, Australia, South Africa, Hungary and Brazil.

The debacle was triggered when the rating agency Fitch downgraded Iceland's sovereign debt, a move that would not normally rattle markets. The new skittishness comes against a backdrop of ever more hawkish moves by Japan and Europe.

"There are several hundred billion dollars of positions in the carry trade that will be unwound as soon as they become unprofitable," said Stephen Lewis, an economist at Monument Securities. "When the Bank of Japan starts tightening we may see some spectacular effects. The world has never been through this before, so there is a high risk of mistakes."

Toshihiko Fukui, the Japanese central bank governor, gave a fresh warning yesterday that this day is near, saying the country was pulling out of seven years of deflation. The economy grew at a 5.5pc rate in the fourth quarter of 2005. In his strongest words yet, he said the bank would act "immediately" to curtail its extra injections of liquidity, preparing the way for rate rises above zero in coming months.

"The moment of truth is approaching,'' said Kenichiro Ikezawa of Daiwa SB. In Europe, Sweden raised rates to 2pc this week in the face of an overheated Stockholm property market, while Germany's IFO business climate index soared yesterday to its highest level in 14 years.

The European Central Bank will almost certainly raise eurozone rates to 2.5pc in March, with likely moves to 3pc by the end of the year.

Most of the world is now tightening, with no sign of a fresh credit window opening to keep the game going. This is new. Japan has had the tap on continuously as the trade exploded over the past five years, while America itself became the source of funds after it slashed rates to 1pc at the end of the dotcom bubble, and held them there until June 2004.

The US Federal Reserve has since raised rates 14 times to 4.5pc in a belated effort to restore monetary discipline, with at least two more rises priced into the markets. It is an open question whether the yen, euro, Swiss franc and Swedish krona carry trades have occurred on such a scale that they have led to over-investment in Latin America and beyond, and compressed US yields, fuelling the American housing boom in 2005 despite Fed tightening.

There are other big forces at work: huge purchases of US Treasuries by Asian central banks, and petrodollar surpluses coming back to the US credit markets. Stephen Roach, chief economist at Morgan Stanley, warns that the carry trade is itself, in all its forms, a major cause of dangerous speculative excess. "The lure of the carry trade is so compelling, it creates artificial demand for 'carryable' assets that has the potential to turn normal asset price appreciation into bubble-like proportions," he said.

"History tells us that carry trades end when central bank tightening cycles begin," he said. Ominously, almost every bank other than the Bank of England is now tightening in unison.

http://globalresearch.ca/index.php?context=viewArticle&code=%20EN20060310&articleId=2076snip:

The idea of creating a new trading platform in Iran to trade oil and to create a new oil benchmark crude apparently originated with the former Director of the London International Petroleum Exchange, Chris Cook. In a January 21 article in the Asia Times, Cook explained the background. Describing a letter he had written in 2001 to the Governor of the Iranian Central Bank, Dr Mohsen Nourbakhsh, Cook explained what he advised then:

�In this letter I pointed out that the structure of global oil markets massively favors intermediary traders and particularly investment banks, and that both consumers and producers such as Iran are adversely affected by this. I recommended that Iran consider as a matter of urgency the creation of a Middle Eastern energy exchange, and particularly a new Persian Gulf benchmark oil price.

�It is therefore with wry amusement that I have seen a myth being widely propagated on the Internet that the genesis of this "Iran bourse" project is a wish to subvert the US dollar by denominating oil pricing in euros.

�As anyone familiar with the Organization of Petroleum Exporting Countries will know, the denomination of oil sales in currencies other than the dollar is not a new subject, and as anyone familiar with economics will tell you, the denomination of oil sales is merely a transactional issue: what matters is in what assets (or, in the case of the United States, liabilities ) these proceeds are then invested.�

A full challenge to the domination of the dollar as world central bank reserve currency entails a de facto declaration of war on the �full spectrum dominance� of the United States today. The mighty members of the European Central Bank Council well know this. The heads of state of every EU country know that. The Chinese leadership as well as Japanese and Indian know that. So does Vladimir Putin.

Until some combination of those Eurasian powers congeal in a cohesive challenge to the unbridled domination of the USA as sole superpower, there will be no Euro or Yen or even Chinese Yuan challenging the role of the dollar. The issue is of enormous importance, as it is vital to understand the true dynamics bringing the world to the brink of possible nuclear catastrophe today.

As a small ending note, a good friend in Oslo recently forwarded me an article from the Norwegian press. At the end of December, Sven Arild Andersen, Director of the Oslo Bourse, announced he was fed up with depending on the London oil bourse trading oil in dollars. Norway, a major oil producer, selling most of its oil into Euro countries in the EU, he said, should set up its own oil bourse and trade its oil in Euros. Will NATO member Norway become the next target for the wrath of the Pentagon?

http://globalresearch.ca/index.php?context=viewArticle&code=LEN20060222&articleId=2027snip:

I don't know, and they're a lot smarter than I am, but I'll stick my neck out. World stability changed direction after 9/11 when the Bush administration declared war on the world - at least all parts of it not subservient to US interests. The price of peace with the US is "knowing who's boss" and being respectful and obedient - just like organized crime family members are to "The Godfather." But just as mob bosses mete out punishment to disobedient underlings, so too will be the fate of any nation daring to go its own way, independent of US wishes. It'll likely see some hostile action against it - political, economic, military or all three.

The "fun and games" began for real against Afghanistan a month after 9/11 and went into overdrive against Iraq in March, 2003. Now the war drums are audible against Iran, at the head of the target country queue, with Venezuela and Syria likely next in line and other choices to be named later to follow. Despite the enormous cost (an economic boon at the outset and for a while), the Bush administration declared a "permanent state of war" and doesn't want to be accused of running out of targets. To keep the war economy going they'll always have another one at the ready.

Looking back, the price for good times that were too good or for reckless behavior that was too reckless has always been the same - the day comes when you "gotta pay the piper." That may not be this week or next month, but I'll speculate that the sharply rising gold price in the US is discounting more than the usual financial rebalancing its price action usually indicates. Ask any gold seer and they'll explain that while geopolitical events may affect the price of gold, they're never a major factor. I'll be contrarian and speculate that along with whatever other message the gold market is sending, it's also signaling concern about the geopolitical threat to peace and world stability, especially in the strategically important Middle East. High oil prices may be sending the same signal, although of late prices have stabilized and come off a bit.

My best guess is that the rising gold price may be the canary in the mine shaft warning of a growing and dangerous change in world stability reflected in investor sentiment. At times of growing economic or geopolitical tension, uncertainty or danger, gold is seen as a conservative asset or "safe haven" and a way to preserve wealth as it always has been for the past 6,000 years. That's a track record even the Dow Jones averages can't match.

There's a lot for investors to worry about now along with the new war drums beating I'll discuss below. There's the perceived threat of terrorist attacks, the continued loss of civil liberties in the West and especially in the US, the possible disruption of oil supplies, and at some point that "piper" waiting to be repaid for years of financial profligacy in the US to fund all the "adventuresomeness" and excess stimulus to keep the economy humming. And there's one other factor affecting the US dollar. Many currency experts believe the currency is in a long-term bear market that began in 2002, even though it rebounded well last year and is holding its own so far this year (a cyclical rally in a longer term secular bear market say the dollar bears). Some of the reasons given for this trend are the emergence of the euro as a competitor to the dollar in December, 2001 by the 12 European nations using it and the desire of other nations to diversify into other currencies (as well as gold). And its interesting that some Islamic nations have begun doing some bilateral commerce in gold dinars and China now has its first gold exchange. All this signals a potential or maybe likely shift away from the almighty dollar as the world's primary reserve currency.

http://www.metaldetectingbooks.co.uk/newscoen.htmThe link contains a particularly nice image (scroll down a bit).

The long debasement of the penny from gold to plated steel is a salutory lesson indeed.

The silver penny was introduced to England around the year 785 by King Offa of Mercia, in the English midlands.

The weight of silver pennies was reduced over time, and fineness was often poor, but Henry VIII debased them considerably by making them two-thirds copper, earning him the nickname "Old Coppernose". Silver pennies returned (together with base metal pennies, so one wonders how Gresham's Law operated in that time) in the reign of Queen Mary, 1553-1558. By the end of George III's reign (1760-1820), the penny was minted in copper. Early copper pennies had to be worth a penny, and hence weighed one or two ounces each. However, silver pennies were again produced in 1816 in the "great recoinage".

Between 1839 and 1860, the penny was made of copper, and from 1860 it was made of bronze. Pennies from the Victorian era could be found in circulation up to decimalisation in 1971.

The decimal penny was also bronze, but was replaced in 1992 by copper-plated steel- the coins may easily be distinguished as the steel ones are attracted by a magnet.

Silver pennies are still minted in the form of Maundy money with a fineness of 0.925, in denominations of 1, 2, 3 and 4 pence and are legal tender. The Queen dispenses Maundy money in an annual ceremony on Maundy Thursday, the recipients (deserving senior citizens) receiving two small leather string purses; a red purse containing ordinary coinage in lieu of gifts of food and clothing; and a white purse containing silver Maundy coins consisting of the same number of pence as the years of the sovereign's age.

A silver Maundy penny weighs 0.5 grams, and has a diameter of 11 mm. There were some Millennium Silver collection sets issued containing Maundy silver pennies.

http://www.lifeaftertheoilcrash.netIf oil is "black gold," then gold is "yellow oil," in which case the more of the latter one owns, the more of the former one will be able to afford.

Even so, increasing numbers of wealthy Americans are operating on the belief that you not only CAN take it with you, you MUST:

http://www.freerepublic.com/focus/f-news/1133313/posts

http://www.federalreserve.gov/boarddocs/press/monetary/2006/20060328/default.htmHow might someone interpret the linked fed-speak?

Thanks MK for creating a little suspense.

For me this is the most revealing part of the Fed's statement:
"As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained. Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."

Why would they add "expectations" after the word inflation if inflation were really contained?

Quote from the release: "ongoing productivity gains have helped to hold the growth of unit labor costs in check,"
---------------------------

No doubt! Outsourcing of jobs helps productivity...Producing the same or more, for less.

@ BM,

Good eye!

What a difference between "containing inflation" and "containing expectations."

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

Here's what I think happened between the time of the Fed announcement (on Tuesday) and gold's ultimate reaction (Weds and Thurs) which was a strong, unexpected drive to higher ground.

1. Boilermaker, Goldilox are observant and correct. The word "expectations" plays large. It indicates that Bernanke, who I assume played large in the wording of the release, sees this as a game, that is, a statistical game between him and the markets. He knows, Wall Street knows and most of the people in and around this forum know that the inflation has already been created; it's just a matter of it feeding to prices which is already obvious in commodity pricing on just about everything, but hidden from the average consumer through another game, government statistical reporting. As Black Blade points out, why else would the Fed be so interested in shelving the M3 report which just everyone uses to gauge and predict "inflationary expectations" if not to cover up what is in the process of occurring.

2. My take is that markets know that we are already in an inflationary period. In fact, the United States government and Federal Reserve may not be able to control either the money supply or interest rates. I think big money knows this. They are not betting on whether or not Bernanke's policy is easy or tight. They know it's easy. They are betting on whether or not he can keep the "expectations" IN FINANCIAL CIRCLES contained; whether or not, as Black Blade put it, he can keep the public from finding out what's going on behind the curtain.

3. And most importantly. . .The other question was whether or not Bernanke represented something different than Greenspan. Financial people wanted to know if his new position had gone to his head and somehow he was going to become a real inflation fighter. Transition times like these can be dangerous. After all, he could be another Volcker! Maybe he would threaten to raise .5%, or talk about the situation being out of control and a time for a new, tougher policy. It didn't happen. He confirmed with the .25% rise and rhetoric similar to Greenspan's that he would not respond to raging commodity prices by pulling the rug. In other words, Bernanke showed Wall Street he was a player. Now. . . he and the Bush administration have their own reasons for that, but as far as Wall Street was concerned, it sighed a huge sigh of relief.

4. This, of course, means more of the same. We aren't talking about boiling the frog here. We are talking about warming him up a half a degree at a time.
Meanwhile, inflationary forces are building underneath this economy like nothing we have ever seen. There will be what we could call stagflationary counterparts, but the underlying melody will be inflationary. This is precisely the kind of policy Germany played out in the 1920s refusing to raise interest rates because it would only add to the inflationary pressure. The consequence was hyperinflationary. To make a long story short, Helicopter Ben, by confirming to follow in Greenspan's mold, looked every bit the role. The big players saw it, they dove for the football (gold) and by the way the rest of the commodity complex as well.

5. The kicker was the very last paragraph. "The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives." First of all, who uses the phrase "in any event" literally. Yet, that is what the Fed did. That paragraph could be read a dozen ways, but when you take all the above into account, and you keep in mind that the concern on everyone's mind was whether or not he would take away the punch bowl, that phrase comes off as meaning: He will revert to lower interest rates at the first sign of a disinflationary consequence to the slow rise, warming the frog, policy. So don't worry.

In the above I left out the effect of rising interest rates on the budget deficit (very negative if we go much further), the interest rate conundrum (which will continue to undermine the Fed's attempts to raise rates in reality), the carry trade and burgeoning currency crisis in New Zealand (which could spread to Australia and the major financial capitols from there), the Fed's newly awarded powers in the derivatives' markets (which will give the Bush administration's "real" dollar policy some teeth) and some odds and ends. . .but I thought I'd give you guys something to chew on, since I brought this all up a few days ago and never followed up ('til now).

Those fuel companies are pretty smart cookies. In the post-Katrina weeks they allowed pump prices to jump to a market saturation point, and took very good notes before prices relaxed enough to quiet the whining.

The past three weeks have delivered prices at the pumps over $3.00/gal for premium in CA (I saw 3.12 at one major this morning), and since we have already seen a peak of $2.80ish, people are taking the $0.50 bump in stride.

Yes, kiddies, inflafla is flowing through to prices, but the delayed effect allows the hedonists to paint it differently long enough to unwind their most dangerous positions while they wax prophetic!

http://www.timesofoman.com/newsdetails.asp?newsid=27910&pn=business Gold higher but volatilty expected - Times of Oman -
Palazhi Ashok Kumar - April 3, 2006

In other words, it seems, that nothing has changed with Fed policy. They are not in the business to fight inflation, but rather in the business to fight expectations of inflation. As long as people buy the stories in the media, they can keep doing what they are doing. If some event happens, well, they'll take care of it and sweep it under the rug. Meanwhile, those that see the real rate of inflation will continue to race towards physical assets. Those few know that the Fed has no intension of stopping the accumulation.

Looking back in the archives, we find a quote from Another "Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves.Oil would explode in price!" Another's statement seems to imply that if the Fed doesn't keep the price of gold at or below the production price those that trade oil cheaply, because gold is cheap, will raise the price of oil to what the world is willing to pay.

We also know that because of the strong dollar policy, those that are accumulating gold with US dollars are getting that gold really cheap. Along with this, there are so many dollars in existence that it would(could) buy up all the gold in a heart beat. So, oil, which has not had any competition for gold now has some! Ah! What has been an invisible transfer of wealth looks as if it's going to be less transparent in the years ahead.

So, while the Fed continues the illusion of no inflation, we'll all watch as large corporations fail and thousands are laid off. House prices is the current targeted asset bubble so one would expect them to raise rates to pop that and then pump the liquidity behind the scenes to repair the fallout. This will continue to re-affirm their roll as an inflation fighter to the public. But, to those that know, they will see it as more hidden hyperinflation of the money supply that only makes the prices of today look better everyday.

More of the same does not look good for the world.

http://www.commondreams.org/views06/0401-22.htmsnip:

You probably saw the story the other day that the U.S. Bureau of Labor Statistics reported that real wages in 2005 had dropped 0.9 percent from the year before.

That was big news because in 2004 overall real wages were flat. For the first time as long as wage records have been kept, American workers' income had not increased in two straight years.

There was other disturbing economic news that came at about the same time but didn't get as much publicity.

For instance, the Federal Reserve not so surprisingly found that "growing numbers of American households face mounting debt and financial instability."

Roughly 76 percent of households carry a debt load averaging $55,300 or about 128 percent of the median household income. That's not surprising either since costs for health care and education alone have been rising well above wage increases, not to mention the cost of gas for the car and natural gas for the furnace. Many American workers are now sacrificing annual raises so that their employers can afford to pay the increases in health insurance.

All of that has caused a 10 percent average family increase in credit card debt and a proliferation of bigger home equity loans almost all of it, of course, in America's middle class.

Many economic analysts see rising costs, plus greater job instability at some of the traditional blue collar corporations in the country, forcing many families to borrow on high-cost credit just to stay even. They can only hope that times will get better so that they can pay off that debt.

And, of course, the economy of the past few years has significantly widened America's infamous gap between rich and poor. America's wealthiest 10 percent experienced a net worth increase of 6.1 percent in 2004 to an average of $3.1 million. But the bottom 10 percent had their net worth fall from zero in 2001 to minus $1,400 in 2004, which means that they owed more than the value of their assets.

Pat Schneider of our staff reported only a few weeks ago that the number of families using food pantries in a 16-county area in southern Wisconsin has grown by 34 percent in the past three years. Nationally, the increase in food pantry use has averaged about 8 percent a year.

-Goldilox

It looks like a lot of folks in the "ownership society" really only own a piece of the debt-berg. Maybe the frog's water is warmer than we think.

http://www.stevequayle.com/index1.htmlsnip:

I was surprised to see that Total Fed Credit was not exploding last week. I was even more surprised to see that Foreign Holdings of U.S. Debt held at the Fed was actually down by $8 billion last week, too. Even the banks were not making fools of themselves, as is their wont, by gobbling up huge fistfuls of government debt. It was, in a word, quiet. In the movies, when somebody remarks how quiet it is, the hero says "Too quiet!" and the next thing you know there are arrows and/or bullets flying all over the damned place.

So I nervously remark that it is, indeed, the proverbial "too quiet", because I know that there are enemies out there. For one thing, crude oil prices are up to around $66 a barrel, although to think that oil exporters would NOT factor in an increasing devaluation of the dollar into the price of oil, in the face of enormous American trade deficits, monstrous American budget deficits and stupefying rises in American business and household debt levels, is to insult their intelligence. And in that regard I will note, with a snide Mogambo sneer (SMS), that they were smart enough to grab the global real estate that had most of the oil, while we took the part that is next to Mexico and South America, places so corrupt and stupid that economic refugees are flooding into the USA to get away from there!

-Goldilox

In his inimitable style, the Mogambu Guru tackles debt, oil, immigration, and corruption all in one fell swoop.

http://www.menafn.com/qn_news_story_s.asp?StoryId=131431snip:

MUSCAT � Gold prices are expected to witness high volatility in the days to come as sharp upsurge in international demand for gold, especially from Chinese, Indian and American investors continues to trigger prices.

As the World Gold Council underlines, "gold is completely free of credit risk, although it bears a market risk. Gold has always been a secure refuge in unsettled times."

Gold has proved itself to be an effective way to manage wealth. For at least 200 years the price of gold has kept pace with inflation. In 1999, Alan Greenspan, then chairman of the Federal Reserve of the US, said: "Gold still represents the ultimate form of payment in the world."

Gold prices climbed by 36 per cent since April 2, 2005. In Muscat, a ten-tola piece (116.64 grams) of gold biscuit was worth RO849 yesterday. The price per gram for 24-crt gold is quoted at RO7.278, and 22-crt is quoted at RO6.674.

The undertone indicates that prices may cross $600, and some investors are even eyeing a price of $800 a troy ounce. Gold prices have also been bolstered by the entry of new institutional investors.

"International markets witness an aggressive buying from stockists and institutional investors such as central banks and other financial institutions across developing and developed markets. On March 31, 2006, the price stood at over $581 a troy ounce (one troy ounce is 31.1034768 grams) in the international market. One gram of gold is now worth more than $18.92 (RO7.278)," Riyas, senior manager, operations, Sea Pearls Oman told Times Business. On March 30, 2006, on the New York Mercantile Exchange, gold prices climbed to a 25-year high of $588.10 an ounce on high speculation that prices might touch new highs.

Riyas said nobody would be surprised if prices crossed $600 before the end of this year. But he strongly cautioned people that high prices also mean high risks.

Traders from Mumbai said that demand for gold in small markets had tumbled over the past two months or so, as prices continue to test new historic levels.

Oman, the neighbouring markets and India, according to gold market analysts, now witness a fall in demand for jewellery.

"Over the long-term, gold has a history of maintaining its purchasing power in real terms. Though studies had shown that over the last decade gold has been a depreciating asset, taking a 30-year perspective, it has been an extremely good investment, and over fifty years, it has more than held its own against inflation. This is another sound economic reason for holding gold, as it remains its store of value," analysts from Dubai said.

India is the world's largest market for gold. Gold consumption in India now stands at more than 850 tonnes, and is growing by nearly 25 per cent a year. It was estimated in 2004 that Indians hold more than 13,000 tonnes of gold in various forms, more than seven per cent of the total global gold stock.

http://today.reuters.com/investing/MarketReportArticle.aspx?type=goldMktRpt&storyID=2006-04-03T010831Z_01_T269891_RTRIDST_0_MARKETS-PRECIOUS.XML Gold Inches Up After Round of Profit-Taking in NY - Reuters - Tokyo - 4/03/06

http://www.msnbc.msn.com/id/12121772/from/RSS/ Wall Street facing an economic conundrum - AP - April 3
"Reports on job creation, other key economic data due in the week ahead."
More economic tall tales and drama clothed in the language of Wall Street and DC approved academia.

http://www.msnbc.msn.com/id/12121772/from/RSS/ MSNBC/AP story below released April 2, 2006

http://www.payvand.com/news/06/apr/1004.htmlsnip:

Tehran, March 31, IRNA-An informed source in Central Bank of Iran on Friday denied the news published in a Swiss daily on withdrawal of 250 tons of Iran's gold reserves from that country's Credit Bank.

The Central Bank official, who spoke on condition of anonymity, told the Economy Desk at IRNA Head office in Tehran Desk, "The news published in the Thursday edition of the Bern-based daily Der Bund, on Iran's withdrawal of 250 tons of its gold reserves, worth five billion Swiss francs, and transferring them to Tehran is totally baseless."

Der Bund had added in its story that apparently Iran has ever since last October withdrawn 700 tons of its gold reserves, worth sixteen billion Swiss franks, from various Western monetary funds and transferred them to other unknown destinations.

-Goldilox

What would Iran rumors be without some gold intrigue?

http://www.atimes.com/atimes/Asian_Economy/EA18Dk02.htmlIn light of recent events...may be worth a second look.
snippet:
The surge in the money supply since the attacks on September 11, 2001, was equal to about $300 billion, which significantly represents about 3.0 percent of GDP, this after the Fed injected $1 trillion into the banking system in the days following the terrorist attacks in New York and on the Pentagon. Since the beginning of 2000, $8 trillion of stock market wealth has vanished, that is 80 percent of annual GDP, or the entire M3 in 2001. Another way to look at these figures is that the entire face value of the US money supply has vanished through market correction.

(written in 2003).. Is the current elimation of the m3 data anticipating a huge increase to off-set another stock crash?

additional snippets:
Central banks in desperate times would look to hyper-inflation to "provide what essentially amounts to catastrophic financial insurance coverage," as US Federal Reserve Board chairman Alan Greenspan suggested

By socializing their risks and privatizing their speculative profits, risk speculators hold hostage the general public, whose welfare the Fed now uses as a pretext to justify printing money to perpetuate these speculators' joyride.

Money, classical economics' view of it notwithstanding, is not neutral. Money is a political issue. It is a matter of deliberate choice made by the state. The supply of money and its cost, as well as the allocation of credit, have direct social implications. Policies on money reward or punish different segments of the population, stimulate or restrain different economic sectors and activities. They affect the distribution of political power. Democracy itself depends on a populist money policy

The creation of the Federal Reserve System was the result of a confluence of political pressures. Fundamental among these pressure was the new awareness, as Braudel hinted, of a heretical proposition that capitalism cannot sustain price stability through market forces. That proposition may not be valid, but centuries of experimentation and innovation have yet to devise a monetary system that can provide permanent market price stability. It was increasingly recognized that the process of capital accumulation inherently produces periodic cycles of fluctuating money value: inflationary "easy money" stimulating economic growth, spreading wealth from the top down, followed by its depressant opposite "tight money" slowing down growth, reconcentrating wealth. Just as there is a business cycle in a market economy, there is a monetary cycle in a capitalistic system.

The Greenspan bubble was actually accompanied by pockets of deflation, most visibly in the manufacturing and commodity sectors, mostly caused by excess investment that led to global overcapacity that fed low-priced imports to the US economy. Deflation has practically destroyed the farming and several other commodity and basic-material sectors in the past decade, including steel. It has eliminated much of US manufacturing. The deflation that faced selected sectors of the US economy in the past decade had not been market-induced as much as it was policy-determined. The Fed's fixation on driving inflation lower, regardless of economic consequences, has caused untold damage to the economy and forced its restructuring toward an unsustainable debt bubble.

It is an economic truism that low inflation for a large, complex economy can only be achieved by driving certain sectors into deflationary levels.

The point here is not to apologize for corruption but to point out that corruption is part and partial of finance capitalism, as the savings and loan (S&L) crisis, the Milken junk-bond scandal and Enrontitis of recent times continue to show clearly. The real culprit was not corruption but deregulation. The Telecommunications Act of 1996, for example, which aimed to create competitive markets for voice, data and broadband services, unleashed a flood of investment in wireless licenses, fiber-optic cable networks, satellites, computer switches and Internet sites, and accounted for much of the new capital that poured into the economy through Wall Street's equity and credit markets. The same was true in the energy sector. But the biggest culprit was financial deregulation.

Under finance capitalism, inflation is not merely too much money chasing too few goods, as under industrial capitalism. Under financial capitalism, two elements - credit availability and credit markets - have overshadowed the traditional goods and equity markets of industrial capitalism.

The Fed, notwithstanding its intellectual pretense, has always been a political institution. The politics of economics repeatedly resurrects from the intellectual wasteland, the theoretical Siberia as it were, new gurus to support its latest ideology. Nobel winners are proponents of theories that explain "scientifically" last year's political expediency. The list includes Friedrich von Hayek (free market), Friedman (monetary theory), Robert Mundell (global capital), Schumpeter (creative destruction) etc. Wicksell makes it respectable for Greenspan to abdicated his responsibility as Fed Chairman, by pretending to follow the market, to treat interest rates as prices of money set by market forces, and not as a tool to promote employment or growth, an if necessary only as a tool to bail out banks in distress.

In the quest for monetary order, stable money in reality creates economic disorder in the real economy. Within the conservative political context of capitalism, stable money produces a complacency of moral satisfaction. The winners are credited with financial genius and rewarded with the right to practice conspicuous consumption, taking on celebrity status. The losers are condemned for their mistakes. It fits neatly into Spencerian Social Darwinism of survival of the fittest, notwithstanding that the criteria for fitness have been defined by policy. The tilted market is hailed as the indiscriminate crucible of perpetual economic revitalization, while in fact a handful of men in the paneled boardroom of the Fed play God to decide who lives and who dies.

With globalization, we are heading toward an economic order in which every sector can accommodate only five megafirms, two real players, market leaders as they are called, in a carefully choreographed condominium that appears to be managed competition to stay on the good side of antitrust laws, with three minor players permitted to survive for appearance' sake.

http://www.atimes.com/atimes/Global_Economy/DL21Dj01.htmla link

MK: Thanks for your analysis. Much appreciated.

@ Ten Bears,

Thanks for the Henry CK Lui post. I always enjoy his NO-BS analyses.

http://www.thehindubusinessline.com/2006/04/03/stories/2006040300050700.htmMumbai , April 2 -- Gold has been in the consolidating phase last two months; and now a springboard for leap up is ready.

Towards the latter part of last week, a weaker dollar, gains in other commodities, fund inflows with the approach of month-end/quarter-end and ongoing geo-political uncertainty all combined to fuel speculative buying interest to push the market to newer heights.

The yellow metal gained more than $15 on Thursday last to settle only slightly below $590 an ounce, while on Friday it closed a shade less than $585/oz due to profit taking. Nonetheless, the up-trend is unmistakable...

There are still higher highs set to come, chartists said.

The next big target of $600/oz is seen increasingly achievable, according to experts.

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

"Chartists" and "experts"... thankyouverymuch.

R.

http://www.bloomberg.com/apps/news?pid=10000102&sid=aFuMfhOX7wyE&refer=ukApril 3 (Bloomberg) --

...a weaker yen led some Japanese speculators to buy the bullion to hedge against the declining value of their assets denominated in the currency.

The yen dropped as the Bank of Japan's Tankan report showed business confidence unexpectedly fell in March, fueling speculation the central bank will keep its zero-interest-rate policy for the foreseeable future. Japanese investors tend to buy gold on concern the yen will weaken.

Gold may top $600 this week for the first time in 25 years as investors buy bullion instead of U.S. bonds, a Bloomberg News survey shows.

Nineteen of 30 traders, investors and analysts surveyed from Sydney to Chicago on March 30 and March 31 advised buying gold, which rose $21.20 to $586.70 an ounce last week in New York. Seven advised selling and four were neutral.

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

Not exactly "news", but for what it's worth it's what is being served up for breakfast on Main Street.

R.

http://www.arabtimesonline.com/arabtimes/business/Viewdet.asp?ID=5946&cat=a3rd Apr 2006; KUWAIT CITY:

...The dollar gave back its fed rate hike inspired gains pressured by ECB rate hike speculation, rising interest rates in Japan, new post revaluation high in the Yuan , speculation the UAE may increase its Euro reserve holdings, a new twenty five year high in the price of gold, and month /quarter end position squaring.

In addition rumors are circulating that US. Treasury Secretary Snow may be sacked and replaced by someone who will seek a weaker dollar to boost growth.

Themes

The dominant themes for FX trade in the second quarter will be, yield differential, the value of the Yuan, and unwind of carry trades. we expect the Fed to hike rates 25 bps in May and then pause at 5 per cent. As the Fed takes a pause in it tightening cycle, focus will shift to monetary policy in the EU and Japan.

...With the Feds� tightening cycle near an end and rates expected to rise in the EU and Japan, the dollar should begin a gradual decline. China is expected to encourage more appreciation of the Yuan in front of HU's visit to the US next month.

If China seeks more Yuan flexibility China will need to diversity some of its dollar holdings and the need to buy dollars to maintain the Yuan value should decline...

The Metal Market
Overview: Gold pushed higher all this week, while silver pushed higher. The market received support from a report that the UAE would be raising its Euro portion of reserve assets to 5-10 per cent from 2 per cent. That led to speculation of further petrodollar buying of precious metals. Buying was also sparked by upside breakouts made during last Wednesday's trade. Gold broke out the top of a flag pattern... The significant strength in metals seen in recent days almost has a mania feel to it.


Comment
There was a comment from a brokerage firm analyst that the dollar will lose its reserve currency status and that will leave gold "nowhere to go but up." The expectation is based on the growing trade deficit, rising home prices, a negative savings rate, and "reckless consumer spending" in the US He said those factors would cause foreigners to lose their appetite for US bonds. While his comments are theoretically possible, they are realistically unlikely. There have been many calls for the dollar to lose its reserve status over recent decades, but it just hasn't happened. Using an unlikely scenario for long-term buying in metals to coax short-term trades contributes to speculative excess and is likely responsible for a good portion of recent strength.

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

The comment used in the concluding remarks, "but it just hasn't happened", is a classic case of a fool attempting to drive through unfamiliar territory by looking into the rearview mirror.

R.

http://www.resourceinvestor.com/pebble.asp?relid=18423LONDON (ResourceInvestor.com) --� As trade relations between the U.S. and China become thornier and the tone of public discourse in the U.S. turns more towards protectionism, a trade war is becoming a significant possibility. If this scenario does develop, then what is the outlook for gold?

...If one takes the stability of the U.S. dollar as overwhelmingly the key factor affecting the gold price in this day and age, then the effect of a trade war on the parity of the dollar must be the main consideration here.

The initial effect would be the precipitation of a dollar collapse, as one of the reactions of the Chinese to the implementation by the U.S. of protectionist measures aimed at Chinese exports will likely be to cease purchasing U.S. treasuries with the foreign currency reserves that China's central bank is constantly accruing at a high rate.

This, and the following suit by other East Asian central banks that it would trigger, removes the most important source of funding for the U.S. trade deficit and hence the primary support for the dollar at its present level. Thus, the dollar would immediately fall and gold would immediately appreciate.

China would also respond to sanctions against it by restricting its imports from the U.S., lessening the demand for dollars on the open market. This would further weaken the dollar and hence stimulate a further advance in the gold price.

...If a transition to the use of new reserve currencies were rapid and complete enough, then gold could be cut out of the equation entirely and be left to depreciate to well below its current level. This though is unlikely; the transition would probably not reach completion quickly enough, and a role for gold would remain.

It should be stressed that the postulation of a simple linear relationship between the real purchasing power of gold and that of the dollar is invalid as far as this question goes and indeed as far as any analysis of the gold price goes. The crucial factor is the instability of the dollar in the absence of suitable alternatives, allowing gold to step in to the void as a quasi currency.

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

Beyond the simple wish that the analyst had said "reserve asset" instead of the the innocuous term "quasi currency", I suppose I could also make the futile wish that he spent more time trying to understand the socio-political complexities that argue against a simple continuation of a reserve role for the dollar or of a substitution in this role by its other fiat peers. That is, which nation (or "basket of nations") will be so eager to inherit the associated problems with trade competition? And on the flip side of the coin, what CB will find any sense in using a new orchestra simply to replay the same old ugly tune? Therefore, one should expect an entirely new song and dance.

R.

http://www.nytimes.com/learning/general/onthisday/20060403.html?th&emc=th...quite an eventful day really...

Truman signs Marshall Plan allocating $5B in aid to 16 European countries in 1948...$5B wouldn't go too far today - about two days US borrowings...

In 1882 Jesse James copped a slow slug from Robert Ford, cutting short his short-cut-to-riches schemes. (Wonder who he left his gold to?)

...and much more!

Never a dull day as homo sapiens marches towards destiny...(let's hope we never quite make it).

;-)

Spot and Spike have escaped. You'd better go look for them. They were last seen somewhere well north of $587.

Caradoc

@ Sundeck,

$5Billion doesn't even pay a decent third-world bribe today, and certainly leaves nothing for the coffers of the arms manuacturers to keep them in power.

Someone over at the Crimex grabbed their collars at the open, but they seem to have gotten away again.

Can't tell which is leading their chase - but one has a silver collar, and the other is golden.

Have fun today, folks, and don't let the Crimex fleas bite our hounds.

I am off to Opening Day at the ball yard. Just hoping to keep the rain at bay about 10 more hours.

BUT, it looks as if everyone has gone to the season starting baseball games today !
<;-)

http://www.crbtrader.com/data/default.asp?page=quote&sym=GCJ5&mode=dGold took up the delivery mantle with gusto today as we saw a hefty 890000 Oz equivalents get done. This sees 11K Contracts shuffled about in April already!
The OI number (when it updates) will give us a clue as to how many more hands are out for Physical ...as will the off-cycle Silver one.

Another encouraging sign of strength was the ECB announcement. Last year ...WAG 2A, they (ECB) only ponied up the Metal when it became apparent other signatories had opted NOT to deliver ...and the ECB made up the shortfall. This year ...from Sept-Mar, they're at it from the get-go indicating further recalcitrance on the part of the others.

Keep your Gold in possession C-Boys!

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

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

MONDAY Market Excerpts

April 3 (from DowJones, MarketWatch) -- Fund buying and "sheer momentum" enabled gold futures to stage sharp rallies Monday. June gold settled up $7.60 to $594.30.

Traders throughout the day cited fund buying, although a floor contact added that this tended to occur in "nominal" volume. "The market is very bullish," he said.

"Every time it dips, the funds come in and buy a few hundred contracts."

A couple of traders cited beginning-of-the-quarter buying by large speculators. And, one added, the metals also drew good buying interest overnight in Japan, which is beginning a new fiscal year.

Stronger crude oil and commodities in general provided some of the impetus, traders said. As gold was closing, May crude was up 72 cents a barrel and the Continuous Commodity Index had risen 4.29 points to 366.20. But much of the impetus is also from a recent shift to stronger sentiment for the metals, related Peter Grandich, publisher of the Grandich Letter.

Grandich offered the view that a "topping formation" is being made in the U.S. dollar and is helping gold.

"The ramifications of that longer term are extremely bullish for gold," Grandich commented, adding that a softening dollar could hurt U.S. stocks and bonds.

The euro was now up roughly three full cents from the late-February low.

Gold "remains an obscure investment product for the vast majority of investors, which means the room to grow remains quite large," said Peter Spina, an analyst at GoldSeek.

"We are still far away from any long-term peak in gold," he said, adding that gold trading for $600 an ounce "will begin to appear inexpensive" within a year.

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

Gold prices climb over $8 an ounce in afternoon trading - AFX
Oil prices shoots up above 67 usd as Iran holds war games in Gulf - AFX
The Slippery Slope - Roach, Morgan Stanley
Rates solution may be hidden behind the fringe - Coggan, FT
Australian officials accuse Citi of insider trading - TheStreet.com
FASB Proposes Pension-Accounting Changes - CFO.com �
Some homeowners struggle to keep up with adjustable rates - USAToday
Gold set to become even scarcer - FT
Report: GM to Sell Majority Stake in GMAC - Minn. ST
Betting Big on Adjustables - LA Times
European March Manufacturing Grows Most in Five Years - Bloomberg
When Japan Tilts, Iceland Quakes in Intertwined Global Markets - Bloomberg

Gators, Gators, Gators!

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=GTO THE MOON, Alice !
Price objective is now $700 +
Forget the worry about $600 !!!!
<;-)

http://www.middleeastforex.com/index.php?section=147A number of Middle Eastern central banks said on Tuesday they would seek to switch reserves from the US greenback to euros.

***********************************************************
Ladies and Knights, of the Table Round, I bring forth an explanation as to my absence in reguard to the story. It was my intention as before in past episodes, to bring forth a story about this forum and gold in a timely manner. Unfortunatly I was a victum of an unforseen accident that had profound circumstances upon myself. One can say, All that Glitters is not Gold" That is true if one considers the lost of a loved one to an unfortunate circumstance. That is to say ME. Without further Adue, let me continue the story and to Gandalf, You knew I could not hold back.
**********************************************************

Stephen the Great recieved the word and he felt that a terrible war was to ensue. So he gave orders to his foundry to produce more cannon and black powder that thundered across the fields. Yet he felt that although his
increase in war material, would be no match at what lay ahead. Villages with their crops harvested what they could to support a marching army. The foundries produce arrowtips and lances and the Valley of Clouds became one to defeat the Dark Forces.
Sir Black Blade organised a group to build brides and instructed them in the art of building catapults and battering rams.
Yet Gandalf returned to his room and studied the books of old for he knew that with all the trust of mortal man, he would still need the help of the mystic.
Twenty eight days had passed when the first resemblence of an army assemled. The sun was not at its zenith and the prospect of reaching Hammerton in strength was promising.
The Castle was energenic as wagons were loaded and Sir M.K. look down from the castle wall. All was coming to bare agaist the Dark Forces. He knew that before the march would begin a meeting within the Great Hall around the Oaken Table of Yore, must be called.

Slingshot--------<>

The amount of precious metals have left the coin shops almost bare. The cost of a one ounce silver is $14.50. The premium for gold coins is 7.5%
Slingshot-----<>

http://www.usagold.com/gold/price.htmlOooofff; seven-point-five percent at those shops implies take-home prices at $632 for ounces of bullion (as spot resides at $588).

Here's an insight that might help cheer you up during your accident recovery -- the prices available through USAGOLD-Centennial are way WAAAAAY cheaper.

Click the URL and have a look; Krugerrands at $602, Philharmonics at $612, Mapleleafs at $613, Eagles at $617...

Consider calling during Denver business hours.
TOLL FREE 1-800-869-5115

R.

Randy

Today I received my shipment of $5 Liberty Eagles (guarded by one French Angel) - way across the pond. Actually this is my second order since moving to Germany and have had no problems receiving these or any of my numerous stateside orders.

Thanks to the staff of Centennial and our fine host.

And the street I live on - IN DER AU

Calidore

Okay,$-Armageddon didn't come last week as per the Newropean article.But,the ECB said they definitively won't sell any more Gold now until Sept.A subtle message?

http://news.bbc.co.uk/2/hi/technology/4872188.stmBBC News -- Tiny particles of gold could soon be helping to spot viruses, bacteria and toxins used by bio-terrorists.

Researchers in the UK have found that gold nanoparticles are very effective detectors of biological toxins.

The particles reveal the presence of poisons far faster than existing techniques which often involve shipping samples back to a lab.

...research makes use of gold nanoparticles that are only 16 nanometres in diameter - roughly 1/5000th the width of a human hair.

Earlier work by Professor Russell's team has refined manufacturing methods so relatively large amounts of the particles can be made quickly.

Once made, the particles are coated with sugars tailored to detect different biological substances.

When mixed with a weak solution of the sugar-coated nanoparticles, the target substance, be it a poison such as ricin or a bug like E.coli, binds to the sugar. This changes the properties of the solution and makes it change colour.

...Future research will focus on building the detection system into a portable device that can be taken out to places where poisonous substances are thought to be present.

^---(full article at url)---^

Gold can also be a very effective indicator in pronouncing judgements upon which international currencies are good or bad, relatively better or worse than their peers.

R.

http://www.usagold.com/gold/coins/us-liberty-5.htmlThanks for the international patronage... glad to hear you're giving these American youngsters a chance to visit a grand old region of Europe. And perhaps not for the first time -- gold sure has a long storied history of getting around.

R.

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-04-04T092648Z_01_PEK195586_RTRIDST_0_BUSINESSPRO-ECONOMY-CHINA-USA-DC.XMLChina should trim its holdings of U.S. debt, a senior Chinese official said, rattling markets on Tuesday in the run-up to a visit by President Hu Jintao to Washington this month.

The 11200 mark sure seems to baffle the DOW bulls over and over. As Infafla takes its toll, that resistance point is lower and lower in REAL terms. The dollar rally looks pretty tired, as well.

Have you seen the new US$ bills? That pucky pink makes them look "antiqued' right off the press.

Got gold? It always looks pretty.

http://money.cnn.com/2006/04/04/news/newsmakers/buffet_global_markets/index.htmSnip:
NEW YORK (CNNMoney.com) - Billionaire investor Warren Buffett is making a $14 billion bet on global stock markets, according to an article Tuesday.
Buffett's Berkshire Hathaway (Research) has sold clients insurance protection against a drop in four equity indices, the Financial Times reported.

If the indices, three of which are outside the U.S., fall by 30 percent over the 15-20-year life of the contracts, Berkshire would incur a pre-tax loss of about $900 million. It has a maximum exposure of $14 billion, according to the report.

Analysts told the paper that the purchasers of the index contracts were probably pension funds that wanted to increase their potential long-term returns by holding more equities but needed protection in case of a stock market meltdown.

In a filing, Berkshire Hathaway did not disclose any more detail about the contracts, including the premiums it would receive or the level the indices must fall below before it made a pay-out, the paper said.

Fl- Ok. What's going on with this big guy? One day, we read how derivatives will lead the dollar into hell and we dream of stashing (if only) a fraction of his silver hoard. But, hey, he owns insurance companies and don't they need to make money? That would imply that he's going to be involved in making promises. Wow. Look at his promise!

This, to me, is a clear sign that this billionaire has calculated the odds and sees hyperinflation in at least 4 different markets as a curtain play in the coming years. It also supports his theory that the dollar is falling in value. I'd be willing to bet that these contracts are US Dollar based. If the dollar drops 50%, his exposure is only 7 billion worth of value. If he hedges with commodities, he stands to make a mint. Maybe this time, he'll buy 130 million ounces of gold.

But, maybe I've got it all wrong. It's just interesting to note.

http://www.amazon.com/gp/product/1558505296/102-3058695-1563331?v=glance&n=283155For all you commodity and motorcycle buffs, Amazon.com is advertising Jim Rogers' book "Investment Biker" for as little as $0.39 used.

Dated, but a really good read - both as investment ideas and as a motorcycle travelogue.

@ Flatliner,

Just because derivatives are sewage, does not mean that the piggies won't play in them. You're probably right about Warren's hedges. As an insurance magnet, he understands risk just fine, and I doubt is we'll see any headlines about BH going bankrupt in the near future.

http://news.yahoo.com/s/ft/20060403/bs_ft/fto040320061336403190;_ylt=AmxgXjUZ3pDoaRZnM9OmT5v2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--Snip:
The European Union will this week urge China to take its time moving towards a more flexible exchange rate system, rebuffing US calls for Beijing to act quickly to boost its currency.

