Science is, in effect, a habit of the intellect which is acquired through acts commanded by the will, and which can be freely used or not. (Alejandro Llano)

The best-kept secret in the investment world is this: "almost nothing turns out as expected" (Harry Browne)

More from Alejandro Llano, "Gnoselogy", Manila, Sinag-Tala Publishers, 2001:

p. 15
St Thomas
Quod sit veritas? (What is the Truth) in: De Veritate (On the Truth)

Veritas est adequatio rei et intellectus.
(Truth is adequation (equality) between the thing an the intellect)

two positive characteristics of this definition
1. it expresses the nature of truth formally
2. it extends to all the various meanings of the word truth

Withal, the implications of this definition can only be grasped if it is properly understood.

ens et verum convertuntur (being and truth can be converted)

The notion of truth adds something to being, but not something which is alien to it
- nothing can be added to being which is of a different nature from being
because every nature is essentially being

Truth adds something to being in that it expresses a formality - an aspect which is not expressed by the very name BEING: its internal intelligibility
- p.17 it adds the conformity of the thing and the intellect

What truth makes explicit about being is specifically the conformity (of the thing and the intellect) in which truth formally consists.

p.17
The adequatio must not be understood in a material or physical sense.
The conformity of truth is a cognitive conformity.

==

The eurocrats are eunuchs. They want to destroy Microsoft.

There seems however to be a political will to create a gold euro. Am I contradicting myself?

Why is everybody silent? Did we lose all orientation? Have we no more standards or value-scales according to which we could judge the value of gold? Nobody can answer the question what is the value of gold.

For a share in a company the answer is simple: what is the real (qualitative) profit of the company? This is then its value.

For gold, it is a "political" value which a whole world (thus not only the Brussels eunuchs � ough, I am not contradicting myself � more on non-contradiction later) would give to this universally exchangeable wealth. Is this gold at a fixed price or freely priced gold, freegold.

The debate which is being conducted about gold is similar to the 9/11 debate. A terror attack or self-inflicted atrocity? A big lie, whereas everybody could see how the three towers were �perpendicularly � imploding into each other. How many huge gold lies are circulating since decades?

Maybe the eurocrats are interested in truth after all?

Who told you the truth could be silenced forever?
By silencing the truth, the silencers force the people who are lied to to contradict themselves.
It's about time that this stops.

Screw the eurocrats!
Give TRUTH a chance!
A chance also, for heroes, like Bill Gates!

Whitewaterwoman (4/30/06; 16:09:02MT - usagold.com msg#: 143713)
===
THIS breakdown in the US$ has now setup the right shoulder for the neckline of the sixth downwards head and shoulders formation.
WHEN it breaks this sixth H&S line at about 80, the FUTURE "price objective" is about 70.5 and I see no reason for this to NOT happen.
Hold on to your YELLOW dearly.
GW

http://news.xinhuanet.com/english/2006-05/01/content_4498153.htmBRUSSELS, May 1 (Xinhua) -- The European Union (EU) on Monday decided to impose 9.1 million U.S. dollars-worth in additional retaliatory sanctions on the imports from the United States, which had taken anti-dumping measures to protect its domestic companies.

The new sanctions will bring to 36.9 million dollars the total amount of the punitive tariffs payments incurred on U.S. imports in the 12 months from May 1, up from 27.8 million dollars in the previous 12-month period, according to a statement issued by the European Commission.

The punitive 15 percent additional import duty would cover eight new products, including different types of blankets, paper products, photocopying apparatus and drills, according to the EU executive body.

EU Trade Commissioner Peter Mandelson's office justified the new move on grounds that it was made to counter an increase in the disbursement to U.S. companies of duties collected from EU products under the so-called Byrd Amendment in 2005.

The Byrd amendment, approved in 2000, was ruled illegal by the Geneva-based World Trade Organization in 2002.

Although the U.S. House of Representatives approved a budget bill in February to repeal the disputed trade law in October 2007, the U.S. government payments to American companies are scheduled to continue for two more years, which arouses protests from the EU. Enditem
----------------------------------------------------------------------------------------------------------------------
TIH : another move by the Eurocrat eunuchs ?

http://online.barrons.com/google_login.html?url=http%3A%2F%2Fonline.barrons.com%2Farticle%2FSB114626139541739275.html%3Fmod%3Dgooglenews_barronsWITH GOLD AT HIGHS NOT SEEN since the early 1980s -- trading at more than $650 an ounce last week -- where can it go from here?
Well: If you view gold as just another commodity with ornamental and industrial uses, then the fundamentals are telegraphing a grossly overvalued market, with a collapse to $200 not unlikely. But gold's also a monetary metal, safe-haven investment and hedge against inflation -- which the recent price rally itself suggests -- which means it could go to $2,000. That may sound insane. But gold at $2,000 is merely the January 1980 high of ...

full article only for subscribers

==
$2,000 - that's the price for eunuchs who (which?) will sell when price is $30,000.

http://english.people.com.cn/200604/30/eng20060430_262285.htmlChina launches IPR protection website

SNIP
China has launched an intellectual property rights (IPR) protection website, a source with the Ministry of Commerce said here on Saturday.
The website is www.ipr.gov.cn

http://www.billcara.com/archives/2006/05/going_for_the_g.htmlGoing for the gold on May Day
SNIP
May Day is anti-capitalist day around the world. Organized workers will be organized today to protest socioeconomic issues. But not my Little People. We're all overjoyed that Gold and Silver is rallying this day.
==
All eurocrats will be liquidated.

http://www.financialsense.com/editorials/schmidt/2006/0430.htmlsnip:

Chairman Bernanke confirmed again this past week in testimony before a Congressional committee the lack of any plan at the Federal Reserve. In short, he said that at some meetings of the FOMC rates might rise and at some meetings rates might not rise. The duck outside the window could have provided the same insight. Such a response in many ways is what to be expected from a lackluster leader. The monetary policy of the U.S. economy, the survival of the dollar, and integrity of the global economy now rest with a mediocre, politically motivated academic. Think back to all the college professors you might have had. Would you turn over to any of them responsibility for the global financial system?

The U.S. dollar quickly plunged on Bernanke's testimony. Gold moved ahead, seeking out a new cyclical high. With the crumbling U.S. Housing/Mortgage Pyramid scheme as background, we now have a less than inspiring academic running the Federal Reserve. Global holders of dollars knew what to do: Sell! Foreign exchange markets are sending a signal that should not be ignored, and needs to be correctly interpreted. The signal this week was that the U.S. dollar's value is tenuous, and the dollar went down. Do not fall into the trap of interpreting the market signal as that your national money, Canadian dollar for example, will get stronger. Gold's price trumped all.