European policymakers fear a sharp realignment of the renminbi could cause exchange rate volatility, leading to the dollar weakening further against the euro and other EU currencies.

However, lawmakers in the US want China to act quickly to make its exchange rate system more flexible, helping to increase US exports and cut the trade gap with China which topped $200bn in 2005.

Transatlantic differences over the issue are expected to surface at a meeting of EU finance ministers in Vienna on Friday, at which global economic imbalances will be discussed.

Fl � There is a little more at the link, but I read this as a huge buy signal on gold. It seems to me that the EU is saying that to China that you'll kill our delicate economy if you diversify into Euros. That would strengthen the Euro against the dollar which would make it harder for their exports. At the same time, the US is all panicked about the deficit and will take steps towards pushing China somewhere � like buying its own currency with surplus dollars. Unfortunately, the Chinese know that would kill their own economy. There is only one currently left that will not kill the economy of Europe or China and it's a metallic yellow color.

But, as always, I could be reading this incorrectly and maybe gold is going up just because it's pretty.

http://news.xinhuanet.com/english/2006-04/05/content_4384592.htmSnip:
BRUSSELS, April 4 (Xinhua) -- The European Commission (EC) on Tuesday sent 28 letters of formal notice to 17 member states of the European Union (EU), saying they were not doing enough to openup their energy markets.

�
In 2003, EU member states agreed to lift barriers and allow newcompanies to start providing gas and electricity in their countries. However, many nations have been slow to put their promises into practice.

...

During the EU summit last month, the leaders agreed to ensure that the legal framework is in place to open up markets for domestic customers by July 1, 2007.

Fl � This have overtones of being interesting. Anyone know anything about this?

http://www.mineweb.net/sections/whats_new/170660.htmsnip:

LONDON (Mineweb.com) -- On the release of Virtual Metals� second biannual "Yellow Book", CEO Jessica Cross said: "There is no doubt that the price activity of the past six months has disrupted the physical markets and we have yet to see at what trading range a market equilibrium will be re-established� our 2006 forecasts are based on what we have seen in the first quarter of the year and we will amend them in the months to come as we observe how the price-sensitive sectors continue to realise and adjust to price developments�. the real imponderable is what the hedge funds and pension funds perceive to be the macro-economic background to global issues in the next few months". Virtual comments that as the markets likely to swing into surplus, the price will consequently become increasingly dependent on continued investment support in the form of hedge funds, pension funds and retail investors.

The company argues that should the price remain at current levels (gold fixed at $585.00 on the morning of April 4) then the international market will swing from a deficit of 310 tonnes in 2005 to a surplus of 422 tonnes in 2006 (this is equivalent to approximately nine weeks� global jewellery fabrication based on the Virtual data), with a drop of roughly 30% in investment-grade jewellery demand. Scrap return is expected (at current prices) to increase by 19% to 998 tonnes in 2006.

Virtual's "Yellow Book" seems to suggest that today's PoG is going to cause everyone to run out and sell their gold and "cash in". They hold up numbers expressing slow growth of gold sales in the Far East to support their assertions.

Wonder where they get ideas lie that?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=You'd have to think this uptick is good for $600 even though it has generally been a bit sluggish, given the basic reasonings for it. From an overall market perspective, PoG600 may well be the limit of their understanding ...as Ms Cross indicates. We'll see, something about Giffin springs to mind.
OI on Comex Ag and Au indicate there's enough sloshing about to be looking at 15k April Gold and we're still a long way away from that ...Silver looks tuckered out but April OI still building nicely, if they get the Ag April OI to under 100, we could be looking at a decent Ag drop, which wouldn't bode well for Gold in the short-term.

http://www.gulfnews.com/business/Banking_and_Finance/10030766.html04/05/2006 Abu Dhabi: The six Gulf central banks have agreed on convergence criteria and on creating a monetary reserve to support their single currency that is on track for launch by 2010, UAE Central Bank governor Sultan Bin Nasser Al Suwaidi said on Tuesday.

"...we will look at the minimum reserves necessary to be created and maintained."

Asked whether there would be a single policy for all the six GCC states to maintain their reserves in dollars or euros, he said "that is left to the authorities of each state to decide. Even the ratio is not yet decided."

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

This is the first of two related articles that should be absorbed in conjunction.

Thanks to the glaring example that the Chinese condition has wrought regarding the socio-political problems regarding use of the dollar as a principle reserve currency, the second article will show that the euro-bloc is not eager to be pulled into that trap by having the euro function an alternative RESERVE asset in place of the dollar as a reserve.

Thinking about it, this leaves only gold as prime candidate for the role. And a central banking commentator is wisely going to remain discreet and say nothing specific on that front so as not to explode the market while the quoted trading price for the metal remains dangerously (nearly dysfunctionally) too low.

R.

http://www.gulfnews.com/business/Banking_and_Finance/10030802.html04/05/2006 Abu Dhabi: The UAE Central Bank has deferred a plan to convert part of its reserves from dollars to euros, its governor said on Tuesday.

However, he hinted they may consider it at next month's meeting.

Central bank governors of Qatar and Kuwait said they were also considering buying euros.

"We have postponed buying euros until the next month's board meeting. The board may decide there's a 50-50 chance of buying euros," the UAE's Sultan Bin Nasser Al Suwaidi told reporters.

"We have not decided against it the final decision is only postponed," he said, referring to the meeting of the board on Sunday.

The UAE Central Bank holds 98 per cent of its $23 billion foreign reserves in dollars, with the remaining 2 per cent in euros and a few other currencies.

Last year, the governor said the bank was considering converting 10 per cent of its reserves to euros.

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

No surprise that they've reached a gentlemen's agreement to put this reserve idea on hold.

See comments to previous post.

See also related comments offered at the conclusion to yesterday's post:
TownCrier (4/3/06; 03:07MT - msg#: 142974)

R.

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

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

TUESDAY Market Excerpts

April 4 (from Reuters, MarketWatch) -- U.S. gold futures gave back some recent gains by the close and held at lower levels throughout the session on Tuesday, as some large players decided to take profits, traders said.

COMEX June gold contracts fell $3.70 to $590.60 by the close and set a session range between $589.50 to $595.30. "At this point in the game, it's all technical. We're still working toward our objective in gold, the initial objective which is $600," a trader said.

"I don't think the fundamentals or the news is adding that much, unless it's shocking. If it's more of the same or slightly different from what people thought, I don't think it can stop this market. The market's too strong," a dealer said.

The market may see "some profit taking and hesitation as we trade just below $600 but once the market kicks-starts itself again, the move higher will once again be quick," said Peter Spina, an analyst at GoldSeek.

Deutsche Bank's global head of commodities research said on Tuesday gold may head beyond $600 and toward $700, boosted by upbeat fundamental factors and by fund buying.

The dollar fell to a two-month low against the euro on Tuesday, as investors expectations for a European interest rate increase were heightened after a news report said the European Central Bank may raise rates at its May meeting.

While the dollar's weakness may have underpinned gold's losses, traders said they thought its influence these days was secondary to technical factors.

"We've somewhat separated from our relationship with the euro. It's one of the things we factor in, but it's not the driving force that it used to be," said one trader.

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

http://www.miami.com/mld/miamiherald/14262731.htm AP Wire | 04/04/2006 | Gold works as a hedge against inflation - Meg Richards

*Dollar falls on reserve shift - CBS Marketwatch
*March US manufacturing growth lower than expected - FT
*Skewed jobs report may hit markets - Crudele, N.Y. Post
*False hopes about retirement - CNN/Money
*Workers Have Retirement 'Overconfidence' - Minn. ST
*Moves afoot to shed light on hospital costs - Stateline.org
*Housing Bubble Trouble - CBSNews.com
*Nervous times for investors - Coggan, FT
*America's pensions in peril � or gone - Seattle Times
*China, Japan Buy Fannie, GE Debt; U.S. Investors Skip - Bloomberg
*Long-Term Rates Creep Higher After Years of Resisting the Fed - WSJ
*Average U.S. gas prices jump 9 cents - Reuters
*Credit cycle may have turned - FT
*Manhattan housing market shows weakness - CNN/Money
*GM, Ford March US sales fall - Reuters
*Merrill to take $1.2 billion first quarter charge - Reuters
*How the US 'lost' Latin America - BBC
*Senior China official urges cut in US debt holding - Reuters

http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060404:MTFH57597_2006-04-04_23-28-24_N04199769&related=true&rpc=44Rato seeks IMF forum to address economic imbalances

BOSTON, April 4 (Reuters) - International Monetary Fund chief Rodrigo Rato on Tuesday proposed a multilateral forum where developing and industrialized nations can address ways to rebalance the global economy, although he acknowledged the fund lacked tools to force multilateral action.

The Washington-based lender has so far been "insufficiently persuasive" in its advice to member countries on global imbalances, Rato said in prepared remarks at Harvard University.

...The United States has been trying to convince China to loosen its relatively rigid currency regime, which U.S. manufacturers complain keeps the yuan currency undervalued and gives Chinese manufacturers a trade advantage.

..."The problem is that good economic performance rests on a shaky foundation, because of large and continuing global imbalances," Rato said.

If these imbalances unwound quickly and chaotically, Rato warned, it could trigger financial crises and a global recession. Should financial markets force an adjustment, it could send the dollar sliding...

...some policy-makers, he added, believe global imbalances can either persist indefinitely or dissipate over time.

"I find these views optimistic to the point of willful blindness," Rato said, without elaborating.

To countries that have argued it was up to others to act first, Rato said: "Be careful what you wish for."

"A disorderly adjustment of global imbalances could be produced not only by inaction, but by unbalanced actions," he warned.

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

What rational thinker would want to entrust their life's savings to a dollar that could collapse on the basis of the feeblest-possible 'event' -- known as the 'status quo'?

Choose gold.

R.

http://www.safehaven.com/article-4912.htmby John Rubino

gentlemen, companions, fellow knights, and generous hosts.

Despite the most challenging reversals of my life in the decade past, my retirement plans and prospects are on track -- ahead of my previous expectations, actually -- thanks to you, your counsel, and your persistence in it.

Year-to-date change in PM prices as of 4-3-06 as posted at Rude-Awakening.

Gold $516.70 YTD +13.74%
Silver $11.75 YTD +33.24%
Thus silver advanced nearly 20% more than gold YTD
..................

Below is my post #140007 dated 1-3-06

"I have been here at the forum for several years and my tune has never changed. I have simply stated, that on a percentage basis, silver will outperform gold. But as we all know, we cannot profit from the past.... the record books for 2005 have been closed. Therefore the important question of the day is, "What will happen in 2006?" I'll make three observations.

1. Silver will outperform gold on a percentage basis.

2. The difference between gold and silver will be even GREATER than the 11.8% difference in 2005.

3. The fact that there is less above-ground silver than gold will finally be recognized. (No one can know exactly how much of each commodity there is. I work with these figures: Gold, 5 Billion ounces and growing by the day. Silver, 1 Billion ounces and GETTING SMALLER by the day.)

Either way, both precious metals seem to have a very bright future."

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

Certainly, there are many more pages to turn on the 2006 calendar ..... but for the silver advocates here .... so far, so good.

Congrats on the performance. Everyone surely loves a high flyer!

For sake of a more complete record regarding your item #3, apporximately how many tonnes of new (above ground) gold are mined each year, and how many tonnes of new silver is mined?

Thanks in advance.

Specifically, you say gold quantity is growing by the day and silver is getting smaller. Forgive my feigned ignorance, but how are the above-ground silver atoms subsequently... destroyed?? (Or, are they being put back under ground?)

Anticipating your response, I'd next desire to have your explanation as to why you suggest the use of silver in its typical disposition is more, shall I say, "consumptive" than the disposition of gold?

R.

@ TC, ski,

Let me take a stab at least part of the question.

When gold is used in processes, it is more economical to retrieve based on the 50X higher price per unit, so while major processes like photography plan for retrieval, uses like silver solder and electronics don't always bother with retrieval planning. Medicinal silver is another form that is probably never retrieved.

This is just a guess, but I suspect the jewelry recycle rate for gold is higher, as well, due to the price premium. How many people take a $10 silver ring to a jeweller and ask for it to be melted and reused in their next ring?

In wartime, even gold teeth are often retrieved before the victims are buried.

Perhaps it's not about "conservation of matter", but merely the economics of recovery.

I don't think this qualifies as full support for ski's assertion that silver is less plentiful, but it is less often fully retrieved at current ratios, so more of it becomes "lost".

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

April 4: Iraq's Interior Ministry is refusing to deploy thousands of police recruits who have been trained by the US and the UK and is hiring its own men and putting them on the streets, according to western security advisers.

The move is frustrating US and British efforts to build up a non-sectarian Iraqi police force which would not be infiltrated by partisan militias.

The disclosure highlights growing US and British concern about the role of militias in sectarian killings, and their links to senior Iraqi politicians. "You can't have in a democracy various groups with arms - you have to have the state with a monopoly on power," Condoleeza Rice, US Secretary of State, said at the end of her two-day visit to Baghdad yesterday.

-Goldilox

I guess we now know how Condi feels about the 2nd Amendment.

You wrote:
"For sake of a more complete record regarding your item #3, apporximately how many tonnes of new (above ground) gold are mined each year, and how many tonnes of new silver is mined?"
.......................

Sorry, but I have to wonder about your question. Is it possible that you already know the answer?

But nonetheless, I'm glad to have the opportunity further explain an under-recognized part of silver's rise.

Any geology student could tell us that, on a daily basis, more silver comes out of the ground than gold. Presently the ratio is around 8-1. But if we stopped right there, how could we explain the superior performance of silver? The answer is in usage.

This forum is not appropriate for long, detailed explanations of PM usage. So, I'll have to take the risk of being too brief.

That ounce of gold that was mined is almost always converted into some form of investment product and added to the existing above ground stock. (Think jewelry and coins.) On the other side of the ledger, the 8 ounces of silver are consumed in thousands of different industrial applications, widely dispersed in micro quantities and forever lost. (Think light switch contacts and the new RFID tags on merchandise.)

But the story certainly doesn't end there. Not only does industry consume the 8 silver ounces, but it demands EVEN MORE! Thus it eats into the above ground stock. The effect of this is a well documented, ongoing silver deficit going back all the way to 1990.

To go full circle, at the beginning of the day, we mine 8 ounces of silver and one ounce of gold. Yet, at the end of the day, sure enough, the gold is there to be seen. But the 8 ounces of silver, PLUS EXTRA INVENTORY have appeared to vanish.

When we inherit our mother's silver tea service, going far beyond issues of recovery is the premise that we will be putting no further demand upon silver for such production. In most circumstances, one service is quite enough. I won't pretend that this is an isolated example in the wide realm of manufactured goods.

By contrast, it is not human nature to say "Whoa! That's quite enough!" when it comes to the size of their accrued savings. And there's simply no getting around the fact that the metal called upon to feed into this unquenchable appetite is the fate and disposition of gold far more so than silver.

It is certainly a fallacy to assume that gold held by CBs is a "stockpile" in any sort of commodity-sense of the word, and it certainly shouldn't be deemed to be any more readily available to the wider market than is any less visible distribution of silver solder simple because it is concentrated in location. To imply such, as thing as is frequently done by folks making ski's argument, is simply turning a blind or prejudiced eye to the true nature of its most significant utility.

Whether or not the metal in question can be physically SEEN in the course of its usage is of no significance whatsoever in making a comparative valuation assessment. Mr. ski is going to have to try harder than that.

R.

Forum members, can anyone tell me how much paper gold exists in relation to physical gold? I remember a Russian central banker mentioning something like a 129.000 ton paper trading yoy in gold?

Thanks!

@TC,

I wouldn't call a "tea service" unrecoverable, but the many silver oxides, sulfates, and amalgams that get dumped in garbage heaps unknowingly more than likely are.

How many auto recyclers go after silver solder? When I was growing up, every toolbox had silver solder in it, but we made no effort to recycle it.

With all the silver solutions on the market today as folk medicine, how many people are recapturing that in their waste?

If a sliver ring goes down a drain, do you disassemble the plumbing to retrieve it? What about a gold ring?

I know printed circuits are melted down for gold retrieval, but is that economical for silver?

My point is merely that the recycycling of gold is much more prevalent and efficient due to the higher price, so more silver is "lost."

I'm not saying silver is or isn't recoverable or "lost". That isn't the point, but rather, whenever it is used to meet a specific physical need, that specific need is satiated. Period. As long as the mirror hangs on the wall, the tea service sits on the shelf, or the soldered circuit conducts electricity in the duty of an appliance, the consumer applies no further demand upon silver for those specific purposes. Sometimes the appliance has a long life, and sometimes it changes hands to satiate needs rather than ending up "lost" in a junkyard.

By contrast is the use of gold particularly as a reserve asset (as savings). Although they may already have some gold in their portfolio, how often have you heard of a right-minded person not eager or interested in having more? It begs the question, at what point might you expect this disposition of metal to fall out of this usage?

As I've tried to convey ineffectively, the whole affair isn't about the relative quantities of the two metals in their various usages. The key determinant regarding pricing/valuation expectations is more about the quantities that are brought forth to the market and the value placed on usage by those bidding on the final ounces.

Silver has different uses than gold, just as it has unique supply factors; it is probably as superfluous to compare snapshots of price performance between the two as it is to compare with molybdenum, or to compare figs and lug nuts. For deeper insights, you've got to look at longer trends and have an eye on social issues.

R.

http://www.safehaven.com/article-4912.htmThat was a mighty interesting compilation from Safehaven. Of all the gems, the one from Peter Schiff most caught my eye. Not to be too derivative, a little snip :-

In desperate need of capital, America is hardly in a position to insult those providing it, or dictate the terms by which they do so. However, the latest tough talk on China comes shortly after Congressional action which blocked key purchases of American assets by foreign interests. Such posturing sends a very dangerous message to our creditors. If as a nation we have decided to sell off our cows to pay for imported milk, we can not complain when our trading partners actually show up to collect the animals.

As a result of the unprecedented foreign-financed consumption binge in the U.S., it is likely that nearly every major U.S. asset will ultimately pass into foreign control, including most companies in the S&P 500 and trophy properties in major U.S. cities. As America lacks the industrial capacity necessary to redeem its IOU's with actual consumer goods, access to capital goods and domestic assets is all that gives its currency value. Restrictions on the ability to acquire such assets will diminish foreign interest in accepting dollars in exchange for exports, and will dissuade foreign governments from holding huge reserves of dollars that they cannot hope to spend.

End snip.

While not small, I fear that the amount of money held as reserves by governments pales into insignificance compared to the global investment funds who, almost by definition, have virtually no national loyalty.

C!

@TC,

I didn't have a problem with your "relative valuations" statement, nor the obvious differences in utility, but your intial response was to ski's post about supply and demand, which is the specific I was addressing.

In that light, might I point out that Rhodium has shown us what can happen to a metal "commodity" in very high demand? $380/oz to $4100/oz in three years.

I think we're focusing on two completely different aspects of the comparison.

This may actually support your point about differences and and ski's point about demand, as well.

Or not.

http://english.people.com.cn/200604/05/eng20060405_256205.htmlGold price hits record high in Beijing | People's Daily Online | Xinhua | April 5
The slant of this and the dealers quoted is expected
greater gold appeal.

Sorry, I forgot to address the "need satiated" part of your response.

This is only true when supply=demand.

Classical economics says that supply will always = demand by using price to negotiate both sides of the equation.

What happens when the demand is designed in, but scarcity continues? For gold in 1933, it was confiscation. For many commodities, ten years later, it was imposed rationing.

Thus it seems, government market manipulation has plenty of precedents.

A small part of my holdings were once brand new $2.00 face value rolls of 2004-P and D Jefferson nickels("Peace Medal" of the "Westward Journey" redesign) acquired at face value.
Sold all 40 rolls before the price appreciated. Today 2004-P rolls sell @ $23.95 and the 2004-D @ $10.95 retail. "Hot", like uranium.

Under the circumstances and without a crystal scrying ball, I knew gold was a better insurance and investment- pretty nickels not even very rare, aside from being bulky and hard to sell in quantity, usually depreciate to their intrinsic value (or less) well before they can be traded away, especially in a recession.

The markets for silver, platinum, palladium, rhodium, vanadium and more exotic metals are similar and intrinsically more volatile but contributing less to inflationary perceptions.

These metal commodities' supply and demand (and thus market prices) are dependent as much on market-distorting government policy such as tariffs and subsidies as they are on both political and strategic national dictates and coercion.

Most importantly as TC emphasizes, gold is held in far greater esteem, traditionally and despite the prevailing public preference for denial, financial surrogates and paper proxies.

I hear that the US has a small, "good will" armada, carriers, destroyers, etc., in the Caribbean sea at the moment. As I understand it, the purpose is to promote solidarity with South America. However, some believe that this is a sabre rattling move towards Venezuela, et al, who are questioning the role of the US in the 911 event. Apparently Venezuela wants an investigation into 911 and other SA countries may be following V's lead.

Can anyone confirm this?

Another Iran? Buy gold and food.

http://www.ecb.int/press/pr/wfs/2006/html/fs060405.en.htmlJiving very closely with my early AM March 31st estimations/predictions (msg#: 142882), the per-ounce valuations of eurosystem gold holdings increased by 11 percent from the previous quarter's value of EUR 434.856 per ounce to a fresh quarterly book value of EUR 482.485 per ounce.

The revaluation has lifted total gold reserves to their highest value ever, to 180.785 billion euro, and this lofty height is despite ALL previous sales, including an additional mobilization of gold last week reducing these reserves by a marginal EUR 205 million. The upside of the revaluation on the extant gold reserves was a significant 17.9 billion euro.

Meanwhile, portfolio liquidations last week reduced the net position in foreign currency by EUR 300 million, and coupled with revaluation effects, the net position in foreign currency dropped by 4.7 billion euro to its current level of 155.3 billion euro.

Since the launch of the euro in 1999, the history of the eurosystem reserves has been a steady discounting of the proportion of paper-based value among the total foreign exchange reserve holdings and a steady rise in the proportion of gold-based value held among those total reserves.

"Can you not also follow in the footsteps of giants?"

R.

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Agreed Ms. Cross and her ilk are out to lunch on this analysis. There can be no equilibrium re-established when supply for the forseeable future lags demand.

That's right, don't sell me any metal coins that function like a currency. I've got all I need. Oh, by the way, when I look at my coins, the collection of atoms is large enough to feel and, unlike paper, when I hold it in the light just so, I don't see watermarks. Do you see any?

As commodities, both metals have been serving their purpose for years.

As currency, people are finding that both metals will serve this purpose better then paper. The demand for metals as use as currency will determine how they float against all paper currencies. Silver and Gold will both have different floats. (Will one be stronger then the other? Will people find more use for one over the other? We will all find out.) They are fundamentally different while being amazingly similar. Human perception will determine adequate values in both as they both fulfill the need of preserving wealth against confiscation through over printing. Buy what you believe in.

One question is still outstanding that weighs heavily on Silver. Will Silver ever really regain �official� support as a currency in our future? Gold currently has this support as shown by the reserve statements in central banks. This is the reason why I still see Silver as a commodity - yet I am willing to buy it out of *hope* that it will be officially sanctioned as a currency. As it stands right now, the Silver commodity function appears to have a larger affect on the PoS then Gold commodity function on the PoG. Unfortunately for Silver, in our digital age, Gold would mostly likely supply all the currency function that is needed as a world reserve currency. For this reason, Gold is unique.

Buy what ever you want and find value in saving anything that works. Meanwhile, we watch as gold currency function grows (See MTM postings) and hope that Silver is officially sanctioned as currency.

I guess that's my question -- i.e., in a fully digitized world, even "atoms" of gold could change hands, could they not? -- leaving silver "out of the money."

On the other hand, if digitalization is only partial, then in a post-fiat world, gold would be too expensive for most transactions, in which case silver -- and even copper -- would have their place.

That's my $.08, anyway, real inflation apparently running at least this much.

Wouldn't you all just love to see MTM reports about Silver?

Thoreauly,

Silver "out of the money"? Sorry, but correct me if I am wrong, but silver was money way before gold entered the scene. Wasn't Jesus sold-out by Judas for thirty pieces of silver??

The Bear

Well, that was then, and this is now. I'm just asking why silver would be necessary if money were fully digitized, as gold could be exchanged in virtually any amount, no matter how small.

I don't have anything against silver, understand, and would be delighted to own large quantities of it (as well as gold, of course) in a post-fiat, partially digitized world.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=
Well we certainly are not following the script for a "normal" delivery month roll-over here and in fact these last couple of months can be seen as quite abnormal.

Gold is more attuned to supporting Buck, or more precisely supporting a measured decline in the US$ and those currency spikes on the Chart would seem to confirm this.

So we who hold great expectations for Au in the fist must wait patiently 'till those that shouldn't have their way with her.

Thoreauly,

Frankly, I don't really have any issue with fiat money� as long as it is properly managed. Efficient management of fiat money can be measured by effective control of inflation. No inflation, adequate levels of fiat. If you have inflation, you have too much fiat, deflation, too little. Following Goldilox's recommendation, I watched the Money Masters video, and the author outlines the effective use of fiat money by some early US settlements.

However, since 1913, we have been OUT OF CONTROL and the Federal Reserve is printing $$ like crazy. Now the manipulators are trying to keep the dollar's "house of cards" from collapsing. The result is only postponing the inevitable correction, and subsequent drop in the value of the dollar. This correction will also make the POG & POS excellent investments. Sadly, almost since day one, the Federal Reserve has been driving the value of the dollar down.

However, given the lack of understanding of general economics by Joe Public, it is probably dubious that fiat money can ever be safely used here in the US. The politicians & bankers just love to print the stuff for all of those little things, i.e. Vietnam War, Iraq, Star Wars and misc.

So, silver or gold or fiat; it really doesn't matter. What matters is how competent the leadership is in managing the money. Given that, let us not forget that the guy who lead us into the War in Iraq has an MBA from Harvard. To quote the Mogambo Guru, "HAHAHAHAHAHAHAHA. We are doomed!"

The Bear

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The Daily Gold Market Report has beenupdated.

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WEDNESDAY Market Excerpts

April 5 (from MarketWatch, Reuters) -- Gold futures closed higher Wednesday, resuming their climb toward $600 an ounce -- a level most analysts see as imminent in the near term -- but prices failed to trade near the metal's recent highs.

"Gold seems to be struggling to clear chart resistance located around $590-$592 at the moment," said James Moore, an analyst at TheBullionDesk. And that suggests "the metal needs a period of consolidation before resuming its charge higher," he said.

COMEX June gold futures closed up $1.90 at $592.50 after peaking at $594.70. On Tuesday, the contract pulled back as traders locked in gains after prices reached a 25-year high $596.80 on Monday.

"The geopolitical backdrop and expectations for continued fund demand have underpinned prices in the early part of Q2," said analysts at Action Economics.

Investors have been impressed by gold's performance, with prices surging 40 percent in the past 12 months. Other assets have lagged behind. The Standard & Poor's 500 index, an indicator of U.S. equity performance, rose just 11 percent in the same period.

Peter Hillyard, head of metals sales at ANZ Investment Bank, said he there was bullish momentum in the market. "Right now there is nothing that says to me that $600 is going to be a barrier. It's definitely going to happen. We could see gold to $625 within a couple of months," he said.

Meanwhile, the Deutsche Bank projection of $700 for gold Tuesday "was joined overnight by an even more aggressive forecast for $1,000 gold prices at an Australian gold conference," said Nell Sloane, an NSFutures analyst, in daily commentary Wednesday.

"Therefore, it is clear that investor sentiment on a global basis remains very bullish toward gold prices."

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

The Coin I have that I like best is a 1 OZ. Silver round from the Constitution Mint. On the back is says ....No State Shall make any thing but Gold and Silver Coin a tender in payment of debts...... ART. 1, SEC. 10 U.S. Constitution ..... RE: US Rep slugging a cop .... why are they not charged with failure to uphold & defend the Constitution ...... not this school yard B.S. ...

"Frankly, I don't really have any issue with fiat money�as long as it is properly managed."

I wouldn't either, were it not for the fact that central management of money is as disastrous as central management of the rest of an economy. You might want to dust off your copy of The Communist Manifesto to confirm how the two go hand in hand.

"Efficient management of fiat money can be measured by effective control of inflation. No inflation, adequate levels of fiat. If you have inflation, you have too much fiat, deflation, too little. Following Goldilox's recommendation, I watched the Money Masters video, and the author outlines the effective use of fiat money by some early US settlements."

I've got the Money Masters video on order. In the meantime, I can't wait for Goldilox's reply.

"However, since 1913, we have been OUT OF CONTROL and the Federal Reserve is printing $$ like crazy. Now the manipulators are trying to keep the dollar's "house of cards" from collapsing. The result is only postponing the inevitable correction, and subsequent drop in the value of the dollar. This correction will also make the POG & POS excellent investments. Sadly, almost since day one, the Federal Reserve has been driving the value of the dollar down."

Over 96% so far. But if we can just get the right people in there...

"However, given the lack of understanding of general economics by Joe Public, it is probably dubious that fiat money can ever be safely used here in the US. The politicians & bankers just love to print the stuff for all of those little things, i.e. Vietnam War, Iraq, Star Wars and misc."

Blame Joe Public if you will (did someone say "public education"?), but as Henry Ford said, in perfectly elitist fashion, "I think it is well that the American people do not understand our monetary and banking system, for if they did, I believe there would be a revolution by tomorrow morning."

"So, silver or gold or fiat; it really doesn't matter. What matters is how competent the leadership is in managing the money. Given that, let us not forget that the guy who lead us into the War in Iraq has an MBA from Harvard. To quote the Mogambo Guru, "HAHAHAHAHAHAHAHA. We are doomed!"

The Mogambo Guru doesn't laugh for partisan political reasons, I assure you.

http://home.hamptonroads.com/stories/story.cfm?story=102085&ran=181584&tref=poSo far, I have found one article on this issue.


SNIPS>>>

"NORFOLK � The Navy will send an aircraft carrier strike group, with four ships, a 60-plane air wing and 6,500 sailors, to Caribbean and South American waters for a major training exercise, it was announced Monday."

""If I was sitting in the Venezuela capital looking at this American task force, the message I would be getting is America still is not so distracted by Iraq that it is unable to enforce its interests in the Caribbean," Thompson said."

"Stephen Johnson, a former State Department and senior policy analyst for Latin America at The Heritage Foundation, said..."It's a chance to show the flag and let our friends know we care,""

"However, there also is increasing concern Venezuela has begun to amass new weapons � from rifles to helicopters � possibly including Russian Su-27 or Chinese J-10 aircraft ."

"Venezuela has always announced plans for acquiring new military hardware, even before Chavez came to power in 1998, but couldn't afford it , {Baranauskas} said.

"That was before the oil prices went up," Baranauskas said. "Now the money is available...""

End of Snips.

If this should turn into an U.S. backyard armed conflict, what do you think the POO & the POG will do? Got food and gold?

Yes, if FIAT were managed responsibly, gold and silver as money might possibly be the "barbarous relic" that the Money Masters profess it to be, but alas . . . the historical score is a complete shut out for gold.

As the FED watchers likened their actions in the past year to a baseball game, the ninth inning is upon us, and the gold team is dealing serious heat. Once again, the overnight action is challenging $590, and Sinclair's $610 is just a quick market rally away.

That "one drop" of burning Saudi oil still has the potential to stomp the bejesus out of the Crimex shorts.

As for Henry Ford, he once compiled a pre-Hitler collection of essays from his Dearborn Independent rag entitled:

"The International Jew, the World's Foremost Problem" c.1921

His poor choice of title cost him readership of all but the most anti-Semitic, but once I finally got a copy (it's hard to find), his premise was that international banking under the Rothchilds, et al, was completely controlling national economies and forcing manufacturing to develop completely subserviantly to their financiers. Not a lot different than the Money Masters story. Henry was not necessarily anti-Semitic (at least in this collection), but, as an industrialist, he was strongly anti-banking-cartel.

Quite an erratic dance the canines are doing in the low 590s. They seem to be anticipating something....

The day before us should be a l9t of fun!

Caradoc

Have you kept a steed in readiness? Thy ride approaches...

Gold stock investors starting to convert to physical at 600/oz.?Will they act as they have outlined many times? (just trying to bring out Deadeye)

Spot snuffling towards $600...seems to be on the scent of something...Hi ho Silver...$12 and away!!

Snip:
This article cites a recent one by Baker in the San Francisco Chronicle, and provides a rebuttal of many of Baker's assertions:

"...
Much like NASDAQ the Iran Oil Exchange is completely computer-driven and does not require the presence of sweaty, over-caffeinated, traders with strips of paper and strange hand-symbols. Hossein Talebi, the bourse's director, has said that "most deals will be conducted through the Internet." (something that NYMEX did back in 2000 through their eNYMEX effort). Not that it matters, but even if you did need physical access to financial service companies, they're just a few short miles away in the UAE.

As for computer and economic expertise, Iran's exchange is being built by a consortium of European technology consultants (PDF) with a deep background in the oil industry. In his article Baker quotes John Taylor of Stanford as saying "You can't set up a petroleum exchange in Omaha." Professor Taylor may not have kept up with what's been going on in outsourcing, OC3 high-speed internet links, and secure trading terminals. So actually, yes, you could set up a petroelum exchange in Omaha. In fact there's a good chance the replicated data center for NYMEX is somewhere outside of New York City -- perhaps even in the midwest -- with the main offices in New York serving administrative and marketing functions. Welcome to the 21st Century.
..."

Sundeck: Mmmm...difficult to separate the information from the misinformation on this subject, but on balance, i'd guess that the Iran Oil Bourse is gonna be a goer..."sweaty, over-caffeinated, traders" or not!

;-)

http://www.uruknet.info/?p=m22279&l=i&size=1&hd=0...see last post...

Yes, indeed! And those of us involved with palladium don't mind it being up an even $20 at this point.

A pleasant day to you, sir.

Caradoc

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093108416...the Economics Program Manager at the Gulf Research Center in Dubai.

Snips:

"...
The women of India and the Middle East, who represent the two most important demand factors in the world gold market, have thus outperformed the sophisticated hedge funds of Wall Street with a very basic "gold, buy and hold" strategy.
...
Dubai constitutes a convenient time window between Asia and Europe and the DGX will be the only exchange worldwide to offer trading on Saturdays and Sundays. Therefore, it can be expected that in the age of the internet an increasing amount of international investors will be attracted to Dubai as well. Another advantage of Dubai is that it won't limit itself to the trading of "paper gold" contracts (futures and options) like Tokyo and New York but will be supported by its vivid trading in physical gold. This will become increasingly important as trust in derivative paper gold might wane in light of the problematic derivative short position.
...
There will be a time where the only available new supply will come from mining companies and like the owner of a petrol station is naturally interested from where the oil he sells comes from, Dubai and the region should develop an interest in upstream investments in the gold sector to safeguard future gold supplies to a thriving gold trading hub.
..."

Sundeck: Wha? Trust in derivative paper waning...NEVER!

...and those wonderful, wise women out-performing the hedge-funds! (Golden touch, but probably not too many with "golden hair".)

Meanwhile, it's farewell to Gene Pitney...probably didn't get around to spending his last dime, but he has certainly played his last juke box...

"...
Whoa-o-o love songs that they sing
Wouldn't mean a single thing
Even though you're standing there
Ruby lips and golden hair
If I didn't have a dime and I didn't
Take the time...to play the juke box."

;-)

http://www.disinfo.com/site/displayarticle15277.htmlThoreauly,

Looks like we see thing pretty much the same, except the education of Joe Public. In that, I find the desire to learn pretty much an individual thing. A lot of my "smart" friends don't bother to read. It is not that they are lazy, but they successful and work long hours (60+). When they finally get home, they either take work home, or they are tired and are seduced by the boob tube.

And I have other "smart" friends, who just got tired of all of the "bummer" information "that they couldn't do anything about", so they just stopped reading. And that's the smart ones.

Let's face it, the world is a complex place and it takes a determined effort to stay informed. Although many of my friends have good educations, it didn't prompt them to make a hobby of studying macroeconomics. In fact, out of the 150 people I work with, I am the only one who monitors international macroeconomics. When I relate my concerns with regard to the current account deficit, or the loss of M3, you can see their eyes sort of glaze over, and you know then that they have no idea about what I am taking about.

Let's not forget the general US populous, who are happy watching the spin from Fox News or CNBC. The information to stay informed is available, but requires the individual to put forth a consistent effort to look for it.

Myself: I am a "dark cloud" type person. I am always on the look out for what can go wrong. (I don't like nasty surprises.) When I know a nasty event is coming, I prepare for it, and then go enjoy life. Greatly simplified, I make sure my spare tire is in good condition in the trunk of my car, so I don't worry about it. This allows me to be a pretty happy guy. When the dollar collapses, I will make a profit.

Unfortunately, the human misery that will result from this collapse, and the war/s that usually follow will put a dampener on all of our futures.

What do you think?

The Bear

PS: The attached website allows you view the Money Masters video in a Goggle video stream.

http://www.sound-ideas.com/wma/mix41_14.asxI've been wanting to post this for years. Now seems a suitably frisky moment ..... Enjoy, all !

C!

I've got a longer reply that is more suitable for off-topic weekend discussion and so will put it off until then. In the meantime, let me simply say that I have had much the same experience with my own friends, all of whom are well-educated and intelligent enough to "get it," but who can't seem to internalize matters enough to act on them. So instead of taking out the ultimate insurance policy in what are clearly very dangerous times -- with gold (and silver) all but screaming at them to "get physical" -- they sit on the fence, waiting to be knocked off.

As for the Pentagon video, all I can say is that there is nothing the government can't or won't do to perpetuate itself and that what we have experienced so far may only be the tip of the iceberg.

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The rest is up to all of you -- to carry forward in the spirit with which we created this forum and with which we would like to see it sustained. Let's not forget that it wasn't too many years ago that discussions like this on gold as it relates to our political, financial and economic well-being did not even exist. The mainstream press controlled what was heard about gold, drowning out all others having quiet voices and smaller audiences. We have been turning the table here for nearly eight years! If we all appreciate and take personal responsibility for what we have here and make it better place for all visitors, both new and old, by this we will nourish something special for ourselves and those who follow after.

Let the discussion continue. . .
___________________________

It was probably time for posting a reminder anyway. Thanks for the inspiration.

R.

After bouncing off $600 and $12, Au and Ag seem to already be consolidating to mount the next charge.

Up into the close?

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

Today I was asked by a reader if I was fighting a market.

My answer was that I am totally familiar with all the cycles (waves of nature if you will) that impact the gold market. I was informed and knew that 2005 to the present should have been much different to cyclical analysts than what has unfolded. They should not hang their hats on cycles alone, but read them carefully in light of what is happening currently.

Structural fundamental rot, exogenous events like Iran, Iraq, Venezuela, Nigeria, outrageous lack of fiscal responsibility and dropping confidence in leadership are a few items that can throw cycles into a cocked hat.

The impact of the many cyclical considerations is only evident in the GM-like slow car wreck that the US dollar is. Gold after all the chatter is nothing less than a currency. This currency comes into favor when others fail. In time all fail and gold ascends to the money of last resort. It is the only HONEST money on the planet because it is without liabilities attached. That is Gresham's Law and will prove (as it always does) totally correct once again.

As you read on today you will see an article that was carried by Fox News of all places. This article sustains the reality that administration has controlled media. The masses are blind to the fire that has started in their house. They are yet to even smell the smoke.

Gold is teasing $600 with a high probability of slicing through it in the near future. This hints at what is going to happen later in 2006 when cycles call for a take off of gold into 2009. It is going to rise with such power and prominence even the most bullish bull will be stunned. I am not speaking of the maniacs that write crazy things, but rational and positive bulls. It might even take John Embry by surprise.

This is why I think it is silly to try and catch every move in gold. I would think trading ICE (a stock) on a strict trend line basis might be more rewarding.

Gold is insurance. Gold is your financial lifeline. The dollar is in an economic war and it is losing. Face it and deal!

Do not play for peanuts. I am not. I see this as the BIG ONE so I am "balls to the wall" in my own way.

You should be the same in a debtless manner.

It is all up for gold. The wind will be at its back after the summer. It was 70 degrees here recently so summer cannot be far off. Stop being a short term thinker and get real. "The world financially has ended, you only don't know it yet".

The dollar slowly and sadly slipped under another Fibonacci support today. The supply of dollars is building, buyers are slowly withdrawing and its future is written on the wall of perdition.

-Goldilox

Couldn't have said it better myself. Everytime I read the short-term chartists, I wonder if they realize the forest they are in for all those trees?

http://english.aljazeera.net/NR/exeres/692176D3-2F6D-4333-8CEF-E697B94A32C8.htmsnip:

Hugo Chavez, Venezuela's president, has tightened his grip on the country's energy resources, following through on threats to punish international companies that resist government control of the nation's oilfields.


On Monday, Rafael Ramirez, the oil minister, said Venezuela seized two oilfields from France's Total SA and Italy's Eni SpA after the companies failed to comply with a government demand that operations be turned over to state oil company Petroleos de Venezuela SA, or PDVSA.

He said: "Those two companies resisted adjusting to our laws. Those fields return to total, absolute control by Petroleos de Venezuela."

Until PDVSA took control of the oilfields on Saturday, Total and Eni had operated them under contract. Some other companies, including Exxon Mobil Corp, decided to sell their stakes among the 32 Venezuelan oil properties rather than go along with the new terms.

Ramirez, asked if companies that resist will be forced out of Venezuela, replied: "We don't have a veto against any company here.

"Companies that don't adjust to our laws, we don't want them to continue in the country."

More revenue

Venezuela's weekend seizures were the first as part of Chavez's effort to draw more revenue from companies pumping crude in the South American country.

Private oil companies had run 32 oilfields in Venezuela independently under contract with the government. But Venezuela demanded last year those contracts be changed into so-called "mixed company" joint ventures that give PDVSA a minimum 60% stake.


Ramirez: We don't want players
who don't adjust to our laws

Venezuela has been emboldened to take a harder line due to rising oil prices, political instability in the Middle East and Nigeria, and new buyers in Asia.

Light sweet crude for May delivery was up 42 cents to $67.05 a barrel on Monday afternoon on the New York Mercantile Exchange.

Ramirez said 20 companies, including Spanish-Argentine Repsol YPF, Royal Dutch Shell PLC and China National Petroleum, representing 25 oilfields have signed on to the new legal framework to create joint ventures.

Another five oilfields were voluntarily returned to PDVSA after companies with stakes decided to turn them over rather than operate them as joint ventures.

Ramirez declined to say if those companies, which include Repsol and Japan's Teikoku Oil Co, would be compensated financially.

http://english.aljazeera.net/NR/exeres/692176D3-2F6D-4333-8CEF-E697B94A32C8.htmsnip:

Hugo Chavez, Venezuela's president, has tightened his grip on the country's energy resources, following through on threats to punish international companies that resist government control of the nation's oilfields.


On Monday, Rafael Ramirez, the oil minister, said Venezuela seized two oilfields from France's Total SA and Italy's Eni SpA after the companies failed to comply with a government demand that operations be turned over to state oil company Petroleos de Venezuela SA, or PDVSA.

He said: "Those two companies resisted adjusting to our laws. Those fields return to total, absolute control by Petroleos de Venezuela."

Until PDVSA took control of the oilfields on Saturday, Total and Eni had operated them under contract. Some other companies, including Exxon Mobil Corp, decided to sell their stakes among the 32 Venezuelan oil properties rather than go along with the new terms.

Ramirez, asked if companies that resist will be forced out of Venezuela, replied: "We don't have a veto against any company here.

"Companies that don't adjust to our laws, we don't want them to continue in the country."

More revenue

Venezuela's weekend seizures were the first as part of Chavez's effort to draw more revenue from companies pumping crude in the South American country.

Private oil companies had run 32 oilfields in Venezuela independently under contract with the government. But Venezuela demanded last year those contracts be changed into so-called "mixed company" joint ventures that give PDVSA a minimum 60% stake.


Ramirez: We don't want players
who don't adjust to our laws

Venezuela has been emboldened to take a harder line due to rising oil prices, political instability in the Middle East and Nigeria, and new buyers in Asia.

Light sweet crude for May delivery was up 42 cents to $67.05 a barrel on Monday afternoon on the New York Mercantile Exchange.

Ramirez said 20 companies, including Spanish-Argentine Repsol YPF, Royal Dutch Shell PLC and China National Petroleum, representing 25 oilfields have signed on to the new legal framework to create joint ventures.

Another five oilfields were voluntarily returned to PDVSA after companies with stakes decided to turn them over rather than operate them as joint ventures.

Ramirez declined to say if those companies, which include Repsol and Japan's Teikoku Oil Co, would be compensated financially.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B55621F78%2D5E02%2D4773%2D8E7C%2D7A07CE297D2F%7D&tool=1&siteid=bigcharts&dist=bigchartssnip:

SAN FRANCISCO (MarketWatch) -- Gold's reached $600 an ounce for the first time since 1981 but the real surprise will be where it goes from here, with experts predicting a near-term downtrend that could clear the way for four-digit prices in the next few years.
"Gold at $600 an ounce might be a surprise to many, but these are the same people that were surprised when gold hit $300, when it broke $400 and when it moved to over $500," said Emanuel Balarie, a senior market strategist at Wisdom Financial.
"Most likely, they will still be surprised when gold hits $1,000 an ounce," which could come in the next three to four years, if not sooner, he said.

-Goldilox

The "mainstream media" is starting to look twice! If the investing sheep are watching too, we probably have some more "volatility" ahead.

Russia's economic development and trade minister said that an oil futures exchange would be opened in Russia in the second half of 2006.
German Gref told a government session that the Economic Development and Trade Ministry and the country's antimonopoly bodies were to complete work on necessary documentation in the first half of 2006.
Source: PIN/RIA Novosti
----------------------------------------------------------------------------------------------------------------------
Dollar, or euro denominated ?

A new exchange is preparing to debut spot and forward trading of oil products here, to pave the way for the opening of China's wholesale oil market at the end of this year, an exchange official said.
"We will begin formal trading in the first half of the year," a senior executive of the new Shanghai Petroleum Exchange said. The exchange plans to open in mid-June.

The exchange would trade spot fuel oil and a six-month forward contract, before adding other refined oil contracts in the future. The Shanghai Futures Exchange already offers a fuel oil futures contract, and has said it is considering a liquefied petroleum gas contract.
Petrol, diesel, and jet fuel imports are concentrated in the hands of a few state-approved importers, leaving little opportunity for traders. But China will open its wholesale oil products market by the end of this year, under commitments it made when it joined the World Trade Organisation.

"This type of oil exchange was approved a long time ago, but it never took off because there were no spot products to trade," said an oil trader.
"They need to open up imports and refiners need to sell freely to the market for this type of an exchange to work," he added.
Source: www.btimes.com.my
----------------------------------------------------------------------------------------------------------------------
Dollar or euro denominated ? With or without the IOB, FOA's process keeps on rolling...

One of my miners went up 28.21%........expensive gold to mine.....must expect physical to go "TO THE MOON"......WILD card...........OIL and SUGAR drought....REMEMBER???

http://www.321gold.com/editorials/willie/willie040506.htmlGoldilox msg#: 142970 & Clink! msg#: 143022
Thanks for the response, you are most welcome.

Jim Willie: "A confluence of powerful forces is at work, far more inter-related than we might perceive or admit. Some of the crucially important listed factors lie in the past, while some are in current status. Some factors lie in the future, either on the cusp of tomorrow or just down the road." "there are few coincidences which involve truly large momentous events."

Jim Willie, in the above referenced commentary, relies on an approach similar to that used by James Burke, creator of the PBS series "Connections".

The same approach could lead us to conclude that the conditions described by Peter Schiff (Best Quotes of March 2006) could reasonably have been predicted in the early 1970's when Kissinger traveled to China and structured the trade deal, for global finance, between the USA and the Chinese rulers. Now, as pointed out by Schiff, the US manufacturing base cannot be restored without paying an unacceptable price.

Looking at the de facto immigration policies for the southern US border, and the shattering of the Soviet Union (previously the other super power) one now might reasonably expect a similar shattering of the US in the not too distant future. The balkanization of the southern US has already occurred.

A significant difference between other waves of immigration and this one is the common border between the migrants old home and their new one. A high percentage of the new US residents believe that parts of the southwest should be returned to Mexico, and that achieving a majority in those areas will accomplish that goal.

Gold is a political metal, the Russians who held gold when their currency collapsed were fortunate indeed.

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

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

THURSDAY Market Excerpts

Gold futures reach $600

April 6 (from Reuters, MarketWatch) -- U.S. benchmark gold futures topped $600 an ounce for the first time since January 1981 on Thursday as a shaky dollar and high oil prices sparked buying by investors.

COMEX June gold contracts closed at $599.70 an ounce for a rise of $7.20 on the day.

Gold futures on Dubai's new commodities exchange also hit $600 an ounce earlier in the day. Futures got as high as $601.90 in early morning electronic trading on the NYMEX ACCESS platform, way above a session low of $592.

The market jumped as the dollar fell to a seven-month low against the euro and oil extended this week's big gains to get nearer to last year's record above $70 per barrel. "It was triggered by the dollar, the yen, and of course the idea of $70 crude," said George Gero, vice president at RBC Capital Markets Global Futures in New York.

"Oil didn't help the stock market, so investors were looking for another place to put their money and they seem to be looking at the metals."

Scott Meyers, an analyst with Pioneer Futures, said jitters over geopolitics also fueled the rally into gold, which traditionally is seen as a safe haven for uncertain times.

"Also, the general public always becomes more interested in the metals when they are rising," said Meyers.

"The sharp escalation in gold prices over the past year, up more than 40% over the past 12 months, clearly makes gold one of the wisest investment choices of recent times," said Matthew Parry, an economist at Moody's.

Analysts said gold probably will close above the $600 mark shortly as investors scoop up the metal, both futures and bars of gold.

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

Ref: Sir 968 msgs# 143062-3...

I'll soon be able to place an order for a few barrels of the good oil down at the corner store while I'm buying the milk...

Seems like everyone is getting into the oil-trading game...references to Norway as well.

Probably not surprising with globalisation...and the importance (shortage) of energy-supply coming to the fore...after all, why would the "developing world" want to continue relying on the anachronism of oil exchanges in the UK and the USA?

Expect more "safety in diversity" as we move along...

:-)

Oh my my my goodness! So many fireworks and nobody takes any notice any more. We need a louder debate on immigration or Ms holloway to etertain us away from all these interesting times.

It used to be that a certain metal was largely ignored in the press. Now it has company in geopolitics, climate, economy, science. I feel almost sad for the president. He's gone from holding his cards close to the vest to a situation where the electorate has really stopped watching whether he has any cards or there is actually any card game in progress anymore. He doesn't seem to need to spin his top, the media are spinning all the tops for him. I suppose in this environment, Mr Delay may get the death penalty- we need more circuses.

Sir lox, you must try this colloidal gold nastoika, it tastes just like- oh fiddlesticks, this bottle's mislabeled!

Sir Ten Bears, when the balkans exploded they were not returned to the USSR or to the Austrian Empire or to the Ottoman Empire. Sacramento is a very long walk from 312 Spring Street in Los Angeles; so also Monterrey California was found too long a walk from Vera Cruz (let alone Madrid!) But I doubt that is the direction the future holds. A monetary federation is more likely (with attendant monetary upheaval burdens like the reunification of the germans). It only sounds impossible, though effectively we are already attempting this with our lack of policy. And riots will happen in due season for reasons unforseen, and in places unlooked for, unless Watts burns again.

Perhaps the real strategic question is who manages the security of the main shipping ports in Mexico and Canada? When the romans stopped fighting, a wall they built which proved no defense gainst the final collapse, nor thwarted the saxons. What walls could defend the dollar?

Filled with high protein oats!

http://news.bbc.co.uk/2/hi/business/4885694.stmGold price passes $600 an ounce

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=Better late than never I suppose, we're finally seeing some divergence associated with the delivery period for April. With OI now being frittered away, it remains up to raw physical demand if we're to see any more follow through here IMO.
A big push back to 92DX could spell the end for PoG and PoS this time however the damage to be inflicted in the Months ahead looks awesome!

We watch.

http://jessel.100megsfree3.com/Gold.jpgA Horse of ANOTHER colour.

http://today.reuters.co.uk/news/newsarticle.aspx?type=businessNews&storyid=2006-04-07T094747Z_01_T294696_RTRUKOC_0_UK-MARKETS-PRECIOUS.xmlLONDON (Reuters) - Gold moved closer to $600 (342 pounds) an ounce after hitting a fresh 25-year high on Friday, with funds and investors intent on lifting the metal to new peaks on bullish sentiment, analysts said.

"We will probably have another look higher again later today. It's just a matter of time before we breach $600," said James Moore, analyst at TheBullionDesk.

He said growing investor interest following instability in the dollar, inflation worries, tension in the Middle East and speculation that central banks would diversify into metals had been boosting gold's allure.

The immediate focus for market players, however, was a key U.S. jobs report due later in the day that might affect the dollar and provide clearer direction for prices.

..."A lot of short-term funds have been shifting heavily into gold and other commodities since the start of the new quarter," said Akira Doi, director at Daiichi Commodities Co. Ltd.

Dealers said gold might rise towards $635 should it break decisively through $600.

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

Goodness, am I dreaming? It's hard to absorb that the key psychological level keenly watched by the entire world -- 342 pounds -- is right here at our doorstep.

You can almost hear them chanting in the streets: THREE - FOUR - TWO!! Three-four-two! Three-four-two...

;-)

R.

http://www.bloomberg.com/apps/news?pid=10000101&sid=axzGIktea5dc&refer=japanApril 7 (Bloomberg) -- Gold futures in New York rose to the highest in 25 years as investors bet metals will deliver better returns than stocks and bonds.

Hedge funds and speculators are betting metals will keep outperforming as demand led by China outpaces supply.

``Fund activity in New York is increasing'' for gold and metals, Tsuyoshi Furukawa, a commodity strategist at Taiheiyo Bussan Co. in Tokyo, said by phone today.

``As prices rise it increases investment efficiency and more money enters the commodities market.''

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

Good point, and it's been made here before. Gold is still very heavy for the price, but truly, as it continues to rise in price (and real purchasing power) it becomes a much more efficient means with which to consolidate your wealth.

R.

http://www.boston.com/business/globe/articles/2006/04/07/gold_tops_600_for_1st_time_since_81/Bloomberg News �|� April 7, 2006

..."You're bringing a new segment into the market that was never there," said Michael Guido, director of hedge fund marketing and commodity strategy for Societe Generale SA in New York. ''A lot of investor money is pouring into gold and commodities. It's become a valid asset class."

Gold may attract investors as worldwide interest rates remain too low to contain inflation, analysts said.

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

Same song, second verse.

R.

http://www.usagold.com/gold/special/mexico.htmlNearly a century old, fine Mexican gold!

TOLL FREE 1-800-869-5115, Extension 100

R.

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

Persons Not in the Labor Force (Household Survey Data)

Nearly 1.5 million persons (not seasonally adjusted) were marginally attached to the labor force in March, slightly less than a year earlier. These individuals wanted and were available for work and had looked for a job some- time in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 451,000 discouraged workers in March, about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.0 million marginally attached had not searched for work for reasons such as school attendance or family responsibilities.

-Goldilox

With a workforce of about 130M, that's about 11.5%, and when added to the 4.8% listed as unemployed, we're taking 16.3%, give or take. These figures compare very suspiciously to 1933, before the miracle of "hedonics", i.e. official lying.

@TC,

The Boton Globe song and dance reminds me of a line from one of my favorite "silly songs".

"Second verse, same as the first."

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B17065742%2DAD6D%2D421C%2D8E4D%2DB3B15E717294%7D&dist=newsfinder&siteid=mktwsnip:

By Kevin Kerr, MarketWatch
Last Update: 11:35 AM ET Apr 7, 2006

New York (MarketWatch) -- Gold bugs, myself included, were gloating with pride Thursday as the yellow metal shined brighter then it has in 25 years.

But when the bells and whistles stop ringing and the horns stop tooting, the celebration of crossing the $600 threshold will likely move to page six, next to the latest celebrity divorce. Then what?

The inflation nation scenario may have been enough to take us above $600. Now gold bugs and those poor souls who waited for the "inevitable" pullback since $250, are equally scratching their heads about what's next and how to get in for the ride.

Investors are scratching their heads and wondering what are the other reasons besides inflation fears that are going to drive gold to the $700 level and beyond. In our drive thru society it's so typical that as we reach $600 everyone is already wondering about $700.

Fiddling while the Fed burns

In the recently released book Empire of Debt, authors Bill Bonner and Addison Wiggin, two respected colleagues of mine, lay out some very non-conventional and straightforward reasons why gold is the clear cut alternative to a currency that, essentially, is not worth the paper it's printed on.

Clearly Federal Reserve Chairman Ben "Helicopter" Bernanke is not instilling the confidence that was hoped for by the Bush administration. Paraphrasing Senator Lloyd Bentsen in the infamous 1988 vice-presidential debate with then-Senator Dan Quayle, "Mr. Bernanke, you're no Alan Greenspan."
Bonner and Wiggin suggest that the empire is crumbling from the inside out.
So if the empire is crumbling and gold is soaring, is there still time to jump on board? Sure -- if you know where to look.

-Goldilox

Not quite shoeshine boyz, but more mainstream media "action".

Remember the days of "$6 resistance" and $13 slams?" It looks like this trend may be reversing of late.

I would say gold got slapped today about like a politician who happens to be married to the judge's daughter. How appropriate!

If the shorts are taking their "best shot", "TO THE MOON, ALICE!"

http://www.usagold.com/gold/special/mexico.htmlAs of noon, Jonathan has sent word that less than one dozen sets remain.

Click link, or call for best prices.

R.

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

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

FRIDAY Market Excerpts

Gold eases on day, gains $6 for week

April 7 (from MarketWatch) -- Gold futures fell more than 1% Friday, but ended the week $6 higher as investors mulled over the precious metal's success in reaching the $600-an-ounce level, but failure to surpass it during the regular day sessions.

"Volatility will keep traders second-guessing themselves," said Peter Spina, an analyst at GoldSeek.

The COMEX June gold contract closed down $7 at $592.70 after an overnight high of $603.10 -- its highest intraday level since January 1981.

It's no surprise to see some pullback and profit-taking after gold prices hit $600 on Thursday, said Amaury Conti, a trader at Austin, Calvert & Flavin.

Taking a look at the bigger picture, "all the catalysts ... [the] weaker dollar, rates, declining mine supply, alternative asset class, growing demand from China and India, have aligned," he said.

Overall, analysts expect higher prices for gold going forward and for the long haul.

"As major central banks continue to irresponsibly flood the world with easy credit and excess liquidity, gold is increasingly reclaiming its former glory as the preferred coin of the realm," said Peter Schiff, president of Darien Connecticut-based EuroPacific Capital.

He claims that investors are "fooled by the government's campaign to disguise inflation" through promotion of such distorted measures as the 'core' CPI.

While prices of most goods are rising, "those higher prices somehow never show up in government inflation indexes," he said.

But "action in the gold market reveals the truth. For my money, I believe what I see, not what the government tells me, which is why my money is in gold," he said.

From these levels, "the price of gold could go even higher, given that it still has not eclipsed the 1980 inflation adjusted peak of nearly $2,200 an ounce," said Brian Hicks, co-manager of the Global Resources Fund.

"We believe the recent strength in gold is due in part to growing participation from more mainstream institutional investors such as pension funds, and not simply the result of short-term hedge fund buying," he said.

"Investors are sensing that we may be near an end to the Fed's current rate tightening cycle, which has supported the U.S. dollar despite rapidly growing trade and budget deficits," Hicks said.

All of that may "push the price of gold over $600 an ounce in the near term and as much as $700 an ounce by year-end."

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

http://www.komotv.com/stories/42820.htmSnip: Government lawyers are trying to remove the gold-capped teeth known as "grills" or "grillz" from the mouths of two men facing drug charges.
"I've been doing this for over 30 years and I have never heard of anything like this," said Richard J. Troberman, a forfeiture specialist and past president of the Washington Association of Criminal Defense Lawyers. "It sounds like Nazi Germany when they were removing the gold teeth from the bodies, but at least then they waited until they were dead." (end snip)

Knaw, I was just kidding about the supply of physical being that tight. But the article can perhaps provide something to chew on. Brush aside the idea of the accused being drug dealers, folks would be well advised to keep their mouth shut about their personal (golden) wealth.

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
With little REAL metal in the price mix for the couple of weeks ahead, 'ol Buck can set about balancing the high Oil-weak Bond situation with a show of strength.

It's so much easier for Bucky when we're all on the same PaperPage isn't it?
Of course, one day that won't be the case.

PLEASE ADVISE GOLD CONTENT OF MEXICAN COINAGE.

http://www.usagold.com/gold/coins/mexican-50.htmlMore than you'd think. 50 Pesos is 1.2057 troy ounces.

Click on the highlighted denominations to see the other coins.

http://www.usagold.com/gold/special/mexico.htmlThe most convenient thing about the traditional gold standard and the fixed rate of convertibility for any given country's monetary unit and gold was that, if you knew the rate on any level, then calculating the the amount of gold represented by any given amount of coinage was simple as tallying up the total face value -- no scale required.

Struck into the face of the 50 peso coin is the message that it contains 37.5 grams of pure gold.

On a peso per gold basis, the ratio is precisely consistent with the message struck into the face of the 20 peso coin that informs us, not surprisingly, that it contains 15 grams of pure gold.

By extension, we know that a 10 peso coin contains half of that (i.e., 7.5 grams), and we could also predict that, were ever a 40 peso coin to exist in that era, it would contain 30 grams of pure gold. And by the same mechanism, and a 5 peso coin contains 10% of the 50 peso coin -- which is 3.75 grams.

For this particular assortment of coins, the total face value is 85 pesos. Mentally simplifying the conversion mathematics would implore us to simply double the hypothetical 40 peso coin and add a 5 peso: 30gr + 30gr + 3.75gr = 63.75 grams.

And happily, a more rigorous summation on a specific coin-by-coin basis reveals a total which is precisely consistent with the one arrived by our mental gymnastics. As Max Rabbitz has indicated, you can follow the embedded hyperlinks to view the individual coin pages to get the specific specs for each one.

But enough of that... the main purpose of this response was to use this opportunity to announce that an online order (last evening) laid claim to the last available set, so this April Buyers' Group special has officially sold out. At under two-and-a-half days, you made quick work of it, and congratulations go out to all of those who acted quickly enough to secure their personal share of this relatively uncommon Mexican gold coinage from the pre-1933 era.

R.

http://www.usagold.com/gildedopinion/RocketSchool/20060408.htmlThe latest update to von Braun's "Rocket School of Economics" arrived early this A.M. at my e-mail's in-box, and -- presto-changeo -- it's now been formatted and archived.

(Excerpts) -- April 8th, 2006

It might well be time to pay attention to what's happening in ALL financial markets right about now. All is not well in monetary land, and paper assets -- such as stocks -- just may have reached the end of the recovery rally from the 2002 lows.

...There has been a surplus of cash chasing just about anything that moved to the upside, while CNBC has been targeting the Mom & Pop's with the likes of Jim Cramer's aptly named Mad Money shows airing 3 times a night. Recently he has been touting Poland (can you believe that??) as the next 'hot' market. Yep, right Jim, but for what -- sausage???

The preservation of wealth should be the focus of investors from now on in as the US-based world financial system is over-extended, over-hyped, over-borrowed and over-due for a severe correction.


...Paper assets include stocks, all stocks, and this includes gold stocks which are, to begin with, unlikely to escape a serious downturn in stock markets in general. There is also still the unresolved issue of the forward sales programs adopted by several of the larger mining companies. To date margin calls have been conspicuously absent but what happens if gold reaches $1000 per ounce? Share registers of these companies show a large percentage of shares being held by mutual funds, and in a downturn what will they sell first to meet redemptions?

...The inherent absurdity of a monetary system that expands by issuing debt which can never be redeemed for anything other than more debt is becoming apparent and this is showing up in rising commodity prices. By this I mean that 'old' money may already be accumulating the metals for their own account.

The 'ball' that one should be keeping ones eye on is the price of both the precious and the base metals and their relationship to paper assets.


^---(see link for access to full commentary and archives)---^

R.

http://www.bloomberg.com/apps/news?pid=10000103&sid=abiYg7ww2rJQ&refer=usSNOW Ball is melting fast.

While the unemployment rate fell to 4.8 percent in February from 6.3 percent in June 2003, workers' pay has risen at
a slower rate than in other expansions, companies are paying a smaller share of their profits in salaries than at any time since the Great Depression and the budget deficit will be a record this year.

That may explain why three-fifths of Americans disapprove of Bush's handling of the economy, compared with 37 percent
who approve, according to the Bloomberg/Los Angeles Times poll.

>>>> IMHO
Snow was a shyster and a huckster for the Administration's failed globalistic policies. They have saddled the country with huge trade and fiscal deficits, sunk us deeply
into a long term war in middle east that threatens our prestige, and have let the country be overrun with illegal aliens who wave foriegn flags at rallies and declare their rights have been violated. The average american no longer supports the policies of the global elites and are fast catching on. They create jobs that american's won't do, and export the ones they do. Prepare for bankruptcy.

http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060408:MTFH47993_2006-04-08_15-08-44_L08653943&related=true&rpc=44snip;
"Perhaps China is accumulating too much foreign exchange reserves," Masahiro Kawai, head of the ADB's Office of Regional Economic Integration, told Reuters.

"Foreign exchange reserves are good as it gives a cushion against any external shock. But if you accumulate too much foreign exchange reserves, the costs will become bigger," he said.

"Experience in many countries tells us that by accumulating foreign exchange reserves, eventually the monetary policy consequences could be big," Kawai said on the sidelines of a meeting of European Union and Asian finance ministers and central bankers in Austria. '

comment
Bejing(ground control) we have a problem. Too much sterilized rocket fuel, no place to store it. Need instructions how to handle. Condition critical.

I bet TC could help these financial astronauts find a home for their overburdened paper treasury.

Max: Thanks.

Randy: You definitely have a way with words and with condescension.

Back to the lawn and to the shadowlands.....CM

........teach humility in Boulder.

Below, I've quoted a couple paragraphs from Black Gold Stranglehold. I found ideas presented in this work interesting and somewhat similar to works store on this website. I have no association with the authors and found is worth the few bucks.

Page 40: "... Astronomers continue to confirm Gold's observations that hydrocarbons are amply available in space. In 1986 scientists had a rare chance to study the makeup of comets when Haley's Comet passed. Several probes flew close enough to obtain scientific readings on the chemical composition of the comet's core. What they found was that about 80 percent of the comet's nucleus was ice; some 15 percent of the remainder was frozen carbon monoxide; the remainder was frozen carbon dioxide, methane, and ammonia.

Methane is a hydrocarbon product. Were there dinosaurs in outer space? No credible scientist yet has come forward to suggest that the methane found in comets was produced as a result of decaying protoplasm. This is the light bulb that went off in astronomer Thomas Gold's mind."

Page 217: "... In January 2004, at an economic conference in Saudi Arabia's Red Sea city of Jeddah, Prime Minister Mohamad advised the Islamic world to sell oil for gold, not dollars, to avoid being "short-changed" by a decline in the U.S. economy: "The price of oil is $33, but the U.S. dollar has declined by 40 percent against the euro, so you're effectively getting $20. You're being short-changed." He suggested that the Islamic oil-producing nations should tally their annual imports and exports, settling the difference at the end of the year in gold dinar. ..."

http://www.atimes.com/atimes/China_Business/HD01Cb05.htmlSnippets:
The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture dollars needed to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies.

To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation.

The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong US dollar that in turn forces the world's central banks to acquire and hold more dollar reserves, making it even stronger. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in US dollars.

All central banks have since been forced to hold more dollar reserves than they otherwise need to ward off sudden speculative attacks on their currencies in financial markets. And dollar reserves by definition can only be invested in US assets. Thus dollar hegemony prevents the exporting nations from spending domestically the dollars they earn from the US trade deficit and forces them to finance the US capital account surplus, thus shipping real wealth to the United States in exchange for the privilege of financing US debt to further develop the US economy.

The US capital-account surplus in turn finances the US trade deficit. Moreover, any asset, regardless of location, that is denominated in dollars is a US asset in essence. When oil is denominated in dollars through US state action and the dollar is a fiat currency, the US in essence owns the world's oil for free. And the Quantity Theory of Money dictates that the more the US prints greenbacks, the higher the price of US assets will rise. And by neo-classical definition, a rise in asset value is not inflation as long as wages lag behind. Thus a strong-dollar policy gives the United States a double win while workers everywhere, including those in the US itself, are handed a double loss.

On top of this monetary scam, the US wants to push the exchange rate of the dollar further down to erode the value of the massive dollar holdings of its trading partners, as the exchange rate of the dollar affects only those who live, operate in or visit non-dollar economies. Because the Fed can print fiat dollars at will under a dollar-hegemonic regime, a dollar-denominated US trade deficit does not present a balance-of-payments problem for the United States, as it does all other countries that cannot print dollars. Thus a US trade deficit, being not a balance-of-payments problem, cannot be cured through manipulation of the exchange rate of the dollar. The solution has to come from reducing wage disparity between the two trading economies. ( Aha; but from increasing china's wages to workers, or decreasing USA workers wages...look for little of the former and more of the latter)

In 2005, the per capita annual income of Chinese urban residents was 10,493 yuan, or $1,294 at the official exchange rate of 8.11 yuan to a dollar. The per capita annual income of rural residents was 3,255 yuan, or $401.

The socialist camp registered impressive growth both before and after World War II but began to lose momentum when the Soviet Union was drawn into trade with the capitalist camp to finance the Cold War arms race.

Thus dollar hegemony has gone beyond the "too big to fail" syndrome. It has created a world of willing slaves to defend the dollar out of fear that without a strong dollar, tomorrow's food may not be available.

For the socialist camp, trading with the capitalist camp was the strategic error that caused it to expose itself unprotected to a game it could not win and that it would lose from the outset and never catch up. In that sense, neo-liberals are on target in claiming that free trade promotes capitalistic democracy, but they are dishonest in claiming that free trade is a win-win game for all participants. International free trade is only good for the hegemon, as domestic free trade is good for the monopolist.

With a stronger yuan against the dollar, Chinese sovereign debt denominated in yuan will buy more dollars from China's export sector, which means each yuan will buy more US Treasuries. This will reverse the historical interest-rate disparity between the yuan and the dollar and cause a halt to the carry trade of borrowing low-rate dollars to invest in high-rate yuan asset and stop the flow of dollars to the PBoC to buy more US Treasuries. So revaluation of the yuan will not help the US.

http://business.timesonline.co.uk/article/0,,13130-2124287,00.htmlSNIP
THE world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=408146∈_page_id=3Investors seek safe haven of gold | This is Money | Brian O'Conner

http://news.bbc.co.uk/1/low/business/4887398.stm Soaring gold price reaches $603 | BBC NEWS | April 7, 2006
Written by a man of few words- too few - but not about your common garden variety spontaneous combustion.

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-04-06T203450Z_01_N05201825_RTRUKOC_0_US-ECONOMY-IMF-IMBALANCES.xmlIMF Gambles as it Convenes Econ Imbalances Meeting
Lesley Wroughton - Reuters - April 6, 2006

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/04/09/cxmktrep09.xml&menuId=242&sSheet=/money/2006/04/09/ixcoms.html Market Report: Precious Metals Show the Midas Touch - Louisa Gault - 4-09-06

http://www.gulf-daily-news.com/Story.asp?Article=140339&Sn=BUSI&IssueID=29020 $600 Gold- Overvalued or Still a Safe Bargain! | Gulf Daily News | New York | April 9, 2006
"But most significantly, said Weldon, gold was "only beginning to flex it's muscle as a store of wealth" versus the key US equities market."

"...only now beginning to flex..."

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

"There is also still the unresolved issue of the forward sales programs adopted by several of the larger mining companies. To date margin calls have been conspicuously absent but what happens if gold reaches $1000 per ounce? "

Hmm,maybe theres a silent agreement that the mines just have to deliver the physical to someone specific and then all remains well for them?

Sir M.K. went to the Council Chamber and sat down at The Table of Yore and thought for a momment. Sir Prictcho's description of an once beatiful town, disturbed him as to the power of his foe. He needed something more before commiting this GoldBug Army to the march.
"Captain of the Guard", he called. Within seconds a Knight entered the Chamber.
" Bring me the Mirror of Magdelena and summon Knights Topaz,Pritcho,Mikal and Toolie to this chamber", said Sir M.K.
The Captain then asked, " Should I also summon Gandalf, Sir.
"No. I am sure he is doing what must be done. Leave him alone to his work" Sir M.K. answered.
The Captain excused himself and headed for the lower parts of the castle where things are hidden and secure from those who would want to acquire wealth and power for the wrong reasons. Bringing with him two more guards he withdrew from his vest the keys that unlocked the vaults doors. Under lantern light they found the mirror encased in protective cover. Together they labored to fulfill the command.
Not much later the Knights that were called , entered the chamber and Sir M.K. greeted them. He asked them to be seated and all waited silently in the room.
A short parcel of time passed when Sir Topaz asked,
"How are we to be of help to you".
Sir M.K. being in deep thought just raised his hand and pace to one side of the table.
The Knights looked back and forth at each other knowing full well this was not going to be just any meeting.
The Captain of the Guard arrived with the Mirror of Magdelena. Intructing them to place the mirror in the corner of the room and then leave.
When the Chamber door was closed Sir M.K. addressed the Knights.
" This is the Mirror of Magdelena and it was left with me to care for and protect. It has certain powers. I, with others, have used the mirror before and the images it produces are real, eventhough they can not traverse the glass. I hope to gain information that will help us before we march". Said Sir M.K.
"What shall you have us do", Asked Sir Toolie.
" Light only four candles in each stand and then close the shutters and drapes to darken the room. Please sit to either side of myself and face the mirror. Said Sir M.K.
"Then what do we do" asked Sir Mikal.
"We Wait",answered Sir M.K.
A passage of time ensued and the four Knights relaxed in their chairs. Then it began.
The obsidian colored glass transformed into what appeared as a dark pool of water with no bottom. The little candlelight within the room did not reflect off the glass as regular mirrors. Now a haze engulfed the glass and then disappeared as quickly as it appeared.
Sir M.K. expected the creatures would show themselves as before but only a fleeting crossing of images plagued the veiwing.
Then as clear as they would have been standing there, the town of Hammerton was shown.
A quarter moon reflected off broken glass and Sir. Pritcho, sat upright. The mirror had shown them Hammerton as if they were in flight. Yes the town was reduced to a stadium of sorts with the objects and furnishing of the towns people thrown about the makeshift seating. There was no movement untill two small creatures moved out to the arena floor. They engaged in combat and moonlght flickered off what was either small swords or daggers. It continued till one had kill the other and the victor dragged the lifeless body into the shadows. The image started to fade but it was not over as the glass began to clear.

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

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aC.zTey2R8qo&refer=news_indexSnip: April 9 (Bloomberg) -- Peruvian nationalist candidate Ollanta Humala, a former army colonel who vows to redistribute the country's mineral wealth to the poor, won the most votes in a first round presidential election, exit polls showed.
....
A Humala victory would put Peru in the camp of Venezuela's Chavez and Bolivian President Evo Morales, who was elected in December, who both advocate curbing company profits to help the poor benefit from the region's oil and mineral wealth.
....
``Investors are worried Humala will raise taxes on mining companies, take them over or do something else equally radical,'' Valdivia, who manages $230 million of emerging market assets at Emerging Sovereign Group, said in a telephone interview from New York. ``He's not been articulate on what he plans to do.'' (end snip)

Well now.... Let's say taxes are raised on mining companies. Sure that may be tough on those that hold shares of those companies, but doesn't that action of making new minerals more expensive increase the value of what one already has on hand? You bet!

http://news.bbc.co.uk/1/shared/spl/hi/americas/06/year_of_elections/html/nn1page2.stmLinked above is a nice interactive map with info about this years elections in South America. Click on the link for a desired country and get a summery of the leading candidates and their political leanings.

http://cbs5.com/topstories/local_story_099201036.htmlSnip:

"...
Economists Kerry Odell, a professor at Scripps College, and Marc Weidenmier, a professor at Claremont McKenna College, in a 2001 research paper, titled Real Shock, Monetary Aftershock: The San Francisco Earthquake and the Panic of 1907, linked the 1906 quake to the 1913 establishment of the Federal Reserve banking system.

"The quake's impact manifested itself in international gold flows, as British insurance companies paid their San Francisco claims out of home funds in the fall of 1906. The capital outflow threatened the fixed sterling-dollar exchange rate, leading the Bank of England to raise interest rates and discriminate against American finance bills. The resulting contraction pushed the United States into recession, setting the stage for the 1907 Panic and the founding of the Fed," according to Odell and Weidenmier's paper.
..."

Sundeck: Mmmm...anyone read the Odell/Weidenmier paper? Apparently the civil response to the 1906 SF earthquake was relatively rapid (compared with that to Katrina and New Orleans) - Ref Simon Winchester's book "A crack in the edge of the world".

I wonder how much more robust (if at all) the financial system in the US is today compared with the 1906 earthquake? I guess having one hand on the monetary hydrant (Fed) makes a big difference..."water quenches fire" and all that...

:-)

http://www.dmcc.ae/facilities_au_tower.htmMmmm...some building...they take gold seriously over there...follow the lnk for more detail on the gold building...

Snip:

"...
AU Tower (AU being the chemical composition of �gold�) will facilitate the gold & precious metals market participants
..."

...errr, I think they mean Au is the "chemical symbol" for gold.


;-)

PMs are sharply up this morning (Australian time)...a bit unusual...could it have something to do with the "civil war" in Iraq comments by Pres. Mubarak of Egypt and the "high-ranking official" in the Iraqi "government"???

???

http://www.swans.com/library/art12/ga207.htmlSNIPS
The destruction of Iraq and its descent into sectarian violence, far from a confirmation of US incompetence, has been carefully planned on a bipartisan basis (notwithstanding domestic squabbles between the two parties in order to better manage public opinion) to achieve those results. Iraq is back into the US dollar hegemony, its resources controlled by the invaders, the main US competitors are licking their wounds without having any sound counter-policy yet to resist the US assault, and Iran is next on the chessboard.

Can the Iran War be avoided? Possibly. Iran would have to quietly agree to abandon its oil bourse project and rejoin the fold of the US dollar supremacy -- but one can sense that the U.S. is far too advanced to now stop in the midst of this creative destruction.

http://news.yahoo.com/s/ft/20060409/bs_ft/fto040920061619283914SNIP
Europe's financial regulators have held a "war game" exercise, simulating a continent-wide financial crisis, amid fears they are ill- prepared to stop a problem in one country spreading across borders.
==
The fun is about to start.

http://news.ft.com/cms/s/66c09a88-c802-11da-a377-0000779e2340.htmlONE MORE SNIP
However, the report warned that hedge funds and credit derivatives were sources of concern "as related risks remain opaque and they have become extremely relevant in assessing financial stability both across borders and across all financial sectors".
It said that, while hedge funds could contribute to market efficiency, they "can also be sources of systemic risks".
Credit derivatives markets were said to have grown by 128 per cent in 2005 compared with the previous year, with a nominal value of �12,430bn ($14,900bn, �8,700bn) in June last year.

If you look at the metals,they are all up over 2% (Gold the Dog-still).If that doesen't sound like the early times of hyperinflation...no wonder Europe plays meltdown.

Gold though hit 25'000sFr./kg today,nice round number.If you told people Gold is up,at 17'000,20'000 etc,they always responded "yeah but wasn't it at 30'000 once?".So if we approach this number again,I'll wager mass psychology will set in.

How much did Free Gold prices smoothen the meltdown scenario?

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

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9E437DA5%2D32F1%2D42AB%2D9DDA%2D2A977D5ECF67%7D&tool=1&siteid=bigcharts&dist=bigcharts≺int=true&dist=printTopNEW YORK (MarketWatch) - Gold futures rose to a fresh 25-year high above $600 an ounce early Monday, joining a broader commodities rally on talk of a possible U.S. attack on Iranian nuclear facilities.

The New Yorker magazine reported that the U.S. is stepping up preparations for a possible air attack on Iranian nuclear facilities, which may involve the use of nuclear weapons against underground sites.

Dan Bartlett, senior adviser to President George Bush, said the New Yorker report is "ill-informed," the BBC reported. Bartlett reiterated that the government is committed to a diplomatic solution to the issue of Iran's nuclear program.

U.K. Foreign Secretary Jack Straw also dismissed the New Yorker report, according to the BBC.

...The United Nations Security Council has ordered Iran to stop enriching uranium but Tehran has refused, insisting its research is aimed at generating electricity for purely civilian use.

"The fear factor related to Iran is real, and an attack of some type is likely imminent from the Bush administration," said Kevin Kerr, editor of Global Resources Trader, a newsletter published by MarketWatch, the publisher of this report.

"The attack could be devastating to the remaining tattered relations between the Middle East and U.S.," Kerr said.

..Frank Holmes, chief executive of U.S. Global Investors, which manages two of the top-performing precious metals funds in the first quarter, said he believes the main support for gold at the moment is coming from the recycling of petrodollars.

"If you look at countries with massive dollar buildup from selling oil, they're diversifying into gold," he said.

Russia has said it wants to increase its gold reserves to 10% of foreign reserves from 5%, Iran has created its own oil bourse based on euros and Venezuela is also turning down dollars for its oil, he said.

"There's a lot of noise (about Iran) but the more important fact is economics," he said.

Meanwhile, an influential Chinese economist said that China should promote yuan reform, allow companies to hold more foreign currency and raise gold reserves...

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

The slow but steady increase of pro-gold media coverage is having its related growth effect in exposing Main Street America to the need to prudently diversify their portfolios with gold.

Stay informed and stay ahead of the curve; act early while prices remain undervalued. Call USAGOLD-Centennial Precious Metals today.

R.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060410:MTFH71165_2006-04-10_07-52-44_PEK333879&symbol=0939.HK&rpc=44BEIJING, April 10 (Reuters) - China should push yuan reforms, let firms hold more foreign currency and raise gold reserves to help slow the rise in foreign exchange reserves, an influential government economist said.

The reserves have soared in recent years as the People's Bank of China, trying to hold down the yuan, has bought most of the dollars generated by a growing trade surplus and the inflow of foreign direct investment and speculative capital.

Investing those dollars, China has become a big buyer of U.S. government bonds and other dollar assets, helping to finance a heavy U.S. current account deficit and to keep U.S. interest rates low.

"We cannot underestimate the possible loss to the reserves if, in the long run, the United States adopts a weak-dollar policy and we are still maintaining a high level of dollar reserves," Xia said.

China is keen to hedge risk by diversifying its reserve holdings away from the dollar, but economists say that fears of a collapse in the U.S. currency will prevent any dramatic shift...

"How to effectively ease the upward pressure is vital for the yuan exchange rate reforms and also vital in resolving the problem of the runaway growth in foreign exchange reserves," Xia said.

The central bank might need to raise its gold reserves, which had been too low in recent years, to reflect China's status as a major trading nation, he said.

...China must follow its own independent policy, regardless of foreign pressure, by letting market forces adjust the yuan's value towards its "equilibrium level", he said.

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

This Chinese situation certainly remains one of the socio-economic pillars spotlighting and supporting the shift to a new reserve structure utilizing a free market gold ('free gold') paradigm.

Get yourself in while the gettin's good.

R.

http://metalsplace.com/metalsnews/?a=4561April 2006 -- U.K. cable maker Prysmian, formerly Pirelli, has declared force majeure on U.K. copper rod deliveries due to a delay in copper cathode shipments, traders said Friday.

"There were rumors after the weekend they were going to declare force majeure after problems with a vessel. This morning I heard they declared force majeure," a trader said.

European copper fabrictors in Germany, France and Spain have had to temporarily stop production due to a shortage of copper cathode in the past weeks, traders said.

A French and German cable maker confirmed this week they had to suspend production "for a few days at a time" following delays in cathode shipments from South America.

"The spot market (for cathode) continues to be very tight with virtually no material available," a trader said.

Copper traded on the London Metal Exchange rose to fresh record highs of $5,830 a metric ton Friday.

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

A portrait of metallic reality. By contrast, in our modern world of banking can you ever imagine users/savers causing and/or experiencing a real shortage of digital/paper dollars?

Make the wise decision and choose gold as the real wealth savings (consolidation) of your excess earnings.

R.

Four decades ago, I spoke with a Colombian native who spent up to a year at time in the rain forest in the employ of a geophysical company. I inquired how he survived the jungle. His reply was, "I pay attention to the signs." Somehow that conversation stood out in my memory of that time.

This morning, while having coffee with some other geezers, one of the younger members of the group jokingly asked an army recruiter who came in if they would take 65 year olds. His reply was, yes, if there was sufficient prior service.

All there had served either in the second part of the great 20th century war or shortly after. None were aware of any persons of that age even being considered for duty in uniform service.

Pay attention to the signs. Even doubters are now acquiring some sound money.

IMO, another sign of debauchery and desperation aside from recruiting older men- women soldiers.

http://news.yahoo.com/s/afp/20060410/bs_wl_afp/chinaeconomymergerinvest_060410045349;_ylt=ArC6yez3dDiXaXF9F1XmwvGmOrgF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--Growing nationalist backlash in China against foreign acquisitions: report - AFP - April 10, 2006

http://today.reuters.com/business/newsArticle.aspx?type=ousiv&storyID=2006-04-10T165535Z_01_N07319057_RTRIDST_0_BUSINESSPRO-MARKETS-BONDS-GOLD-DC.XMLNEW YORK (Reuters) - Normally an afterthought for U.S. government bond investors, gold prices are suddenly back on the radar amid growing worry the yellow metal's surge to 25-year highs portends more blood-letting for Treasuries.

"Higher gold prices are one of the things fanning fears that monetary policy is still too easy and inflation is a bit of a problem," said Bill Hornbarger, chief fixed-income strategist at A.G. Edwards & Sons in St. Louis.

...Spot gold is up nearly 15 percent year to date while benchmark bond prices have fallen...

Apart from providing stiff competition for global investment dollars, gold's reputation as an inflation warning signal is also alarming for bonds.

"I specifically tie together the weakness in bonds and the strength in gold and commodities," said Peter Schiff, president of Darien Connecticut-based EuroPacific Capital. "Inflation is going to drive down bond prices as it drives yields higher.

For a long time, a direct correlation existed between yields on longer Treasury debt maturities and gold -- both are safe havens when times get turbulent, both are good places to hide when the economy heads south.

Yet in an environment where signs of strong economic growth have kept government debt prices on a downward path, Jes Black, director of research with FX MoneyTrends, argues the recent precious metals rally is yet more fodder for the bond market bears.

"I just keep thinking, man, bonds really need to sell off," he said.

...While a continued rally in precious metals could reinforce that tendency, some analysts caution against reading too much about the inflation outlook from this newfound luster in gold and silver.

"The problem with the logic of using the price of gold as a leading indicator of inflation is that it is subject to a variety of influences that have at best a tenuous relationship with U.S. inflation," warns Lakshman Achuthan, Managing Director at the Economic Cycle Research Institute, an independent research group.

"This includes the policies of the world's central banks..."

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

To be sure, the inter-relationship between gold prices and general price inflation (and expectations) at this juncture in time is more complicated than a mere soundbite can do justice to.

Choose gold and rest easier having consolidated your promissory digital purchasing powers into actual, tangible wealth. Rhetorical: how else would you propose locking in your accumulated purchasing powers -- with buckets of icecream and stacks of tenuous paper???

R.

http://www.azcentral.com/arizonarepublic/news/articles/0408teeth0409.html...and why should be stored elsewhere.

http://www.shanghaidaily.com/art/2006/04/11/260639/Gold_set_to_shine_more_as_retail_prices_sparkle.htmGOLD jewelry prices in Shanghai will hit a new high at local shops from today and may climb further amid soaring demand for the metal whose prices have already surpassed its 25-year high in the global markets.

The Shanghai Gold and Jewelry Trade Association told Shanghai Daily yesterday that local base retail prices for gold jewelry will rise to 182 yuan (US$22.69) a gram from 174 yuan from today.

Buyers may find local jewelry shops like Shanghai Lao Miao Jewelry and Shanghai Laofengxiang selling the metal even at 186 yuan a gram, as the association allows a 3 percentage point range over the price.

The base retail gold prices in Shanghai markets have gained 19 percent after five price markups since December 13.

Industry watchers said consumers' enthusiasm for the metals may not be dampened despite the record high prices.

"Consumers have a sentiment to buy more amid rising prices as they worry the precious metals will be even more expensive in the future," said Duke Lee, managing director of Prime Platinum International Ltd. "That's why consumption of the metals may not be pulled down by the higher prices in the short term."

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

R.

My dentist used to charge $20 additional for gold crowns over ceramic, because he said the amount of gold was quite small. With the run up, it's maybe $50. Leave it to government to spend $500 in dental bills to recapture $50 of gold.