Gold investors clearly are on the right train. The disastrous economic fundamentals created by the former leader of the Federal Reserve are clearly evident in the housing problem. The selling of dollars in response to Bernanke's testimony is simply confirmation that the path of least resistance for the dollars is down. Investors in the U.S. and Canada that remain complacent in such a situation will clearly be available for yard work in future years.

That Gold's Super Cycle is unfolding is no longer at doubt. The only remaining questions are how much Gold an investor should own and when should it be bought. You must answer the first question. Methods exist to help with the latter, as presented in the last two graphs. Graph for Euro Gold is available.

The closing note is on an amazing financial, or business, characteristic of the past year or so. The Federal Reserve has raised interest rates fifteen times, from 1% to 4.75%. Thus far no serious nor notable failure event has occurred because of this change. That lack of event would seem to be a historical oddity. Somewhere out there is a ticking financial time bomb. Somewhere someone had misjudged their true risk exposure. In June we know the hurricanes will come, just not where and when. A "monetary hurricane" is brewing in this financial environment, only when and where is not known. The time for insurance, Gold, is before the storm hits.

-Goldilox

Great article covering monetization, RE "values", gold, etc.

snip:

Note: This article was originally posted on April 22, 2006. The USD currently sets the gold price, but as the Euro and Yuan gain a greater percentage of investor confidence the set price of gold is likely going to be more reflective of individual currencies than the USD. This is already happening in India. I can not remember the exact number, in the Indian currency, gold is already at or more than the 1980 record in Rupees. There are many wealthy people in the world with trillions upon trillions of dollars and many middle class folk that want to preserve what we have. There is not enough gold to satisfy the current amount of money floating around the globe, so this means that gold will get revalued to a price reflective of a balance. Assume all the gold ever mined till 2001 was 145,000 tonnes, with approximately 90% remaining in circulation (10% lost over time from sinking ships, industrial applications etc. etc) bringing the number down to 130,500 tonnes. There are 32,150.72 ounces in a tonne, bringing the total ever mined (including 2500 tonnes per year from 2002 till the end of 2006) to 4,597,552,960 ounces.

Taking the Friday (April 21st, since this article was originally posted at the beginning of last week) gold price close of $632.50/ounce, the total worth of gold in the world is $2.91 trillion dollars. I could not find any statistics on the amount of total money supply, but assume there will be around 90 trillion dollars at 2010 (assuming 15-20% global monetary inflation between now and then) in cash from each country thrown in a pot. In order to balance things out, the price of gold would have to rise 30 fold from current levels to $18,960/ounce. Note that I have not included the 54 billion dollars of unfunded liabilities in the US or other countries, which if included could be in the hundreds of trillions. The bottom line is that gold is still very undervalued and may go higher than all of us believe. One thing for certain, gold at $5000/ounce would see governments seizing mines for political stability. Even if a new currency were to be installed, the value of gold in the new system would still create many millionaires. Back to the USD analysis.

Update of the US Dollar Index

Now that I have cleared my thoughts, a focused analysis should be seen (if not, be prepared for a diversion J). The lower Bollinger bands are beneath the index, which could be signaling an interim bottom. The downside pressure in the USD should exist for the next 6-9 months, pending how quick the price objectives are reached. Compare October 2004 to the present setup: the upper Bollinger bands all curled up, similar to the current situation. The short-term stochastics are forming a tight wedge structure with 4 upper touch points and 3 lower touch points. A break of the lower trend line would see a similar decline in the USD as from October to December 2004, while a break to the upside would suggest a gentler decline to the 81-82 level. An interim bottom in the USD is possible, but it could be a mere blip on the decline.

http://www.financialsense.com/fsu/editorials/petch/2006/0430.htmlSorry - itchy trigger finger. Here's the link.

the SIGN of the Devil is not far away
Jump SPOT, and bite him !
GW

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

When this inferno really gets going, their attempt to put it out will be like trying to spit on it INTO the wind!

http://www.chron.com/disp/story.mpl/nation/3823206.htmlsnip:

SAN JUAN, PUERTO RICO - Nearly 1,600 schools shuttered. Some 205,000 public workers unpaid. Most government offices closed.

The U.S. Caribbean territory is staggering under a nearly $740 million budget shortfall and heading toward a grim scenario Monday, when it will run out of cash to pay salaries and provide public services if local lawmakers don't approve a bailout plan.


Talk of the possible shutdown dominated the island Wednesday.

Puerto Ricans jammed gas stations and supermarkets amid rumors that truck drivers would go on strike to force the government to resolve the crisis. Callers flooded talk shows, expressing anxiety.

Union leaders and government workers lashed out at politicians.

A doctors' group said the government may not be able to provide adequate medical care for the 1.6 million people with public health insurance. The doctors said 1 million prescriptions filled each month were also at risk. Police will stay on duty and hospitals will remain open.

Gov. Anibal Acevedo Vila promised to maintain limited, essential health coverage, but urged Puerto Rico's 3.9 million residents to pressure their lawmakers to approve his plan to take out a $638 million loan backed by a 7 percent sales tax.

The money would carry Puerto Rico through June 30, the end of this fiscal year.

Puerto Rico's House of Representatives wants to impose a 4 percent sales tax instead. The island now has no sales tax.

Protests were planned today.

-Goldilox

While the "Day Without Immigrants" rallies build in the US, Puerto Rico struggles with budget balancing and backlash from taxpayers.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10US DX in minor recovery this morning.

Senate Banking Committee is discussing Naked Short Selling this morning on CSPN2.

http://timesofindia.indiatimes.com/articleshow/1511053.cmsBANGALORE: Diamonds may be a girl's best friend, but their sparkle was outdone by the glitter of gold this Akshaya Tritiya, with 70,000 kg of gold being sold across the four states of South India on Sunday.

Almost all of the city's 2,000 gold shops were choc-ablock with customers making a beeline for the yellow metal � some as early as 6.30 am, much before the stores' opening time.

In fact, jewellers in the city on Sunday sold almost as much as they do in a month. Not surprisingly, Bangalore saw the highest growth rate in the market share, with the number of customers increasing by 50 per cent this year.

However, of the four southern states, Tamil Nadu led the gold rush with around 25,000 kg of gold changing hands. "Tamil Nadu and Kerala are the leading states of gold consumption in the country, followed by Andhra Pradesh and Karnataka.

Bangalore sold around 10,000 kg of gold on Sunday," said sources. While the jewellery booked by customers in advance were collected early in the morning, lakhs of new customers joined the gold rush to making purchases.

Coins and light weight jewellery were mostly in demand and even soaring gold prices didn't seem to deter buyers on the occasion. Around 100 kg of gold coins, offered by one of the banks, was sold by 11 am itself.