The criminals should will their teeth to an asset protection trust, so they can function like the big boyz.

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

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

MONDAY Market Excerpts

Gold up $9, highest close since 1980 on nuclear talk

April 10 (from MarketWatch) -- Gold futures closed above $600 an ounce Monday for the first time since December 1980, joining a broader commodities rally on talk of a possible U.S. attack on Iranian nuclear facilities. "The saber rattling (albeit strongly watered down in the past few hours) coming from the White House and the wayward chatter coming out of Tehran once again clashed on the world political scene," said Kitco's analyst Jon Nadler.

That left "many to wonder as to when, not if, a preemptive attack on the country's nuclear-facilities-in-the-making would take place," he added.

So "gold will continue to do what it must do to reflect the world's realities and thedemands placed upon it by apprehensive buyers small and large alike."

"The critics are left scratching their heads, as who is to say whether -- in retrospect -- $600 will come to be regarded as having been 'just the beginning,'" Nadler said.

COMEX June contracts closed up $9.10 at $601.80 to mark the highest session-end price for futures since December 1980.

The New Yorker magazine reported that the United States is stepping up preparations for a possible air attack on Iranian nuclear facilities, which may involve the use of nuclear weapons against underground sites.

President Bush said that the news reports over the weekend were merely "wild speculation".

However, "The fear factor related to Iran is real, and an attack of some type is likely imminent from the Bush administration," said Kevin Kerr, editor of Global Resources Trader, a newsletter published by MarketWatch.

"The attack could be devastating to the remaining tattered relations between the Middle East and the United States," Kerr added.

Frank Holmes, chief executive of U.S. Global Investors, which manages the Gold Shares Fund, said that he believes the main support for gold at the moment is coming from the recycling of petrodollars. "If you look at countries with massive dollar buildup from selling oil, they're diversifying into gold," he asserted.

Meanwhile, an influential Chinese economist said that China should promote yuan reform, allow companies to hold more foreign currency and raise gold reserves, according to Felicity Algate, economist at Bear Stearns.

"As Iran returns as a focal point for investors, aided by talk of Chinese increase in gold holdings, [that] should keep a flame under gold this week," said Peter Spina, an analyst at GoldSeek.

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

Now, on with the show.

R.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060410:MTFH87936_2006-04-10_19-27-47_L10233180&symbol=.SPX&rpc=44LONDON, April 10 (Reuters) -

..."The momentum is sufficient to push gold through $600 and certainly up to the $620-$625 area. It's the continuation of investor demand and these investors don't want to give up," said Peter Hillyard, head of metals sales at ANZ Investment Bank.

"Potentially this market can go as high as you like and I don't believe this is a short-term play. The market is just tracking higher and we are in a new paradigm of prices."

The metal has risen 16 percent this year and more than 40 percent in the past 12 months.

Investors have turned to the booming commodities markets for alternatives to lagging equity, bond and currency markets.

In the past 12 months, the S&P 500 index rose about 10 percent, while the Dow Jones industrial average gained 7 percent. The dollar against the euro was up by 6 percent and oil increased by 30 percent.

Tensions in the Middle East, uncertainty about the dollar's outlook, worries on firm oil and speculation that central banks would diversify into metals have also boosted gold's appeal.

Gold had shot up to a record high of $850 in January 1980.

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

Are you a gold owner yet, or are you waiting for the convenience of $1,000 as an entry point?

R.

http://www.usagold.com/gold-price.htmlIn case it isn't obvious, that previous graph is a snapshot to commorate that point now frozen in time.

To enjoy more useful, updatable graphs, click on the url above for the 'realtime' source of that earlier $600.01 snapshot.

R.

As I type this gold has crashed to $599.60!!!!!!!!!!!

Bombs, tsk tsk, so passe'. Wouldn't it be better if the persians had a little nuclear "accident" rendering the refinery both harmless and useless at the same time? And it would be so much better for the oil market (and less disruptive to the gold market too- why the price might drop to $450, almost affordable!) Well, I can dream cant I? Unfortunately, orc mischief is the order of the day in this age.

http://biz.yahoo.com/ft/060410/fto041020061305303994.html?.v=1 Market Insight: Dollar Faces Punishment For US's Economic Imbalances | Financial Times | Steve Johnson | April 10, 2006
Without mentioning the 'g word', this currency analysis readily makes gold very conspicuous by it's absence.

Ag at $12.85 in after-hours.

Seems only last week it was under $12.00 - oh, was it last week?

Silver is defintely riding its "volatility," while gold more passively marches onward and upward.

Spot over $601 as I type.

The HUI was rather tame today, as corrections ensued as soon as it was apparent that the $600 run would not be successful.

Gandalf, what was it we witnessed at 400 and 500? Three running starts before blasting through the "barrier"?

"Man the battering rams!"

Now up over $602/oz. The barrier has been pierced and so no psychological resistence to be claimed. New territory and rarified air in this next leg up.

- Black Blade

http://www.monetary.org/2006_conference_announcement.htmTilting at windmills?...or maybe worth a trip to Chicago.

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-04-11T023606Z_01_SP334641_RTRUKOC_0_US-MARKETS-PRECIOUS.xml&archived=False Gold Speeds Past $600, Highest Since December 1980 | Lewa Pardomuan | Reuters | 4/10/06

Theory: In a globalized market like we have now when capital and businesses can move anywhere on the planet to take advantage of labor and resources it would seem that wages will reach some equilibrium. At this point an ounce of gold would be related to the average wage in a more or less constant way such as one half a year's average wages in any of the industrialized countries will buy 1 ounce of gold for example.

Right now the average wage in China is about $1,000 per year where assuming gold = $500 per ounce an ounce of gold will be worth about one half a year's of wages for someone in China. With the effects of globalization I have stated above the average American salary is around $20,000 to $40,000 per year I think so that the future price of gold would be around $10,000 - $20,000 per ounce excluding inflation.

Of course there would still be countries that are very poor and would not be included in this theory because they would still be agriculturally based not industrialized. I would be interested in what others think. :)

http://jessel.100megsfree3.com/dowgold.pngNot as long as I would like on the timeline, but vivdly demonstrates the effect of rising gold against a basket of inflating dollar assets.

Assume that world GDP is about 56 trillion Dollars.

Assume that GDP divided by M3 is in the range of 1.2 to 1.5.
See http://www.economagic.com/em-cgi/charter.exe/var/vel-gdp-per-m3

Then, world M3 should be in the range of 47 to 37 trillion Dollars.

Assume that Central Bank gold weighs 30,000 tons or about 1 billion ounces.

Assume that Central Bank gold reserves cover all of the M3.

Under these assumptions, gold price per ounce should be in the range of 47,000 to 37,000 dollars in current dollars.

http://www.newsgd.com/business/prospective/200604110028.htm2006-April-11 -- The People's Republic of China experienced strapped days after it was founded. Now should China have to be worried about its massive forex reserve which is still scaling up sharply? The Overseas Edition of the People's Daily published on April.7 an article by Jiang Yong, an expert on economic security with China Institutes of Contemporary International Relations, to look into the question.

...The prospect of riskier forex reserve market and weaker US dollar has been increasingly underpinned by the US trade and fiscal deficit. That will lead to shrinking US dollar denominated assets.

...The experience of Japan and Russia has proven that an adjustment of the mix of forex reserves, more gold and strategic materials holdings, foreign debts repayment in advance, moderate scale management, and the discretion of forex settlement are effective precautions against forex reserve risks.

...It is also necessary to control the rise of forex reserves. It is of consideration to slow down the rise of forex reserves, curb the influx of hot money, and adopt new forex management regime to avoid turning all favorable balance of the international payment into official forex reserves.

China does not take the forex reserve growth as a reflection of economic growth. There are two sources of China's forex reserve. One is from its world trade surplus which is generated by the competitiveness of "made in China" and represents China's economic power to some extent. That is to its credit.

The other is the influx of speculative capital driven by the expectation for "RMB appreciation" since 2002. That part is to the country's debits and does not reflect the country's economic strength. In recent years the debit entry has been higher than the credit entry in terms of the total amount and the growth. Therefore, the soaring forex reserve is the result of the further openness of China's economy and the hot money on the speculation of the prospect of stronger yuan.

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

Amen to the perspective (awareness) on the gold usage.

Regarding the problems from flow of so-called "hot money", I would merely reiterate my previous elaborations on a socio-political solution by which central banking policy engenders a scenario in which appreciation of the RMB is curbed below that of gold such that, together with open ownership and friendly tax policy, the speculative heat is shunted into the gold market.

Once therein, the very hottest (and stupidest) of the otherwise non-productive speculative inflows can be dissipated in a fitting manner via a (seemingly inevitable) mass conflagration of the paper gold (derivative) portion of the market, but meanwhile in the process thus setting forth the crucible of physical gold to vault to necessary valuation heights of respectibility upon its unfailing performance, and thus be elevated to the position necessary for small amounts to fill in for copious dollars within the reserve portion of the CBs balance sheets around the world.

Amen.

R.

Spot over $603/oz. Note that WTI Crude is now over $69/bbl as well. In spite of all the spin about why the price of precious metals and petroleum are higher, it really comes down to "Demand exceeding Supply".

- Black Blade

http://www.ecb.int/press/key/date/2006/html/sp060411.en.htmlJean-Claude Trichet: "I would draw your attention to the fact that 313 million citizens, even without the United Kingdom, is still a little bit more than the United States. Personally, I am convinced that the United Kingdom will one day join the Economic and Monetary Union because it is in its interests to do so."

"I am convinced of the sincerity of the UK Prime Minister, who did not conceal the fact that, in his opinion, it would be in the United Kingdom's interests to enter the Economic and Monetary Union when the time comes."
------------------------------------------------------------------------------------------------------------------------
Randy, any thoughts what J.C. means by 'when the time comes' ?

http://news.ft.com/cms/s/c1733916-c877-11da-b642-0000779e2340.htmlSNIP
Although the outlook remains positive, gold could pause in consolidation below $600, gathering sufficient momentum to break psychological resistance and resuming its inexorable march towards $625," said analysts at Standard Bank.

Yesterday's sell-off of the XAU and HUI telegraphed a full court press in today's London and Comex gold markets. The cartel has become so transparent that the smart money will take advantage of the opportunities that appear on these days. The footsteps of giants are crushing the cartel's feeble defenses.

While gold challenges resistance at $600, and silver flirts with $13.00, it looks like the DOW is gonna battle for support at 11K - AGAIN.

Each time the DOW "settles" to 11k, it is worth less, thanks to miracle of "money supply liquidity."

Personally, I don't care if the inflationists "prop up" the markets with liquidity. Fundamentally, it still comes back to the bear market axiom - Gold=DOW at the bottom.

No doubt a lot of folks are gonna get hurt - but as usual, some worse than others.

Got gold?

http://biz.yahoo.com/iw/060411/0122545.html

This etf out of canada holds gold and silver in vaults, but it is loading up with more precious.

J-C: "I am convinced of the sincerity of the UK Prime Minister, who did not conceal the fact that, in his opinion, it would be in the United Kingdom's interests to enter the Economic and Monetary Union when the time comes."


The most important perspective to bear in mind when assessing the relevance of this quote is to consider whose words we're hearing. Jean-Claude has a keen reputation as a very careful and deliberate speaker and communicator. Are we hearing him merely paraphrasing Blair's words (in which case we are on thinner ice) or are we hearing a product of J-C's own good communication?

The difference is this. It would be completely meaningless if, in the actual context of Blair's usage, his effective opinion being conveyed was "it will be in the UK's interest to join when we're ready, and we'll be ready when we're ready." Essentially, it would be conveying a only an unprofound understanding of an INTERNAL condition (specifically, UK's readiness) that will arrive whenever it arrives -- internally. It's no better than confessing the standard fare that you have no prediction for what the future holds, but that you'll know it upon its arrival and that you'll have a certain interest or feeling at such time as when that interest of feeling comes. (big yawn)

However, my hunch is that J-C is communcating something more important -- otherwise, he wouldn't have bothered to cite this particular dialog in the first place. It conveys that there is a definite distinction between the condition of UK's internal interest/feeling and a separate condition of EXTERNAL time. Most importantly, the implication here is that it hints that there is indeed an underlying prediction for a particular external condition that will exist at some coming time.

It would be naive to think that everything ahead is random, unplanned, and left completely to chance, especially in light of J-C's brief comment regarding the "progressive construction" of Europe.

On the nature of change (planned or otherwise), J-C also had this to say...

"The world nowadays changes very, very, very fast given the challenges of science, technology and globalisation."

Wow, I counted the use of 'very' THREE times -- "...very very very fast..." And for a man who is a very efficient communicator, that seems exceedingly excessive, unless he's trying to drive home an very very very exceedingly important point.

I also took not of this part of the interview. The questioner asked,

Q: "Is Europe likely to pay the price of the large US deficits?"

To which J-C spoke in turn GENERALLY, but, notably, chose NOT to answer the question SPECIFICALLY -- that is, there was no comment with regard to the nature of a "price" to be paid nor whether or not Europe stands vulnerable for the paying of it.

Naturally, one might think that any given clever fellow, seeing any manner of exposure to another's debt, would try to structure his own affairs in such a way to avoid paying too burdensome a price himself for the other's behalf. To my mind, clearly, this is largely what the euro project has been all about -- a construction and use of a monetary (and reserve) system that is once and for all NOT a dollar-system derivative and not overly exposed to the ill fate of the dollar reserve system in days ahead -- "when the time (chage) comes"!

And, to be sure, this time/change in question may appear to arrive "very very very" quickly!

[By the way, I'm sure you are quite clever enough to realize that IF this note superficially resonates ANY sort of condescending (simplified) tone to a such smart fellow like you, you will CERTAINLY understand, even though it was addressed to you specifically by name, I have nonetheless tried (as I almost always do) to expand its utility for the broadest possible spectrum of readers, especially including our all-important newcomers. (This footnote can also be considered as my official response and final word in regard to Cavan Man's utterly asinine comment to me on Saturday.)]

Thanks again for the dialog.

R.

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

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http://yahoo.reuters.com/news/NewsArticle.aspx?storyID=urn:newsml:reuters.com:20060411:MTFH09909_2006-04-11_15-05-46_NYH000171&related=true&rpc=44NEW YORK, April 11 (Reuters) - The Swiss franc, often considered a "safe-haven" currency, gained against the euro and dollar on Tuesday after a former president of Iran said the country is producing enriched uranium.

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

Why settle merely for paper Swiss francs when you can without any fuss actually have it in gold? Sovereigns, too, and so much more. Call your friends over there at USAGOLD-Centennial headquarters and get the ball rolling. Better peace of mind can be a simple phone call away. (Remember... Denver business hours!)

R.

http://www.dailyreckoning.co.uk/article/100420061.htmlApril 10, 2006 (the Daily Reckoning) by Puru Saxena

Our lives depend on commodities yet most are too afraid to invest in them. ... even the mention of the word 'commodities' creates tremendous fear amongst the public.

Human beings are totally dependent on commodities, period. Everybody needs food and clothing to survive as well as energy to go about the business of living. What amazes me though is how people know so little about commodities. Nobody seems to care, and 'things' are just taken for granted.

Every so often, however, commodities get their revenge and the limelight they rightly deserve. When raw materials are in great demand and supplies are extremely tight, commodities make headlines all over the world as prices soar. Now, we are witnessing another such time.

History is dotted with massive bull-markets in commodities, which occurred regularly. In fact, over the past 200 years, we had five major booms in natural resources. The shortest boom I could find lasted 15 years, and the longest one continued for 40 years!

"Why do commodity bull-markets last for such a long time?" you may wonder. The answer can be summed up in two words - supply and demand. When demand is on the rise, it takes years to increase the supply. Unlike financial assets, the supply of commodities cannot be increased at will.

Consider crude oil as an example. Despite our desperate need for increasing oil production, not a single gigantic oil field has been discovered in the past 35 years. ... Similar supply- constraints also apply in the case of gold, silver, sugar, corn, coffee or wheat - wonderful news for the commodity-investor.

Moreover, we are living in a highly inflationary world. Most central banks continue to print money like there is no tomorrow. ... If they don't, the $46 trillion debt in the United States will become even more of a problem and lead the world to a depression. The truth is that money printing (inflation) makes debt less formidable. Due to inflation, the hundred dollars you owe today 'feel' like a lot less in ten years time. So, monetary inflation is another very good reason why you want to protect your wealth by investing in commodities.

While many are concerned about the risk involved with investing in commodities, a recent study conducted by professors from the Yale University and Wharton School reveals that as an asset-class, commodities outperformed both stocks and bonds since 1959 - and with lower volatility when compared to stocks. This study is clearly a milestone, as it eliminates the myth associated with commodity investing....

Today, I continue to accumulate commodities for the long-term as I feel that the current boom will last for another 10-15 years based on historical patterns.

The main drivers behind this boom are the rapid urbanization and industrialization of China and India. As these two economies continue to power ahead, they will require a lot of commodities over the coming years.

Metals and energy will be needed to build cities and food will be in great demand as the 2.4 billion Chinese and Indians acquire more wealth. It is worth noting that per-capita consumption levels in these two most populated countries are amongst the lowest in the world and expected to rise rapidly. So, even a small increment in demand will cause shockwaves in commodity prices.

In the current economic environment, where monetary inflation is rampant, every investor must take a position in commodities as a wealth reservation strategy. Now, I am not saying that you should sell all your assets and put everything in tangibles. After all, this bull-market will be punctuated with periods of correction and nothing beats a good night's sleep. How much you invest is a personal decision, but consider allocating 20-25% of your net-worth as a starting point and add when you make some profits....

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

Another bit of fine expression from the good folks at DR.

R.

968 & TC
Of course Britain will
join the EU in time:
When and if they see it
as an advantage; there-
fore all that posturing
on both sides of the
equation. But, as long
as the US is in the mili-
tary and financial leader-
ship of the world, why
should they? The Brits
are a bunch of, shall we
say, subtle, nimble, far-
thinking, unscrutable
pokerplayers and obviously
part of the Anglosaxon/
American Roundtable.
The world is being devided
into factory countries,
trading countries, Univers
Cities regions, Military
Hardware regions and Paper/
Finance Street/City; create
enough liquidity to shift
around and keep everyone in
line. If out of line, a
couple of nukes will take
care of that.
If Asia and India want to
keep their newfound (newly
bequeathed riches and long
accumulated treasures) they
will be accomodated with a
2nd ranking roundtable mem-
bership. That will leave a
certain group short; but
after all, we need scape-
goats.
Oh Ja. Cb2. Pretentious
little me is going back to
reading Abbe Barthelemi's
Travels of Anacharsis the
Younger in Greece,M.DCC.XC.
Round and round we go. Up
and away. Cheers. OvS

http://www.safehaven.com/article-4957.htmby Julian D. W. Phillips

A good read!

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

April 11 (from Reuters) -- Gold futures in New York backpedaled after reaching a new 25-year high on Tuesday as profit taking above $600 an ounce pressured the market. Investors have been piling into commodities, especially energy contracts and precious and base metals, as these markets continue to show strong momentum compared with lagging stocks, bonds and foreign exchange, analysts said.

Andy Montano, director at bullion dealer ScotiaMocatta in Toronto, said gold has been bolstered by lingering worries about inflation, Middle East tensions and uncertainty over the dollar's outlook.

"It's the same story... oil, Iran, Iraq, silver, currencies -- the list goes on," he said. "We were happy to see the $600 figure taken out (in spot), and what we have seen of course is a little bit of profit taking overnight and through the day today."

COMEX June gold contracts fell $2.40 to end at $599.40 after trading between $597.10 and a contract high at $608.40 -- a level last seen in January 1981.

During the choppy session, strong physical demand for gold out of Asia on Tuesday helped prop up the market on the dip in prices, according to Montano.

---(click url for full news, 24-hr newswire)---

http://www.uscongress.com/Last month the US Congress raised the credit limit thus avoiding a US default. This move was done with nearly
no deliberation and was not accompanied by a bi-partisan attempt to cut spending and/or raise taxes on those most able to pay. This lack of ation puts at question the resolve we have to put the country on a sound fiscal status. At the same time or government The net worth of the nation is now falling. Only the rich globalist elites are prospering.

At some point the borrowing binge has to be reversed or we will suffer drastic consequences which will sink our nation and our children into bondage.

The media is ignoring the issue for the most part, as it ignores so many others. Nothing is being done to save us. No one in any responsible leadership position is lifting a finger to make the changes we need.

Write your Congressman and Senator and complain. Tell them to protect our borders, and to put us back on sound financial ground! It's time to leave IRAQ and the ME as well. Its up to us now to make one final attempt to save the nation from bankruptcy and doom!

http://www.iran-daily.com/1385/2535/html/ieconomy.htmJEDDAH, Saudi Arabia,
April 11--The Saudi stock market dived 8.3 percent yesterday in panic selling following Sunday's suspension of two dealers by the Capital Market Authority for manipulating the stocks of three companies...

The decline was the sharpest by any Gulf Arab market since March 14 when bourses plunged across the world's biggest oil-exporting region.

Faisal H. Alsayrafi, president and CEO of Financial Transaction House, told Arab News, "Whenever traders are caught in illegal activities, the followers of those traders panic. This in turn affects the market either positively or negatively. This is what happened today (Monday). The reaction was negative."

The Banking Index dropped 3,677.44 points or 7.98 percent as shares of all listed banks declined yesterday...

The Industrial Index closed 3,266.58 points or 8.22 percent lower...

The Insurance Index plunged 9.90 percent...
__________

SYDNEY, Australia, April 11-- Gold hit $600 an ounce for the first time since 1980 and copper stormed to a new record of just below $6,000 a ton on Tuesday, as jittery investors chased higher profits than available elsewhere.

According to Reuters, as oil surged towards $69 a barrel, investment funds hungry for higher profits flocked to gold, considered a hedge against uncertainties in troubled times.

The precious metal, which has gained 16 percent this year and about 41 percent in the past 12 months, touched $603 an ounce--its highest since December 1980.

"We're there mate, we've done it," said Darren Heathcote, head of trading at N M Rothschild in Sydney.

Investors have turned to surging commodities markets for investment alternatives to stocks, bonds and foreign exchange, where returns have not been as good.

Worries about inflation, Middle East tensions and uncertainties over the U.S. dollar's outlook also helped the precious metal, which has doubled its price in the past four years, to climb further.

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

Also of note, at this link: Trans-Asian Railway Project Making Headway

JAKARTA, Indonesia, April 11--A planned trans-Asian railway network to connect 28 countries took a step forward that was first drafted in Bangkok last year.

The railway network will stretch almost 81,000 kilometers (50,000 miles) and from Southeast Asia to Central Asia...

The agreement "provides a new impetus for regional development," ... and identifies internationally important routes to serve the transport needs of member countries and will provide regional connections as well as links to Europe...

The agreement will play a catalytic role in defining a common vision, coordinating programs of action and, in collaboration with international financial institutions...

...member countries have already started identifying "dry port" stations that would have functions similar to sea ports.

"These dry ports can also spread the benefit of globalization and create employment opportunities for the local population."

---------

Mate, here deep in the heart of EurAsia do you think they'll forever be using the U.S. dollar as their primary means of monetary conveyance? Don't count on it.

R.

http://www.safehaven.com/article-4954.htmby Andrew McKillop

snippets:

Interest rates are hiked, by monetarists, with the firm belief they counter inflation and come after inflation. They in fact come before, cause and intensify inflation, but no amount of Nobel economics prize rhetoric will work. Monetarism is an age-old dogma, and needs no facts and figures.

In normal logic the US dollar should be completely worthless, but the same also applies to the Euro, the Yen or most any other money you care to name. Oil exporters have to accept these paper moneys, like you and me.

No amount of gold selling by national banks, today, will or can halt the upward rush of gold prices - or oil prices.

We can almost count down to this coming struggle. Surely, our great democratic and economic leaders will reason that all they have to do is repeat the 1980-1983 recession through cranking interest rates ever higher, showing immense courage as they watch the economy fall apart as a result. But this time around the strong money medicine is going to be harder to sell than 25 years ago - and is aso not going to work because of Peak Oil and the end of cheap energy.

Hi everyone;
I have just recently returned from a trip to Venezuela and on to Margarita island for a 3 week holiday.
In the back of my mind I kept an eye out for gold in any form. The jewelery stores had very little in the way of gold jewelery, in fact one very impressive store which sold jem stones and jewelery had only one show case devoted to gold jewelery. I estimated about 2 ounces of gold in jewelery form in that store.
I had expected more gold offered although I was limited to the areas that I had visited in Caracas.
My conclusion is that we are fortunate to have access at this time to invest in gold, where as in some areas of the world this could be a dificult endeavor.

I think no matter how you measure it an ounce of gold would be in the tens of thousands of dollars for fair value. :)

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-04-12T022049Z_01_SEO344212_RTRIDST_0_ECONOMY-GREENSPAN-LIQUIDITY.XML Global Economy Faces Asset Price Fall- Greenspan | Reuters | Seoul - April 12, 2006
Greenspan predicts changes in the Sarbanes-Oxley accounting rules and abnormal asset prices.

http://www.turkishdailynews.com.tr/article.php?enewsid=40516Snip:

"...
The Bank of France said it sold 161 tons of gold in 2005, for a value of $2.30 billion, leaving it with gold reserves of 2,824 tons at the end of last year.
..."

Sundeck: ...not saying how much they will sell in 2006.

:-)

http://news.ft.com/cms/s/b5dca1a8-ca13-11da-852f-0000779e2340.html Gold's Bull Run Could Reach $850 | Chris Flood | 4/12/06

http://www.vheadline.com/readnews.asp?id=53514 Global Monetary System: The future of gold and the devaluation of the US$ | Julian Phillips | April 11, 2006

http://news.xinhuanet.com/english/2006-04/12/content_4413475.htmBEIJING, April 12 -- The country should push yuan reforms, let firms hold more foreign currency and raise gold reserves to help slow the rise in foreign exchange reserves, an influential government economist said.

The central bank might need to raise its gold reserves, which had been too low in recent years, to reflect China's status as a major trading nation, he said.
------------------------------------------------------------------------------------------------------------------------
Well, well, raising goldreserves...

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

Then try the People's Economist's vastly simplified version:

January's deficit was $68.6 billion. That's $2.2129 billion per day.
February was smaller at $65.7 billion but there were also only 28 days. Soooo...the daily plunder was $2.3464 billion per day.

My simple conclusion: Trade Worsened, but don't listen to me - go with the happy talk!

-Goldilox

In between the doo-doo George has stepped in over immigration (one of the more polarizing issues out and about), he has still found time to analyze the Trade Deficit release.

http://www.financialsense.com/editorials/phillips/2006/0411.html
Druid: Reads like he has spent some quality time on the trail. Enjoy the read.

Re: "Unexpected plunge in trade gap" - Must you always be a party pooper? :)
Headline hoedown:
Fierce surge by metals sets new price records - Reuters["Fierce surge"? They'll be at a loss for words when gold really does "surge".]
Fed credibility crucial to dollar faith- Fed's Fisher - Reuters[Nothing spends like the almighty dollar?]
U.S. MBA's Mortgage Applications Index Fell 5.5% Last Week - Bloomberg
Realtors: Home Sales, Prices to Cool - AP["Cool" enough?]
11% Rise in Gas Prices Expected - Wash. Post[That's INCORRECT! Try 10.89%!]
Behind 25-Year High for Gold: Changes From Ground to Market - WSJ ($)[Big story, front page, albeit watered down.]
Skilling reminisces as memory fails him - Steffy, Houston Chronicle[What's next, a run for office?]
Why aren't stocks tumbling? - CNN/Money[I haven't a CLUE!]
Russia to supply less oil than expected - FT[So is the Gulf of Mexico.]
Market Worries Dog Retail - TheStreet.com[Wait until the dog days if you want to see "worry".]
Airlines raise base fares sharply, still fill planes - USAToday[What? You expect us to WALK?]
U.K. Unemployment Climbs Close to a Three-Year High - Bloomberg[No stats for "underemployed" and "temp" workers.]
UK trade deficit in goods widens unexpectedly - FT[Nothing to see here either.]
Greenspan calls for stronger Asian currencies - FT[NOW you tell us, "Maestro"!]
Ready for $262 a barrel oil? - Fortune[Those thirsty ET's!]

Druid, nice post.

snip:

So �in extremis� it is the only money around that keeps its convertibility always. In this climate its price will rise, until we no longer price gold in currencies, but price currencies in gold itself!

-Goldilox

About eight months ago, when window shopping for motorcycles, I noticed the new model I liked was just aout 38 oz/Au with all the bells and whistles. Now it is just under 32, with some great used bargains in the 10-20 oz range. I settled on a well-appointed used BMW for 10 oz last September.

Gold is not a only "hedge" against inflafla, but the BEST hedge against covert inflafla!

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

@ mikal,

Well, since you ask, yes!

"Why aren't stocks tumbling? - CNN/Money [I haven't a CLUE!]"

Oh, But They Are!

DOW2000=11K=42 oz Au
DOW2006=11K=18.5 oz

Liquidity has created a bear trap for paper investors, as they "maintain" prices, but constantly lose value.

http://www.usagold.com/webads/gold-coins.jpgTangible security.

Yours is just a TOLL FREE phone call away... those fine folks in Denver have been assisting investors like you since 1973.

1-800-869-5115

R.

http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWDamocles so far this month has managed to keep his head but you get the feeling ye olde Sworde is soon to drop.
DX hasn't run into the 90's "yet" and the rest seem to be falling in line.

Silver is simply outstanding given it's full-blown paper status at this time...next months roll-over (May) should put the Silver shorts to bed well and truly imo.

Julian Phillips has an article currently doing the rounds which focuses on the logic of super high value Gold ...well worth the reading effort for those who may be looking for some reassurance in the coming week.

We watch.

http://www.mineweb.net/events/conferences/2006/euro_invest_metal_mining_forum/208501.htm10-APR-06 LONDON (Mineweb.com) -- Two experts say gold has begun the second phase of its bull run, a phase where the yellow metal trades as a currency.

"The second wave is where gold becomes money, gold becomes a foreign reserve and has a new credibility to it. And therefore gold starts to rise in most currencies and that is what we are seeing today" says Frank Holmes, chief executive of US Global Investors, that manages over $3 billion in funds.

While many factors drive the gold price, Holmes says there are some that are currently more prominent. Holmes points out the recent indication by some governments to hold or even increase their gold reserves.

"A lot of it has to do with exporting countries that are exporting oil and gas. Russia is the second largest exporter of energy in the world. They have to find a place for their diversification and gold plays an important part in that foreign reserve," says Holmes.

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

Eugene McBurney, chairman of a mining finance investment bank, GMP Securities, also had a noteworthy soundbite:

"Back in February 2005, there was an interest rake high and you had the dollar going up and gold going down," said Mcburney, adding that in April 2005 the same thing happened. This was the first wave.

"Last week however (after another US interest rate hike), gold went up and the dollar went down," says Mcburney. "It is no longer the case that the Fed can come in and protect its currency against gold. Gold is at currency."

Your life's savings can take the form of digital, paper, or gold. Isn't the wise choice quite easy and obvious?

R.

http://investing.reuters.co.uk/Funds/FundsArticle.aspx?type=fundsNews&storyID=2006-04-12T120733Z_01_NOA243539_RTRUKOC_0_GOLD-INVESTMENT.xmlLONDON (Reuters) - Gold has tremendous scope to attract more investment that could push prices past a 1980 peak of $850/oz in the next couple of years, due to economic and geopolitical uncertainty, consultancy GFMS said on Wednesday.

"This is not a rally being driven by fundamentals. Essentially, it's being driven by the weight of money that's coming into the market from the investors," GFMS chairman Philip Klapwijk told Reuters.

"I think that flow will not cease or reverse. It will probably increase. Prices are set to go higher."

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

As a store of wealth, savers are increasingly discovering the superiority of scarce, precious gold metal versus the vast quantities of paper which can be further inflated without limit.

R.

http://www.bobsguide.com/guide/news/13264.htmlA recent surge in investor interest in gold is set to push prices of the precious metal to record highs, according to a recent survey.

The price of gold has now risen to $604 an ounce, the highest in 25 years, and the Gold Survey, carried out by precious metal consultants GFMS, suggests that the increases could be set to continue.

Within the next two years, the survey suggests, the price of gold could push past the record level of $850 an ounce, set in 1980.

"Levels safely over $600 are now in our sights and further hefty gains over the next year or two are quite possible," said Philip Klapwijk, GFMS chairman.

"In the right circumstances, the 1980 high of $850 could even be taken out."

Mr Klapwijk added that the recent trend was in sharp contrast to past attitudes to gold investment.

"Overall, the apparent 'anti-gold' sentiment within the official sector community that had grown during the 1990s seems to be moderating, if not fading away," he said.

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

Five short years into gold's resurgence, a majority of investors still haven't been aroused from their long slumber. It has only just begun.

R.

I see so much reference to the 1980 high of $850/oz, which seems to me to be merely a "psychological" benchmark.

It really is no more accurate a measuring point than DOW 11K, which we've seen has very different "values" in different periods of time.

To really "take out" the 1980 high, we would also need to take out the numeraire measured by REAL inflation since that time. Some have suggested more like $1650.

While most of these movements do not happen "overnight", increasing volatility may likely bring us some $50+/- days as world tensions continue to heat up. Thirty dollar per month swings will seem very "stable" by comparison.

It shouldn't be long before the difference between $500 and $600 seems miniscule.

My question for the board concerning trade imbalances is this:
When I, and a million other Americans, go into Walmart and pay full price retail for a shiny piece of crap from China we have paid all costs and profits. So everyone should be paid in full based on what we paid.
Now as I understand it the transaction gets consolidated at the International Settlements Bank, which I believe is the same as what is referred to as the Import / Export Bank, and they then say one country has a surplus and the other a deficit. The question is: If all of us paid full retail...who pocketed the difference and who owes the money? Not the consumer...they paid full retail price.

It reminds me of the BS in annual Soc Sev surplus theft by the govt. They steal our money surplus and then we one day will be forced to pay ourselves back.

http://www.platinum.matthey.com/media_room/1144849307.html12th April 2006 -- The Russian parliament is to debate new laws surrounding the oil, gas and minerals industries within the next month, it has emerged.

Resources minister Yuri Trutnev announced yesterday that the Duma would soon be discussing the details of the subsoil law, which, it is hoped, will spark investment in some of Russia's natural resources.

...Originally the law had been due for debate last year, but Mr Trutnev's efforts to ensure the changes do not open the door for overseas aggrandisement of domestic resources has meant delays.

Resources considered as "strategic" � ones which need to be preserved as a matter of national importance due to their scale � include the vast gold deposit Sukhoi Log...

Like the decision to declassify state secrets concerning the release of statistical information on the country's resources � including pgms � this has proved a lengthy and incremental process.

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

As gold gains strategic prominence, I'd rather have my gold investment in a metallic form that is already safely in-hand rather than as a mere share in a company's cashflow stream as tries to extract it profitably from sovereign soils anywhere in the world.

It comes down to understanding the difference between means and ends. Seen from a teleological vantagepoint, on the road of life actualized gold ownership is a goodly step ahead and beyond the lagging pursuit and position of money.

R.

Good points. Re: "To really "take out" the 1980 high, we would also need to take out the numeraire measured by REAL inflation since that time. Some have suggested more like $1650."
James Sinclair gives that number as a target "pulling from the front" but I don't recall inflation as his reason. Most inflation-adjusted estimates I've seen for the 1980 POG high come in around $2200- $2400 and are beginning to appear in the mainstream media.
"While most of these movements do not happen "overnight", increasing volatility may likely bring us some $50+/- days as world tensions continue to heat up. Thirty dollar per month swings will seem very "stable" by comparison."
Maybe such "volatility" will be a flash in the pan on the way to revaluation and relative price stability. I wouldn't want to be tempted to "day trade" it that's for sure, unless someone was holding my hand all the way.

arbyh, FWIW, I'll take a stab at this, but try to keep it really simple. The answer might be in how you view the situation. Sure, on a personal level, everyone is paid in full just like you say. But, you must extend the personal point of view up to the level of the economy (country level). There you'll see that countries are borrowing and selling between themselves. If one borrows more then it sells there is a deficit. If one sells more then it borrows, there is a surplus. When trade between countries does not balance out you get a wealth transference into the country that maintains the surplus. As the surplus grows, that country gains more buying power and they usually buy things up around the world. If they buy enough things, the surplus no longer exists � you end up back in balance.

Also, when you look at what's being exchanged on the country level, it's IOUs � paper currency. That IOU entitles the holder to goods and services in the country from which it came. So, if trade is balanced between two counties, the IOUs that the US gathers that entitles the US to Chinese goods can be exchanged for equal value of US IOUs that China holds. On the open markets this value exchange can happen. When things get out of balance, IOUs start to build up in one county (surplus) and they will want to exchange them for value in the host country (wealth transference).

The only way for a country to prevent that wealth transference is to dilute the value of the IOUs. This way, when the country the holds a surplus goes to buy things in the originating country, they find that they can't buy as much. Unfortunately, this causes price inflation in the host country and it doesn't make the surplus country happy. They, effectively, get cheated out of value. In the past, foreign countries could exchange surplus currency for gold, but that was shut down years ago. If gold still backed the currency you would see gold being exported at the rate of 2+ billion per day to all foreign countries.

Meanwhile, the bankers watch all this closely. They watch surpluses and deficits because they make profit off paper. If wealth is transferring into a country, they want to be there to make loans off that extra capital and not be caught holding the currency that is falling in value. The deficit countries currency will fall in value. Oh, when countries get mad at each other they also go to war. Bankers love to finance both sides of wars. So, an imbalance is very important to a banker because they know that in time they are going to make a lot of money helping the countries settle the dispute.

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

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

WEDNESDAY Market Excerts

April 12 (from MarketWatch) -- The front-month contract for gold futures closed above the $600-an-ounce level Wednesday for only the second time in the last quarter century after Iran pledged to push ahead with industrial-scale uranium enrichment, prompting safe-haven buying from metals investors.

COMEX June gold futures closed up $1.90 at $601.30.

The U.S. said Iran is "moving in the wrong direction" with its nuclear program after the Tehran government announced that it has successfully enriched uranium at one of its facilities.

President Mahmoud Ahmadinejad said the country has become a nuclear power and will push ahead with large-scale enrichment. He reiterated that Iran is aiming to generate power for peaceful, civilian use and is not planning to develop nuclear weapons.

Meanwhile, independent precious metals research group GFMS said developments across the Middle East are one factor that may help gold post further strong gains in the next two years -- and even surpass the 1980 high of $850 an ounce.

In its Gold Survey 2006, released Wednesday, GFMS said it expects the metal to find support in a slowing U.S. economy, weaker dollar and inflationary pressures.

After its gains of the past year, the metal has also become an attractive investment target for institutional investors, making it an asset class in its own right as well as an inflation hedge.

GFMS believes this phenomenon is still at its early stages but would not be surprised to see longer-term investors like pension funds enter the commodities market, propelling gold prices even higher.

"You're playing with fire if you ignore the weight of money argument, looking ahead into 2006," said Klapwijk. "We'd only need to see a tiny slice of mainstream assets diverted into gold, which comparatively is a pretty small market, and the price could really take off."

There is little doubt that the $850 level will be reached "within the next few years as trillions of dollars float around looking for refuge," said Peter Spina, an analyst at GoldSeek.

---(click url for full news, 24-hr newswire)---

Surprise! You (and I) will pay for that "shiny crap" from China twice or more. First you pay at your friendly WalMart store and then again when your $ based assets go into the crapper because no one will accept them. Do the math and convert your $ to real stuff to avoid the double/triple billing.

http://www.projects.ex.ac.uk/trol/scol/index.htmI thought this calculator for inflation would be worth posting to the forum - try putting in todays price of gold and seeing what it was worth in 1980.
Even though this inflation calculator is based on disputable government figures it still gives you a good idea of how much value our money has lost and how cheap gold is.
Gold is still a gift at todays price.

http://www.safehaven.com/article-4960.htmThe Mogambo Guru at the top of his game... a good one!

****Mogambo sez: As I found out the hard way, l ife is hard when you are stupid and it is even harder when you act stupid. And if you want a definition of "acting stupid", then how about betting all your money and all your retirement that now, after it has failed every time in history, a government with the power to create unlimited money and credit (this time courtesy of a criminally compliant Supreme Court and Federal Reserve) will NOT destroy the currency and the economy by over-issuing money? Want to take that bet?

If, on the other hand, if you want to bet that this time, too, like all the other times in history, the over-issuance of money will destroy the currency and the economy, then buy gold

http://www.theinternationalforecaster.com/trainwreck.php?Id=118&PHPSESSID=6cb8192a766be9f5dfc5d80af97de3aaBob Chapman

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-04-13T095047Z_01_BAN335428_RTRIDST_0_OZABS-FINANCIAL-CHINA-GOLD-20060413.XMLSnip:

"...
Chinese banks are expanding the options they offer wealthy depositors in the face of greater competition from foreign banks. Next month, the Bank of China plans to launch its newest product, dollar-denominated certificates linked to the price of gold.

More individual investment in paper gold and other such tools in theory means that more Chinese banks might have to buy gold, to limit their exposure.
..."

Sundeck: Mmmm....how is this going to work? Buy a "paper ounce", gamble on gold going up and get redeemed in dollars??? You betcha...banks will be getting their cut somehow... More paper gambling...why not just buy the real stuff?

;-)

http://news.moneycontrol.com/india/newsarticle/stocksnews.php?autono=197592Snip:

"...
Q: Can the dollar fall alone, or would it be the dominos effect, which would take down other markets?



A: In my opinion, the dollar will depreciate mostly against the gold. In the long run, what you will see is the standard of living in America will decline very significantly compared to the standard of living in Asia. And the stock market capitalization of US, which is now 52% of the world's stock market capitalization, which will decline to somewhere between 20% and 30% and the Asian stock market capitalization will rise to between 20% and 30%, possibly 50% of the world.
..."

Sundeck: Worth a quick scan

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

Interest Rates Rising

Two weeks ago right after the Fed meeting I noted a comment by Bill Gross of PIMCO who rightly stated that the employment figures would indicate the near-term direction for interest rates. He said strong employment data would signal a further sell-off in bonds ushering in more increases by the Federal Reserve. Bond traders are pricing-in at least two more increases from the Fed to 5.25%. The curve is still flat with the two-year yield currently standing at 4.90%, five-year at 4.89% and the ten-year at 4.96%. Treasury yields should be around 5.4% to 5.5% by the end of June if all goes as expected.

As I continue writing, overall market volatility remains low with the S&P 500 index higher by three points or 0.27% at 1,290, the dollar index higher by 0.13% at 89.27, and the ten-year note lower by 0.19% at 105 27/32. Gold is $1.50 higher (0.25%) at $600.90 an ounce and crude oil is lower by $0.33 (0.48%) at $68.65 a barrel. I list all of the percentages so you can see stocks, bonds, gold and the dollar are all very quiet. This is absolutely NORMAL for a day when the U.S. Treasury is busy borrowing more money. The government is auctioning $8 billion of ten-year TIPS this afternoon and Freddie Mac already sold $10 billion of their debt this morning.

Bill Gross says to watch employment data to see what the Fed is going to do, but I would like to add that we should be watching the dollar very closely. If the dollar begins to sink notably lower, the Fed will be forced to continue raising interest rates. Overall commodity prices have been going through the roof! Global consumption of commodities is still sky high and looks to continue increasing. The Fed says they are inflation watch which should be considered synonymous to defending the strength of the dollar. The U.S. dollar is the "tool of control" on the global scene�they can't afford to let it go into freefall. If foreign governments continue with announcements of divesting dollars for euros, gold and other currencies, bonds will sell-off, but stocks should get worse. If necessary, stock prices will be sacrificed to save a cratering bond market. I expect interest rates to continue rising as much as is required to keep the dollar showing some semblance of stability.

A final note on interest rates has the Mortgage Bankers Association reporting 30-year fixed rate mortgages higher by one basis point to 6.50% and the average one-year ARM also higher by one basis point at 5.97%. From one year ago, the one-year ARM is higher by 1.69%. The MBA also reported their application index fell 5.5% (down 15.2% from a year ago) with the purchase index lower by 4.7% and the refinance index lower by 6.6% from the prior week. The purchase index is 12.0% lower from a year ago and the re-fi index is down 19.3% year over year. You can see why the Fed is between a rock and a hard spot. They need to defend the dollar, but risk caving-in the economy (home prices, consumer spending and the stock markets) if they go too far! The price of gold suggests they will still err on the side of inflation to keep the current fiat money system in place.

Global Inflation Watch

It's fascinating to hear all the Fed-speak about inflation being "well contained." The only thing they really care about is inflation EXPECTATIONS being well contained. They don't want everyone to freak-out with higher prices because it means they are not doing their job. Rising prices are the consequence of inflating the supply of money! Inflation is here loud and clear. Gasoline prices moved higher again today by nearly 2% at 2.09 a gallon as crude presses against the $70 mark again. We should be expecting $3.00 gasoline at the pumps for the summer driving season. The oil companies are in hog-heaven! Look at the five-year increases in oil, silver, copper and the commodity index. A picture is worth a thousand words. From just a few years ago, prices are three to five times higher, but you wouldn't know it based on the inflation data with the core rate rising at roughly 2%.

Druid: G, good read, the dollar is definitely being devalued alright but not in the traditional sense. Another words, not against any fiat currency but against pretty much all commodities albeit in a controlled type of fashion. I believe that it is the continued pricing of oil in dollars that is determining the rate at which the dollar is being devalued versus the interest rate cycle. It will be interesting to see how this plays out when the Fed reverses course.

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

http://www.usagold.com/webads/gold-coins-13.jpgNot a shabby little performance by a group of players originally marked forevermore with such unfitting and belittling labels as 20 lira, 10 rubles, 20 francs, 5 dollars, and 5 pesos...

Well beyond those humble beginnings, each golden disc pictured here (see url) is currently valued by the market in a range between $125 and $250. Hundreds upon hundreds speaks soothingly and confidently of a comfortable retirement upon a steady sea driven onward beneath sails full of purchasing power.

Those who put themselves adrift upon a sea of the paper equivalents (printed notes of 20 lira, 10 roubles, 5 pesos etc) didn't fare nearly as well, and, with sails luffing, to this day they still must paddle like a crazy-man just to stay within view of the fleet of golden mariners chasing leisurely the horizon.

R.

http://www.imf.org/external/np/vc/2005/121505.htmIn an under-appreciated year-end speech entitled "Encouraging Stable Financial Markets", Mr. Rodrigo de Rato y Figaredo offered the following guidance:


"In recent years there have been fundamental changes in global financial markets. Non-bank financial institutions have grown enormously, largely at the expense of banks. Institutional investors are playing an increasingly important role in capital markets. Financial market innovation and integration are proceeding rapidly. And huge transfers of risk are taking place, not only between countries but also from financial institutions to other sectors.
+
"The globalization of financial markets has great potential benefits for economies, but also poses considerable challenges. There are implications for the private sector, for governments and for international financial institutions, all of which have responsibilities in promoting and protecting global financial stability. ..."


"At the global level, monetary policy responsibilities are less clear, and too often governments point fingers at other countries to justify their own inaction. As a result, while some tentative steps have been taken, much more needs to be done. This is important because global imbalances have grown larger, and there is a real risk of a disorderly adjustment. It is in everyone's interest to take action. ..."


"Monitoring the global financial system is perhaps the most difficult task for governments and for the IMF. It is essential to understand how global assets are allocated, and how to detect potential problems that could lead to financial crises."


"... there is also an area where governments and the private sector have a shared responsibility. As pay-as-you-go pension systems diminish in importance and defined benefit pension plans become rarer, individuals are becoming responsible for their own financial futures in a new way.
+
"Therefore it has become essential for individual savers to diversify their asset holdings just as it always has for corporations. An education on financial markets, therefore, especially on the trade-off between risk and return, becomes even more important.
+
"But providing this education is not only the responsibility of governments.
+
"If they are wise, private companies will recognize that they also have a responsibility to educate their clients.
+
"If they do not, then losses are likely to be met not just with disappointment but with anger, and such anger will inevitably translate into pressure for public intervention."


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

Since 1973, Michael Kosares and Centennial Precious Metals have been among the proactive companies leading the way toward a better-educated public and clientele in regard to building a self-reliant retirement savings program built upon prudent tangible diversification rather than mindlessly exuberant paper-chasing investment strategies.

And with the launch of USAGOLD online in the late 1990's, that important message is being conveyed to people now more than ever.

Why the unflagging effort in this particular field of endeavor? Again, in the words of Rodrigo de Rato:

"If they are wise, private companies will recognize that they also have a responsibility to educate..."

R.

http://www.dailytimes.com.pk/default.asp?page=2006\04\13\story_13-4-2006_pg5_28snip:

MUMBAI: India's central bank will probably raise its key short-term rate next week, the second increase in three months, as it seeks to contain inflationary pressure in a robust economy, a Reuters poll showed on Wednesday.

The Reserve Bank of India, which gives its annual monetary policy statement next Tuesday, will raise the reverse repo rate � the rate at which it absorbs funds from banks � by 25 basis points to 5.75 percent, 10 out of 15 economists forecast. It has raised this rate four times since October 2004, taking it to 5.5 percent in January when it cited rising property, equity and gold prices as areas of concern.

"The policy in January outlined concerns on rising asset prices and those concerns remain and that is why we expect the central bank to raise rates," Sanjeet Singh, head of research at ICICI Securities, said. The central bank warned again in March that excessive increases in asset prices and credit had emerged as major challenges that could lead to financial instability.

India's stock market has risen 24 percent since the start of January, adding to the 42 percent gain last year. Profits from the stock market have driven property prices up by more than a third in major cities, analysts say, leading to fears of an asset bubble among policy makers.

Eight participants in the poll expected a 25-basis-point rise in the repo rate, but seven thought it would stay at 6.50 percent. This is the rate at which the central bank lends overnight funds to banks.

Three economists expected the central bank to raise the bank rate, or the rate used by banks to price long-term loans, by 25 basis points from a three-decade low of 6 percent. The central bank has also expressed concern over high global oil prices and their possible second-round impact on inflation in an economy growing at 8 percent over the past three years.

Last year, global oil prices rose by more than a third, but India raised domestic fuel prices by only 15 percent. This year prices have risen more than 10 percent and none of that has been passed on to consumers, but policy makers are likely to factor in a possible increase in prices by domestic refiners. Wholesale price inflation � the most widely followed gauge of inflation in India � was just 3.96 percent in late March. "

"Inflationary expectations are higher given rising asset prices and oil," said Shuchita Mehta, chief India economist at Standard Chartered Bank. "Credit to industry is also growing at a robust pace and we expect them to raise short-term rates." Bank loans to industry have been growing at an annual rate of more than 30 percent as more and more companies borrow funds to feed robust domestic demand for goods and services.

Economists say rising US interest rates could also be a factor in the Indian central bank's decision. Although the Reserve Bank places more emphasis on domestic factors like inflation and growth when framing monetary policy, rising US rates increase the pressure on it to tighten as narrowing rate differentials could affect capital inflows and the rupee.

-Goldilox

Repeat the mantra:

There is no inflation, there is no inflation . . .

note: simply "competition for investment capital"

http://www.bloomberg.com/apps/news?pid=10000103&sid=acqbH7wK9LK8&refer=us'Revolutionary' Fed Study Has Economists Rethinking Forecasts
April 13 (Bloomberg) - Snippit: "A new Federal Reserve study has shaken economists' forecasts by suggesting the U.S. economy will have to decelerate much more over the next decade than most now expect.
The study, to be published in July, finds that the retirement of the Baby Boom generation will force far-reaching adjustments in the way the economy works. Forecasts for everything from growth and employment to corporate profits and interest rates will have to be recast."

...POO shooting up above $70, and now above $71 a barrel. Heard someone say a month ago that when it hit $66 we'd hit Iran. Is $70 an important trigger?

@ Druid,

"Bugger thy neighbor's currency" is alive and well, but gold is "out-buggering" them ALL!

Perhas you should say, falling down the abyss in a desperate fight to the bottom, the Currencies are slashing at each other.

I wont wait for the splash, that water is cold and stinky, not a bath I would want.

Somehow I wonder if Mr Rato isn't speaking in euphemism. {free translation, albeit less noble sounding.}

"At the global level, monetary policy responsibilities are {lost in a fog of moral hazard} , and too often governments point fingers at other countries to {hide their own complicity and general abdication of moral duty and leadership]. As a result, while some tentative steps have been taken, much more needs to be done {to safely bamboozle the masses}. This is important because global imbalances have grown larger, and there is a real risk of a {general conflagration inimical to the interests of TPTB}}. It is in everyone's interest to {inflate with extreme prejudice}. ..."

Yes, education: that which happens when the barn door is closed after the cow has exited. Somehow, "diversification" into the paper provided by these innovative "institutions" just doesn't seem to be all that appealing.

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

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

THURSDAY Market Excerpts

Gold eases in pre-holiday session, up $7 for week

April 13 (from MarketWatch) -- Gold futures closed lower Thursday as a pullback in energy prices eased inflation fears and encouraged investors to lock in gains, but the contract still finished out the holiday-shortened week with a more than $7 gain.

COMEX June contracts closed down $1.20 at $600.10, coming back from a low of $594.

Regular trading for metals futures won't resume until Monday because of the Easter holiday.

Crude futures also recovered from early lows hit amid a nearly eight-year high in U.S. crude-oil inventories. "While there still remains a strong link between oil and gold prices, at this moment any market interpretation of high U.S. inventory levels is being overshadowed by the tense standoff with Iran," said Kitco's investment analyst Jon Nadler. "Many surveyed energy analysts feel that current supplies notwithstanding, the likelihood of $80, $90 or even $100 oil should not be completely discounted," he added.

"To call today's easing in gold prices as strictly oil-related (as opposed to a round of profit taking) or to assume that the Iranian factor has been shelved (far from it), and therefore to abandon one's gold positions would make for unpleasant surprises down the road."

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

http://www.chron.com/disp/story.mpl/ap/business/3791778.htmlIMF: Globalization Can't Be Relied On
SNIP
The international lending organization said that while globalization has provided some brake on inflation in recent years, it cannot be relied upon to do so in the future.

http://framehosting.dowjonesnews.com/sample/samplestory.asp?StoryID=2006041215340029&Take=1 DJ MARKET TALK: More Short Covering Expected In Comex Gold
| Darlene Ross | April 13, 2006
"With an early close on Friday, Comex gold is set to continue it's move higher..."

We have 6 retired generals (with gold on their hats) who don't like the way things are going. What this country needs is an oldfashioned military junta to straighten things out.

Let me refine that post, because somehow I think it's important:

As an aside, I think the retirement of the baby boomers is greatly exaggerated. Fortunes have been made and lost attempting to predict the future habits of this group. The one thing I can tell you for certain (given the history) is that the future of the boomers will come as a surprise to the sociologists who try to quantify this group's prodigious achievements. The concept of retirement is something that came out of the Roosevelt socialist onslaught on the thinking of Americans, when a tired and worn out industrial class "needed" to be led to pasture (with the government's blessing). This is not something you find traditionally in the upper classes of Europe (and the United States) in the period before Roosevelt. My point is that I don't know too many boomers in the flow of things who are truly considering "retirement" in the traditional sense. Health allowing, something more of a hybrid is what most are considering. You are not going to see the group that created the modern world, as we know it, simply fade into the woodwork on some pre-planned rota. This group was never easily satisfied; it won't be easily satisfied now. I do not believe that retirement in the 21st century has anything to do with "wearing out" or "wearing thin" but more a lifestyle choice. Most boomers still feel themselves in the mode of creation. The driving thought is that no matter what this group has done (each in in his or her individual field); much remains to be done. Politicians, economists -- take note.

http://www.freemarketnews.com/Analysis/222/4499/2006-04-13.asp?wid=222∋d=4499 Juiced Numbers- How the Government Gets the Statistics it Wants, Markets Get Manipulated, and Citizens Get Deluded - and Worse - David French - FMNN - April 13, 2006
Wordy synopsis of many familiar topics and personalities.

HEAR HEAR, Sir MK !!!

As a "Septuagenarian" I fully agree with your concept of the work ethics of the older population in the US of A !
I can't stop working right now as I have a number of Patents to file on in the near future.
I consider 40 hours a week to be a fun time period, showing the "youngsters" how to do things and try to think outside the "BOX".
(and with a hoard of YELLOW, I have nothing to worry about)
<;-)

Well said and inspiring. "Much remains to be done" indeed.
Our generation is NOT "satisfied". The hunger grows and has been passed to the next generation as well, here and abroad.
One of the reasons "the retirement of the baby boomers has been greatly exagerrated" is the establishment media diversion and disinformation. For example, everyday I pass on posting the majority of financial items I read due to shallowness and especially diversion. Just a minute ago I saw a promising story on today's IMF warning that high oil prices may cause serious unforeseen problems etc. But it quickly descended into an otherwise hypothetical argument that deficits and inflation are largely due to higher oil(in "the past two years") and the recycling of petroleum profits back into the country.
Those of us "vocationally retired", must continue to find wholesome and healthy ways to enjoy life, keep mentally and physically active and find personal fulfillment, simplicity, and stay "young at heart".
"You're as young as you feel". Our generation includes some great achievers, musicians that won't quit, lifelong professionals and free-thinking philosophers like yourself, Randy and many others. And to make this short I left out husbands, fathers, wives, mothers, nurses, farmers and countless other dual-roles, multi-roles and invaluable and unsung occupations.

So, if the globalization process pauses and retrenches, how will things unfold?
Isn't the most likely outcome a retreat into regional blocs, where wage and cultural differences are less pronounced. Where the major powers of each region try to focus their hegemony into strategic territories.

Asia is going to be a very interesting place with Russia, China and India all vying for power. A super Balkans? Poor Japan?

What of the US, who has bet so heavily on a seamless transition to a global love-in? Once the US defaults on treasuries what will become of all the physical investment made in Asia? De facto nationalization? Does an already wounded dollar duplicate that productive capacity in Mexico, further stuffing excess manufacturing capacity into a world in recession?

Once the US defaults (or revalues) treasuries, is that lift off for gold?
Maybe Another has some thoughts along these lines. It's been too long since I've visited those pages anyway.

A seamless transition
to a global love-in..

Great. Love it. Thanx.

Those gold and silver eggs in our Easter baskets are shining bright in Asia tonight.

Goldilox,

"Gold out buggering them all�"

Don't get me wrong, I like gold.

Wait, in the last month, silver is wayyyyy up past gold.

I would recommend that http://www.usagold.com/ starts selling silver and gold�.. & expand the forum....


The Bear

@ tejbear,

My "out-buggering" remark was about currencies, not metals.

Most other metals have outperformed gold recently, but I wouldn't presume that a gold dealer should start selling Copper or Rhodium to ride the commodities rush. It's just a different business.

Silver has done well, but shipping ten thousand dollars worth of gold coins is a completely different task than shipping a similar value of silver.

Remember, IBM was never was successful in the PC market, just as Apple was not much competition in Enterprise computing.

Asian gold is at $599.30 and Silver at $12.90 as I type this.

We'll see what London has to offer.

http://www.usagold.com/goldtrail/archives/goldtrailone.htmlYou'll be weary and disappointed if you stay up late specifically looking for any sort of action out of London today.

May I suggest some light reading instead?

R.

Goldilox wrote:
>>>
Silver has done well, but shipping ten thousand dollars worth of gold coins is a completely different task than shipping a similar value of silver.
<<<

Not really. A full bag ($1000 face value) of 90% silver coins is now worth roughly $8,000. And over $10,000 worth can be shippied in a single USPS Flat-Rate Priority Mail box. Registered and fully-insured, it can be sent for about $25. I know, I've done it.

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

@ specie-man,

My shipping experiences (no corp account) have not been so fortunate of late, especially with fuel surcharges. Some of the motorcycle parts I have shipped were nearly double that amount.

At 46:1, shipping (and storing) gold and silver are still quite different.

But as gold:silver was 60:1 recently, your point is noted.

@ TC,

Went to sleep right after the 11:30PM post (my time). Tried some "light reading" over at AmericanAnitgracity.com, but the brain-eye coordination was not cooperating.

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

http://www.washtimes.com/upi/20060414-113131-9894r.htmUnited Press International

Apr. 14, 2006 -- The soaring price of gold and other precious metals took a breather Friday, but only because most markets were closed for the Good Friday holiday.

Gold settled Thursday at $602.10 per ounce, and silver was pennies from $13 per ounce.

Platinum ended the week at $1,089 per ounce, and copper set a record high Thursday at $2.8155 per pound, its 12th straight trading day to achieve such a distinction.

The current bull market in precious metals appears to have nowhere to go but up. The World Gold Council predicts demand will rise threefold...

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

A flow of bonds can't provide meaningful balance for international trade, but gold metal can. A stealthy (attempting for smoothness) transition is underway among key players. If you wait for such time as this paradigm shift becomes obvious to the public, it will be too late for you to make significant acquisition of cheap metal to ride the wave of revaluation.

R.

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/Big_Turning_Point_Ahead_for_1145032459534.html?engine=rss&keyword=article(report excerpts) -- Unsurprisingly, with all of the major markets closed for Good Friday, trading has been very quiet especially since many European markets are also closed Monday. We are at an important crossroad in many of the currency pairs and next week could prove to be the major turning point that everyone has been waiting for.

...we are near the apex of major triangle formations, which means that breakouts are imminent.

The Treasury International Capital flow report due on Monday could set the tone for the week. With the February trade deficit reported at $65.5 billion and the TIC forecast at $60 billion for the same month, it looks like we may be setting up for another deficiency.

If so, this would bring back the concerns that we talked about in yesterday's fundamentals, which is that with rising long term yields attracting Japanese investment money back into the country, and the Chinese using their money to invest in more tangible assets, we will have the two largest buyers of dollar denominated investments fading to the background.
�
Japanese Yen -- The Japanese Yen lost ground against all of the majors currencies over the past week as the Bank of Japan continues to signal their reluctance to raise interest rates. Last night's release of the Bank of Japan minutes shows that the central bank sees inflation as well contained and expects growth to continue to rebound, but they still want to keep rates accommodative for some time. They are probably getting a bit uneasy with the rise in long term yields, which have gradually been heading towards 2.00 percent.

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

Looking beyond short-term liquidity, some clever politicians and central bankers have second-guessed the wisdom of settling on IOUs for the mid- and long-term when gold can be had as a viable and more systemically-stable alternative.

To reiterate, you will get only the faintest hints of dots, but you won't connect them, and you won't know this is happening with certainty until it is too late -- the low-hanging fruit having been harvested already by others.

Therefore, rather than take such a thing on faith, you would do well to acquire gold for whatever other reasons among the multitudes that resonate most appropriate to you.

R.

http://www.timesofoman.com/newsdetails.asp?newsid=28392

Palestinian minister sees economic collapse
SNIP
SNIPRAMALLAH � Finance Minister Omar Abdul Razek yesterday predicted economic collapse in the Palestinian territories within months unless Arab governments stepped in to stave off financial crisis.


http://msnbc.msn.com/id/12316554

Choose Your Own Crisis Scenario
SNIP
Today's financial markets are suffering massive imbalances almost certain to lead to some sort of disaster. Where will it hit?

http://www.gulf-times.com/site/topics/article.asp?cu_no=2⁢em_no=81804&version=1&template_id=48∥ent_id=28SNIPS
But [the regulator, the Saudi Capital Markets Authority (CMA)] must prevent a flight of speculative capital that could trigger a crash and ruin millions of Saudis who borrowed heavily to invest in stocks - a scenario that could have grave political as well as economic consequences.
+
But in Saudi Arabia the volume of speculative capital is huge, swollen by record oil revenues. Managers of massive private portfolios, often acting in concert, have enormous clout in a market that has little institutional capital.

http://www.larouchepub.com/lar/2006/3315monterrey_vips.htmlInteresting thoughts from LaRouche...I thought about posting last night but deferred until I saw today's musings on collapse. He might be a little extreme sometimes, but there might be some gems among the rough.

...

The 'Post-Greenspan' Era
First of all, what we're faced with immediately, you should understand, is an impending general collapse of the world monetary-financial system. It's nothing different, in a sense, than what I've been warning about as inevitable in this process. But we have reached a critical point, where, for example in Mexico, you may have a total collapse of the system before the Presidential elections. It may not happen at that time, but that potential is there, and it's developing very rapidly.

Since 1987, the international monetary-financial system has depended upon a gigantic fraud. And the fraud is, that the collapse of the U.S. stock market in 1987, October '87�what happened then�was essentially the same thing as the 1929 collapse. So what happened at that point: Alan Greenspan, who was now about to replace Paul Volcker at the Federal Reserve System, told Volcker, "Wait, I'm going to fix this." What he did is, he legalized a form of transaction, which would have been considered criminal fraud in many cases. For example, Enron is a criminal fraud. And the entire world monetary system has been operating on the basis of a gigantic criminal fraud. This is called "hedge funds." It's called "financial derivatives." The whole thing is one gigantic bubble, which would embarrass John Law.

The bubble goes in the order of magnitude of quadrillions of dollars equivalent, in a world where you're measuring total product in terms of less than $100 trillion. And therefore, the crash of this system would be the biggest financial crash in all history, not only in magnitude, but as a percentile of total listed assets.

There's no way, in a financial crash, that the debts which are outstanding from financial derivatives can be bailed out. That does not mean that the economies have to crash, because, what you do if you have a true nation-state, the government takes over the banking and financial system in order to maintain the levels of employment, payment of pensions, and so forth. Then the government must create credit to launch legitimate growth. And that's the great issue before us.

This system is coming down. The entire world monetary system, as presently defined, is at some early time, about to collapse. The collapse could be stopped in one way, by having governments put the monetary system into receivership. In other words, the governments would put the financial system into bankruptcy reorganization. And the state would act on a constitutional provision of the General Welfare, which is, for example, the fundamental law of the U.S. Federal Constitution.

...
Now what's happened is, the gigantic inflation, which was launched under the tenure of Alan Greenspan, this credit has now reached the point that a general collapse of this system is now inevitable. With the change in the occupation of the Federal Reserve System to replace Alan Greenspan by the new Chairman Bernanke, a decision was made among leading central bankers, that the growth of the bubble must be stopped. This means that the financial derivatives market, the bubble, is to be stopped. But this means, by stopping the bubble, you're going to cause it to collapse.

The center of the problem is, that you have what's called the "carry-trade." People have been borrowing yen at almost zero interest rates; the people who borrow the yen, convert this into dollars, thus increasing the flow of dollars in the world market�actually being issued by Japan, not by the United States. Those who borrow in this way, then go into other markets, and loan the money they borrowed in higher-priced markets! This credit is then used to buy up whole industries with hostile takeovers. The real estate bubbles around the world are an example of this.

What has happened by virtue of this decision to stop the growth of the bubble, means that essentially, the carry-trade is going to collapse. For example, Iceland has just gone bankrupt; New Zealand; Australia's ready. Most countries are ready to go bankrupt. The central banking systems of Western and Central Europe are already bankrupt. The major banks of the United States are bankrupt, hopelessly so. The banks of South and Central America are generally bankrupt, already. That is, if you tried to match the obligations with resources, you couldn't do it.

So, what we're going to see, is that, unless there's a change, some innovation which changes this, the three months before the election here in Mexico�April, May, and June�will see a general collapse in the world financial markets. It will hit the Americas as well. So therefore, in this country, you have to face the fact of an incoming, threatened shock. And unless there's a change in policy, this will increase over the three months to come.

...
...
We're having an election in November, a general election, a mid-term election, so that by the end of the year, we'll either be headed for dictatorship in the United States, or we'll be rid of this mess in Washington, and we will either have begun to deal with the crisis which is coming on now, or we'll be in a world financial crisis beyond anything that any of you can imagine.

...
So, what we're getting today, again, you're getting groups of financial interests, predatory financial interests, who are using mercenary armies around a program of "the enemy is Islam." And this whole mess was organized by major intelligence services associated with these financial interests. You look at, for example, you look at the question of the Napoleonic Wars: Napoleon's image was based on this. The Napoleonic image was used for creating the Nazis, same thing.

So, we had this recurrence of the attempt to destroy modern European civilization, for a return to a modern parody of the Roman Empire, in which the Roman Empire was constantly at wars, killing people, setting up puppet governments, and so forth. Such an empire could not succeed today, but failing to defeat it, could mean the end of civilization for some time to come....

Sir 'Lox, I must admit that I was wrong about transmutation; I wont elaborate, but since you play in 'new physics' you will know what I mean. I had forgotten about the odd properties of tempic waves (which is inexcusable) and also about the unusual abilities of legumes and chickens. Those who listen, can learn from strange sources.

When this will have an effect on the gold market is anybody's guess, Evans field theory isn't in print in a form that is easily absorbed save by experts at this time, and all the other technologies are just as invisible in the news. It depends on when we all grow up.

Fraught with risk is the future. The US bond markets should have blown up by now. Yet, were the US and Europe to have a second "black death" event, there could conceivably be plenty of oil to go around for several decades. Too much now depends on the degree to which massive "intervention" is considered "on the table" by the men behind the green curtain. That gold and international trade will again have a real relationship is merely a dream. I have other dreams too; not nice ones. Children should grow into their manhood, else they will spend their adult years in a prison. The days of banging our spoons on our high chair and bawling loudly for treats must give way to more sober manners, yet to continue the conceit, the behavior of our president and the president of Iran are not promising.

So, sir TC, two cents are only worth a bit more than a copper penny.

What's a CuNi nickle worth? The mint ought to be striking 5 and 10$ coins.

With my purchase of one of the fine collection of Mexican coins, I have finally hit a milestone.

It has taken me since the fall of 03 to reach my 20th onz of gold purchased from our fine host here at Centenial precious metals. I certainly want to complement my dealings with Jonathan as I really enjoy my conversations. Buying steadily at the dips caused by tremendous dondrafts in the futures market has created wonderful opportunities. Seems harder and harder to see this hapening.

Jonathan once ask me why I buy 100oz silver bars and I commented that it was for my future. Well he never asked me about gold but I would have given the same answer. By the way I paid .15 an oz for shipping from our host which is a lot less as a percentage than now, but still, shipping the stuff is not very expensive.

The day of the 2 cent penney is about over. When I really started saving them I could get 1 in 3 in change. Now it's 1 in 5. Got a cup full from someone at work today and was disappointed in finding less than 30. Wait till its a 3 cent penney. Heck, even the zinc ones are getting pricy. Don't think we can afford to keep making the things unless we go to steel.

I follow the mining industry closely and IMO we will be very lucky to have an increase in any metal production let alone gold. We do have some good mines coming along but it reminds me of the energy industry in that the majors aren't and the little guys are. Political problems, permit problems and depletion problems are plaguing the industry.
Even tires and equipment are getting hard to get. Costs are rising rapidly.

The largest copper mine (and second largest gold mine) Grassberg, is experiencing tremendous local strife. This is going on all over the globe. Don't count on a lot of new supply just beacuse of the price. The best current known gold property is under a glacier.

Gold, maybe the Central banks and the Comex boys,
a little more up their sleeve.
It seems obvious that they are slipping...

Be wary of fiat money and the central banks,
paper we may have to leave.
Don't miss out on what others are missing...

Glenn

Hey again folks, been back to working a 100+ hours a week and we got weathered out so have been catching up on my internet reading the last 36 hours.
I wonder what a nickel cost the us gubmint to make now that nickel and copper are so high. i've been buying 1-4 boxes a week of nickels for the last 3 years so got a bunch of them. Was shocked to see what the 2004 peace medal p-mint nickels were going for this fall so i sold 940 rolls of them recently ( i never look a gift horse in the mouth). I've also never turned in a penny to the bank for over 25 years and have bought many collections and hordes from estates and pawn-brokers, am wondering if it is worth seperating the pre-82's out yet. And i paid 75 cents a roll for wheaties for awhile and am wondering if the copper value is higher than that now?
Might have made a mistake a few weeks ago when i sold 6k oz. of silver for 2 new cars, silver is up 2.70 an oz. since then so i lost the value of a nice used 4wd pickup on the table by selling early. Even though i have lots of au and ag let that be a lesson to everyone. This market has so much farther to go if you measure your stash in fiat-paper values that when you feel a corrective phase coming on,-stop and think, this market for gold and silver is still so deep in its infancy stage that it will boggle the mind. I was around for the 70's and the 1980 peak and there is so much more dollar liquidty available now that it will astound the most ardent believers, such as myself as to what peak values will be at the market top. Also remember the market top may not have a dollar that exists that will buy any commodities or precious metals. But your oz. of au or ag. will still be an oz., it never devalues or loses weight except by direct theft.
Been lots of insightful posts and commentary lately (keep it up) As an occasional poster and lurker, i would like to put out a call for some of our long-time posters to come back again and grace our halls with their insightful wisdom, such as ANOTHER, FOA, ARISTOTLE, BELGIAN and many others whose names are on the tip of my tonque. So much has changed, accelerated in the last few months that i, and probably many otrhers would love to hear your updated opinions on many subjects.
MCLEE

P.S.
On shipping. Once had 127 100 oz. bars shipped by regular freight on a pallet from tenn. to va. for 236 bucks. Seller wrapped em in black plastic, no problems, came out to less than 2 cents an oz. shipping. Don't think i would take that risk again though!

http://www.timesargus.com/apps/pbcs.dll/article?AID=/20060409/NEWS/604090308/1022/EDUCATION05April 9, 2006
SNIP
Right now we basically owe our economic soul to oil-producing countries because we have been so woefully negligent since the 1973 oil embargo. We had 30 years to develop a real energy policy, and now that crunch time is here, the Europeans are walking all over us. After Sept. 11, whose perpetrators were practically 100 percent Saudi, we attacked Iraq � may as well attack Argentina in terms of strict cause and effect.

==
So 9/11 was perpetrated by Saudis?
Is that the reason why the Saudi stock-market will collapse?
Punishment (by Allah?) for 9/11?

This was my post on the Saudi stock-market crash:
The Invisible Hand (4/14/06; 13:36:09MT - usagold.com msg#: 143227)
Can you spell "crash" in Arab?
http://www.gulf-times.com/site/topics/article.asp?cu_no=2⁢em_no=81804&version=1&template_id=48∥ent_id=28

http://www.zawya.com/story.cfm/sidGN10032557Is the world safe from economic collapse?
Zawya - Apr 13 1:56 AM
Is the world safe from economic collapse

This article is temporarily not available. Please try again later.

http://news.yahoo.com/s/ap/20060415/ap_on_re_mi_ea/iran_israelIran President Again Lashes Out at Israel
AP - 2 hours, 4 minutes ago
TEHRAN, Iran - The president of Iran again lashed out at Israel on Friday and said it was "heading toward annihilation," just days after Tehran raised fears about its nuclear activities by saying it successfully enriched uranium for the first time.
==
Panes et circenses! Give the Western sheeple bread and games and they'll be happy.
Nay, they will blame the imminent economic collapse on Iran, Saudi-Arabia, Iraq, Argentina and Belgium.
Is Belgium no more part of the West?

Congratulations on your stashes. Keep on truckin', the markets are and you ain't seen nuthin'...
Headline holidaze:
Dow Jones Newswires - China To Formally Launch Interbank Forex Swap Mkt Apr 24
Dow Jones Newswires- MARKET TALK: China To Launch Forex Swap Mkt Monday
Dow Jones Newswires - Vietnam Starts First Copper Production Project - Official
Dow Jones Newswires - Mutual Interest: There are good reasons to own gold, but don't get caught up in speculation
Dow Jones Newswires - Taiwan's Lien Calls For Closer Economic Ties With China
WSJ - Treasury Yield Passes 5% Mark
The Himalayan Times - Business - Wales Scotland Ireland joint bid for Euro
Dow Jones Newswires - Vietnam, Guangxi eye faster construction of economic corridors, better trade
People's Daily - China's forex reserves surge again
FT.com - Autos - Manila: Retail sales in Asia-Pacific to weaken
Gulf Daily News - Business Report: China forex reserves world's biggest
Dow Jones Newswires - Treasury Rate Signals Burdens for Borrowers[Usury is a burden at any rate. And interest rate sensitive derivatives do exist, we repeat, DO...]
Star-News, North Carolina - MARKET TALK: Gold Set For Big Move Back Over $600- Analyst
WSJ - Currency Trading: Dlr Off Thu Despite Strong Data[Just a fluke... there's NO INFLATION.]
Dow Jones Newswires - China Calls For New Economic Measures
CBS 11, Texas - MarketWatch' - Economic patriots' imperil EU's drive for free market[Bubble, bubble, peril and trouble...]
Bloomberg - Asia(AMM) - Copper, brass boost US nonferrous export[And Ft. Knox could boost too- prove me wrong!]
International Herald Tribune - Green and gold are colours for new trusts

Michael Kosares: Gold Forecast for 2006
January 1 (USAGOLD) - Snippit- "2006 could be a breakout year. My $525 2005 forecast hinged on G-8 programmed dollar weakness. Instead we had the dollar and gold going in the same direction for most of the year. The obvious question is "If gold managed to rise over 25% with the dollar appreciating, what might it do should the dollar resume its bear market?" ...Given the fact that none of the disturbing trends (the twin deficits, etc) driving gold demand has been addressed, it all adds up to what could be a breakout year for gold in 2006. As is the case in any breakout, the top will be difficult to call. If I were to make a wild guess..."
When Michael feels compelled to actually "make a wild guess", it's time to watch out. What more could you ask for?

http://www.arabamericannews.com/newsarticle.php?articleid=4959SNIP
There's speculation that Saddam Hussein's pursuit of a euro-based oil bourse may have contributed to his downfall. Such a plan would have undermined the American dominated market, in which two bourses, London's International Petroleum Exchange and New York's Nymex are both dominated by American oil companies.
Iran has reportedly pursued a similar path and the bourse was supposed to start in March of this year. The significance of this has been debated, although not in any major media outlet (surprise, surprise.)
==
The author, Ali Moosavi, is a Detroit area freelance writer. Reuel S. Amdur and M. Kay Siblani contributed to this report.
Mother, where do babies come from?

http://www.bizjournals.com/losangeles/stories/2006/04/10/daily43.html?from_rss=1Central Coast area sees $3 gas
SNIP
Certain areas of Southern California have already broken the $3-a-gallon threshold, and it appears that all areas will be above $3 as soon as next week.
==
If We the People face gas price increases, wouldn't it be sensible or reasonable to try to have good relations with oil producing Tehran?

Who told you We the People are reasonable or sensible?

It's all about patriotism
(love, support and defense (What defense?) of one's country, says Webster's)
and nothing else.
So that's what Rummie is doing in Afghanistan, Iraq, and soon in Iran, upholding the name or the reputation of the US of A. (Maybe the economic collapse arrives before Rummie's men arrive in Iran? Let's hope it. )

http://news.bbc.co.uk/2/hi/americas/4908948.stm
Last Updated: Friday, 14 April 2006, 07:56 GMT 08:56 UK
SNIP
Pressure is growing on US Defence Secretary Donald Rumsfeld, with more retired generals calling for him to resign over the Iraq war
+
But [Gen Peter Pace, chairman of the Joint Chiefs of Staff] said people "should never question the dedication, the PATRIOTISM and the work ethic" of Mr Rumsfeld.
END OF SNIP

Who invented guv'mint? Perhaps the same person who invented the wheel? But the wheel can be useful.

http://news.ft.com/cms/s/8c5ad8c0-cbdc-11da-a7bf-0000779e2340.htmlSNIP
There is a mystery in all this, which relates to gold. The price of gold has doubled since early 2002, when central banks were still happily selling off stocks of gold into the open market. Even events in India cannot explain an annual growth rate of almost 20 per cent in the gold price.

The gloom-mongers have an easy answer. Gold is through the roof because any day now the dollar will go down the tube. Yet there are no confirming signs of anxiety about the dollar. Indeed, the inflow of private capital to the US exceeded $1,000bn last year and the year before, and has surpassed the outflow of American capital to foreign economies every year since 1996.
==
Or did I confuse the FT with gloom-morgers?

http://www.hindu.com/thehindu/holnus/006200604151552.htmSnip:

"...
New Delhi, April. 15 (PTI): A stampede of jewellery fabricators and stockist buying in both precious metals - gold and silver zoomed past all barricades on the bullion market today to set new high records at Rs 9000 per ten gram and Rs 19,300 per kilo respectively.

..."

Sundeck: Now that is a headline you don't see every day of the week...at least in the past...may not be so uncommon in the near future 'though...'

:-)

http://www.solidariteetprogres.org/spip/sp_article.php3?id_article=2141Here's the website from Solidarit� et Progr�s.
On March 21, 2006, it carried an article which started by saying that the Icelandic banking system collapsed in February 2006 because of a carry trade whereby "investors" were borrowing euros to buy bonds issued by Icelandic banks.
The article continues with a section headed "Crash on the Arab stock-markets" arguing that shares are being sold in panic since the end of February.

Yestersday, I said that the crash had not yet started. Interesting times.

The Invisible Hand (4/14/06; 13:36:09MT - usagold.com msg#: 143227)
Can you spell "crash" in Arab?
http://www.gulf-times.com/site/topics/article.asp?cu_no=2⁢em_no=81804&version=1&template_id=48∥ent_id=28
SNIPS
But [the regulator, the Saudi Capital Markets Authority (CMA)] must prevent a flight of speculative capital that could trigger a crash and ruin millions of Saudis who borrowed heavily to invest in stocks - a scenario that could have grave political as well as economic consequences.
+
But in Saudi Arabia the volume of speculative capital is huge, swollen by record oil revenues. Managers of massive private portfolios, often acting in concert, have enormous clout in a market that has little institutional capital.

TODAY�S LINK

http://www.solidariteetprogres.org/spip/sp_article.php3?id_article=2141

BR�VES / 21 MARS 2006
ISLANDE : D�B�CLE DU SYST�ME BANCAIRE SUITE AU CARRY TRADE

Les trois grandes banques islandaises - Kaupthing, Landsbanki Islands et Islandsbanki - ont jou� un r�le important sur le flanc islandais du � carry trade �. Les investisseurs empruntaient � des taux faibles, notamment dans la zone euro, pour investir l�argent dans les obligations islandaises (comme celles �mises par ces trois banques de Reykjavic) offrant un taux de r�mun�ration sup�rieur � 10 %.
+
Krach sur les march�s boursiers arabes
La bulle boursi�re des � march�s �mergents � est en passe d��clater . La premi�re vague a �t� marqu�e par le krach islandais au mois de f�vrier, suivi de ses r�percussions internationales. D�but mars, une nouvelle vague a frapp� les actions, obligations et devises partout en Am�rique latine et en Afrique, et notamment en Russie et en Turquie.
Depuis la mi-mars, les bulles d�actifs sont touch�es � leur tour dans les pays arabes o� une bulle g�ante s�est accumul�e ces derni�res ann�es. En plus des liquidit�s inject�es par les � carry traders � internationaux, les prix �lev�s du p�trole ont fait augmenter la quantit� de p�trodollars.
Ainsi la capitalisation des sept Bourses des pays du Golfe s�est multipli�e par neuf en cinq ans, passant de 119 milliards de dollars en 2000 � 1140 milliards fin 2005 - dont 650 milliards rien qu�en 2005 ! Pendant la m�me p�riode, l�indice boursier de Dubai est mont� de 125 %, celui de l�Arabie S�oudite de 97 % et celui de l�Egypte de 162 %.
Depuis fin f�vrier cependant, on assiste � des ventes panique.

http://finance.yahoo.com/currency/convert?amt=9000&from=INR&to=USD⊂mit=Convert
9000 rupee = $ 200 = 10 gram

1 gram = $ 20

www.goodcooking.com/conversions/metricw.htm
1 ounce = 28.35 grams

1 ounce =$ 20 X 28.35 = $ 567


That was 10 gram, 9000 rupee
One kilo is one hundred times 10 gram. Price only double 10 grams 19,000 ?

Let's try to find the error.
19,000 rupee = $ 428.89 = 1000 grams
not possible ten grams was 1 gram = $ 20.
In the kilo, the gram cannot be worth double.
I don't know how to find the error.
But I am probably in error myself.
Do we have per kilo price which amounts to twice $ 567 per ounce?
For me that's okay. My Maple Leafs are worth around $ 1,134.

http://www.thebulliondesk.com/india.aspxIndia : Gold Prices, Gold Price Charts, plus Gold & Precious Metal ...
Gold prices and gold price charts, precious metal news and research for the Indian market.
www.thebulliondesk.com/india.aspx

1 troy (!!!) ounce of gold would be 31.11 gram

1 gram = $ 20

1 ounce = $ 20 X 31.11 = $ 622.2

That's better!

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

http://www.adn.com/money/story/7628911p-7540518c.htmlAnchorage Daily News, April 15, 2006

Alaska's largest gold mine has shrunk dramatically in value.

Kinross Gold Corp., owner of the Fort Knox Mine near Fairbanks, wrote down the open-pit mine's book value by $142 million last year.

Company executives said higher operating costs, mostly due to rising fuel and electricity prices, forced it to move two satellite deposits, True North and Gil, from reserve to resource status. That means the company has no plans to mine them anytime soon.

...Because of these decisions, Kinross lowered Fort Knox's book value to $113 million in 2005. The write-down hit Kinross' bottom line hard. The company ended the year with a $216 million loss...

...Fort Knox is considered a "mature" mine, meaning it's nearing the end of its life. Production began in 1996 and is expected to wrap up in 2010 or 2011...

Fort Knox is forecast to produce 311,379 ounces this year, down from 329,320 ounces last year.

In 2001, its highest production year, Fort Knox yielded 411,220 ounces. It has declined every year since.

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

If you take the time to read this article, and if you can understand how a gold mine can crap out even as the price of gold itself is reaching for historically high price levels, then you are truly light-years ahead of your fellow investing public who often by stocks on a wing and a prayer.

What many novice investors haven't figured out is when you put your investment cash into a mining operation, you ultimately own shares in a company with nothing to do except stand around an empty hole and blink in the mid-day sun.

By contrast, if you were instead to have exchanged your money for the liberated gold metal in the first place, you would have locked in the present and future purchasing power of a physical asset which is utterly indestructible throughout the far reaches of time.

Mines and their companies fade away, but gold is forever. Shouldn't your savings enjoy the security of the latter?

R.

Well, at least there's one Fort Knox which is marked to market. I wonder when the other one will be audited ....
C!

Thanks for reading.

Very likely a day will come when the latter Knox you referred to is also MTM (instead of the present $42/oz abomination), and it's probably a safe bet that upon such a time, its fate will then be soon after to become as empty as the former Knox mentioned in the article.

I have no practical difficulty in imagining the Treasury mobilizing the vaulted gold in the not-too-distant future to help mitigate the hyperinflationary effects of a dollar that's lost international reserve status, and then, in the name of "homeland security", subsequently putting strict controls on the production and disposition of all gold newly mined on U.S. sovereign turf as a means to restock its supply of this strategic reserve asset.

Hard to imagine any shareholders getting outsized dividends under such a scenario. Some bags are just too empty to be holding for the want of paper money. In my view it's better to have simply bought the gold outright and up front -- its value is not on thin ice as is the "paper" dollar or the potentially at-risk shares.

R.

Sundeck's quote:

" <...> gold and silver zoomed past all barricades on the bullion market today to set new high records at Rs 9000 per ten gram and Rs 19,300 per kilo respectively".

19300 Rs = $428.89 = 1000 grams

Therefore, $0.42889 = 1 gram

Therefore, $0.42889 * 31.11 (grams per troy oz) = $13.34 = pretty close to the spot of silver.

Mystery solved, otherwise I was getting ready to hop on the plane to Delhi to pick up some more gold at bargain prices of 19,300 Rs per kilo. Talk about CHEAP!

http://observer.guardian.co.uk/business/story/0,,1754476,00.htmlWhat's good for the US is no good for GM
SNIP
That could be enough to tip [GM] into Chapter 11 itself just as the rest of the US picks up steam and that old adage would be well and truly dead.