"The sale, which was only 10,000 kg in the four states till morning, shot up with the soaring temperatures of the day. Customers were also happy with the arrangements made in shops.

"Last year, we could not manage the crowd and had to pull down our shutters in the afternoon of Akshaya Tritiya, but this year we had made sufficient arrangements both in terms of counters, staff and security to look after the customers," said one of the leading jewellery shop owners.

Some shops also made arrangements for home-delivering the jewellery for their VIP customers. Akshaya Tritiya is considered as auspicious as Vijaya Dashami and Udagi and is believed that gold purchases made on this day will bring good fortune for the family, for the rest of the year.
----------------------------------------------------------------------------------------------------------------------
Got gold ?

http://www.safehaven.com/article-5056.htmGandy, if we have DX at 70 we'll have AU at 780 and oil at 87. (The above article is no longer on the safehaven site)

I wanted to point out the implicit inflation in TC's comments about the house anti-reconquista bill and Sir Lox's comments about C Austin Fitts work.

Regardless of where we stand on the issue it is obvious that congress has ignored the problem. They are happy with the status quo, in immigration, in monetary things and in SSA and medicare.

However, as Senholtz points out, felonies implies incarceration and that means about 1.2 million (10% of 12 million) people locked up. That means numerous new private prisons and whopping profits for some and gigantic deficit spending for uncle sam. Once locked up these people will need something to do, so the government (or contractors) will hire them out and compete with private sector labor.

In exchange for receiving a small stipend, they may "volunteer" to serve their sentence in the "green zone" washing latrines or digging ditches or whatever KBR & co happen to need that day. This all sounds disgusting and crazy, but I just wonder. Of course the REST of US will have to have national ID cards (which will be forgeable anyways) so the feds can tell who is legitimate or not.

Back in the 1980's the ratio of legal citizens to illegal was about 1 to 100, it is now about 1 to 25 (assuming 12 million illegals, which is just an estimate, it could be 25 million or 1 in 12). By the year 2025 the ratio could well be 1 in 6 or 1 out of 5 by which time the issue will be unresolveable- reconquista will be fait accompli.

Given the lack of morals in Washingdoom, I can imagine congress deciding to do both: incarcerate and "amnestize". Admittedly, there are no easy solutions, but there are many really BAD solutions. Eventually we will have brought the US economy down to the level of Mexico's economy, the wage scales will have been "normalized" and an ounce will be worth many months wages.

The irony of it all... two lousy governments, but one pays better... for now anyways.

http://yahoo.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?storyID=urn:newsml:reuters.com:20060501:MTFH09531_2006-05-01_15-22-04_N01401412&symbol=SLV.A&rpc=44NEW YORK, May 1 (Reuters) - ...London markets were closed on Monday for the May Day holiday, which thinned trade and added volatility.

Though buyers have continued to take their cue from higher prices in Asia, dollar weakness and higher U.S. inflation readings, traders noted that price action may be guided primarily by the technical aspects of less liquid market conditions.

"Geneva and Zurich are open, but none of the big shots came in. So I think it's safe to say everything's on hold. Any moves would be due to illiquidity in the market rather than strong fundamentals," a gold trader said.

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

Speaking of London, I would note my interest in one item of some mail I received last week that the LBMA is no longer requiring its market making members to provide all three facilities of spot, forwards, and options in the gold and silver market.

In an obvious effort to remain relevant and liquid in a changing world environment, the Membership and Management committees have taken steps to allow for full Members to be based outside of the UK, and this comes not surprisingly in tandem with the latest provision to allow for members to be official market makers who might, for example, focus on physical spot markets while ignoring the derivative facilities of forwards and options.

On net this development likely represents a step in the right direction (whereas ETFs by contrast represent a step in the wrong direction on net).

R.

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

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

MONDAY Market Excerpts

Gold hits $660 in holiday-thin trade as dollar falls

May 1 (from MarketWatch) -- Gold prices closed above $660 an ounce Monday to mark the highest front-month futures level in more than 25 years, as steep declines in the U.S. dollar and concern about Iran's nuclear-research program fueled safe-haven buying and fed a broad-based metals rally.

"Sheer momentum, combined with a sliding U.S. dollar and heightened geopolitical concerns greatly underpins the long-term direction for gold," said Peter Grandich, editor of the Grandich Letter, adding that while he believes a correction is "out there," he's not willing to predict it.

The COMEX June gold contract climbed to a high of $663.80 before closing up $5.70 at $660.20, levels a front-month futures contract hasn't seen since late 1980.

The gains came on the heels of further weakness in the dollar. The greenback hit a one-year low against the euro and seven-month low against the yen Monday, as investors remained confident the Federal Reserve is nearing the end of its interest-rate-tightening cycle.

A number of Asian markets were closed overnight. Exchanges in China will be closed all week and reopen May 8.

In Tokyo, the Golden Week holiday officially gets underway later this week.

European markets were also closed for the May 1 holiday.

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

@ Melda laure,

I heartily concur with your analysis. Attempting to stop immigation flow at teh border without addressing the corporate side of the issue is ludicrous beyond one-sidedness, and CONgress's hands are tied by their funding sources. It is no different than the "war on drugs", whose hands were bound by the participation of official intelligence services at the source points.

Mexico is one of the richest countries in Latin America. Their tiered structure is completely supported by globalism, and their class differentiation is one of the widest in the world. That is why the common folk in third-world countries think of US workers as "rich". They know we're not living like them, and the only other alternative they have seen is the walled-off villas of their own mega-rich "leaders".

When illegals come here to find work, they are essentially refugees of globalism, as the global corporations pay them less than liveable wages in the sweat shops off-shore.

The main reason feet are dragging in finding solutions is that the only REAL solution is wage parity and NONE of the globalists want that unless it is accompanied by complete destruction of adequate working conditions and wage superiority attained in the 20th Century US and Europe. World Wars interrupted this process, but globalism is the only thing that has succeeded in reversing it.

The Chinese "miracle economy" can only last as long as the new "middle class" attains no visible political power, or they will succumb to similar labor unrest to what the West is now experiencing.

I absolutely loved the Galbraith quote posted earlier.

"With capitalism, man exploits man. With communism, it's the reverse"

Our planetary society is experiencing a period of rather rapid social evolution (or de-evolution, from an opposing perspective), and the pain that accompanies that is what sends people into gold for wealth protection. History has demonstrated what happens to those who ride the FIAT train all the way to the end of the tracks.

http://www.thestandard.com.hk/images/coates_corner/20060502/cartoon.jpgR.

http://afr.com/articles/2006/05/01/1146335671747.htmlMay�02, Reuters |�New York -- The surge in the gold price to a 25-year high couldn't have come at a worse time for gold miners, including Newmont Mining and Barrick Gold, as a competing rally in oil could spoil their party.

Shares of the big producers have barely budged despite record metal prices, defying conventional wisdom that says where the gold price goes, so go the stock prices.

But as the price of gold burst through the $US600-per-ounce barrier for the first time in 25 years, oil prices have also skyrocketed and threatened to squeeze any windfall that most miners stand to get from the higher bullion price.

For some big miners, their prospects could be made even more complicated by their hedging.

Some miners, like Barrick, hedge some of their production, to protect against falling prices. But that means they are locked in to sell at certain prices - even if the gold price goes up...

So far this year, the shares of Newmont, which has a non-hedging policy, have risen 9 per cent... Barrick shares are also up 9 per cent for the year...

In Asia yesterday, gold was as high as $US661.63 an ounce, the highest since October 17, 1980. This year, the gold price is up as much as 25 per cent as investors diversify into precious metals...

Bigger miners carry the weight of contracts that tie some of their production to prices far lower than the spot prices. More instances of stock underperformance could be on the cards for the big gold miners, while takeover talk fuelled gains in some smaller miners, analysts said.

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

Not all so-called gold investments are always truly as good as gold. Stick to your strategy without distraction and choose real metal as the solid base to your diversified portfolio.

R.

http://news.ft.com/cms/s/b6eb7516-d930-11da-8b06-0000779e2340.html(excerpts)
...I am coming around to the view that nonlinear "threshold effects" -- the macro equivalent of the tipping point -- will probably play an important role in unmasking the endgame in today's liquidity-driven unbalanced world.

The breaking point in this case will probably be determined by a combination of economic and psychological factors.

That's because the sustainability of America's current account deficit -- by far, the most serious imbalance in today's unbalanced world -- is critically dependent on the confidence that foreign investors place in dollar-denominated assets.

If that confidence were to falter for any reason, the subsequent venting of the pressures stemming from the massive US external deficit may be swift and severe -- with important spillover effects on other markets and wealth-dependent economies around the world.

I honestly don't know if the bond market and oil prices are now at thresholds that could spark such pyrotechnics. I suspect it could take something more in the 5.5% to 6% range for yields on long Treasuries to qualify as a full-blown tipping point. Even so, a 5% bond yield and $70 oil are much closer to that possibility than has been the case in a long time. Moreover, it's important to note that this confluence of forces is not occurring in isolation -- it is playing out in the increasingly ominous context of a post-US-housing bubble shakeout and an increase in protectionist pressures.

Courtesy of a more-than-ample cushion of excess liquidity, an unbalanced global economy has endured an extraordinary array of destabilizing developments in recent years. This had led to excesses in many segments of world financial markets -- especially in some of the riskiest markets, such as emerging-market debt and equities.

Investors are now taking liquidity-induced resilience in the global economy for granted. Maybe Iceland was the canary in the coal mine after all.

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

Are you taking the resiliance of your purchasing power for granted? Newer and ever shakier paper constructs are spawned every day. Find a firm foundation beyond the clutter and choose the enduring reliability of tangible gold.

R.

http://www.thestandard.com.hk/news_detail.asp?pp_cat=2&art_id=17816&sid=7757191&con_type=3May 02, 2006 -- The Hong Kong bullion exchange plans to take advantage of rising gold prices by launching a long-awaited 24-hour electronic trading system by the middle of next year which it hopes will turn around its declining fortunes.

The 96-year-old Chinese Gold & Silver Exchange Society, which operates from 9am to 5pm, still uses the open-outcry system, where traders shout out offers and bids.

With the new system, the exchange hopes to boost trading volume to more than 200,000 taels per day - or about 10 times the current daily volume of 20,000 to 30,000 taels. (A tael is a traditional Chinese measurement equal to 1.2 ounces.)

As recently as 1980, the exchange was trading an average of one million taels per day. But, according to exchange president Alvin Ching Man- kit, the market has been hit both by a two-decade slump in the demand for gold and rising competition from the London market.

"The trading houses and banks use the electronic trading system to allow customers to trade loco London gold 24 hours a day. With the new electronic system, we believe the bullion exchange can take back 60 percent of the loco London gold trading volume," Ching said.

...Prodded by worries over the rising US deficit, gold started shooting up, along with other metals, in the second half of last year, hitting US$661.1 per ounce in Monday Tokyo trading - a new 25-year high. But while the market was flying, the exchange - often criticized for being slow to react - was not taking advantage of the bounty because of its antiquated system.

In 2004, then-exchange president Fung Chi-kin said he was lobbying for round-the-clock trading. But since the exchange is registered as a society, its members need to approve every change.

"The exchange is 96 years old, so it takes some time to persuade our members to change to the new system," Ching said.

To help make the switch easier, the exchange plans, at some unspecified point, to change its status to limited company, allowing its leaders to institute reform without much input from members.

"Hopefully, by the end of 2006 the hardware and software of the trading system will be finalized, enabling us to use the new system by mid-2007."

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

Is headline news clue-ing you in on the global changes in the gold market based on its ascendancy as the supremely reliable and notably non-dollaresque neutral international reserve asset?

R.

"With capitalism, man exploits man. With communism, it's the reverse."

I would say, rather, that with the crony capitalism of the corporate state, man exploits man, but that capitalism, properly understood -- i.e., as voluntary exchange that is the essence of the social enterprise -- is cooperative, not exploitive.

I would hope that you agree, notwithstanding the fact that capitalism, properly understood, is impossible, given the corruption of money -- i.e., of that which historian Will Durant called "the root of all civilization."

@ Thoreauly,

I would hope that non-crony capitalism would function much better, but as the whole point is to end up with all the marbles, it is difficult to imagine it in any sort of altruistic state.

Communism, in a democratic (non-dictatorial) form offers similar potential, and interestingly the exact same set of caviats and corruptions. This planet has yet to see that one in any governmental capacity.

It would seem then, that the issue is not whether a system is better, but which system offers the least opportunity for spoilage by corruption.

Then we get to the Aristotilians, who think that pure democracy cannot work because it will fall to the greed of the electorate as they vote their way into the treasury.

The question ultimately reverts not to system, but perhaps to the morality of those administering the system, and the effectiveness of defined checks and balances.

How ironic that as the US loses freedoms to PA I,II,III, the Chinese are experiencing a rennaisance of market freedom - meeting somewhere in the middle, maybe?

Wow, I am really waxing philosophical on this one.

We're probably getting way too far off-topic.

Having so "Thoreauly" enjoyed -- and learned from -- your postings for over a year now, I confess that I'm shocked and disappointed by your reply:

1) If "the whole point is to end up with all the marbles," then a zero-sum, winner-take-all ethic is what you espouse, in which case it matters not what form this Hobbseian war-of-all-against-all takes.