Here's why Britain and the US of A are picking up steam and why what's good for the US of A (such as attacking Iran) is no good for GM.

http://www.timesonline.co.uk/article/0,,2087-2136638,00.html

Iran suicide bombers �ready to hit Britain�
SNIP
IRAN has formed battalions of suicide bombers to strike at British and American targets if the nation's nuclear sites are attacked. According to Iranian officials, 40,000 trained suicide bombers are ready for action.

http://www.financialexpress.com/fe_full_story.php?content_id=123924SNIP
NEW DELHI, APRIL 15: Gold and silver prices zoomed past all records buoyed by demand from jewellers and stockists Saturday, setting new highs of Rs 9,000 per ten grams and Rs 19,300 per kilo respectively on the bullion market.
+
The domestic market, which normally moves on overseas signals, turned bullish as the yellow metal in London touched 25-year high levels around $604 an ounce after crude oil prices surged to over $71 a barrel.

http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=113148
SNIP
Silver ready sky-rocketed by Rs 800 to Rs 19,800 per kg and weekly-based delivery by Rs 310 to Rs 19,110 per kg. These levels were never seen before.
In line with the firm trend, silver coins jacked up by Rs 200 to dizzy heights.

http://reuters.myway.com/article/20060415/2006-04-15T220018Z_01_SCH579091_RTRIDST_0_NEWS-POPE-DC.htmlSNIP
In his homily the Pope, wearing gold and white vestments, said the resurrection of Christ could not be considered a thing of the past because it was still sending a message of hope to people.
"We grasp hold of it, we grasp hold of the risen Lord, and we know that he holds us firmly even when our hands grow weak," he said before thousands of people in the basilica.
"If we live in this way, we transform the world. It is a formula contrary to all ideologies of violence, it is a program opposed to corruption and the desire for power and possession," he said.

by definition of suicide they can't be very well trained at all. nobody available for a mission could have any actual track record of successful experience. it's more like having 40,000 rookies and fanatical idiots. either way, it doesn't speak comfort for either side.

http://www.thebusinessonline.co.uk/Stories.aspx?The%20decline%20and%20fall%20of%20Europe%20%E2%80%93%20and%20that%20includes%20Great%20Britain&StoryID=FC7D82DA-31C3-4568-A648-7C6BCA1052CD&SectionID=803597D7-4BD5-45D5-BF88-E1AC85BF7FDFThe decline and fall of Europe � and that includes Great Britain
SNIP
IN Decline and Fall of the Roman Empire, Edward Gibbon famously chronicled the slow and tragic collapse of a great civilisation. After Italy's vote for paralysis last week and France's abject surrender to striking students over a modest attempt at economic liberalisation, it must be merely a matter of time before Europe will require a new Gibbon to pen the story of its own gradual demise towards economic, military and cultural obscurity.

http://news.bbc.co.uk/2/hi/americas/4913414.stm
SNIP
Ex-Nato commander Gen Wesley Clark, who ran for the Democrat presidential nomination in 2004, backed calls for Mr Rumsfeld to resign

http://news.bbc.co.uk/2/hi/africa/4913142.stm
SNIP
Chad has threatened to stop oil production next week if it does not immediately receive several months' worth of oil revenues.

http://news.scotsman.com/international.cfm?id=577092006Blair refuses to back Iran strike
SNIP
TONY Blair has told George Bush that Britain cannot offer military support to any strike on Iran, regardless of whether the move wins the backing of the international community, government sources claimed yesterday.
==
"Another" beer please!

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42038&NewsKind=Current%20AffairsSNIP
Two former US National Security Coucil experts warned Sunday that military action against Iran could be more damaging to US interests than the current struggle in Iraq has been, according to AFP.

http://timesofindia.indiatimes.com/articleshow/1491571.cmsis indeed gold!

Skyrocketing prices of the yellow metal have sent both jewellers and sellers into a tizzy.
+
The chances of gold prices falling soon is as high as India losing to Bangladesh in a test match or the Sensex going back to its 7000 days.

http://video.google.com/videoplay?docid=-8260059923762628848This superb documentary ends with a story about the (Kuwaiti) gold stored in the WTC towers...

http://onlinejournal.com/artman/publish/article_698.shtmlSt Google gave me this article of the day before yesterday (Good Friday) , but I can't open it.

Painwashing" the Moussaoui jury and us
Online Journal, FL - Apr 14, 2006
... board of Securacom, the company that did security for the WTC from the ... line, it was really more like $160 billion in gold that had been stored under the ...

Who knows what those three final dots are?
Perhaps those 160 were stored not under the WTC but under Another building.

http://smh.com.au/news/world/moussaoui-jeers-at-tears-for-dead/2006/04/14/1144521504018.htmlSNIP
[Moussaoui] said � that he hated America because it had abandoned the gold standard.

"Painwashing" the Moussaoui jury and us
Online Journal, FL - Apr 14, 2006
... Bottom line, it was really more like $160 billion in gold that had been stored under the Towers by various banks and corporations. ...

(come back they are nuts)
Kom terug, ze zijn zot!

Too much economic growth? This is already a non-sequitur. But this becomes hilarious when the same guy, Hu Jintao, goes to meet Bill Gates. He wants Bill to stop growth or what?

http://news.bbc.co.uk/2/hi/asia-pacific/4913622.stm
China worried over pace of growth
SNIP
Chinese President Hu Jintao has expressed concern over the rapid speed of the country's economic development.
He said the Chinese economy had grown by more than 10% in the past year, but that such high growth was not an official target.
He added the government wanted to pay more attention to improving the lives of ordinary people. There are also fears that fast economic growth could impact on the country's resources and the environment

http://www.digital-copyright.ca/node/2391
China president at Gates house, not White House
SNIP
SEATTLE--The first lavish dinner of China President Hu Jintao's historic visit to the United States next week will be in a big, secure house in Washington where the host is one of the world's most powerful men.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2006/04/16/BUG88I9CMS1.DTL&type=businessA new way to invest in gold and other commodities
SNIP
Until recently, ... [e]ven if you knew which way commodity prices were headed, there was little you as an individual investor could have done to act on your hunches.
Perhaps you could have invested in companies such as oil drillers or gold mines that in theory benefit from rising commodity prices. But all too often, other factors prevailed, and those companies' stock prices didn't move as much as the underlying commodity. Buying futures options on the commodities themselves was another possibility, but that was risky business requiring your full-time attention.
However, new avenues for commodities investing are emerging in the form of exchange-traded funds.
BLABLABLA
==
Jama, the San Francisco Chronicle is saying that until recently � even if you knew which way commodity prices were headed, there was little you as an individual investor could have done to act on your hunches.

http://onlinejournal.com/artman/publish/article_698.shtmlSNIP
And then there was the gold, baby, the gold. Follow the shiny stuff. Was this mentioned?

Rudy Giuliani claimed they reclaimed some $230 million in gold from the rubble of the Towers. Later, an abandoned 10-wheel delivery truck and a fleet of cars were discovered in a tunnel between Buildings 4 and 5, running it seemed from the soon to tumble South Tower, the second hit. Bottom line, it was really more like $160 billion in gold that had been stored under the Towers by various banks and corporations. So, where did the gold go after it left the 10-wheel truck? Perhaps it was the ultimate pay-off for the high-level government participants and patsies?

During the short period of time, as the looking glass began to reveal the next image, the four Knights seeing the glass for the first time, sat in silence. The clarity was spellbounding.
Sir M.K. was in deep thought. How could this have happen with no word? It has been close to a year with no war and Therroth had been defeated, dispersing the Dark Army. His eyes were looking down at the table when they all heard.
" M.K., So nice to see you. It has been a long time"
It was as if the person was standing there in the room with them.

Sir M.K., looked into the glass expecting a figure to match the voice, but it was passage way like a tunnel. Desending and soon there was a flickering light in the distance.

"Who are you?", asked Sir M.K. "Why M.K. I am surprized you do not recognise my voice. Haven been your guest for so long", the voice answered.

The image in the glass drew closer to the light.

The speed at which the image desended increased and suddenly a cave lit by torchlight, filled the mirror.

"Welcome, to my home", the voice said proudly.

" Where are you?" asked Sir M.K.

"HERE!" and with that a flame rose from a pool of black water and illunated the roof of the cave and to Amasement of the Knights also brightened the Council Chamber.

The flame died down and a Man in dark clothes stepped out of the shadows. He had a pale face and was small in statured. Sir M.K. knew who he was.

"Are you taking good care of MY CASTLE" he asked

"Something is wrong" whispered Sir M.K. to the other Knights.

"What's that you said?" the man asked.

"It is fine" answered Sir M.K.

"Good! I plan to retake all that was taken from me by you soon. A pause and the man appeared to move closer.
" Where is Gandalf? I do not see him amoungst you?"

Sir M.K. did not reply.

"Tell him Therroth would like to see him again and Oh yes, I almost forgot to tell you I have a new name. My name is Cyrus. You will come to know it well"

Standing there, Cyrus motion with his hand to someone outside the image. A small creature walk slowly up to Cyrus , then turned so he could be seen. He was not an Orc or Gobblin. He was stout. His head was that of a wolf with plenty of teeth protruding from his snout. His body was hairy but strength could be seen in his muscular build.
He wore battle gear made of leather and mail that fit him tight and two swords attached to his wide belt.

" My new friend" said Cyrus. He leaned over and said a few words to the creature. In a few seconds the creature drew his weapons from their sheaths. His eyes sparkled in the torchlight. He began to run towards the seated Knights.
The creature ran faster and faster as to catch a runaway wagon or horse. His image faded asending in the tunnel passage,only his eyes could be seen moving back and forth in ever increasing motion.
Then there was light. The creature leaped into the air. A snow covered moutain behind him and a road leading up to the entrance. The creature was getting bigger and closer.
The mirror began to bow and as one would enter through a door the creature passed through the glass as if it was air and landed on the Oaken Table of Yore. With remarkable balance the creature steadyed himself. Holding his two swords at his side he gazed at the Knights and snarled.

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

"The mirror began to bow and as one would enter through a door the creature passed through the glass as if it was air and landed on the Oaken Table of Yore. With remarkable balance the creature steadyed himself. Holding his two swords at his side he gazed at the Knights and snarled."

...when one messes with tricksy magic-mirrors! Not good, O no precious, not at all! =8-0

S.

Very entertaining and no doubt cautionary.
There must be an appropriate name for this "creature". Because you cannot teach an old dog new tricks, a rechristened one may learn not to put the bite on people.
Nothing demeaning like 'pookie' though.

http://www.deepikaglobal.com/ENG5_sub.asp?ccode=ENG5≠wscode=136870New Delhi, Apr 16 (UNI) The weakening of the US dollar in the international market, coupled with the rising gold demand, may lead to a hike in gold prices to Rs 10,000 per ten gm in the next 5-6 months, an Associated Chambers of Commerce and Industry in India (ASSOCHAM) study has said.

The faith of the international community in the US economy has started diminishing so much that the investors now prefer to accumulate gold rather than the dollar...

The gold demand world over is constantly shooting up and has neared at levels around 4,000 tonnes per annum against its supplies which remains stagnant at about 2,250 tonnes per annum.

The gap between supply and demand of the yellow metal will continue to widen as no significant discoveries in the major gold producing countries have been hit while its consuming pattern will always enlarge because it will always be deemed to be a real currency world over...

Commodities, in general, and precious metals, in particular, are in motion and will continue rallying until acted by a credible global monetary force. There is no [more] powerful rocket fuel for a gold bull market than a collapsing US dollar...

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

Assuming flat currency exchange rates over this 5-6 month period, a gold price rise to Rs 10,000 per ten gram corresponds with $690 per ounce. Of course, if the dollar weakens against the Indian currency during that time, it would translate into an even higher price denominated in dollars.

R.

http://allafrica.com/stories/200604160011.htmlBusiness Day (Johannesburg)
EDITORIAL -- Gold at $600 an ounce seemed far-fetched not so long ago. Now, with the metal having gone past the $600 mark earlier this week, we're being told $850 could be in sight.

And it doesn't come from extremist gold bugs either, but from the respected precious metals research group GFMS. At the release of its annual gold survey yesterday, GFMS predicted gold might show "hefty gains" in coming years because of the weight of money coming into the market from investors.

The dollar gold price has gained more than 40% in the past year and 16% this year alone. The weaker dollar and US inflation concerns, as well as geopolitical tensions, have helped to drive up investor appetite for gold as an alternative investment.

GFMS sees no slackening off of investment demand for the metal. And it is not alone in its bullishness. JPMorgan, for example, suggested early this year that gold could hit $800 because supply, of newly mined or existing gold, is unlikely to grow fast enough...

And that's not all good news for SA's economy... That's because the more gold rises, the more the rand strengthens -- the correlation between gold and the rand over the past six months has been 90%, Bloomberg estimates. If that were to continue, an $800 gold price could be a nightmare scenario for SA. Gold exports would benefit, but they are not much more than one-eighth of SA's exports. Meanwhile, a rand that much stronger could wreak havoc on SA's other exports as well as on manufacturers competing with imported goods.

So we'd better hope that gold doesn't run too fast -- or, more importantly, that the rand doesn't follow it upwards.

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

There's no iron-clad consequence that the rand necessarily need get any stronger than the South African Reserve Bank chooses. Such is the power of emission. Maybe all the more reason the SARB should give serious thought to Robert Sleeper's speech last year pointing the way to MTM gold reserves. If the Bank deems that inflationary (depreciationary) emission of new (liability) currency is appropriate, they should at least make sure in the finished equation that the counterposing assets on the balance sheet are literally as good as gold.

R.

You must have a crystal ball. Just a few points.

Magdelena's Mirror. In the first veiwing Magdelena told Sir M.K. and the Knights that the Images would not harm them. They could only see and not communicate. Sir M.K. sensed that this time, things were wrong. Same as the markets today. They have changed and become a new creature. We all have our own creature coming out of the darkness. Will we be prepared when it lands on our table.
Slingshot--------<>

POG up around $3 and POS up around 25cents straight out of the chute. I guess three days of 'roo meet will do that kind of thing ...
C!

Looking on the screen at the gold price gently climbing I had a thought............Is there anywhere on the net where I can see the number of gold contracts being traded in real time? Not a day or a week later.

I trade gold mining shares (shock horror, my secret is out!I have "outed" myself) and with these I can see the number of shares on offer, the number traded and the number of people involved etc.

With gold I am flying blind.

Maybe this is the way the big boys like it but surely they have some transparency to assist them in their trades.

Gold just hit $604............Keep the good work going in the US later!

...to render a tirade from the ex a laughable triviality...

...for we soldier on, we happy few, we "small dogs" who safely feast from the table scraps of power, we foxes who "run away, and live to fight another day."

Anyone think an "event" might be on the horizon? A discontinuity? A "set of cascading cross-defaults"? A Herstatt "Holiday"? Greenspan's gone, and the patsy's in place to take the fall...

It looks as if the US$ is headed SOUTH as the Euro and Pound are "looking good" !
Does anyone have a real time US$ chart webpage ?
My old ones now are "private clubs" !
Tks
GW

http://www.abs-cbnnews.com/storypage.aspx?StoryId=35766SNIP
The United States is relying on the huge dollar reserves held by Asian central banks and oil producing countries to finance its deficit. Without them, the US currency would lose a crucial prop and could collapse.
"The big fear is a chain reaction that would start with the external creditors of the United States, especially the central banks," said Antoine Brunet, chief economic strategy at HSBC CCF bank.
Brunet points to the recent surge in the price of gold, a traditional refuge for investors.
"It's a sign of concern about inflation and about the US external deficits," he emphasized.
==
The website is the one from ABS-CBN, the largest (only?)television "network" in the Philippines.

http://www.bloomberg.com/markets/commodities/cfutures.html
Looks like we are on a possible "rocket ride" tonight in Asia. Should it carry through European trade then we will probably have an "interesting" day during NY trade. Spot has got his bone and tearing the place up! Note that the metals and petroleum are surging across the board (see link).

I would not be surprised to see this action carry through. The talking heads on CNBC and the ticker are screaming "higher oil and gold" (CNBC World - a much better and rational version with a balanced view rather than the US CNBC version chock full of carnival barkers). I haven't logged onto the online Bloomberg network yet, but I would not be surprised to see some excitement there as well.

- Black Blade

http://www.chinapost.com.tw/business/detail.asp?ID=80574&GRP=ESNIP
Meanwhile, the United States is relying on the huge dollar reserves held by Asian central banks and oil producing countries -- nations with big current account surpluses -- to finance its deficit.
Without them, the U.S. currency would lose a crucial prop and could collapse.
High energy costs account for about half of the deepening of the U.S. deficit between 2001 and 2005, according to the IMF.
Last year the U.S. current account deficit reached a record US$804.9 billion, equivalent to 6.4 percent of Gross Domestic Product (GDP).
"The big fear is a chain reaction that would start with the external creditors of the United States, especially the central banks," said Antoine Brunet, chief economic strategy at HSBC CCF bank.
Brunet points to the recent surge in the price of gold, a traditional refuge for investors. Gold reached the 600 dollar-an-ounce mark during trading in London over the past week, its highest level for 25 years.
"It's a sign of concern about inflation and about the US external deficits," he emphasized.

http://www.bloomberg.com/markets/commodities/energyprices.htmlOh yeah, the talking heads are putting most of the action on geopolitical tensions with Iran, however, there is more. The US Dollar is under threat and the Federal Reserve appears to have miscalculated by raising rates. With rising rates the housing bubble comes under threat. When the ATM (the family home) is under threat from higher rates, the housing bubble deflates - something the Fed did not count on in their quest to beef up the USD. Oh what fun.

That energy prices are soaring to new records tonight also helping hard assets along (see link). NYMEX, IPE and Brent North Sea are all higher and ready to smash through to new records. The implications for "real inflation" are obvious - definitely lock in at least a modest position in physical gold and silver.

As always, get outta debt and stay outta debt, stash enough emergency cash for several months' expenses, accumulate Gold and Silver for "portfolio insurance", and start a storage program of nonperishable food and basic necessities. We live in "interesting times".

- Black Blade

@BB,

"When the ATM (the family home) is under threat from higher rates, the housing bubble deflates - something the Fed did not count on in their quest to beef up the USD."

I think you give them too much credit for benevolence in your statement.

I believe they knew, but had no other choice, and got Sir AG to really "push" ARMs to cover their "bets" in the inevitable decline.

http://www.fxstreet.com/nou/fxtrek/senseframescharts.aspThis site does not have the dollar index per se, but it does have the euro, the pound, and with a little effort, you can find the renminbi

I have those too, am missing only the ol'e US$ !
<;-(

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10<;-(

$606 is broken !
Where is Sir Gold-fly when you need him !
Keep jumping SPOT !
<;-)

http://finance.yahoo.com/q/bc?s=%5EN225&t=1d&l=on&z=m&q=l&c=
The Nikkei 225 is taking it on the chin tonight and investors are scrambling. Presumably some well heeled Asian investors are grabbing some Gold in a "flight to safety". This is going to be one "interesting" night.

- Black Blade

http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyid=2006-04-17T070856Z_01_T269891_RTRUKOC_0_US-MARKETS-PRECIOUS.xmlSNIP
"We all know both gold and silver prices are too high, but no long holders are willing to sell, while short holders were getting heavily squeezed," said Takashi Ogura, risk management section manager at Kanetsu Asset Management.

http://www.netdania.com/QuoteList.asp@Gandalf,

While not listing the cumulative FX, Netdania allows you to follow the individual currency moves in real time.

Euro +.5%
$/Yen -.25%

Not huge, but measurable.

http://news.bbc.co.uk/2/hi/asia-pacific/4915122.stmSNIP
The Chinese authorities say they are putting up a huge statue of Chairman Mao Zedong in Tibet.


http://www.aynrand.org/site/PageServer?pagename=education_contests_edu_index_about_atlas
SNIP
"If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater the effort the heavier the world bore down upon his shoulders--what would you tell him to do?"
"I . . . don't know. What . . . could he do? What would you tell him?"
"To shrug."


Storm op zee (Strom on the sea)
http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyid=2006-04-17T070856Z_01_T269891_RTRUKOC_0_US-MARKETS-PRECIOUS.xml
Gold storms to new 25-yr high, silver surges


http://ftblogs.typepad.com/martin_wolf/2006/01/global_imbalanc.html#comments
Martin Wolf's economists' forum
Global imbalances
SNIP
The quantity of analysis devoted to the so-called "global imbalances" is extraordinary. As is usual with economists, we have reached no conclusion. Yet what is happening is extraordinary enough to merit an attempt at least to clarify the basis of the disagreements.

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

Up until a week or so ago, I was concerned that my modest physical portfolio was too heavily weighted towards gold (about 65%) versus silver. I had tried to heed the advice to go 50/50.

But now, with spot leaping and jumping so, my portfolio balance is coming in line without a single purchase in the last 3 months--gold now only 54% of it, thanks to the huge run-up in silver.

Wow.

http://quotes.ino.com/chart/?s=NYBOT_DXThe dollar just fell over a Cliff!

http://biz.yahoo.com/ap/060417/asia_dollar.htmlSNIP
TOKYO (AP) -- The dollar fell sharply against the euro and yen in Asia Monday on a media report suggesting that China might reduce its purchases of U.S. Treasury holdings, and amid speculation that U.S. interest rates may have peaked.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5156D683%2DF6E6%2D4C48%2DA1A4%2D3EC6D83D06B9%7D&siteid=googleSNIP
Gold futures rose to a fresh 25-year high on the New York Mercantile Exchange on Monday, propelled higher by a steep decline in the dollar and continued concerns about Iran's nuclear research program.
==
How they know? Only me, The Invisible Hand, knows.

Ninderbuckinhandengrabbin
;-)

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

http://news.yahoo.com/s/ap/20060417/ap_on_go_pr_wh/bush_shake_up;_ylt=Appn9gc.ZKiw8faVEZcmSems0NUE;_ylu=X3oDMTA3OXIzMDMzBHNlYwM3MDM-This came out at about noon eastern time. Gold jumped 3+ in minutes.

http://www.usagold.com/gold-price.html
Gold for the first time has breached the 500 euro per ounce level.

Now bear this in mind... as the gold price goes higher, gold becomes ever more efficient as a financial resource.

You didn't for a moment ever think the ECB was idiotic (or merely random) for choosing a MTM gold reserve regime, did you?

Choose gold for your personal savings and you, too, can follow in the footsteps of giants.

R.

I just caught this quote on the MSN Market Ticker page:

"Fed President Moskow says policy makers must be "vigilant" to ensure increases in energy and commodity prices don't spur inflation."

He is half right, I suppose, because high commodity prices are largely a response to monetary inflation (AKA The Dollar Flood) and therefore cannot also be a cause of the same as far as I know.

And, if he is talking about *price* inflation, then sorry Mr. Moskow . . . those high commodity prices show that you are already too late!

This is a classic example of mis-information - but then we are used to it.

Got Gold?

- Survivor

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

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

MONDAY Market Excerpts

Gold climbs $18 from pre-holiday close

Gold futures soared Monday to their strongest levels in more than two decades, boosted by geopolitical concerns and a sharply weaker U.S. dollar. The COMEX June gold contract hit a contract high of $619.50, its strongest level since late 1980.

It settled with a gain of $18.70 at $618.80.

"There are many upward pressures on gold that continue to take it higher, like the deficit, the weakness of the dollar and additional Iran threats. The path of least resistance is up," says George Gero, vice president with RBC Capital Markets Global Futures.

Several traders cited ongoing concerns about Iran's nuclear program and concerns about whether the United States would launch an attack.

Also pushing up gold prices Monday, the dollar tumbled after reports that China could reduce its buying of U.S. Treasury products.

There was also speculation that the Federal Reserve may finish its rate-increase cycle sooner than expected. A weaker dollar tends to push gold higher because gold, denominated in the dollar, is regarded as an alternative investment to the U.S. currency.

Also, May crude oil was up 68 cents to $70 a barrel in afternoon trading on the Nymex. Stronger energy prices usually support precious metals.

Bernard Hunter, director of precious metals at Scotia Mocatta, added that some physical buying has emerged in India as participants get used to $600 gold and perhaps stop waiting for a pullback to present a buying opportunity.

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

http://www.usagold.com/cpmforum/tools/guideandsignup.htmlJust a very quick note to inform you that it's been brought to my attention that your posting of the Sanders missive is largely off-target for this particular discussion forum and had to be deleted not only for its disruptive (or maybe I should say distractive(?)) subject matter but especially because it serves as a free promotional piece for a firm that competes with the host of this Forum.

This is likely an appropriate time to review the posting guidelines. Please see the URL given above.

R.

I thought the "Freedom to Fascism" post was timely and relevant to the concerns of most every poster here, and I don't see the financial conflict of this movie being the competitor that you speak of.

Name and contact info for a competing company was very obviously provided in that post -- definitely not an appropriate free use of this hosted venue.

'nuff said.

R.

With Chinese President Hu Jintao expected to visit President Bush this week, for discussions on trade and Iran, I wonder if we can expect POG action in Asia, that is similar to that of last night. Since President Bush has set the menu as TRADE and IRAN. Perhaps Hu is choosing the mood music.

Gold is up 30 cents, silver is up 26 cents.

It is getting very interesting.

http://www.theinternationalforecaster.com/trainwreck.php?Id=119 Due to offshoring and outsourcing over the last eight years, US manufacturing employment is down almost four million jobs, or almost 25%. Eight-five percent of these losses took place in the first three years of the first Bush administration.

In reality hyperinflation has already begun. It's just no one wants to admit it or talk about it.

The amount of funds that will enter the commodity markets in 2006 will double and that which will enter the gold and silver arena will more than double, perhaps triple.

A few years from now after the bond and stock markets have fallen, gold will ultimately be the only game in town.

We have been beset by some of the worst ever politicians over the past 40 years. Ninety-five percent have a price and it's disgusting.

The illegal alien problem is no longer about illegals - it is about a power move by One-World government advocates.

We remembered when they began trading in derivatives in the early 1970s we wrote an article of which the conclusion was someday they would destroy the financial system. It seems like that day is fast on its way.

One way to stop this derivative madness is just raise interest rats. It's that simple. Just like in 1995 when Sir Alan Greenspan talked about irrational exuberance all he had to do was raise margin requirements.

John Williams he says inflation is 8%. If the same CPI were used today as was used when Jimmy Carter was President, Social Security checks would be 70% higher

Due to free trade and globalization, unemployment is 13%, wages in the form of disposable income are falling and 45 million of our fellow citizens have no medical coverage.

It costs $1 million to win a seat in Congress, yet less than 1/2 of 1% of all Americans made a political contribution of $200 or more to a federal candidate in 2004. We call that distain. Congress belongs to the highest bidder.


A critical view of the present and a dark projection of the future from Bob Chapman. I wish he could be easily proved wrong; unfortunately, what he says has a ring of truth.

Can the Global Market withstand a simultaneous, limit up in both Gold and Silver?

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

Ten Bears,

Thanks for providing the link to Bob Chapman. He certainly has a lot of concerns with regard to America's increasing debt and how it will impact the POG & POS.

Sadly, I too share many of his views.

Got gold yet?

The Bear

$618. has been BROKEN !
Where are you Sir Gold-fly ?
<;-)

You are welcome.
No doubt most of us here have a percentage of our wealth in gold or other sound money.
And none want to see economic conditions which adversely affect a large segment of the population.
Nevertheless we are obligated to provide our families a measure of insurance against economic adversity.
Having gold in secure storage is a good step in that direction.

Interesting that this week, the top dog of China is coming over to the U.S. to listen to carping about our trade deficit and the dollar/Renimbi. The Chinese even went to the lengths of having some advance men spread a few billion dollars around the U.S.buying things, in effort, to show us they're not so bad after all.

Well-next month, I think we can all predict that the U.S. trade deficit will probably hit an all time high...May just blow through the old high like nothing. (Last weeks glee that the trade deficit had fallen from the previous month? Heck, that was for the 28 day month of February to begin with--and the amount was still the 3rd highest on record!) We can then look for presure to build once again on China to do something in the currency area or face a growing tariff threat.

Now to the point! If I were the Chinese and were facing an increasing threat of tariff action, I think that I would begin to allow the U.S. currency to fall in value against the Renimbi. Yes- and while I was about it, I would take some of those trillion dollars U.S. and begin to buy futures contracts in ALL of the commodities that my country would be needing to further develop. Then I would pull back from buying further U.S. debt instruments--lighten up some on those I'm holding--and see what begins to happen.

So--now I have futures contracts for all types of commodities contracted for when the dollar value of those commodities was lower due to a higher dollar at that time, and if --as the U.s. wants-- the dollar falls, causing the commodities to spike higher in dollar terms, I still have my contracted futures price to pay with my now, deflating in value--dollars.

As the futures contracts in oil, copper, gold, silver, corn, wheat, ---whatever else---come due, I pay up with my dollars and take delivery of the commodities. Beats the political hassle, it would seem, of trying to acquire companies in sometimes unfriendly areas.

http://www.moneyweb.co.za/shares/boardroom_talk/242146.htmSNIP
It's the best of times for gold bugs. Those returning to their offices after a short holiday are today being cheered by news of another gold price surge, this time to almost $620 an ounce.
==
Gold Herr, Gold Herr, oder ich fall um!
(There's a song in German: Beer Sir, Beer Sir, otherwise I collapse!)

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42089&NewsKind=Current%20AffairsSNIP
Iran's armed forces must be at the ready and will "cut off the hand of any aggressor", hardline President Mahmoud Ahmadinejad said in a speech Tuesday to mark national army day, AFP reported.

Antwerp is Antwerpen in Dutch. Werpen is to throw in Dutch. Legend has it that Ant is Old Dutch for hand. Ant-Werpen (Hand-Throwing).

==
Was Belgian not from Antwerp? No, IS Belgian not from Antwerp?

http://today.reuters.co.uk/news/newsArticle.aspx?type=businessNews&storyID=2006-04-18T054307Z_01_SYA002091_RTRUKOC_0_UK-MARKETS-PRECIOUS.xmlSNIP
Gold has gained nearly 50 percent in the last two years, supported along the way by a collapse of FIXED-PRICE forward selling of bullion by producers and assurances by the world's central banks they would hold on to most of the 32,000 tonnes or so sitting idle in vaults worldwide.

http://www.bernama.com/bernama/v3/news_business.php?id=192332HEADLINE: HSBC Offers First Islamic Dual Currency Structured Investment

KUALA LUMPUR, April 18 (Bernama) -- HSBC Bank Malaysia Bhd has introduced the country's first Syariah-compliant structured investment product.

According to the bank, the HSBC Amanah Islamic Dual Currency Structured Investment will further complement the success of its Islamic banking business which it has steadily built up since 1994.

...The product is made of two components, namely the Commodity Murabaha-i and the Unilateral Promise to Exchange Currencies, which offers investors the opportunity of earning enhanced returns on short-term surplus funds.

The Commodity Murabaha-i, which is based on the concept of deferred payment sale, allows an investors to invest a sum of funds through the purchase and sale of an underlying commodity in which the commodities and the profit rate are agreed upon upfront.

Under the second component, the investor will provide the bank with a unilateral promise to exchange currencies in which the amount of currencies to be exchanged is specified in the unilateral promise.

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

"Pssst... hey buddy. I've got a derivative on a bridge I'd like to sell you."

R.

The Koran prohibits the collecting of interest. This is very inconvenient. For some persons with religious convictions, it is appropriate to enter into contracts that offer the effect of interest without breaking any religious rules.

If all parties agree, and there is no funny stuff going on, then there is nothing too remarkable going on.

If you want to look at funny accounting, keep your focus on the structure of the US housing market.

Can you tell me where it says that?
That's the whole problem, seems a lot is said and then misinformed on.
Sorry for my views.
Just every one is into Koran bashing these days and yet they have never read. Remember he wrote the Koran for the Jews! First pages of the Koran.
Go figure!
Good luck all.

http://moneycentral.msn.com/content/P148489.asp?Printer(4/18/2006) -- Call the theory Peak Metal. The price of gold and other metals, and related stocks, will keep rising as finding new sources gets harder and more expensive.

Is it too late to buy into the boom in metals stocks -- everything from gold to silver to copper to iron to zinc? ...does the current boom in metals have longer to run, making this a good time to buy despite gains like these?

Investors looking to answer questions like those should take a clue from the boom in oil prices and particularly from a theory called Peak Oil. The analogy isn't perfect -- the commodity markets for metals are much smaller and much more speculative than the market for crude oil. But applying a theory that I'm calling "Peak Metal" argues that while short-run risks have risen recently, the boom in the prices of metals and metal stocks is a long, long way from over.

...Twin peaks?

Now look at the three similarities between Peak Oil and Peak Metal:

** It's becoming harder and harder to find significant new deposits of everything from gold to copper. Gold production in South Africa, traditionally the world's biggest gold producer, is now just one-third of its peak because the country's deep underground mines are exhausted and mining companies haven't been able to find enough new gold deposits to make up the difference. Global gold production has actually tumbled as gold prices have spiked. After peaking in 2001 at 2,621 metric tons when gold sold for less than $260 an ounce, gold production fell in 2005 to under 2,500 tons.

** When new deposits are discovered, they are in politically riskier countries. In gold and copper, that's meant replacing production from South Africa and the United States with production from Peru and Indonesia, for example.

** Production costs are higher in newly discovered deposits. Part of that's a result of location: It's more expensive to produce copper if you have to build roads, railroads and ports from scratch in remote Indonesia than it is to produce copper from Arizona. And part of that is a result of the poorer quality of newly discovered deposits. Costs are rising at many gold-mining companies because the grade of ore -- the amount of gold per ton of rock -- is lower in newly discovered deposits than in older mines.

To those, I'd add these factors that could produce even sharper and more sustained price increases for Peak Metal than for Peak Oil....

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

Not a bad little article, but it is too bad that the concept of physical ownership seems to be completely off of Jim Jubak's radar screen.

It is nice, however, to see him run with the notion of Peak Gold on nearly the one-year anniversary of a post in which I offered up the analogy.

(an excerpt of that post follows)
__________________________________________
TownCrier (4/11/05; 11:28:43MT - usagold.com msg#: 131075)
HEADLINE: South Africa's golden sunset
http://www.mineweb.net/sections/gold_silver/431741.htm
11-APR-05
JOHANNESBURG (Mineweb.com) -- Uncontrollable costs are adding inordinate pressures on South Africa's gold industry (the world's largest producer), which has accelerated the demise of older shafts, says the South African Chamber of Mines....

There are no signs that the rate of decrease in production may be levelling out as the biggest tonnage fall came in the second half of 2004, where 20.2 tonnes less gold was produced compared to the last six months of 2003.
...in 10-years since 1995, South Africa's gold production has fallen 34.4% or by 179.7 tonnes.
^----(from url)----^

Peak oil got your undies in a bunch? Try "peak gold" on for size.

When choosing between a gold bar (or coin) and a gold mining share, consider which one will definitely still be around in a thousand years. You'll then have a pretty good idea which one you can therefore also reliably count upon during the interim years -- the years that are especially relevant to your personal timeframe. Choose the metal. Choose peace of mind.
R.
________________________________

Put a firm foundation under your portfolio. Choose gold -- it's a better material for the task than paper.

R.

@ TC,

Is there a lease rate on the Bride derivative?

I meant "Bridge" derivative! Bride derivatives are WAY OFF TOPIC.

Freudian slop!

When the government manipulates the economic statistics to hide the true state of the world economy;

When the fiat money system guarantees ever growing imbalances, debt and money creation with no end in sight;

When the base components of the financial system (stocks, bonds and their derivatives) rely for value not on their individual merits but their appeal to highly organized and capitalized speculators;

When no analyst or money advisor is required to ascertain the complexity of the economy and financial markets because they are all driven by a single principle -- speculative interest;

When rational expectations become exacerbated to the point where chance, or luck, overrides intelligence;

Then, be it resolved, that the only sensible course of action is to buy gold in the form of coin and bullion, sit back and let the tide of events take us where it will. If, indeed, the society has succumbed to a baser view of value as the evidence suggests, then we must know that for now there is no other rational alternative but gold ownership -- gold, which in the end, stands as the gaurantor of wealth no matter what happens to paper assets.

Something about that word that makes you want to skip the letter "G"
Sir Black Blade must be having a heck of a time teaching how to Build Brides.
Slingshot----------<>

http://www.financialsense.com/fsu/editorials/marketpulses/2006/0416.htmlsnip:

Moving forward to the metals, both gold and silver remain en fuego. While both investors and traders have attempted to isolate "the top", those who have exited their positions are finding it extremely difficult to angle their way in for re-entry at lower levels thus far. Although both are overbought and in need of some consolidation, either through price, time, or a combination thereof, there's no doubt that the secular bull remains in tact. Interestingly, at today's prices, 1 ounce of Gold buys approximately 47 ounces of Silver. Historically, the ratio is in the 17-20:1 range, thus we would not be the least bit surprised to witness a further narrowing in the spread, albeit at much, much higher prices!!

The world remains awash in liquidity. How is one to know, now that "Big Ben & Co." have done away with M-3? Did they not ask the masses for trust in "Team Transparency"? The price action in Gold and Silver are telling us. While the Fed and central banks worldwide contend that inflation is under control, or non-existent for that matter, the "whites" on their knuckles are starting to show, as they grip the stick and continue to force feed baby incremental rate increases, all the while they have both feet stomped on the pedal-to-the-mettle in an attempt to engineer the soft landing.

What to make of it all? We're not quite sure. However, one thing is for certain from our perch, and that is the continued systemic destruction of the purchasing power of the dollar (i.e. inflation), or as we refer to it as the "transfer and confiscation" of wealth. Somehow, we get the feeling that this plane is coming down without any landing gear, thus buckle-up, close your eyes, and buy gold and silver with both hands!!

http://www.financialsense.com/editorials/navarro/2006/0416.htmlsnip:

In 2000, the conventional wisdom said it's different this time when the yield curve inverted. The rationale then was it was an "artificial inversion" due to the low outstanding amount of thirty-year treasuries so no recession would be forthcoming. We all know what happened then.

Today, we're again told that it's different this time. The new rationale is because China and Japan are buying US Treasuries, they are thereby keeping yields on long-term paper artificially low. This leads us to ask, If Europeans or Americans were the ones buying bonds instead of the Chinese or Japanese, would it still be artificial buying.

The 10-year rates closed Friday at 5.036% and the 30-year is well over 5.12%. There is a clear "slowing" in real estate nationwide particularly in the fast moving west coast California markets and southwest Arizona and Nevada along with some of the stronger east coast markets in Florida, Washington, D.C., and Boston. Foreclosures are at 20-year highs and in places like Denver, it is downright ugly. Lending constraints are also beginning to tighten down. The jobs continue to come in "just right" according to the BLS numbers, but when you dig down and dirty, most of the jobs appear to be marginal at best, with the service and Real Estate sectors driving most opportunities.

With manufacturing jobs disappearing and interest rates rising, here's my question: Is the growth in Real Estate, which has recently gone parabolic, going to continue? My bet is not.

Wage growth in the US is flat at best. Higher interest rates will cause some major economic slowdowns in the next 3 months to a year as rates for ARMs and exotic mortgages are reset in a big way.

Consider this: When a 400k home is reset at the higher interest rates of today, most people will see a full $1,000 a month difference in their payments. Where will the strapped consumer who used the housing ATM to finance purchases the past 4 years get this additional income? Maybe they will have to sell that house and downsize. Maybe, their neighbors will be doing the same thing.

It really is a fine line that the Fed has drawn in some very thin sand. I hope Ben Bernanke is a true artist because I don't see how the higher interest rates and higher commodity price inflation will translate to anything but lower consumption over the next few years. The parabolic move we had in real estate is first going to slow and then revert to a mean. In this process, I would not be surprised to see Real Estate move swiftly down and cause a big ripple in the economy.

The broader point here is to show that this certainly won't be the first or last time we ever hear the term it's different this time. However, we should be on guard, because whenever we hear it's different, it usually isn't.

And Sir MK strikes first with a poetic incantation against the evil that stands on the great Oaken Table of Yore!

http://www.financialsense.com/fsu/editorials/gnazzo/2006/0415.htmland one more-

snip:

Gold stands in the way of irresponsible bankers that will inflate and inflate, continually debasing and devaluing our currency of its purchasing power. Gold is the ever-watchful sentinel that gives first warning of the banker's misdeeds.

The bankers know this � it is why they fear and shun gold. It keeps them honest, healthy, and wise. However, their desires seek out other shores more distant and alluring. The pull of nature is too strong � and they are too weak.

As we stated in Gold Wars: Intervention and Manipulation during a conference organized by the World Gold Council in Paris on November 19, 1999, Robert Mundell, Professor at Columbia University and 1999 Nobel Prize Laureate in Economics, made the following remarks during the question and answer session after his speech on "The International Monetary System at the Turn of the Millennium":

"Gold is subject to a lot of elements of instability, not the least of which is the attempt on the part of several big governments to make it unstable. [...] If you notice what happened in the past 20 years in government policy in respect to gold, nobody sold gold when the price was soaring to $800 an ounce. It would have been a good deal and it would have been stabilizing if they would have done so. But people sell it when it hits bottom; the British have been selling gold now that it seems to have hit the very bottom. That element � governments selling when the price is low or not selling when the price is high � makes it destabilizing. Governments should [...] buy low and sell high."

If interest rates have been manipulated downward since 1995, and with them the price of gold, then it would seem to make perverted sense that now that interest rates are going up � that gold should go up as well.

Therefore, does it still hold water that either gold or interest rates are wrong? Maybe � maybe not: maybe both.

Which relationship is right � should bonds and gold march together or in opposite directions? In addition, might the present relationship change again in the future?

I believe that those capable of such wizardry have persuaded interest rates to steadily fall as the charts indicate. Consequently, the long existing inverse ratio between gold and interest rates no longer holds sway � at least perhaps for a bit longer.

Now gold is rising with interest rates. I do not believe the Fed and company want the long end of the yield curve to rise. It will destroy what has taken them decades to pull off. It might even destroy the real estate market and with it the economy.

We have a dilemma: just what is the Fed up to? Do they want an inverted yield curve as we have repeatedly stated? Has the Fed lost control? Perhaps they no longer have the power to persuade interest rates to heed their beck and call.

The most horrid of possibilities is that rising interest rates are the desired choice. Perhaps a big hit to the real estate market is in order, as who forecloses on the property?

Who gets to keep whatever monies have been paid to date, and now gets to confiscate the property as well. A piece of property that cost him nothing to lend the money to, and which he can now lend to another � ad infinitum.

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

To summarize a couple key points I got from the wise and experienced Larry Jeddeloh (www.tisgroup.net, a MUST HAVE service for those that can afford it) of the Institutional Strategist. Maybe you cannot afford NOT to get it.


1. Several more wars in the Middle East are happening as the battle for control of 4/5th of the world's light sweet crude continues.

2. Shia occupies the great majority of the land where this crude oil exists and Sunnis run the countries where most of it exists. On Shia-occupied land Sunnis are making a whole lot of money.

Now some of your and my points

3. The Shia, Sunnis and Kurds, as well as smaller groups in the region, all fear annihilation at the hands of one another. There will be no mixed group governments that last.

4. As you and I have both pointed out in the past, the pipeline systems in Iraq and in Saudi Arabia are very vulnerable. Larry also makes this point.

5. As we have been mentioning for years, the demand for oil in China, Brazil, India and other emerging countries will continue for many years. Now that the growth genie is out of the bottle governments are under tremendous pressure to continue the growth and provide higher standards of living for their people.

In China it means revolution if it does not occur. In India, Brazil and elsewhere it means loss of power for the ruling political class and the stopping of their income from the public trough and corruption.

6. Last time I checked wars never did anything other than increase the debt and budget deficits of the countries involved in them.

-Goldilox

6.b. . . . and entrench the powers of them what rally for them while the masses scramble for survival.

While the DOW broaches 11,200 for the umpteenth time, PoG continues its upward march, with "correction" so far, amounting to little more than a pause to catch its breath.

Certainly not in the baseball sense, but 11,200 sure seems like a "rally cap" for Wall St.

Druid: Good read. My comment awhile back about oil and gold now serving as proxies for serious dollar devaluation are in lieu of the Dollar Index serving that role as a function of interest rates. The Dollar Index, like so many others, is antiquated and range bound but extremely useful as a tool for classic misdirection.

The paper faction can still get a hell of a lot of mileage out this Index as they play up any type of noise they can muster to correlate with the direction.

Another missed opportunity.

http://www.gold-eagle.com/editorials_05/willettalway041706.htmlRe: "What happened to $13 Ag? Another missed opportunity." According to Brady Willet, you may have another chance:
Why Not Squezze the Charmin - Brady Willet - April 18

http://today.reuters.co.uk/news/newsarticle.aspx?type=businessNews&storyid=2006-04-18T181922Z_01_L18460789_RTRUKOC_0_UK-MARKETS-PRECIOUS-EUROPE.xml&src=rssWhen John Reade, precious metals analyst at UBS, says as he does here, "We recognise that prices are above what is justifiable on the basis of supply and demand fundamentals -- but as the moves of the last nine months have demonstrated, fundamental factors do not seem to matter very much at the moment," we would all do well to recognize that he has taken only a very shallow view and that there is an undercurrent of deeper, central banking- driven fundamentals that he hasn't even begun to acknowledge as part of the scenario.

R.

Considering the POS behavior since your post, you might just as well have bemoaned the passing of $14 too ! ($14.07, as I type).
C!

http://www.iran-daily.com/1385/2540/html/economy.htmTEHRAN, April 18--Record high gold prices will negatively affect the already critical situation of inflation in Iran, said a senior Management and Planning Organization (MPO) official here on Tuesday.

Mohammad Kordbachcheh, MPO director general for macroeconomic affairs, told Fars news agency that gold is a major consumer item in Iran, stressing that a rise in the prices of gold and gold coins will worsen inflation.