2) As an inherently cooperative enterprise, a free society recognizes self-interest, not altruism, as its motivating force, said interest being the basis of the voluntary exchange whereby each party gains; otherwise, the parties would not engage in it.

3) Democracy can be, and generally is, as dictatorial as any other form of (statist) government, since it is nothing other than mob rule disguised as the "rule of the people."

4) True democracy is market democracy -- i.e., the kind we practice at the grocery store -- where we vote (or would if we could) with the sound money that is, to quote Will Durant again, "the root of all civilization."

5) This is only off-topic if sound money is off-topic.

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=LOWAs Mr Roach joins the cacophany of experts Jawboning 'ol Buck lower it's interesting to take a look at Bond Yield and try to get past all the noise.
If we extend the accompanying TYXY Chart to max, would we not be mistaken to assume or expect a reversal and power-drive back to 4% ?
What might Buck do under such circumstances ?

This, if sound TA and in spite of Feds powers to purchase currencies, points to an impending SM rout. Given our Au/Ag currency disconnect, the metals complex get out in "US$ sideways" fashion. ...IMHO.

I notice that while SLV has reported buying only 1.5moz. of silver, their volume is reported as an average 2,343,200 shares. If those figures are correct, then obviously they couldn't have the 10 oz. per share that they say is backing their fund. What's the story?

http://www.ishares.com/fund_info/detail.jhtml?symbol=SLV Try this link. The SLV holds just under 22 million ounces of silver.

Can't remember having seen you in the forum before - it's good to see new �faces�.

One can only guess that the 1.5 Moz, which equals 150k shares, of SLV traded hands many times during the day. My calculations would suggest that each share traded an average of about 15 times. That's a lot of churn, but that is much like stock trading � which is the market they are in.

The part of the mix that I'm unsure about is how often they offer new shares to the public. In other words, are they going to increase their issued shares over time? If so, one would guess that for each new share they will back it with 10 ounces of consumed precious.

On the topic of backings, does anyone have a link to information about the backings in the different ETFs? I once read an article that compared Gold ETFs to central banks where ETFs are steadily climbing the list of gold ownership. It would be interesting to see the information after the last pullback.

The following applies to the gold ETF, too.

'Daytraders' are flipping shares of the ETF.

What's more, shares can be essentially borrowed into existance, thus making for a market effect of inflated supply.

As a foreseen consequence, in fostering the creation of ETFs, the banking brotherhood has effectively taken the rigors of allocated accounts and rendered them entirely superficial by means of this unallocated trading of shares instead.

It's not exactly the gentlemanly "buy-and-hold" vehicle that proponents would like to make it out to be and have you think it to be.

Unfortunately, few people out there comprehend it, and among those that do, few will be willing to tell you.

So on behalf of anyone who reads this, thanks for checking in and giving some airtime to the matter.

R.

Sorry, make that 20,999,769 ounces and please note that that number was as of close of trading on last Friday which was the IPO. I have no idea how often it will be updated nor do I have any idea if Barclay's has all that silver NOW in physical form. Nor do I have any idea how many shares were sold today....maybe someone else can help?

There are now many gold ETFs. Whether or not they are backed with actual physical or not....who knows...but they seem (just my opinion) to have increased demand.

@ Thoreauly,

This is why I suggest that the most important feature of government is the defined "checks and balances". As we know power corrupts, etc., Our most important job as citizens is to be vigilant agianst corruption's ravages.

Theoretically, the best government is the smallest possible government, perhaps all volunteers, but it ain't gonna happen, as it so often gets overwhelmed by the men "behind the curtain."

Anyway, I don't think the issue is a slam dunk, which is why I punted after the previous post.

http://www.fromthewilderness.com/free/ww3/042706_paradigm_speech.shtmlSnip: "As M. King Hubbert wrote, and as Catherine Austin Fitts teaches, and as I have said for so long, "Until you change the way money works, you change nothing.""

Men, by their nature, are competetive and greedy creatures (we can discuss the faults of elves and hobbits some other time); I suppose the issue is the difference between a poker game played between gentlemen and one where the final hand has to be settled with sixguns (utterly juvenile!) in other words a balance of power- something this world has lacked for some time now. Fiat money would never have been approved if the balance hadn't been completely lost somewhere first, my guess somewhere back in 1634, but I digress.

The missing piece you seek is in the nature of Law, sir Goldilox, and how it does or does not protect the property OF THE WEAK. A large coercive state like Rome, Babylon, etc is impossible without it. Deep capital is essential to a massive state and advanced society. This is why there were so few truly coercive states in the New World. But of course, to see that, you would have to be familiar with the barbarian european history in the ages BEFORE ROME, indeed if you start with the laws of Hammurabi you will fail utterly, because his reforms were incited by just the sort of man-abusing-man "capitalism" you bemoan. By the time of Hammurabi, all was lost. To regain the proper perspective you may have to climb mount olympus, or observe an allthane in progress: the rapacity of gods and the civility of barbarians. It is a long sad tale.

Money has its secrets. But the secret to a civil social order is a greater secret still. And while sound money is essential, by itself it is not sufficient. An did you know the history of elves you would berate me for even presuming to lecture on the topic. If gold does go to the moon, the day may come soon after when alchemy is revealed, and energy is abundant. But I think that those secrets may have to wait until men master their greed and baser natures. For now such things remain suppressed, even in the face of great need, and we are on the withering verge of great peril. Some things it is better to begin than refuse, as they say, though there is still hope.

I now have all the Pre-1933 European Gold coins listed on CPM's main gold coin shop website. Most of the coins I bought here at CPM/USAGOLD.

I was wondering if USA gold/CPM could put more of their gold coin inventory in the Gold Shop that can be bought online via credit card? I tend to purchase my gold in groups always online using a credit card. I like the freedom of browsing the online store and ordering the coins at any hour I wish and have the freedom to compare prices and quality of the coins. I am looking to buy more pre-1933 European gold coins listed in MK's book about European coins.

Basically, I am suggesting that USA GOLD/CPM put more of their gold coin inventory online instead of only acessible via phone orders. I believe that this would benefit USA Gold tremendously by increasing sales to current and future customers like me. USA Gold's Prices are very competitive so I don't see any reason not to do this. Thanks.

I may be able to offer some info.

Commodities can be bought or sold short...without regard to actual physical supply. This is a hard concept for many to grasp + is somewhat irrelevant here...

Because, shares of stock traded on the stock exchanges can ONLY be shorted from the existing supply of outstanding shares that do exist (sometimes called open interest).

Also, volume is somewhat misleading because, as TownCrier indicated, shares are bought and sold all the live long day.

However, the site I posted gives the number of outstanding shares + the total amount of metal that the fund holds. This number is slightly lower than the 10 ounces of metal per share because the fund has carrying charges. It does not exist for free.

Hirise reported the number of 1.5 million ounces which many financial reports had mentioned as the original holding, just before the IPO. After the first day, more than 20 million ounces were needed to back the outstanding shares. Did Barclay's buy that much on Friday alone? I doubt if they could take physical possession that quickly, most of that was probably bought on paper for delivery when? Or did they already hold that much or more? Just because some news service reports 1.5 million ounces does not mean there was only 1.5 million. After all, that number was never officially denied.

If more was bought as needed last Friday (and today?), was it bought on commodity exchanges where short selling is common practice and almost always offset by simply buying back the contract for cash? If Barclay's wants delivery of the physical, can those who sold them the metal deliver? It is perfectly normal + legal to buy a commodity from someone who not only does not possess the item but has no intention of ever delivering it. They simply offset the trade for cash. Barclay's, from what I understand, has to hold PHYSICAL metal to back their shares. What happens to the price of an item when someone stands for delivery and the shorts can not deliver + must buy back for cash? Rigggght!

Each answer often creates more questions. Also, there is always speculation that Buffett's stash or part of it may be used to back Barclay's. Who knows? Do we then need open interst in excess of 130 million ounces before the delivery becomes difficult?

My opinion only here....I do not place too much emphasis on these numbers as the ETFs (gold, silver, oil, etc.), have provided another means of hedging + possible arbitrage opportunities for producers, users, investors and traders. It's similar to what options on contracts did as opposed to when commodities traded contracts only...namely it creates unlimited strategies...much too complicated for anyone to discipher with any certainty. However, I am intriqued by the fact that ETFs must hold physical to back their shares....but, I have no idea how flexible the regulations are as to how long they have to acquire this or how long they can hold this reguirement on paper only.

Can anyone add anything or correct any factual errors I may have made?

Thank you for your kind comments.

To address your question concern:

We have added a few new coins to our offer list in the last few weeks, but Randy (our illustrious sitemaster) is in the process of some new features to add small lot specials to the site on a regular basis.

We do have a number of new and unusual coins which we can offer at the store but the background programming is time consuming. With unusual pre-1933 gold coins, the problem is availability. Previously, we attempted to get enough coins of one type to offer a major special. We will continue to do that, but we are now in the process of adding the capability to offer small lots of some of the neat stuff we run into (that often doesn't see the light of day because some investor scoops it up when offered on the telephone.)

For example, today Jonathan bought a small lot of Austrian 25 schillings (in BU condition) -- a really neat little deal. They will probably go out as an investment lot to a couple of investors, but if you give him a call you can get in on the offer. Once we get the new system up, these will go out to all our clients on a first-come, first-served basis.

I can't tell you how much I believe in the potential of this sort of offer for the long run (with future & bargain oriented investors/collectors).

Thanks again for the advice. I think you are right on and we are trying to upgrade our system. By the way, thank you for your business.

It is your purchase from USAGOLD-Centennial Precious Metals that nourishes these important pages.

http://www.enterpriseintegrators.com/flint/4thR/TomSmithsIncredibleBreadMachinePoem.txtA cart full of fireworks is quite stable until an idiot with a match enters it, eh Gandy?! Gadzooks and ninnyhammers! I wish they'd stop subsidizing the gold price. Fortunately they're not subsidizing gold production yet, I couldn't afford it!

http://www.usagold.com/gold-coins.htmlThanks for the comments.

Here's a more comprehensive list for you to consider, including some of the additional items (below the bullion) that shall soon become available for online ordering depending on inventory status for the rarer items on any given day. Others will surely join the list.

Until then, a phone call will always give you the latest info AND the best prices.

R.

http://www.nymex.com/media/delivery.pdfSomeone's training wheels have fallen off or they think it's Apr 1 not May, the Silver Deliveries should be Gold ...and the Silver "so far for May" should be for Gold...I think!

http://www.russians.org/williamson_testimony.htmIf a country is to be looted there must be a cover story. Is peak oil it for the USA?

Wow! And all this time I thort it was the CIA wot done it!

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=GNote the little "5" atop the stack and the latest Price Objective !
<;-)

"if you start with the laws of Hammurabi you will fail utterly, because his reforms were incited by just the sort of man-abusing-man "capitalism" you bemoan."

Don't misunderstand my bemoaning cronyism as bemoaning capitalism.

I am just as critical of the Sino-Soviet aberations of communism, for all the same reasons.

Gold ownership is probably the best insurance for those who are not members of either nepotistic hierarchy.

@ Golden Lionheart,

That's exactly her point!

Sorry Goldilox but I didn't read it all.

So we have the USSR, Chile and Panama accounted for. I just hope they don't try their dirty tricks on China because that country will break up into warring tribes just like the old Yugoslavia did.

Good for gold maybe like bombing the stuffing outta Iran but I would not like to see it.

In Australia many people think the CIA were responsible for the disappearence of out Prime Minister Harold Holt
many years ago around the Vietnam War time.

I enjoy all your posts. Keep up the good work.

Yes, "Men, by their nature, are competetive and greedy creatures," but if they weren't also cooperative by nature and willing to give as they get, civil society would not be possible.

Recognizing this, I can do no better than quote Jefferson:

"Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of others? ... Let history answer this question."

Having answered that question unequivocally, it is clear that the balance of power is to be found in the decentralization thereof, such that the people rule through their day-to-day interactions, not through decisions made on high by those who think they know better. And nowhere is this more true, of course, than in the case of money.

Thank you for your thoughtful responses to my question as to how there can be so much more volume in SLV than there seem to be assets.It sounds like possibly another paper game, without, perhaps, much actual silver to back it. (A possibility GATA, among others, has mentioned.) I notice there was a huge exodus from CEF to SLV, and I'm wondering whether anyone knows if CEF has less paper silver and more of the actual stuff. Anyone?

BITE the Devil !
Just went through $666.
Keep Jumping !!
<;-)

http://www.usagold.com/cpm/aboutcpm.htmlIf, truly, you're interested in assuring that some portion of your investments are indeed more tangible metal than mere representative paper, I would suggest you contact a reliable precious metals dealer/broker.

For silver, gold, and platinum, the link will give you info on one of America's very finest, in business since 1973.

R.

http://www.usagold.com/webads/gold-coins.jpgUSAGOLD-Centennial Precious Metals can meet your needs with the Real Deal.

Phone TOLL FREE 1-800-869-5115

R.