He called on the Central Bank of Iran (CBI) to announce its figures on the status of the precious metal in the basket of consumer goods and services to enable analysts to determine the exact impact of high gold prices on other economic indices.

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

I am too stupid to find the sense in that, unless it it just a means to an (unstated) end. To be sure, I like Vietnam's latest initiative exploring implementation of official inflation indices for the purposes of central banking monetary policy that were NOT biased by gold's performance.

When a significant revaluation of gold is foreseen as a necessary inevitability, it is best to simple cut the mooring and let it FREELY skyrocket rather than having it simultaneously rip a CB's attempt at a stable currency (vis � vis prices in the broader economy) to shreads.

It wasn't lightly that FOA coined the phrase "free gold".

R.

http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=564719398611715838Gold, silver reach fresh multi-decade highs
MADLEN READ, AP Business Writer
April 18, 2006 12:32 PM
NEW YORK (AP) - Snippits: "Gold and silver prices on Tuesday extended their rise to levels not seen in more than two decades, driven by turmoil in the Middle East, rising oil prices and a weakening U.S. dollar."

"Driven" prices are as much in motion as redefining themselves towards more realistic levels, on a daily basis.

"Because gold is denominated in the dollar, its long-term performance will depend largely on that of the U.S. currency - which has been weakening due to concerns over the U.S. economy and the budget and trade deficits.
''Gold is going to turn more into a monetary concern ... the need for an alternative to the U.S. dollar will be evident,'' Grandich said."

Various reasons the dollar is heading south have been seen for years, but may now be viewed at short range. Gold has also been heading higher in all currencies, reflecting global monetary and fiscal imbalances including debt, asset imbalances, revenue shortfalls and derivative risks.

"Because gold is now in territory not seen in 25 years, price resistance levels are more psychological than anything, Hunter said. Still, market watchers are saying the metal could soon be flirting with its all-time high of more than $800 an ounce from early 1980.
''We remain very firmly in an overall uptrend,'' Hunter said. ''The one caveat would be that given the rapid rise in prices we've seen in recent weeks, it opens the door for some periods of weakness ... but the underlying uptrend remains intact.''
''We're only in the fourth or fifth inning in the bull market in gold,'' Grandich said, adding he expects gold will likely rise to $650 or $700 an ounce before seeing any big pullback, and that silver will easily reach levels of $14 to $15 an ounce."

As "big pullbacks" become attenuated and less frequent, they are sometimes less unpredictable.

http://www.thedailystar.net/2006/04/19/d60419050148.htmPrice of the precious metal is soaring in domestic market, as its price is also increasing in international market, Anwar Hossain, president of Bangladesh Jewellery Manufacturers and Exporters Association (BJMEA), said.

...gold is regarded as an alternative investment in times of rising inflation and political uncertainty.

Big economies are also reserving gold as an alternative to US dollar, which is also responsible for high prices of the precious metal, the BJMEA president said.

The gold prices have been witnessing continuous rise since the 9/11 incident as many countries especially Gulf states have resorted to gold reserves instead of US dollars...

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

"...gold reserves instead of US dollars..." is a linchpin in the the leveling of the economic playing field so that future generations need not live in fear of their economic wheels suddenly falling off due to a buildup of excessively asymmetric loads being forever forced across uneven terrain.

R.

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

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

TUESDAY Market Excerpts

April 18 (from DowJones) -- Gold futures once again climbed to fresh quarter-century highs Tuesday, helped by technical momentum, worries about Iran's nuclear intentions and higher crude oil, traders and analysts said.

COMEX June gold settled with a gain of $4.50 to $623.30.

"The Iranian situation and all of the related strength we're seeing in the energy markets are adding to the general bullishness in the metals markets," said Dan Vaught, futures analyst with A.G. Edwards.

"Basically, every time the Iranian president makes a new statement, it increases the amount of tension, at least in the metals markets."

And this in turn has prompted safe-haven buying of gold, continued Vaught.

Market participants are thinking about several potential scenarios in the Middle East if Iran eventually should develop nuclear weapons, said Vaught. One worry is that Iran would be able to dominate Middle East and OPEC politics, he explained.

But if the U.S. and/or Israel should take military action, "you are really talking about a potentially nasty conflict," added Vaught.

As gold was closing, May crude was up 40 cents to $70.80. It has since hit a contract high of $71.40.

The dollar remains on the defensive and this was yet another factor underpinning the metals, related Vaught. As gold was closing, the euro had risen to $1.2284

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

http://news.independent.co.uk/business/news/article358593.ece19 April 2006 -- The world's leading banks urged Gordon Brown today to use his powerful role at the International Monetary Fund to drive through reform at the fund this week in time to avert a financial crisis.

The Institute of International Finance, which represents hundreds of the world's largest financial institutions, said the growing risk of a major shock to the financial system made reform "crucial".

The warning came as the Chancellor, who chairs the international monetary and financial committee (IMFC), prepares to fly to Washington for the spring meetings of the IMF and World Bank. The meetings are set to be dominated by fears of growing global imbalances and an intense debate over the role of the IMF in a globalised world.

There have been calls for a shake-up in the voting system that would see Europe cede some of its representation to Asian economies to reflect the massive changes in the world economy.

Mervyn King, the Governor of the Bank of England, said this year the IMF must embark on urgent reform to restore its legitimacy in a changing global economy.

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

Throughout history, within the wide body of gold-minded people (advocates and investors) is always to be found a core (fringe(?!)) group of perma-gloomers who never have a positive thing to say about anything, regardless, and on the basis of no legitimate analysis. On the balance of wisdom it usually serves one well to ignore half of what they say and to take the other half with a grain of salt.

Now where this gets interesting is when one takes inventory of bankers who, by nature of their position, tend to maintain a stiff upper lip and strive to have an even keel from which to navigate the uncertain waters ahead. And yet despite this, conditions sometimes arise in which the gloominess of bankers can, by comparison, make even the gloomiest of the small goldbug fringe look like pikers with training wheels.

And lately, there's been plenty of gloomy unrest from the quarters of the banking fraternity.

"Harrrr! Batten down the hatches, me boys, there's a wicked storm a' brewin!"

R.

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=M3&xml=/money/2006/04/19/cmgold19.xmlTelegraph 19/04/2006 --

Maverick fund managers such as Hugh Hendry and William Littlewood are still betting on gold, while GMFS, the precious metals consultancy, has suggested that gold could surpass $850 a Troy ounce this year.

Such is his enthusiasm for gold that Hendry has 10 per cent of his new European fund invested solely in the asset - in gold exchange traded funds or gold mining companies.

"...my job is to be ahead of the trends," says Hendry. "I'm allowed to invest 10 per cent of my fund outside Europe and I have taken gold to the max."

Hendry has played the gold market for several years now... and he firmly believes the gold bull run - now six years old - is still in its infancy.

"Bull markets follow bear markets and vice versa. We have had the greatest bear market in gold, which lasted for 25 years until 2000. We have barely scratched the surface," he says.

Hendry reckons we are about to mirror events of the 18th century when the gold standard (a monetary system that backs its currency with a reserve of gold) was introduced. It subsequently lasted for 200 years.

"The US closed the gold window in 1971 and the central banks were put in charge to rescue the economy," he says. "They have printed money for 35 years - greed assets such as equities, bonds and property have risen 20 times over that period and people are now becoming fearful of the consequences of easy credit - suddenly gold is alive."

...For instance, the US current account deficit is causing much anxiety and a slowdown in its consumer consumption could have negative implications on the dollar with a knock-on effect on the world economy. Analysts reckon that if the dollar shows signs of weakening, Asian banks will bail out of dollars into gold as a safety valve, boosting demand further.

...Peter Hambro of Peter Hambro Mining says there is nothing but bad news around.

"It's all military and consumer debt in the US and Israel and bird flu," he says. He believes it makes sense to have around 3 to 5 per cent of a diversified portfolio in gold. "People think nothing of buying insurance when they buy a house and gold provides that for an investment portfolio."

The gold bulls also highlight that while it may have doubled in price in the past three years it is still some way off its peak in real terms - in other words, allowing for inflation. Gold was priced at more than $800 an ounce at its peak in January 1981 and Jill Leyland, an economics adviser to the WGC, reckons it would have to hit $2,000 today to be as expensive.

"What's more, figures show that gold has held its real value since 1596," she adds.

...But predicting gold price movements is extremely difficult. Birch and Hambro won't be drawn on whether the price will break through the $800 barrier or beyond. Meanwhile, Harris reduced his exposure to gold from around 10 per cent to 2 per cent in December - a move he acknowledges was a mistake. "I thought the market had peaked, but I ended up buying funds [such as Craton Capital Melchior Precious Metals, MLIM Gold & General and ACDS Australia Natural Resources] again in February."

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

Gold funds are buying other gold funds, selling funds "too early" and then buying them back again, but has any one of them given serious consideration to the strong hands who are quietly picking up the metal in the meanwhile? At substantially higher prices nobody will still want to be buying all this yellow paper as a surrogate for the sure thing -- metal. Those with actual ownership of coins and bullion will have the last laugh and the longest staying power. I'd wager than Hendry has some in his personal portfolio.

R.

http://www.bloomberg.com/apps/news?pid=10000080&sid=aTBs9vlvviyU&refer=asia
Snippit:

April 19 (Bloomberg) -- Jim Rogers, the former George Soros partner who foresaw the start of a commodity rally in 1999, said the boom in energy and raw material prices will endure, driving gold to a record $1,000 an ounce.

``The shortest bull market for commodities lasted 15 years, the longest 23 years,'' Rogers, 63, said in an interview. So if history is any guide, ``they've got a long way to go.''


Black Blade: Sounds about right to me. This is a secular bull market!

http://news.inq7.net/nation/index.php?index=1&story_id=72990
SNIP
"While we are hoping that this [oil above $70 barrel] will be a temporary phenomenon, nevertheless we have to prepare for any eventuality that it will persist for a month or two or longer," the [Philippines] energy secretary [Raphael Lotilla] said.


http://www.americanchronicle.com/articles/viewArticle.asp?articleID=8265
SNIPS
Any way you slice it, these next couple of years are going to be an utter DISASTER! From War to a failing economy, collapsing dollar, radical climatic changes, the outsourcing of American jobs, and terrorism on a global scale!
+
Thus I fear the paradigm edges ever closer to the Hitler years. All it will take will be a total collapse of the dollar, general depression AND domestic terrorism and a crazy man with balls the size of Tombstones, will step forward.

Brother: Where you gonna place your Shorts?

....In the wash machine!

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

If you're long the future's market and things go against you in the extreme, the price goes to zero; your loss is limited. If you're short the futures market and things go against you in the extreme, the price can go (theoretically anyway) to infinity ~ as can your loses. Some of these shorts in it for the long run, makes one wonder if the Fed is just handing them free money?

Copper closed about $3.05/lb, today. And they said it wouldn't hold over a buck--then two... Three?

Where can the shorts run? Nowhere seems safe now. The dollar? There's a bet. Bonds?maybe...but then...they'd be turning against themselves.

http://groups.yahoo.com/group/gata/message/3791Latest GATA dispatch.



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

gata-subscribe@yahoogroups.com

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/04/19/cmgold19.xml&menuId=244&sSheet=/money/2006/04/19/ixperson.htmlSNIPS
... the biggest risk to the gold price reversing is if the economic landscape is in decent shape. A strong dollar and benign inflation will give investors a reason not to buy gold; the reduced demand will soften the price.
+
People are saying the US dollar could collapse but they have been saying that for years and it hasn't materialised. Why weren't people buying gold when it was $250 but want to buy it at $600?" he says. "Gold has had a hell of run and it needs to take a breather - but I'm the lone wolf in the forest over here
==
Some are very frightened.
The truth hurts or what?
Why does the gold bashing continue?

Invisible Hand: I got a kick out this quote from the excellent article you post:

"He believes it makes sense to have around 3 to 5 per cent of a diversified portfolio in gold."

What a laugh! That percentage is nothing compared to what a person now should have accumulated if financially able to do so. Most reading on this site, I would guess, have way over that percentage. It's true though...There's no rush like a Gold Rush.

I've been to three shops the past couple of weeks (at home and away). In two of the three, Gold was basically gone. Silver bullion was going fast too. I watched one construction man drop $5,000.00 on the counter at a shop in Pocatello, Idaho, two weeks ago and haul away the silver booty. Got me so excited, that I hauled out everything that I had in my pockets at the time--about $700--and hauled off a lot of the rest! And hell! I wasn't even that interested at the time in Silver. I hadn't bought silver since it hit $6.50 a few years back-- and had become too heavy to carry...I had decided that was enough. But there I was, hauling out more at higher prices. Was I nuts? Yes! Maybe. It's the fever! The greed! The avarice! It's what gold and silver does to a man in a Gold Rush!

Another fellow looking at the fancy high-end, high priced MS Silver Dollars, asked the counter person if she had any specials on Silver that she wanted to get rid of. She laughed and responded, "The cupboards bare, Now!"

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

The question: Why does the gold bashing continue?

My answer: Fear, control, and containment.

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42102&NewsKind=Current%20AffairsSNIP
Iran is against an increase in OPEC production, an official was quoted as saying, arguing that the cartel did not have the capacity to do so, according to an AFP report.

http://news.ft.com/cms/s/0a10f2ec-cf00-11da-925d-0000779e2340.htmlSNIP
Opec warned on Tuesday that soaring oil prices were slowing global economic growth as one of its most vocal members admitted there was little the group could do to reduce prices from yesterday's record highs.
==
Connect the dots!

snipped from "Globe and Mail" (competitor names removed):

Don C. has worked at xxxx in Calgary for more than a decade and, with the small exception of some pre-millennium panic buying, he's never seen so many customers carting off silver bars and gold coins.

"I've been in the business since 1991 and these are new highs for me, for both metals," the general manager says.

He's not the only one surprised by the growing appetite. In Ottawa, silver demand at the Royal Canadian Mint tripled in the first quarter. yyyyy, a global gold dealer based in Montreal, has hired 10 new salespeople to take calls, while another distributor, based in B.C., is busy shipping coins across the country.

Rising geopolitical tensions and record oil prices are boosting the allure of precious metals, sending gold to its highest level since 1980 and silver to a 23-year high yesterday.

But it's not just exchange-traded funds or mining company shares that are popular. Canadians -- and investors around the world -- want the real, physical stuff.

In Calgary, Mr. C. is seeing huge interest from middle-aged and older people who have cash on hand and want to park it in gold and silver.

"We're seeing a lot of new faces," he said. "It's basically cash-and-carry. People like to have it in their hands."

Like other dealers, Mr. C. says silver demand is particularly strong. Sales of 100-ounce silver bars are surging and, at $1,692 a pop, many customers are buying several bars at a time. Clearly, silver prices that have already surged 58 per cent this year aren't deterring clients. Coins are also selling at a steady clip, he said.

While Albertans may be the biggest buyers of gold and silver these days, interest is growing across the country.

At the 98-year-old Royal Canadian Mint, investment demand for silver Maple Leaf coins more than tripled in the first quarter while demand for one-to-10-ounce gold bars doubled, said David Madge, the Mint's executive director of bullion and refinery services. He expects silver sales this year will be the best in a decade.

You know commodities are hot when people are pawning their old gold and silver trinkets to the Mint.

The Mint's recycling business, which buys old jewellery or silver flatware from individuals and turns them into coins and bars, has soared in recent months in lockstep with the run on commodities prices. Thus buyers of Canadian gold coins can't be certain whether they're derived from Aunt Bessie's wedding ring or come fresh from the mines.

yyyyy, the world's largest Internet-based bullion dealer, knows this better than most. It added about 10 salespeople to its desk earlier this year to field floods of incoming calls.

Investor interest has soared for several reasons, said J, yyyyy's investment products analyst. Demand in China and India is growing, while supply is dwindling. Worries about a decline in the U.S. dollar are mounting. Energy prices are soaring and tensions in Israel and Iran are rising.

Those factors are prompting more people to see gold as a hedge in their portfolio, he said.

"It's very, very strong and across the board, and not just in Canada," he said. "People are feeling more comfortable with holding gold than they had before."

In B.C., Martin L. is managing director of the country's largest direct distributor of Maple Leaf coins. His company, zzzzz, is seeing everyone from plumbers to bankers adding precious metals to their holdings.

"People in the trades, who have their own small companies, you see them buying and putting 5 to 10 per cent of their portfolio in gold," he said. At the same time, "a lot of business people, with higher income, are putting high hundreds of thousands or even a million or two million into gold."

Goldilox

Here's an article that suggests, at least in Alberta, that "Everyman" is getting in on the "gold rush" - maybe the Albertans, closer to the gold fields, are still ahead of the larger masses.

The first interviewed dealer, however, has only been in the business since 1991, so he cannot compare his experience with 1980. Too bad.

http://www.marketwatch.com/News/Story/Story.aspx?siteid=mktw&dist=moreover&guid={F1CB3815-BD6B-4DBB-9D5B-1B13F240330B} Gold keeps climbing, up $4 to 25-year high | MarketWatch | Ciara Linnane | 8:37 EST, April 19, 2006
No effervescence or objective coverage here, thank you.

http://quotes.ino.com/chart/?s=CBOT_US.M06 INO Charts and Quotes - Interest Rates - T-BOND Jun 2006 (CBOT:US.M06) 5 Day view
A chart. Nothing out of the ordinary.
-.50 @ this time, subject to comfortable, modest, moderate and mild change.

http://www.mineweb.net/sections/whats_new/247041.htmsnip:

JOHANNESBURG (Mineweb.com) -- Anyone needing further proof that investment in commodities like gold and oil have gone mainstream, got it last night. Jim Rogers, celebrity investor, bestselling author and famous for his apparent insights into commodity markets, is the latest to join the cheerleaders.

In an interview with Bloomberg published overnight, the until now muted Rogers added his voice to those who believe oil, gold and other commodities have entered a Super Cycle. He expects the upswing to last some years and drive prices much higher.

Rogers raised the bar for gold, predicting a peak of $1 000 an ounce although he has not set a time limit. His public pronouncement follows the forecast of $850 earlier this month by Paul Walker, who as chief executive of respected gold market researchers GFMS is another "serious" commentator.
Just how opinions have changed is reflected in skeptical response last December to cycles analyst Issy Bacher's $700 forecast on Moneyweb Radio. Then gold was trading at $490. Last night (April 18) in New York it set a fresh quarter century high of $624, adding almost $10 on the previous day.
Bacher remains upbeat, but warns the next barrier will be far tougher to crack than the $600 mark bullion cruised through this week. He reckons $700 was the "true" high of the 1979/80 gold bull market, with the spike to the record $850 being more froth than substance.

But as in December, the investment crowd is not paying much attention to Bacher's views. This time he is regarded as overly conservative.
Commodities are now highly fashionable. With relatively small proportions of their portfolios allocated and the flow of money from institutional investors being stimulated by the likes of Rogers, the boom might have only just begun.

Rogers is sure to be quoted in dozens of professional fund management meetings today having pointed out that the shortest commodity bull market on record lasted 15 years; the longest 23. The latest cycle, the start of which global investment guru George Soros's former partner predicted in 1999, is barely four years old.

And, for the moment, this young bull it is able to draw strength from a seemingly never ending stream of positive data.

Last night's buying pressure, which also took the crude oil price to a fresh peak (Nymex up 95c a barrel to $71,35) was aided by news from China that its economy grew at an annual rate of 10,2% in the first quarter of the year.
Stronger growth from China, naturally, translates into higher demand for the commodities its economy absorbs as it expands. And as we haven't seen a significant oil discovery in three decades or a major new mine in ten years, supply has no way of catching up anytime soon. Which means higher prices.
In the past year, crude oil is up 54% and the gold price is 48% higher. With virtually all the experts calling prices higher still, some feel it is becoming scarily reminiscent of the 1999/2000 dot.com bubble.

But as the current upswing is a calf compared with the 22-year bear market which came before, it Is far too early to start worrying. Especially when, in real terms (inflation adjusted), both oil and gold are some way off the peaks established in the previous cycle.

In the ultra short-term another exciting day beckons for the resource-laden JSE, with the All Share Index poised to break through 21 000 for the first time.

On top of the boost it will receive from the higher gold price comes last night's best-in-a-year increase on Wall Street where the Dow and S&P rose 1,8% and the Nasdaq 2%. The New York equity surge came on fresh evidence that the US's upward interest rate cycle is drawing to an end.

Few seem to have made the connection that rising commodity prices are inflationary. That, in turn, needs to be combated through raising interest rates.

In the market's current mood, thinking that far ahead simply does not come into the equation. For the moment, the trend is the market's friend. Enjoy the ride.

-Goldilox

Jim Rogers, THE LATEST?

Was this article written in Y2K, or what?

http://www.free-europe.org/blog/english.php?itemid=56The answer to the gold-bashing question will solve ALL the mysteries of the goldmarket.

Gold (metallic gold) is the one and only all-comprehensive competitor of the financial-monetary industry (the AngloAmerican-dollar-model).

This industry has only one trump, i.e. PERMANENT MONETARY DEVALUATION through money-creation. The industry has only one task, i.e. to keep the whole mess LIQUID AT ANY COST. This can only be achieved through the exclusion of metallic gold (from the system). Paper gold within the system, metallic gold outside the system.

Historically, the industry has often been faced with liquidification problems.

Since 1971 � 1980, the bashing of metallic gold in possession has become the main foundation upon which the whole liquidification is built. An indication of this is the fact that the stock and bond markets are being kept very liquid (through hyper-derivatisation), whereas the price of gold (POG) can no longer be called contained.

We are being told that gold and oil would increase in price because of international tensions. But why do the stock-markets then not crash or at least decrease in value?

Very good question, Madam. Unfortunately, this is a conundrum (1) and we can thus not provide you with an answer.

Conundrum? No, the whole dollar system is about to implode and the elites know this but they are still hoping for a miraculous solution, they are hoping for a deus ex machina (2).

By liquidifying to the extreme, the gearing ratio (degree of debt?) increases faster than the economic growth. This results in massive (explosive) saving/reserves surpluses and similar deficits. The liquidificators want to force those surplus-builders by all means to stimulate growth (Asia and petro-wealth). The latter are however not prepared or not able to proceed to this stimulation because of the all-encompassing dominance of the dollar-liquidificators � who (the latter) can only supply "liquidity" and nothing else, With those surpluses, one can buy nothing from the dollar-debt producer (the US of A).

The whole world, outside the US of A, is thereby FORCED to mutually transact business with a dollar-unit which has no legal tender outside the borders of the US of A. This explains why the old dollar IMF protocols will soon be ignored and why it is already too late to reform the dollar-dominated IMF. This explains also why the EU slows down the gold-collaboration and why Gordon Brown, Her Majesty's Chancellor of the Exchequer, could not mobilise the IMF gold (sale - partial revaluation). It also explains why the Rothschild family left the gold-fixing business long ago.

Even if Asia would ever be granted its legitimate power in the IMF � it will never respect the old IMF protocols.
By accepting and using the IMF-dollar-regime, Euroland has respected these protocols for decades.
Asia looks forward to nothing less than a complete transfer of power.

So, my dear cowboys, get ready for Armageddon in the US of A.

notes

(1) a conundrum is a riddle whose answer involves a pun, says Webster's, a pun being the humorous use of a word or phrase so as to suggest its different meanings or the use of words that are nearly alike in sound but different in meaning

(2) a deus ex machina would be a resolution, says Wikipedia, to this story which would not pay due regard to the story's internal logic and which would be so unlikely that it challenges suspension of disbelief; allowing the elites to conclude the story with an unlikely, but more palatable ending.

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

To the best of my knowledge there are no gold fields in Alberta, just lots of oil. Of course, that doesn't disqualify them from being smarter than the average individual and holding physical gold in hand (over paper gold or whatever you want to call it).

Thansk for the article - good to see someone's finally recognizing gold and silver's value!!!

http://www.usagold.com/gold-coins.htmlLast week, amid typical activity associated with the Central Bank Gold Agreement (i.e., reallocations of bullion), one of the Eurosystem central banks actually **BOUGHT** GOLD COINS?

They also dumped a net 0.1 billion euro worth of foreign currency.

R.

There was this plausible theory (pandagold etc.) that the manipulation of Silver is an integral part of the Goldmanipulation scheme.

Now either

1)they push Silver to distract a lot of money from Gold
2)the Silver manipulation is blowing up now in advance of Gold
3)POG reflects that there just is not enough metal available and big money knows it

@ Rimh,

I did not mean to say there were gold fields in Alberta - why, one might start a false gold rush with such a brash statement - just that they were "closer" to them than other points of reference.

Given the high concentration of mining representation on the Canadian exchanges, "closer" can be interpreted in more ways than geographic.

It's even more interesting that Canadians, whose currency seems less at risk than the sawbuck, are flocking to PMs ahead of such movement by the US populace.

We were living in Alberta when I first "got the message" about fiat currency and PMs. That was in the mid 70's. As I've suggested here before, AG and AU were very kind to us around 1980.

- Survivor

Yes, perhaps the move by Albertans is twofold: They are a resource rich province so to hold gold is fairly close to their roots; and they are a rich bunch with all those oil revenues (Klein, the premier, recently gave everyone a $400 bonus and they still have the lowest taxes in the country) giving them lots of extra spending cash to put into gold - I mean, how many pickup trucks, ATVs, boats, etc. does a guy need before he has to spend his money on some real wealth....

Nice rally by the PMs into the Crimex close.

"Gold will be re-priced but once in your lifetime." (quoted from memory)

Wonder if he checks in now and then? Actually, the story has gone worldwide now. I'll bet our old friends "in the know" are busy battening down their hatches along with the rest of us...

I'm assuming that was FOA and not Another.
FOA promised to return when the "rain" comes.
I agree the price trend occurring in these five or six years of the bull market is just the beginning.
Would be fun to see the afterhours market OTC access revalue Au in one fell swoop this spring, or any time and place.
May happen this year or next, or as early as this spring or summer IMO.

I wonder what was meant by the "Once in a lifetime" quote. This sure feels a lot like deja vu/1980 to me.

- Survivor

Perhaps the re-pricing of which he speaks will make the 1980s spike look like a speed bump next to a high hill.....

Someone know off hand what we might all expect for limit up shutdowns on the different world markets? For instance, what price jump stops the London market from trading? US markets? Asian markets?

Thanks.

http://www.cbc.ca/story/business/national/2006/04/19/commodity-060419.htmlCBC News: Commodity price correction coming, TD Bank economists warn - April 19, 2006
Short report backed by authoritarian lofty assumptions and no fundamentals. Makes a perfect alibi to continue holding IRA's, bonds, dollars and similar proxies, for those needing the quick, comfy summation of available investments.
I can agree with the part regarding US slowdown later this year, which is when the US recession may be too obvious to be denied. But that would improve the case for gold and make only a small dent in many of the named "commodities".

Trust the far-left leaning useless excuse for a national broadcasting corp. to slam the very source of major tax revenues to the government! Sorry, but there's no love lost here for CBC. Just another hand in my pocket....

While the source of the report is the TD Bank, the so-callled journalist who wrote it did not seem to consider getting any alternate thoughts from any pro-commodity sources who may have a better grasp of FUNDAMENTALS!

Your emails have been bouncing (note: unclog your server inbox -- its full).

Now you can call it "official" if you'd like (but I still say it's old news -- for my part there was never a doubt). The shortest possible grapevine has given me word that the thing was not only roundly green-lighted, but the key portion was effectively singled out to be expedited. Maybe you already reached that conclusion since Easter... why does best news travel slowest? Unleash the hounds; tallyho.

R.

http://www.financialsense.com/fsu/editorials/vaughn/2006/0419.htmlsnip:

Well, how is gold these days?

Are you one of those still convinced this rise in the gold price is merely a short term rally that has reached its climax? If you follow the fundamentals you have to be aware the real forces destined to drive gold even higher have not even kicked in yet. So in other words we are barely at the beginning of a long term price appreciation of the gold price.

But let's stop here and consider the forces in motion driving the gold price higher today and now. The facts are that the rest of the world is seeing something today that American investors as a whole are totally oblivious to. Or maybe American investors in their inflated over confidence just choose to go though each day wearing blinders.

Why do American investors wear "blinders" on their eyes keeping them from seeing the economic realities of today? Read the text below and you will understand why American investors refuse to recognize the growing financial mess this country is in now.

"In the mountain town where I used to live, we celebrated "Winter Carnival" � a midwinter, weeklong festival that included winter sports, ice sculpting and a good old-fashioned parade. I remember the big Belgian workhorses pulling sleighs loaded with hay down Main Street. Attached to each horse's headgear were blinders � big black wings � that cupped the horse's eyes, blocking part of its vision." "Why do they always put blinders on the horses?" I asked my friend Sally, a knowledgeable horsewoman. "It seems sort of mean to me." "Oh, no, it's not mean at all," Sally said. "Blinders are helpful tools, and there are good reasons for using them." "Horses have limited side vision because their eyes are situated toward the sides of their heads," she explained. "Because they're only seeing out of one eye or the other, sudden movements on either side can frighten them, causing them to bolt or shy away." "Also, it's hard for horses to see what lies directly ahead, so it's difficult for them to focus down the road. By putting blinders on a horse," Sally continued, "a handler helps him focus straight ahead � on his job, his purpose and his destination." - click here!

Well, there is the answer folks as to why investors in this country wear blinders. It is because "�sudden movements on either side can frighten them�" And if folks remove these blinders heaven help the fright they would experience from looking at reality.

And by wearing these blinders the investor can "�focus straight ahead � on his job, his purpose and his destination." And what is that goal and destination the average American is seeking just over the hill? More debt and the false hope that good times will always be just around the corner�as long as you are invested "in the long term." In the long term we'll all be dead. Maybe we better start concentrating more on the activities of day to day.

Well, let's pause here and take those confounded blinders off as the rest of the world has done and look at economic reality. The following Asian news text is a good indicator of how the world community views the US dollar today without the aid of blinders. Take your blinders off just for a moment here and comprehend well what you read below and do not ignore its message.

"Mumbai, April 16: Gold is expected to touch Rs 10,000 per 10 grams in the next five to six months because of the weakening of the dollar as the US economy is fast losing its sheen coupled with the constantly growing gold demand for the yellow metal." "These findings are contained in a paper brought out by Assocham on "Yellow metal: its future pricing trends", which points out that the dollar has already lost its lustre by 40 per cent against the euro since 2001." - click here!

Just curious to ask you here� Is this what you are hearing on the US evening news or the US cable financial channels?

"The trend is unlikely to be reversed in the future as the faith of the international community in the US economy has been shaken so much that it has reached saturation point. The US economy has started sagging and the trend has become so pronounced and visible that investors henceforth prefer to accumulate gold rather than dollar," says the study."

Did I just read above that this trend has become "visible?" If it is visible to the rest of the world community why is it not also "visible" to US news networks and American financial analysts? I wonder if Katie will be able to see this "visible" trend when she begins this fall to report the news for CBS as the new network anchor?

"�the US dollar losing its pre-eminent position of most preferred investment instrument." "The report says further that gold demand the world over is constantly shooting up and has neared levels around 4,000 tonnes per annum against its supplies which remain stagnant at about 2,250 tonnes per annum." "Since the dollar is losing its glitter the emerging trend among the investing communities would be "to develop and widen the yawning gap for yellow metal accumulation which will naturally accelerate it price�."

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

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

WEDNESDAY Market Excerpts

Gold extends gains by $13, higher yet in after-hours

April 19 (from Reuters) -- Gold futures in New York shot to a 25-year peak on Wednesday as gyrating currencies and fears of U.S. inflation sped up precious metals purchases as an alternative investment.

Record-high oil prices and news that core U.S. inflation rose at its fastest rate in a year pulled investors into gold as a hedge against inflation, said analysts, many of whom felt momentum for higher metal prices looked strong.

"Really, the investment off-take is continuing unabated. It's crazy," said Bernard Hunter, a director at bullion dealer ScotiaMocatta in Toronto. "There's a lot of traditionally positive gold news out there at the moment."

COMEX June gold futures settled up $12.70, or 2 percent, at $636, after trading from $622.10 to $637.40 -- the steepest price for futures since December 1980.

Gold rose for a sixth-straight session, and was even extending gains sharply in after-hours trading following Wednesday's close.

June gold in NYMEX ACCESS electronic trading got as high $643.80 Wednesday afternoon -- up $7.80 from the close.

Uncertainty about the economy's outlook, coupled with worries about tensions in the Middle East, including the war in Iraq, has been a key factor behind investors pouring more money into gold and other commodities, analysts said.

"From a technical standpoint, the next objective is $700," said Carl Birkelbach, president and chief executive of Birkelbach Management Corp.

The dollar, meanwhile, fell to a seven-month low versus the euro after stronger-than-expected U.S. consumer price data for March.

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

http://news.ft.com/cms/s/344655e8-cfc8-11da-80fb-0000779e2340,_i_rssPage=de095590-c8f4-11d7-81c6-0820abe49a01.html(FT) April 19 2006 -- With the war of words over Iran's nuclear programme escalating and the domestic economy stalling, Iranians are scrambling to buy gold coins, sending their value soaring by 32 per cent in the past two months.

"It's unbelievable," blazed a front page story in Etemad-e Meli, a reformist newspaper, earlier this week. "It seems no investment field is as safe."

"Gold coins are Iranians� political hedge fund," says Heydar Pourian, editor of Iqtisad Iran (Iran Economics), a monthly magazine. "We keep them at home and they make us feel secure."

Commodity prices have risen worldwide over recent years partly in response to Middle East tensions centred on Iraq, but Iranians are now starting to feel they may be at the centre of a growing storm.

Hence the appeal of gold coins given as presents for weddings and new year; gold coins are a liquid and proven investment. And at 460,000 rials (about $41.50) a quarter, gold coin is within reach for all but the poorest Iranian.

By contrast, Iran's largely state-owned banking sector offers limited services, while investors face inflation put officially at 14 per cent.

Lower lending rates mean lower returns for small depositors such as pensioners who, already wary of inflation, are among those fuelling rising demand for gold coins.

While deposits in state banks lost 1 per cent in real terms in the year to February 2006, gold coins gained 21 per cent.

"Buying gold coins reflects a lack of alternatives," says Mr Pourian. "Big investors may pull out of real estate and move their capital to Dubai. Smaller investors have fewer opportunities."

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

A largely unique article insofar as it trumpets the fact that gold is particularly good and helpful for the SMALL investors, too.

Some folks like to say that "silver is the poor man's gold"; but in actual fact, GOLD is the poor man's gold. Just look to the billions of buyers elsewhere in the world. Gold is the EVERYman's gold. Remember: time and perspective go hand in hand.

R.

From my own correspondent � Re: gold bashingThe Invisible Hand (4/19/06; 08:49:23MT - usagold.com msg#: 143354)
From my own correspondent � Re: gold bashing
http://www.free-europe.org/blog/english.php?itemid=56
The answer to the gold-bashing question will solve ALL the mysteries of the goldmarket.

My correspondent sayz:

... no reaktion...

Wait until the price of gold dissociates itself from the prices of comparable commodities (palladium, silver etc.) Only then, will the train have left for "FREEGOLD"

As long as gold can be conceived (or maintained) WITHIN the commodities context ... it can be classified as being "speculative".

http://news.bbc.co.uk/2/hi/business/4923706.stmSNIP
[IMF:] The world economy is expected to accelerate in 2006, despite setbacks caused by recent natural disasters and fears over the surging price of oil.

The text under the picture may be true:
China's economy is continuing to expand strongly

http://www.iranmania.com/News/SectionView/Default.asp?SectionKind=Current+Affairs

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42135&NewsKind=Current%20Affairs
SNIP
According to an AFP report, a top US diplomat refused to rule out unilateral action by the United States to curb Iran's nuclear program but said it would be "best" to work with other countries in doing so.


http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42139&NewsKind=Current%20Affairs
SNIP
Tehran plans to step up uranium enrichment work soon and has asked European countries to help in the effort, a senior French official told AFP

==
The fun is starting. Les jeux sont faits.
The gold war is in the open now.

http://radicalacademy.com/cgi-bin/eboard30/index.cgi?board=Main&message=2916>>So, my dear cowboys, get ready for Armageddon in the US of A.<<

Armageddon, Ivo? I think I agree with you on this one. The end of the USA is - like the end of the world - foretold by every generation but realized by none.

MESSAGE =
http://radicalacademy.com/cgi-bin/eboard30/index.cgi?board=Main&message=2916

Today was interesting in the markets. We saw, interest rates up, the dollar down, and Gold up. Something that we have been seeing more frequently of late, though still not a trend, but closer. A little counter-intuitive, as we usually associated rising interest rates with a stronger dollar and lower Gold. But here we have a falling dollar, driving up interest rates, causing the bonds to fall, and gold to rise. An extremely dangerous situation.

If you were not a citizen of the U.S., would you want to hold and place your money in a currency that is loosing value? Or, buy or hold U.S. bonds in an environment of rising interest rates that forces bond prices to fall, thereby losing principal?

The U.S. Government is making all sorts of noise that the Chinese MUST revalue the Renminbi in a more aggressive manner, or face possible tariffs of up to 27.5%. If you were the Chinese, would you let the U.S. Government have a 27.5% profit on everything you ship to this country!!? Perhaps the Chinese are in the this process right now of letting the dollar fall. All that they need do, is stop buying bonds. The overhang is so great, that it forces up interest rates, forces down the dollar due to lack of demand, and gold prices increase for a number of reasons, including deterioration of the dollar.

That's what we saw today--lower dollar, higher interest rates, lower bonds, higher Gold.

Thr term limit up means nothing for it is figured in fake dollars. The real limit up is figured in feet, about 29,280 of them. To the Moon.

http://www.capitalownership.org/lib/WildeBookReview.htmA book review of "The Lost Science of Money" : The Mythology of Money - The Story of Power. By Stephen Zarlenga
Snippets:

In Karl Marx= analysis, the source of social injustice was the system of industrial capitalism; in the view of monetary reformers the villainy is transposed to finance capitalists. The most damning accusation is that the club of international bankers deliberately promote warfare to increase their wealth and power.

The appropriate response to this situation, in the view of the American Monetary Institute, is that management of money and credit policy should be a fourth fundamental branch of democratic governments, on a par with the legislative, executive and judicial functions.

The thesis and the campaign are not new, therefore, but rather the extension of an American tradition. A strong sub-theme is that American thinkers have been at the forefront in arguing the principle that money is a public good that should be supplied by governments.

Not only is the standard approach of economists completely mistaken, reformers suspect it is even that way by design.

The answer is called The 100% Reserve Solution and is attributed to both Frederick Soddy and Henry C. Simons.

The enduring dilemma for reformers is the passivity of what should be a mob. Why do citizens in a democracy not get rid of their oppressors? Ferdinand Lundberg explored the phenomenon in the mid-sixties in The Rich and the Super-Rich, at a time when the question was why the rich (e.g. Goldwater) did not rise up against the super-rich (Rockefeller). His answer was that the merely rich didn=t want to foreclose on opportunities to become super-rich themselves. The American dream fizzled out in the 1970s and after a period of dithering and unease reasserted itself as denial, via technological and military imperialism. Now it is not the comfortably rich whose motives arouse the curiosity of thinkers and writers, but rather the struggling representatives of the diminishing middle class.

The reviewer is an economic policy analyst and a Canadian civil servant, coming at the subject from a perspective most succinctly described as agrarian.

That is still a long way from the moon, but I'm sure the view will be crystal clear from up there.

http://www.imf.org/external/np/tr/2006/tr060419.htmTranscript of the World Economic Outlook Press Briefing
International Monetary Fund
April 19, 2006
SNIPS
Risks to the strong central forecasts are tilted to the downside. They include possible inflationary and growth consequences of the still-high and volatile oil prices, rising real interest rates, and possible exchange rate volatility.
+
In sum, it would be fair to say to the world, "You have never had it so good," but challenges are building in the background.

http://www.shanghaidaily.com/art/2006/04/20/263275/Gold_bugs_push_price_to_record_in_Shanghai.htmSundeck (4/15/06; 04:42:13MT - usagold.com msg#: 143241)
Gold surge to all-time high of Rs 9000 per 10 grams

The Invisible Hand (4/15/06; 05:23:49MT - usagold.com msg#: 143243)
http://finance.yahoo.com/currency/convert?amt=9000&from=INR&to=USD⊂mit=Convert
9000 rupee = $200 = 10 gram
1 gram = $20

Tomorrow's Shanghai Daily
http://www.shanghaidaily.com/art/2006/04/20/263275/Gold_bugs_push_price_to_record_in_Shanghai.htm
Gold prices ended at 161 yuan (US$20.07) per gram yesterday on the Shanghai exchange, the country's sole bourse for gold and platinum. It is the highest price since China opened the exchange to deregulate the gold market in late 2002.

==
Was that price already fixed last Saturday.
Gata, can you hear me?

http://www.thanhniennews.com/business/?catid=2≠wsid=14667April 20, 2006 -- The Vietnamese gold market has gone white hot, with prices Wednesday leaping to an all-time high...

Saigon Jewelry Gold Co. (SJC) rates skyrocketed to VND13.08/13.1 million ($822.60) per tael late Wednesday at the southern business Ho Chi Minh hub's private gold shops but trade volume remained heavy.

The precious metal gained VND1.01 million ($69.07) per tael in a period of three days � the fastest and highest jump so far.

Rising demand for gold pushed up the price of gold in the domestic market, with local rates outstripping world levels, according to bankers.

Some banks encouraged their clients to repay gold loans prior to maturity to avert risks of higher gold prices, promoting many borrowers to buy the precious metal for repayment, according to Nguyen Thi Cuc, a top leader of Phu Nhuan Jewelry Joint-stock Company (PNJ).

Additionally bankers� forecast the trend will continue...

The State Bank of Vietnam (SBV) suggested solutions for commercial banks to help borrowers avoid possible higher gold prices by allowing them to change gold loans to Vietnamese dong.

The central bank would provide conditions for banks and gold trading companies to import gold, ensuring sufficient supply for the market.

PNJ Company has just imported 500-600 kg of gold, with 200 kg more arriving in a couple of days.

SJC plans to import 4-5 tons of gold in the near future.

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

Very good to see gold loans being driven out of vogue.

R.

Spot seems to be in lock step with Gold and Silver on the Kitko site, at least for the last few days. Anyone notice this? A large institution or big money Pockets? Games are being worked, and to who's Benifit??

http://news.moneycontrol.com/india/newsarticle/stocksnews.php?autono=210737SNIP
Indian Overseas Bank today began gold retailing with a "better than expected" performance on the first day. The bank sold over 4,600 coins of various weights, totalling 36 kg. At today's prices, this would be valued at close to Rs 3.25 crore.
==
IOB is no longer the Iranian Oil Bourse.

http://news.ft.com/cms/s/a2ad983e-d009-11da-80fb-0000779e2340.htmlHeadline:
Iranians' rush to buy gold highlights nuclear and economic uncertainties

Menschen, Menschen, Menschen, now all the pieces of the puzzle are slowly falling to together.
The big picture is arising.

The title of this message is a snip.
"Menschen" means "humans" in Italian.

http://www.thehindubusinessline.com/2006/04/20/stories/2006042004490600.htmSNIP
Although the gold retailing product, which IOB calls `Fine Gold', was launched only today, the bank has been in gold business since 1997, when the RBI appointed the bank as one of the nominated agencies to import and sell precious metals in the Indian market.
Over the years, IOB has sold 27 tonnes of gold valued at Rs 9,984 crore, the background note says

http://investor.ninemsn.com.au/investor/news/commodities/story_detail.asp?index=17919SNIP
Gold rose in other currencies too, with prices per ounce (XAUEUR=R) jumping to a record high of 597.89 euros and hitting a two-decade high of 351.69 sterling (XAUGBP=R).

http://www.basemetals.com/content/reports/bm/william/W060420.htm Roaring Gold, is it Bullish for Base Metals?
BaseMetals.com Morning Report | UK | April 20, 2006

http://www.boston.com/business/globe/articles/2006/04/20/imf_to_implement_monitoring_of_exchange_rates/ IMF to Implement Monitoring of Exchange Rates - The Boston Globe - April 20, 2006
In advance of a weekend IMF and World Bank meeting, IMF announced it's seeking to modernize and buttress it's "legitimacy" through various changes.
Among these are monitoring of exchange rates, levels of investment, savings and personal consumption and reweighting member voting system toward increases for many emerging economies such as Mexico and Turkey.