Aren't most of the folks on this forum of the persuasion that a mix of physical and paper "assets" is at least feasible, if not desirable?

I certainly can't speak for others' opinions here, but if you double-check my post you'll see the words "some portion".

R.

Excuse me for the interruption but I thought today's absolute drubbing of the major gold & silver stocks- PAAS, CDE, SIL, NEM, for example- is a real time example of why the physical is the REAL deal. Bolivia's possible nationalization of mines will NOT harm the value of gold or silver. It is apparently harming the paper stocks enormously.

Some have advised against a big exposure to volatile countries - but the fact is, they ALL are, yes?

Paper should be acquired with he same diligence as
any other necessary commodity. Imagine life using papyrus
or oak leaves to perform daily tasks instead, such as on writing paper, the Sunday paper, legal paper, scrap paper, wiping paper, promissory paper or contractual paper.
Papering over disagreeable things is ok if it's done with old newspaper or devalued notes.

Like FRN's?

@ The Hoople,

Thanks for the info about Boilivian nationalization. I was wondering why the HUI stocks were getting so seriously hammerd on an up day for PMs.

http://today.reuters.com/business/newsarticle.aspx?type=bankingFinancial&storyID=nL0269046ℑid=∩=Barclays takes chair of London gold fixing
Tuesday 2 May 2006, 7:53am EST
LONDON, May 2 (Reuters) - Snippit: "Barclays Capital, the investment banking arm of British bank Barclays Plc (BARC.L: Quote, Profile, Research), has assumed the chair of the London gold fixing from HSBC (HSBA.L: Quote, Profile, Research) for 12 months, HSBC said in a statement on Tuesday.
It was decided in May 2004 that the chair of the fixing would rotate annually among the five member firms. Since then, the fix has taken place by telephone and members no longer meet face-to-face, as was the case earlier.
Other members are Deutsche Bank (DBKGn.DE: Quote, Profile, Research), Scotia Mocatta of Canada's Bank of Nova Scotia (BNS.TO: Quote, Profile, Research) and Societe Generale (SOGN.PA: Quote, Profile, Research), the statement said.
The twice-daily fixing aims to provide an opportunity to market players to buy and sell gold at a single quoted price. It also provides a benchmark price for producers, consumers, investors and central banks."

Here we see some prominent names that in recent years have had various roles identified in the gold market. Societe' Generale is known for their recent bullish expose. Other players like Barclays stand out for their metals purchases.
It's a small world after all!

http://www.rense.com/general70/doro.htmHidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world - more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. Three companies have been chosen to lead the way. Test drilling has already begun

---Snip---

Could this be true?

http://www.mines.edu/outreach/cont_ed/emfi2005/OilShale.pdf#search='shale%20oil%20green%20river'I found and read this file...the shale oil story appears to ve true.

It's like those too good to believe offers you receive in the mail. It's crappy oil shale, probably takes more energy to convert to oil than it releases, plus you'd have to build an enormous infrastructure to handle it. It's like the tired old "oil sands" outfit they trot out on the runway every so often. If it looks like a leisure suit, it walks like a leisure suit, and it talks like a leisure suit, it's a leisure suit!!!

It seems to me that an independent group if anyone should establish the "settlement price" twice daily. If any of the members of this group is in the business of trading gold in whatever form, it is an obvious conflict of interest. "Fixing" the price is the correct name for it when traders collude to set a market price. Price fixing is generally thought of as a shoddy way to do business and flat out illegal in many places. Not the stuff freegold is made of.

Not a salesman here but have heard rumors of even more advanced technology being brought to bear for in-situ heating...among these are microwave generators for low level heating and/or fuel cells that use the embedded methane of the deposit as fuel for the heating. At such depth the amount of heating only needs to be minimal as there is nowhere for it to escape. The heat builds slowly until the extraction temperature is attainned. previous ISP required large amounts of power to run the electric resistance banks making the process less economical. Shell is definitely a player and has bought into a deep oilsand configuration in the athabasca for piloting their technology as well. Not sure which players have what technology at this point.

This is good for future oil pricing domestically but is still a ways off from production

I believe the only paper held by CEF are Mocatta Deposit certificates for gold. To my knowlege the certificates represent allocated physical bars numbered and audited. I am not aware of any silver paper being held.

US Gov't now leasing lands to oil companies for exploration - of 18, 14 companies were rejected including XOM. CVX is still in the running. Does anyone know the status?

http://www.rockymountainnews.com/drmn/energy/article/0,2777,DRMN_23914_4611832,0 0.html

"The Green River shale deposits in Colorado, Utah and Wyoming are estimated to contain 1.5 trillion to 1.8 trillion barrels of oil, and while not all of it can be recovered, half that amount is nearly triple the proven oil reserves of Saudi Arabia.

The agency has rejected 14 out of the total 18 applicants on various grounds. Among those rejected was Exxon Mobil, the world's biggest company with revenues of $339.94 billion in 2005.

The companies want to develop technologies to extract oil from shale in 160-acre tracts in Rio Blanco County.

The fate of the three companies still in the running in Colorado, including energy giant Shell, is up in the air. Shell has been testing oil shale technology in a private plot near Meeker since the late 1990s and hopes to have a commercially viable operation by 2010.

The two others are Chevron and EGL Resources. The BLM says it will decide by early summer."

http://www.rockymountainnews.com/drmn/energy/article/0,2777,DRMN_23914_4611832,0 0.html

May 2, 2006
SAN FRANCISCO (MarketWatch) -- On Monday, Bolivian President Evo Morales said the move to nationalize the country's hydrocarbons sector was just the beginning. "Tomorrow it will be the mines, the forest resources and the land," he said, according to the Associated Press.

In research note Tuesday, analysts at Bear Stearns said that the headlines emerging from Bolivia are "unlikely to contribute to anything other than transitory short-term pressure on the stocks most exposed to the hydrocarbons sector."

"We would be more concerned, however, with mining stocks with assets in Bolivia,..." they said, adding that "the pattern we have seen in Venezuela is that energy companies are subject to seeing their concessions changed first and that mining concessions come next."

-----------

We continue to warn against this particular investment risk to mining company shareholders as gold gains in price and strategic importance.

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

May 2 (from MarketWatch) -- Gold futures climbed more than 1% to close at a quarter-century high above $667 an ounce Tuesday, as a weak U.S. dollar, strong energy prices and concerns about Iran's nuclear program fed into investment demand for the precious metal.

"Traders were watching a sinking dollar and the apparent diversion of petro-dollar profits into bullion (a repeat of the pattern that was last visible in the gold run of 1980)," said Kitco's products analyst Jon Nadler.

So, "while a correction is surely out there, the numerous bullish fundamentals have created the 'perfect storm' for gold and silver," said Peter Grandich, editor of the Grandich Letter.