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

Google gives this, but I can't open
IOB launches gold coins
Business Standard, India - 1 hour ago
Indian Overseas Bank (IOB) seems to be gearing up for Akshay Tritiya (auspicious day to buy gold) that falls on April 30.
Nor can I open the site of the Business Standard, India www.business-standard.com

http://newstodaynet.com/20apr/bu1.htm
SNIP
IOB has tied up with leading showrooms like RmKV, Naidu Hall and Saravana Selvarathinam to set up sales counters in their stores on Akshaya Tritiya to facilitate buying of gold on that occasion. The bank would soon be retailing denominations in 100 gms too as orders had already been place from the exporter.

http://www.salagram.net/parishad66.htm
SNIP
Akshaya Tritiya day is the very auspicious day - there's no inauspiciousness to be found today so even checking muhurthas is considered unnecessary, so auspicious it is.

My foot.

At moments like this, I feel for all paper investors.

http://yahoo.reuters.com/news/articlenews.aspx?type=topNews&storyid=urn:newsml:reuters.com:20060420:MTFH99935_2006-04-20_14-20-47_WAT005349&rpc=44WASHINGTON, April 20 (Reuters) - ...the IMF would aim to begin multilateral consultations with key world economic powers to help correct worrying imbalances in international trade and finance.

"Coordinated action would be both politically easier, and...economically more effective than governments in systemically-important countries acting alone," Rato told a news conference, adding this would include liaison with the likes of the European Union or the Gulf Cooperation Council.

"We believe that would be an important vehicle for analysis and consensus-building prior to policy action," said Rato.

"These consultations will enable the Fund and members to propose actions to address vulnerabilities that affect individual members and the global financial system," he said.

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

Definitely not your father's IMF.

Evolving to stay relevant. It's significant that the EU and GCC were singled out to be mentioned specifically for liaison.

Seems all the more clearly that the dollar-reserve stage (II) of Bretton Woods is entering its death throes and the IMF wants to serve the coffee (have something to do) as the rest of the world gathers around to talk about it and formulate crisis mitigation strategies.

R.

@ Flatliner,

Yeah, I really "feel" for the investors who bought my "gold derivatives" yesterday and are giving them back to me at 8-10% reductions today - NOT!

-G'lox

http://urbansurvival.com/week.htm"In a related development, my buddy the gold and silver trader tells me that margins were pushed up again last night from $4,360 for the NY Comex silver contract to $5,065 for NY Comex silver."

Your comment now shines. You are most wise and observant. My hat is off to you!

I do remember similar rule changes in Japan a few months back that shook the markets just as hard. If I remember correctly, the same change set the market in a downward trend that lasted a few weeks. To me, this is good news. It's an opportunity to spread the word and get a diehard friend to pick up some physical.

As the Crimex wraps up for the day, one sees that the closing price is nearly equivalent to yesterday's close. Isn't it interesting that all the volatility of the evening and morning trade was sufficient only to quell the huge after market rally, but not erode the PoG in the Comex itself.

These wild swings in foreign markets gotta be giving traders serious Maalox moments.

Flatliner: "I feel for all paper investors" .... on margin or don't know what the hell they're doing. The 5% that do make money are tickled pink.

Goldilox: The Crimex isn't my favorite institution either but the margin increases have been reasonable in keeping the ratio of contract value to margin funds at about 16/1. Keep in mind the shorts also suffer on these margin increases, at least the ones outside of Goldman Sachs who apparently own the printing press to cover the margin.

@The Hoople, Flatliner,

Didn't mean to confuse you guys. My "gold dervatives" are actually mining stocks. I wouldn't know where to begin playing Crimex, and certainly don't want to start now.

http://news.ft.com/lex/investmentnavLex Investment Navigator - April 2006
Various asset classes and regions graded by sentiment-
positive, neutral or negative.
In US category, gold given a positive.

http://www.imf.org/external/np/speeches/2006/042006.htmSpeech by Rodrigo de Rato
Managing Director, International Monetary Fund
At the Institute for International Economics Lunch Meeting to Discuss Reform of the IMF
Washington, D.C.
April 20, 2006

SNIPS :

"The days when G7 finance ministers could sit in a hotel room and make decisions about exchange rates are gone. There are new players in the global economy: at the moment China and some of the major oil producers have a significance in the global economy that they didn't have even ten years ago. As the global economy changes further, other players will become prominent. And all of the countries engaged in global economic policy making have to be aware of the awesome and unpredictable power of the financial markets. This is a whole new ball game."

"Multilateral consultations would be something new for the IMF and for our member countries, and they would be an important vehicle for analysis and consensus building."

"I have proposed a more systematic assessment of the consistency of exchange rate policies with national and international stability and an extension of the IMF's multilateral framework for assessing equilibrium exchange rates, which currently covers industrial countries, to the major emerging market currencies. But in looking at global imbalances, we must focus not only on exchange rates: consideration of exchange rate policy must go hand in hand with consideration of supporting policies, for example fiscal adjustment in the United States and structural reforms that boost consumption in China."

"Introducing high access contingent financing arrangements would have advantages for both emerging market economies and the broader Fund membership. Emerging markets would benefit from an added level of protection against crises, and would need less in the way of precautionary holdings of reserves, which have a substantial opportunity cost."
----------------------------------------------------------------------------------------------------------------------
Emerging markets would benefit from an added level of protection against crises, and would need less in the way of precautionary holdings of reserves, which have a substantial opportunity cost ?????
Why not replace them by goldreserves valued in a "free" market ?

The rest of the commentary is already perfectly formulated by Towncrier in his previous post. Thanks.

Relatively speaking

From spot silver's overnight highs to its present place (probing the bottom) of its trading range today reflects a 19+ percent move.

For spot gold to have equalled that incredible range, it would have had to come down its $645 overnight high by approximately $123. Instead, it fell only a shade under $40, and presently sits $30 off the overnight high, simply revisiting its levels of a couple days ago -- Monday and Tuesday.

Does anyone care to tally up some of the fundamental differences to explain the radically different behavior of late?

Will there be lessons to be learned as time marches on, or is this still all just a case of six one way and a half-dozen the other?

R.

@ TC,

I think today's action underlines the fact that silver is moved a lot more by spec action than gold. Ag certainly fell further, but had also risen more steeply.

Smaller market, less conservative, more risk/reward potential!

my $0.04, inflation adjusted.

From DowJones:

"At its contract high, May silver was up a whopping 61% from its Feb. 14 low of $9.14. At its contract high, June gold was up 20% from its March 10 low of $540.20."

At current levels above those same recent benchmark lows, silver is still riding high in the saddle, up nearly 30%, gold is up 13+%.

Is it possible that if/when some speculators get bucked off hard enough, they never get on again? With the loss of those lil' buckaroos, what impact might that begin to have on the participation levels (liquidity) in silver futures?

What's fine for attracting more gamblers and speculators is not so suitable for attracting those who are especially looking to reliably protect and build their wealth in a steady-as-she-goes manner.

Perhaps this will foster yet more volatility in silver, and more steady growth stability gold such that a separation is underway. In the future, maybe it will be only in old Christmas songs that we shall continue to hear 'silver' and 'gold' being mentioned together in the same breath.

Much like the separation we see today between dice and Crown Jewels.

R.

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

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

THURSDAY Market Excerpts

April 20 (from MarketWatch) -- Gold futures dropped Thursday to close with a loss of almost $13 an ounce and silver prices gave back nearly 14%, prompting concern that the weakness may signal a broader correction in the metals from their more than two-decade highs.

"As is so often the case in the precious metals, corrections tend to be vicious and quick," said Peter Spina, an analyst at GoldSeek.

"With the major move higher over the past several sessions, the gold market is working off some of the excesses."

COMEX June gold contracts fell as much as $25.50, or 4%, to a low of $610.50, its lowest level since Monday, after closing out Wednesday's session at a more than 25-year high of $636. The June contract recovered a bit to close down $12.90, or 2%, at $623.10.

Gold will find support in the low $600s, then around $580 -- "should it need to correct a bit more," said Spina.

Given the price drop, Peter Grandich, editor of the Grandich Letter warned: "it's time to take out a caution flag. Many classic signs of frothiness now abound in commodities in general and while no one can ever pinpoint exact tops, this is not a good time to first become aggressively bullish," he said, warning that "a sharp 10%-20% correction is lurking out there."

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

How much influence does China have re the price of silver?
What are their reserves, and their refinery capacity? Are they the the tap that regulates/influences the PoS?

@ TC,

your quote:

"Is it possible that if/when some speculators get bucked off hard enough, they never get on again? With the loss of those lil' buckaroos, what impact might that begin to have on the participation levels (liquidity) in silver futures?"

Twenty-six years later, we still see the effects of the 1980 speculative rodeo on gold - and silver as well.

More than half the people I talk to who are not following PMs give 1980 as the reason.

Whiie I have no quarrel with the "differences" between gold and silver as investment vehicles, expecting major decoupling is perhaps, well, speculation of another kind.

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

The old gang had nothing to do with this. The $612 magnet slingshot gold to $630 and it reacted. Nothing here is out of the ordinary and the violence is natural to a major bull market in gold. Magnets pull a price up to it. As it crosses the number the same magnet has the ability to pull it back.

Top callers are a hard lot to understand. Every one of them so far has been so completely wrong one would expect they would be quite embarrassed. It appears they are so crass that being a public fool makes no difference. They want you to come to their website where they sell advertising.

The good people need only to stop listening to these people. Forget the bears on websites trying to sell their case to a point moving beyond the first amendment.

Gold is headed to $682 on its path to $887.70 and $1650. All the noise and fury created by gold trading funds today is madness. Eventually when sharks feed on sharks the gene pool is badly culled.

Relax and go about your business. Await the inevitable much higher price objectives.

http://news.bbc.co.uk/2/hi/asia-pacific/4919362.stm
American secret service agents have been in the South Korean capital, Seoul, on the trail of the famed "supernotes" - expertly forged hundred dollar bills that the US says are made by the North Korean government.

http://news.bbc.co.uk/2/hi/europe/4927736.stm
Poland's central bank has revealed a new banknote depicting the late Polish-born Pope John Paul II.

http://news.bbc.co.uk/2/hi/europe/4928936.stm
The alleged head of the Sicilian Mafia, Bernardo Provenzano, arrested last week, has refused to answer questions in his first official interrogation.

I am looking forward to 26 years from now. Then, I will expect people to say something like - the reason why I'm not holding US currency is because of the great inflation in 200x. The ramifications of the mistreatment of the right to print �money� will have long lasting, severe ramifications.

If the speculation ratio is 16 to 1 for silver contracts, expect that to be used as a tool to keep speculation at a manageable level.

At the same time, one would expect reports, in the coming weeks, that show a huge spike in buying from the ETFs (regarding gold) on this down turn. With every other down turn they have seen to it to pile in. One would expect that as these buying opportunities come along, the noose gets cinched just a little tighter each time.

I guess somebody will soon come out and gloat about the way we have hammered the Iranian gold buyers who bought heavily in recent days. Don't mess with Uncle Sam!

Good to see this reaction in the gold price, time to top up at a lower price ready for the push to great heights later this year.

Get gold!

This seem to be capitalist South-Korea, not the socialist North, which is helping to achieve the annihilation of the greenback.

ttp://english.chosun.com/w21data/html/news/200604/200604040019.html
So-called supernotes, high-quality counterfeit 100 dollar bills suspected of originating in North Korea,

The Heritage Foundation also says it's the North (and Beijing)
http://www.heritage.org/Research/AsiaandthePacific/wm1046.cfm
A considerable amount of circumstantial evidence points to Chinese complicity in North Korea's counterfeit currency networks.

I should learn to read what I copy. The BBC is also saying that the notes originate in the North:
http://news.bbc.co.uk/2/hi/asia-pacific/4919362.stm
American secret service agents have been in the South Korean capital, Seoul, on the trail of the famed "supernotes" - expertly forged hundred dollar bills that the US says are made by the North Korean government.

http://news.yahoo.com/s/ap/20060420/ap_on_re_as/nkorea_us_counterfeiting_1
North-Korea has accused the United States of counterfeiting its own currency to fabricate evidence that the communist state is engaged in manufacturing fake U.S. hundred dollar bills.

http://abcnews.go.com/International/wireStory?id=1864340&CMP=OTC-RSSFeeds0312SNIPNorth Korean police said late Wednesday that authorities have obtained "shocking information" the CIA hired counterfeit experts to produce fake currencies at U.S. military bases worldwide.
"They let these notes find their way to the [Democratic People's Republic of Korea,] DPRK and go out of it in the course of commercial transaction in a desperate bid to term it 'producer of counterfeit notes,'" the North's Ministry of People's Security said in the statement, carried by the country's official Korean Central News Agency.
==
Can you spell "police state"?
Menschen, Menschen, Menschen, what's happening?

Contradictions cannot exist.
Check your premises.

http://www.vheadline.com/readnews.asp?id=54518 Big 7.7 earthquake in Russian Far East
No word yet on casualties or damage to pipelines or other infrastructure.
Bank of Ireland: Oil may make swift advance to at least $82.30 in near term - Finfacts.com - April 20, 2006

http://news.bbc.co.uk/2/hi/americas/4925704.stmSNIP
Mr Bush urged Mr Hu to take action over the yuan. US producers say its low value is a barrier to exports to China, and has contributed to the massive US trade deficit with China - which reached $202bn (�113bn) last year.
==

Well, if China (or N-Korea) is counterfeiting the greenback (which they are not), then the supply of greenbacks increases, its value decreases, so the value of the yuan vis-�-vis the greenback increases and Mr Hu has taken appropriate action over the yuan.

That's why the CIA took action itself.

http://news.bbc.co.uk/2/hi/asia-pacific/4919362.stm
North Korea � has been boycotting talks on its nuclear weapons programme in protest against the US financial squeeze.

http://news.yahoo.com/s/nm/20060420/pl_nm/korea_north_fraud_dc_2SNIP
The North Korean spokesman said the U.S.
Central Intelligence Agency had enlisted the help of artists in Japan to produce and distribute video tapes and CDs that falsely accuse North Korea of violating human rights and conducting illicit activity.
+
The talks have hit a snag over a U.S. crackdown on firms Washington suspects of aiding North Korea in illicit activities such as counterfeiting and drug trafficking.
North Korea has said it is unthinkable for it to return to the nuclear talks among the two Koreas, China, Japan, Russia and the United States when Washington is trying to topple its rulers through financial pressure.
==

Is it really so difficult for Amerikans to accept that the dollar is toast?

As Dr. Nathaniel Branden writes op p. 142 of his book
"Taking responsibility" (Simon & Schuster, 1996)
Confront the pain, then accept and let go, and frame this very act as an expression of newfound self-assertiveness and self-responsibility.

http://www.gold-eagle.com/editorials_05/silberman042006.html Will Derivatives Cause This Market To Fail?
Greg Silberman - April 17, 2006
Interview with ex-London swap originator covers number(size of market said to rival bonds) and types of derivatives, select examples and some of the impacts and unique risks.
A brief refresher course with a closing opinion on an economic collapse later in the year precipitated by an exogenous event and magnified many times by derivatives.

@ TIH,

The Chinese would just be watering their own massive holdings down by counterfeiting US dollars. It would take many semi-truck loads to even dent their $800 B in US dollar reserves. Probably not even cost effective - LOL. It's much easier to take over our industries.

As far as drug trafficking, the Mena, Arkansas Drug Cartel has no room to point fingers at anyone else's drug trafficking.

Maybe the North Koreans will get their own show for their smuggling efforts like Oliie North!

The more treacherous the financial waters get the more they will result to mis-direction plays.

http://www.taipeitimes.com/News/biz/archives/2006/04/21/2003303853Rogers Sees Yuan Becoming Reserve Currency - Taipei Times - Bloomberg - April 21, 2006

http://www.irishexaminer.com/pport/web/ireland/Full_Story/did-sg4NtWS7zX-eY.asp�5-a-litre petrol in the pipeline for motorists, warns expert
SNIPS
MOTORISTS could face the prospect of paying �5 a litre for petrol within the next four years because of global oil shortages.
+
Another expert, Professor Austin Darragh, University of Limerick, said some predictions would suggest that oil could cost as much as �5 a litre before 2010.

http://www.metric-conversions.org/volume/liters-to-gallons.htm
1 litre = 0.2641720 gallon

http://finance.yahoo.com/currency/convert?amt=5&from=EUR&to=USD⊂mit=Convert
E5 = $6.1527

$6.1527 = 0.2641720 gallon

1 gallon = $6.1527 / 0.2641720 = $23.29

http://www.abc.net.au/news/newsitems/200604/s1620319.htmsnip:

The weather bureau says it expects tropical cyclone Monica to turn back to the west, despite taking a sharp turn to the north tonight.

At 10:40pm AEST, a cyclone warning was in place for coastal communities on western Cape York Peninsula from Pormpuraaw to Weipa.

A cyclone watch was current for Northern Territory coastal and island communities between Port Roper and Milingimbi including Groote Eylandt, Elcho Island and Nhulunbuy.

At 10:00pm AEST, the category 2 storm was 150 kilometres west-southwest of Aurukun. The cyclone had recently turned to the north-northeast.

The weather bureau says the cyclone will continue to intensify overnight and is expected to start moving towards the west early in the morning.

Manfred Greitchus from the Cyclone Warning Centre in Brisbane says the cyclone is not likely to return to the Queensland coast.

"We're anticipating that Monica will again resume its westward path during the early hours of the morning," he said.

"However it still could produce some destructive wind gusts along that coast between Weipa and Arukun during the early hours of the morning as it intensifies and before it turns to the west again."

Cyclone shelters are being prepared across east Arnhem Land.

Four thousand residents of Nhulunbuy, on the Gove Peninsula, are preparing for Monica.

Today, staff at the Gove District Hospital were clearing out the building storeroom that serves as Nhulunbuy's only public shelter.

They are putting in portable toilets and facilities to boil water.

The hospital's acting manager Diane Brown is expecting hundreds of people will come to the shelter if the cyclone hits.

She says most will come from Aboriginal communities in the area.

-Goldilox

Another massive cyclone hits Australia's mining region.

http://business.iafrica.com/randwatch/254755.htmGold's collapse knocks unit
SNIP
The rand is weaker on the back of a softer euro as well as short stops being taken out and also the collapse in the gold price � yesterday gold traded at a high of $645 and now it's around $610," a currency trader said.
"The market was short dollars and it was caught unawares when the gold price collapsed so there was some short covering."

http://www.mineweb.net/radio/mineweb_radio/254885.htm...(a transcript). Bill laying it out as per usual (and probably enjoying it)...

:-)

http://today.reuters.com/business/newsarticle.aspx?type=tnBusinessNews&storyID=nSP99766ℑid=top-news-view-2006-04-21-085447-view_DBX10D_MINERALS_GOLD_RHODES_0421_03%5B1%5D.JPG∩=A%20security%20guard%20places%20several%20one-kilo%20gold%20bars%20inside%20a%20secured%20vault%20in%20Dubai%20April%2020,%202006.%20A%20broad%20sell-off%20in%20gold%20and%20silver%20accelerated%20on%20Friday%20as%20speculators%20took%20profits%20after%20the%20prices%20of%20both%20metals%20raced%20to%20their%20highest%20in%20more%20than%20two%20decades%20this%20week.%20REUTERS/Tamara%20Abdul%20HadiGold, silver sink as speculators cash in
SNIPS
The sharp dip in precious metals took a bit of shine off the boom market, but analysts said the up trend was likely to continue.
"Whatever short-term turbulence may be encountered on the way as speculative enthusiasm waxes and wanes, a long bull market in commodities is under way," said Sean Corrigan, chief investment strategist at Diapason Commodities Management, a commodities fund co-founded by investment guru Jim Rogers.
+
While some of the selling was profit-taking, some was by speculators cutting their losses by selling long positions they bought at what turned out to be a temporary market peak, fund managers said.
Beyond this short-term volatility, all the factors that made gold attractive to investors -- worries over the Iranian nuclear standoff and worries over inflation -- remained, analysts said.
"Despite the huge decline...such a correction would be deemed a healthy scenario in order for the metal to continue on higher in the future," Standard Bank said in a report.
"Fundamentally, there are no changes to suggest that inflationary and geopolitical concerns have been allayed, which is supportive in the long term."

http://money.cnn.com/2006/04/20/markets/goldstocks/index.htm?section=money_latestHere's an article from yesterday which says that the stocks are not following the metal.
Did FOA not argue something to that effect, or rather did he not say that when this would happen, the road was free.

SNIP
A necessary pullback?
Analysts say demand for the commodity as well as global economic growth projections are likely to continue to drive the price of gold higher going forward. In addition, many of the gold stocks have not risen as aggressively as the commodity price, suggesting that there are still values to be found.

http://www.usagold.com/goldtrail/archives/goldtrailone.htmlFOA (05/14/00; 20:39:25MT - usagold.com msg#22)
Mothers: the only real gold of this earth!
SNIP
There will be some huge profits to be made by holding certain mine stocks. But, almost all of them will go close to zero first. I doubt many investors could hold their current percentage through this price action. Physical gold will find a new market and soar in that medium of trade. In the face of this, few if any stockholders will hold their falling mining shares while watching gold soar. Yes, some will (like me) hold through thick and thin because they have a right percentage of (the best) mine shares to bullion. But, many, many others will pressure the market as they attempt to adjust to (our)level of holdings.

http://www.bearforum.com/cgi-bin/bbs12.pl?read=69934
25 October 2000
sNIP
He and his friend 'Another' (FOA=Friend of Another) have been calling for a failure of the gold stock and futures markets for over 2 years now.

http://news.ft.com/cms/s/a73b2234-d128-11da-a38b-0000779e2340,_i_rssPage=49c48c22-c99b-11d7-81c6-0820abe49a01.html Dollar Falls as Sweden Slashes Holdings in Half - Financial Times - Steve Johnson - April 21, 2006

http://www.usagold.com/goldtrail/archives/GoldTrailFour.htmlSNIP
-Professor von Braun's latest update at The Rocket School of Economics,,, Excerpt from "Lecture 38"--
...
Just like oil today,,,,,,,, Free Gold is a good deal for tax income. And most gold industry workers will stay in their jobs (although some layoffs will happen) even though it's a dirty, almost break even deal for mine owners. Their business would only get a fraction of the profits from a huge rise in gold bullion and their shares would wallow in uncertainty as gold soars. But, then again, didn't your buddy Will Rogers say something about American risk takers,,,,like:

"staying out of the governments path with your investments is the second national pass time behind baseball"

Ho! Ho! That Will was something

The Comex implemented limit or market orders only today in silver. Take your choice, either get filled at any damn price they choose or sell below the bid. Funny how the panic buttons always get hit when the shorts need it. This isn't a get out of jail pass, it's more like a never get charged for a crime and never go to jail pass. When will they lift the no-buy stops rule? Tuesday after option expiration would be a good time, unless they're in such deep trouble it gets carried to May contract expiration.

http://today.reuters.co.uk/investing/financeArticle.aspx?type=allBreakingNews&storyID=2006-04-21T121908Z_01_L21650784_RTRIDST_0_MARKETS-FOREX-UPDATE-5.XML Euro Gains as Diversification Fears Haunt Dollar | Katie Hunt | Reuters.co.uk | 04-21-06

test

http://www.usagold.com/GoldTrail/archives/ANOTHER4.htmlIn His reply to Steve, Another says that He answered the question earlier.
I don't find that answer.
Can anybody direct me to that answer?

SNIPS
Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock, everyone wants an increasing investment. Contrast this action against that in Korea, where everyone sold gold as it increased in an unstable currency!

Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe. In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system, built on a world market price for gold. Michael, you are absolutely correct in that the USA will see a hyper inflation of it's currency and a gold price in dollars that reflects it. Unfortunately, for most investors, the gold price rise will be sudden and also hyper fast. as it will occur just after a rapid plunge in dollar based assets including, stocks, debt and the entire banking system. This action will destroy virtually all gold based paper assets as they are also dependent on a functioning economic system. A local gold mine, in any country, must sell production to realize a profit. The contract system they deal with will not be functioning during this time. Contrary to many hopeful investor, local treasury officials will not allow miners to pay employees or buy equipment with physical gold. When the dust does clear for mining to continue, gold will be recognized worldwide as real money, and the mining of money will, no doubt, carry Extreme taxation. Stock prices of these operations, after being priced to zero, will then double or triple in price. Zero times three equals?

+

From Steve: On 8/10/98 Friend of Another commented that hyper inflation "will destroy virtually all gold based paper assets," and that "the contract system they deal with will not be functioning during this time." Could you help me understand the breakdown of the contract system on a global basis and why those companies with cash reserves will not be able to whether the initial economic system collapse and do you literally mean "zero" stock value for all gold stocks.
Do you foresee any interim period between now and hyper inflation where gold will go up enough to suggest that those holding gold paper assets will be able to sell at a higher value than the doldrums it presently holds?
Thank you for your insight.

ANOTHER: Mr. Steve, If you read my letters for today, I think this question is answered. Also, this new gold market is "ongoing" and "changing". The potential exists for the return of gold as the "only" reserve currency. This may result from a failure of the Euro, due to a massive upheaval. Oil states, they have the ability to force this outcome. During this result, all paper will burn and the world economy will start over. However, the BIS is buying gold for customer governments as they begin to lower the dollar. This action, began some months ago will bring gold up, perhaps to the middle $360 range. If the world paper markets do not destroy themselves, gold stocks may rise for a time. But, physical gold is the good hold for this time.
Thank You

@ TIH,

I read the CNN article twice and didn't see anything that suggested shares weren't following the metals - nor does my experience support that notion.

One analyst was spreading BS about waiting a few more days until the flushout was complete, but as gold is already back over $626, this may be some pretty poor advice.

Another analyst:

"Kerry Smith, a gold stock analyst at Haywood Securities said that gold prices and gold stocks may not need to consolidate much further before rising again, if recent history is to be trusted."

They lifted the ban on buy stops around 9:30 Eastern.

This was part of the excerpt I snipped:
In addition, many of the gold stocks have not risen as aggressively as the commodity price

Perhaps my English or my knowledge of economics is too bad but to me, this means that the shares aren't following the metal.

@ TIH,

Now I see it. Thanks.

It's a pretty vague statement not supported by the HUI. "Many shares" may be referring to the dry holes, which is certainly true, but the established miners do not fit into the authors blanket statement at all.

Caveat Emptor.

http://sg.biz.yahoo.com/060421/15/406ru.htmlSNIP
gold stocks in China have already priced in the gold rush, at least for the coming months, traders said

While gold and silver press onward and upward, the DOW and S&P are making new "highs", as well. It looks a lot like a '03, the dart board year.

Was yesterday's short run on gold and silver engineered to keep the SM indices from faltering at these lofty levels?

What was the FED statement about "unconventional methods"?

No reference, just my $0.04, adjusted for inflation.

@ MK,

Even CNBC pundits today said of gold and PM stocks:

"you just can't knock these down for more than a day!"

Nice buying op yesterday.

Note: Wanted to complete some incomplete thoughts per below. Pls read this one not the previous. Thanks for the comment, Goldi. . .

_____

Volatility in the gold market is greater than anything we've seen since the 1970s bull run. There is so much analysis out there as to why this is happening that it becomes difficult to pin down the two or three primary drivers to this market. My hope with this post is to pull together some seemingly disparate parts into a functioning whole for the benefit of our readers trying to make some sense out of this.

Overall, despite the volatility, the trend is gold is solidly to the upside. The most important feature of the trend from both a fundamental and technical standpoint is that there are some deep pockets on the bull side of the equation with last night's overseas run-up in the price the latest manifestation of this "presence."

But what is the nature of this presence?

In my view, that "presence" is not so much an individual or group, like the hedge funds, but an idea which has reached full maturity in the collective-global financial consciousness and working across the spectrum of financial interest from the hedge funds, to the big banks and trading houses, to large capital investors, and smaller investors alike. That consciousness has to do with the U.S. government/Federal Reserve's move to devalue the dollar.

Thursday's Financial Times featured a front page headline -- "IMF eyes dollar depreciation to resolve global imbalances."

"The dollar will have to depreciate 'significantly' over the medium term if global imbalances are to be resolved in an orderly fashion, the International Monetary Fund said yesterday as it stepped up pressure for far-reaching shifts in exchange rates." Please note the use of the cage rattlers "significantly," "far-reaching," and "orderly fashion." In other words dollar volatility, destabilizing as it might seem, is preferable to the alternative -- an international economic collapse.

In my view, Bernanke has been positioned at the Fed to engineer this dollar depreciation and the IMF statement both falls into line with this policy and serves as a warning to the financial establishment that devaluation is clearly the policy of the U.S. government/central bank. I would not be surprised to learn that the report was leaked before the latest leg in the gold run-up. The financial establishment may have been enlisted to play a role in the policy. Overarching all is that the policy, as of the IMF statement, has become common knowledge.

This is the "presence" driving not only gold but all the commodities. When you add the "rolling bubble" phenomena to this analysis, the volatility is more easily understood. Anyone who believes that these markets are driven by anything other than pure monetary inflation is by-passing an important aspect of the current financial markets, and the liquidity is going to gold for good reason.

In the end, a devaluation cannot occur without the blessing of the other major players -- the yen, the euro and the yuan. In today's world of currencies without a de jure attachment to gold -- that devaluation is as much a "political" consideration as it is "economic." The IMF, we now know, will play a key role in bringing the devaluation to fruition, and should be equated by current and potential gold owners as a call to arms -- a flex point the equivalent of Nixon's 1971 closing of the gold window. Those of us old enough to remember can pass along what "devaluation" meant to the American economy in the 1970s. Further, when you take the 1970s timeline as a template, it begins to look like everything that has happened so far has been merely the prelude.

For the small investor (you and me), coming to some understanding of the political culture driving these markets remains key to our personal psychological well being. The most successful investors come to an understanding -- a philosophy, if you will -- and then carry that philosophy around with them applying it to everything they do financially. Understanding that devaluation is a policy and not something that comes out of the clear blue without warning has become requisite. Holding physical gold in the form of coin and bullion is the best alternative when faced with this volatility and the clear conception that the U.S. is likely to prevail with this policy. (If it doesn't, my advice to the world's citizens no matter where they live is to prepare for the worst. Either way gold becomes the most important holding for the individual.)

Some of you will recall that I predicted a $525 gold price by the end of 2005. When the prediction was made, some thought it to be out of line with reality. Also, remember that I predicted a spiking gold price in 2006 and a $760 interim top based on a "devaluation of the dollar." Whereas the 2005 uptrend occurred without a coincident dollar drop, the $760 prediction was based upon a dollar devaluation becoming part of the market mix.

The pieces are beginning to fall into place. The volatility will now be ever-present, but the dips are likely to be met with buying by those who understand the culture now at play. Marc Faber recently noted that the Kondratieff Wave is really an analysis of the commodities� cycle. He said that we just finished the 15 year bear market in commodities and are now in the first years of a 15 to 20 year bull market in commodities (gold being the king of commodities). The devaluation of the dollar falls into that analysis.

My best,
MK

A lot of dots seem to be getting connected recently. They all lead to major revaluation of paper vs. gold and commodities. When the clamor about the Yuan being undervalued is raised what is unspoken is that a dollar devaluation produces a similar effect; it will raise the Yuan defacto. Bottom line though is it really doesn't matter when all countries have faith-based currencies. They all jockey for the title of best of the worst.

I think a lot of worldwide wealth has had that epiphany lately. It isn't a matter of running from one currency to another, it's a matter of running from all currencies. A dollar collapse would be ominous for all currencies in my belief. Much like the Asian contagion in the 90's, it didn't take traders too long to figure out Thailand wasn't the only tiger in trouble. If you factor in derivatives all paper could go up in flames like a match on an old dry Christmas tree. The dollar devaluation will attempt to be orderly and politically cooperative, but I wouldn't count on it.

How high can gold go? How bright will the light of the Christmas tree flame be I'd say.

http://news.independent.co.uk/world/americas/article358568.eceFollowing on from MK's "Devaluation", this article talks about some of the ramifications of such a devaluation.

Snip:-

The rise of China is posing awkward questions for the US, along with the realisation that its days as the world's economic superpower are numbered.

Some analysts see America entering a period of "managed decline" not unlike that which Britain has experienced since the end of the Second World War and the end of empire.

End snip.

While it is nice and comforting to think that there is going to be a "civilized" passing of the baton to China (and others), there are a couple of points of difference between the lasting passing (UK -> USA) which I believe it is important to keep in mind.
1/ When the Bretton Woods accord was signed, the takeover was between two of the longest- and closest-allied countries that the world has seen in recent times - allied in virtually any sphere of human interest you care to mention.In other words, it was a passing between two very old friends.
2/ Looking back at the very long history of Chinese civilisation (from circa 1500 BCE), there has been an underlying theme of (re)conquest by absorption. China has been conquered on several occasions, but the invader has only lasted in power a couple of generations before being enveloped and subsumed in the existing culture. I see the possibility of a gentle descent of US supremacy into relative insignificance on the world stage without someone thinking that all it took to save the situation was a flexing of the extraordinary muscle power of the US military as somewhat remote. Saber rattling over Iran is a good current example. While it can be argued that the Roman Empire, say, crumbled in a gradual fashion over several centuries, I don't think that this changeover is going to take nearly as long, and the US will still have its institutions intact and functional, rather than being totally decadent.

I think that the best we can hope for is that we move from the current unipolar world to one where there are several reasonably autonomous power blocks. South America is showing signs of wanting to move in this direction, for instance. In the meantime, we all have to hold our breath. And wonder what the real world leaders have in mind for us.

C!

I agree with you on your analogy and your point that all currencies are endangered and highly flammable. The citizen of Japan, China or Europe has just as much reason to own gold as the citizen of the United States. Recitifying the "imbalances" talked about so often these days WILL have consequences similar to the Asian contagion in that all fiat money economies react to the same set of stimuli in approximately the same way, and the inflation is global in scope. (The numbers might be on a different scale, but the circumstances are similar.) I have said many times that the first victim of the Asian contagion was the United States in the 1970s. That's the template. When fiat money systems go bad, it produces some recognizable results -- results that can be planned for.

As an aside, I find it interesting that the citizens of Iran (no less) -- not completely trusting their government -- are scrambling for gold. This comment is particularly telling:

"Gold coins are Iranians' political hedge fund. We keep them at home and they make us feel secure."

Seems that our citizenries have found some common ground even if our respective government's have not. That comment doesn't sound too far afield from the comments we see at this forum on almost a daily basis.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060421:MTFH31750_2006-04-21_18-03-23_N21256689&rpc=44&search=.DXY&searchtype=symbol&norics=1WASHINGTON, April 21 (Reuters) - Russian Finance Minister Alexei Kudrin on Friday questioned the dollar's pre-eminence as the world's "absolute" reserve currency, given its recent volatility and the size of the U.S. trade deficit.

The remarks helped send the dollar lower against major currencies and caused Wall Street analysts to wonder whether central banks will increasingly diversify their holdings out of dollars.

Kudrin, in Washington for the semiannual meetings of the International Monetary Fund and World Bank, told reporters at a news briefing the dollar's value had not been very stable in the past several years, particularly against the euro.

"This causes significant changes in the international situation and that is why we do not understand the U.S. dollar at the moment as the universal or absolute reserve currency," he said. "The international community can hardly be satisfied with this instability."

"Whether it is the U.S. dollar exchange rate or the U.S. trade balance, it definitely causes concerns with regard to the dollar's status as a reserve currency," Kudrin added.

...Russia's foreign currency and gold reserves of $212 billion are the largest of any country outside of Asia.

Currency traders were especially sensitive to any remarks regarding the dollar's reserve status after the Swedish central bank earlier Friday said it had decreased its holdings of dollars to 20 percent from 37 percent of total holdings.

Asked whether Russia will continue to recycle its so-called petrodollars back into U.S. financial assets, Kudrin only said, "We are developing cooperation in the international arena."

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

The international monetyary world as you knew it is undergoing change even as we speak. Do you dare face the change without primary holdings in physical gold?

R.

This is heavy stuff !!!!

Usually they are much more political -- much more discreetly circumspect in their hints and nudges.

I guess the message is that we've now moved beyond that very gentle phase of the transition.

R.

For the feeble brain newbie's (like myself) in the forum, can you please shed a little more light on what appears to be a simple statement that you've referenced below.

http://www.imf.org/External/spring/2006/imfc/statement/eng/arg.pdfStatement by the Honorable Felisa Miceli
Minister of Economy and Production of Argentina
Speaking on behalf of the Southern Cone Countries of Latin America
International Monetary and Financial Committee Meeting
Washington, D.C., April 22, 2006

SNIPS :

"We all agree that persistent high imbalances represent a major vulnerability. They generate an exponentially growing holding of U.S. dollar-denominated financial assets
and if the time comes when investors consider that enough is enough, this would unleash a chain reaction that will certainly plunge the world economy into a major recession. This is not unlikely to happen; it is critical, therefore, to reduce global imbalances in the less disruptive way possible, while trying to avoid adverse effects on growth and employment."

"Rather than being part of the problem, I would like to see the Fund as part of the solution."

"The IMF has been forthright in providing members with adequate analysis of the ever-growing imbalances and a bit less forthright in presenting them a policy package that could unwind them."

"We all know that exchange rates should be part of the package but we would mislead ourselves if we come to believe that all will be solved by a depreciation of
the U.S. dollar. Of course the policy package that the Fund has been hinting at is more comprehensive than this as it also calls for collective actions from all members to avoid the type of beggar-thy-neighbor policies that the Fund must prevent."

"Particularly significant at this stage is the impact on the real estate market which has been a main supporter of consumption and growth through the wealth effect in several countries, especially in the US."

"It is very important to have a correct perspective in relation to the role played by central banks in this process. In this regard, we believe that we should avoid creating the perception that central banks per-se are able to deliver growth and low inflation on a sustainable basis. If this view gets entrenched, there is a risk that protectionists� interests may have their day in the misleading hope that central banks will be able to continue delivering growth and low inflation."

"Finally, by giving policy advice requesting more labor flexibility without first considering whether internationally recognized core labor standards are being complied with, and whether the black economy is already providing too much "flexibility" to the labor market, the Fund may have made things worse."

" Also of critical importance is that the intra-Euro trade should be considered as domestic trade in measuring openness."
----------------------------------------------------------------------------------------------------------------------
Towncrier, any thougths on (gold-buyer) Argentina's Economy Ministers' speech ?

Key elements:

"...exponentially growing holding of U.S. dollar-denominated financial assets and if the time comes when investors consider that enough is enough, this would unleash a chain reaction that will certainly plunge the world economy into a major recession. This is not unlikely to happen..."

Again... "NOT UN-likely to happen" means IS likely to happen...

"...it is critical, therefore, to reduce global imbalances in the less disruptive way possible..."

"The IMF has been ... a bit less forthright in presenting ... a policy package that could unwind them."


At the risk of boring you with a rehash of my old opinion, recognizing that central banks can (and do) play a key role, in the interest of trying to work out the imbalances in the least disuptive way possible, it is advisable that the CBs not aggravate the problem by selling their own vast U.S. bond holdings into a depreciating dollar market. Instead, they would be advised to hold fast to those holdings and "eat" the resulting losses. There is no need to fear for the position of their balance sheet, however, because a soaring price upon their gold holdings can be utilized to neatly and concurrently fill the void for all those who practice MTM valuations of their reserve assets.

In the role of reserve asset, it has to be GOLD as the primary replacement for U.S. bonds -- not euro bunds or any other type, otherwise we would simply be out of the frying pan and into the fire... same old same old. For its part, Europe surely does not want an overvalued currency to stymie its balanced economic position.

And in the course of this dollar dethroning, the world economy need not fear overmuch for the loss of the American consumer as a driver of economic activity because the revaluation of gold will create such a vast wealth effect for all of the humble gold-owning people in the developing regions of the world that there will be no lack of economic stimulus as these folks capitalize upon their new-found purchasing power to demand a long-overdue upgrade to their standard of living. The economy truly becomes GLOBAL rather than merely a one-sided servicing of the U.S. consumer's demands.

R.

http://yahoo.reuters.com/news/articlenews.aspx?type=topNews&storyid=urn:newsml:reuters.com:20060421:MTFH00090_2006-04-21_21-00-36_WAT005393&rpc=44WASHINGTON, April 21 (Reuters) - The IMF needs reform to help the world economy better withstand challenges, because the Group of Seven can no longer manage the global financial system om its own, British Finance Minister Gordon Brown said on Friday.

...the Bretton Woods institutions urgently needed an overhaul to reflect the changes in the world economy.

"In the past, exchange rate policies could be seen to be simply a matter of concern between the advanced industrial countries and involving other countries only as borrowers. This is not the case today."

Brown said there had to be a place where the G7 could discuss with emerging market countries their accumulation of currency reserves, a place where a global strategy to cope with imbalances could be thrashed out.

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

I'd like a little cream with my coffee, thank you.

Now thrash away... gold can take it all, and then some.

R.

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

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

FRIDAY Market Excerpts

Gold gains almost 6% for week

April 21 (from Reuters) -- Precious metals in New York ended higher on speculative bargain buying and short covering on Friday, after a dramatic free-fall in metals on Thursday, though prices still held well below recent multiyear peaks.

Steadier spot prices for metals overnight, coupled with rising crude prices and a soft U.S. dollar, helped boost precious metals, trade sources said.

COMEX June gold futures rose $12.40, or 2 percent, to $635.50. It had slumped as low as $610.50 previously.

"The funds came right back in, certainly, and today, I think, the correlation with the oil price was very evident," said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois.

"Oil went up to $75 and the metals went along with it," he said.

But trading remained relatively cautious on concerns about more possible selling by funds after gold fell 4 percent and silver 19 percent, respectively, at one point on Thursday.

Futures bounced after spot gold rose in Asia and Europe and as dealers came in to support prices on the New York market's open, traders said. Gold then stretched higher by the close as nearby U.S. crude futures advanced above $75 a barrel to a new record.

Rising energy prices boost gold because investors often turn to the metal as a hedge against inflation.

Meanwhile, the dollar fell against the euro after Russia's finance minister (see article below) questioned whether the greenback would always maintain its undisputed preeminence as a reserve currency. The euro popped up to $1.2360 after the comment.

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

http://www.uofaweb.ualberta.ca/philosophy/nav04.cfm?nav04=38830&nav03=12617&nav02=12335&nav01=12326Diogenes Laertes, "Lives of Eminent Philosophers", Pythagoras, Bk. VIII, 8
"When Leon the tyrant of Phlius asked Pythagoras who he was, he said, "a philosopher," and that he compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as SPECTATORS; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for truth."

Aristotle, "Metaphysics", 980a
"ALL MEN BY NATURE DESIRE TO KNOW. [Pantes anthropoi tou eidenai oregontai phusei]. An indication of this is the delight we take in our senses; for even apart from their usefulness they are loved for themselves; and above "all others the sense of sight. For not only with a view to action, but even when we are not going to do anything, we prefer sight to almost everything else. The reason is that this, most of all the senses, makes us know and brings to light many differences between things. "

http://commentisfree.guardian.co.uk/james_k_galbraith_and_warren_mosler/2006/04/thank_you_president_hu_1.htmlThank you, President Hu
China's inaction is the best America can hope for.
SNIP
Finally, do imports cost American jobs? Yes they do, and those hurt by expanding trade should get help. But any failure to replace jobs lost to trade with better jobs is also entirely domestic.
+
The "innocent fraud" of "borrowing from abroad" to fund our trade deficit diverts attention from real problems to false ones. And should one day those false problems disappear, then the real problems would become much worse. So, let's hope they don't, and in the meanwhile, we might say a word of thanks to the Chinese, instead of blaming them for what they do.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BE04F5AD7-59B8-4129-A6B8-90DD3D7C7E3A%7D&siteid=googleThis guy concludes that if you believe in gold as an asset class, you want to own gold.
But he said in the paragraph before that he would buy a mutual fund or exchange-traded fund.

Any rush to this gold-mining stock would be foolish
SNIP
Rob Lutts, president of Cabot Money Management in Salem, Mass., believes that gold still has a lot of room to run, but he wouldn't recommend trying to keep up by purchasing one stock. Instead, he would look for a mutual fund or exchange-traded fund.

"It's really tricky to go out and buy individual gold stocks," says Lutts, who manages about $375 million in client money. "If you went out and bought the biggest and best of the last 20 years, you would have been wrong. You're loading up on management risk for the one stock; if you believe in gold as an asset class, you want to own gold, not one or two mining stocks. Just because gold has been so strong doesn't mean this is a good time to buy a stock with a bad long-term track record; that just doesn't make sense."

http://www.riksbank.com/upload/Bilder_riksbank/Kat_sedlar_mynt1/staplade_guldtackor_high.jpgFew people will ever own this much gold by weight, but soon enough many will by price. Work it out, mate, and then choose the proper scorekeeper for your savings.

Thanks to the Riksbank for this one.

R.