"We are not likely to see this again in our lifetime."

COMEX June gold contracts closed up $7.20 at $667.40 after topping at $669.30. Futures prices haven't traded at these levels since November 1980.

The benchmark gold contract climbed $5.70 on Monday, leading a broad-based advance in the metals sector as the dollar hit a one-year low against the euro and a seven-month low against the yen. The dollar remained under pressure Tuesday as investors awaited Federal Reserve Chairman Ben Bernanke's speech on Wednesday for more clues on the U.S. interest-rate outlook.

In the latest developments surrounding Iran, leading diplomats from the five permanent members of the United Nations Security Council -- France, the U.K. the U.S., Russia and China -- and a representative from the German government were meeting in Paris, ahead of a formal May 9 meeting in New York at which foreign ministers from the council member countries and Germany are due to meet to discuss some sort of resolution.

As the financial markets watch the Iran situation closely, a per-ounce price of $700 for gold "now looks likely from current price levels over the coming weeks unless there is some significant negative event to set the market back," said John Meyer, a mining analyst at Numis Securities.

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

http://www.business-standard.com/common/storypage_c.php?leftnm=10&autono=89630May 03, 2006 -- The recent hike in gold prices had affected the sale of the yellow metal only marginally and city jewellery store managers maintained that they have not faced losses.
�
The price hike is because countries like Japan, China and Russia are involved into bulk buying of gold, said jewellery industry sources here.
�
So the demand has gone up while supply is limited.

Gold prices on February 15 were Rs 7920 for standard gold...

Gold prices spiralled to Rs 9770 for standard gold on May 2.

At Satramdas Dhalamal, the high profile jewellery shop at Park Street, manager Rajesh Jhunjhunwala is of the opinion that price hike affecting sales is a misnomer.
�
"People buying gold jewellery always feel it is value for money," Jhunjhunwala said.

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

For newbies, in India, gold jewelry is synonymous with gold investment -- that is, with tangible, reliable WEALTH. It almost goes without saying that indestructible WEALTH in a liquid market is a good trade, good value in exchange for inflatable paper money.

R.

Silver Stock Report
5-2-2006
by Jason Hommel


Silver ETF


As of the close of business on Friday 4-28-06, the Barclays iShares Silver Trust ETF (Trading symbol: SLV) had nearly 21 million ounces of silver, up from 1.5 million ounces of silver when it started trading Friday morning. The Silver ETF (SLV) continues to be priced slightly higher than silver bullion spot prices; at present the ETF is at about $14.27/oz., (minus half of 1% annual fees and other expenses), while silver is at $14.18/oz. This spread, driven by market created demand for the ETF, creates the arbitrage incentive for the Silver ETF market makers to buy physical silver, in lots of about 500,000 oz. for 50,000 ETF shares, for the trust. Twenty million ounces is a shocking increase in the amount of silver purchased in a single day, and at this rate, the Trust could obtain about 100 million ounces of silver by Friday this week, and by next week, we might see a default on delivery of silver via NYMEX futures contracts! Silver moved up over $1/oz. on Friday, up again about $.50/oz. on Monday and up another $.20/oz. Tuesday.

http://news.ft.com/cms/s/391b7774-d978-11da-8b06-0000779e2340.htmlIn my post of a couple weeks on the coming devaluation of the dollar, I made the following point:

"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."

In this morning's Financial Times, Morgan Stanley's Stephen Roach made a similar point.

------

Financial Times - The world economy may be able to unwind its current imbalances without serious disruption, Stephen Roach, Morgan Stanley's famously bearish chief economist, predicted yesterday, in a remarkable revision to several years of gloomy prognosis.

Mr Roach had long warned that the US current account deficit and Asian central banks' ballooning currency reserves risked destabilising the global financial system.

But yesterday, in a note to clients, he said: "I must confess that I am now feeling better about the prognosis for the world economy for the first time in ages."

His comments came as the dollar hit a one-year low against the euro and seven-month low against the yen, as investors remained confident the Federal Reserve was nearing the end of its interest-rate-tightening cycle. Mr Roach said the tipping point had been last month's decision to mandate the International Monetary Fund to begin multilateral discussions with the aim of resolving the largest trade imbalances. At the same series of meetings, the Group of Seven highlighted the need to address the imbalances, underlining policymakers' apparent resolve.

"I've been wringing my hands over the mounting global imbalances for longer than I care to remember," said Mr Roach. "The world is finally taking its medicine - or at least considering the possibility of doing so. The risk is that this is so far only on paper, but it's a critically important first step."

----------

MK: Of course, for the world to take its medicine, it must let the dollar drop -- an event of considerable import to gold owners. I would caution Mr. Roach that should he get what he wishes for, the inflationary fires will be mercilessly fanned. I do understand, however, that this might still be the best of an exceedingly bad list of outcomes -- at least for the interim.

Gold ownership is the answer. The current dollar price is prelude.

that when Roach talks about the change being thus far on paper only, he concedes the same point I do. That the dollar devaluation depends upon the implicit agreement of Japan, Europe and China. If the Big Three were to meet the U.S. attempt at devaluation with devaluations of their own, the policy will have been neutralized. The end result of that? International inflation with the potential for international hyperinflation. With all due respect to Mr. Roach, I do not see the same evolution of a positive outcome. I see a 'damned if you do; damned if you don't' scenario in which there are no clear winners except the individuals wise enough to avail themselves of the requisite protections.

MK just touched on a related question I had about the dollar devaluation. I read in the Washington Post recently that South Korea may not be on board this dollar devaluation scheme and the article stated that traders believed that South Korea was printing more of its own currency to buy dollars to keep the Korean won low against the dollar. Futhermore, I haven't read anywhere that China has agreed to work with America to devalue the dollar. I am thinking the Fed plans on devaluing the dollar on its own without the consent of other major countries like China. I think the Fed plans on printing enormous amounts of dollars and daring countries like China to print yuan knowing that this would cause huge inflation in their own economy. The Fed basically will try to force a dollar devaluation against the China yuan.

Also, I am wondering what people especially MK think about where credit card interest rates are going in the next few months? Thanks.

"The road(s) to Serfdom" have many routes. Hayek's socialist dependence is only one.

Milton Friedman's "inflation is everywhere and always a monetary phenomenon." And financial capitalism's continually expanding supply of money and the accompanying depreciation of purchasing power is another route. The current necessity to devalue the US dollar against other currencies is a direct result of a massive money supply increase during the Greenspan era to bail out bad loans(many foreign) made by American banks coupled with efforts to prevent assets (primarily paper) from falling. The serial rotating asset bubble is coming home to ride on the shoulders of the middle class and will, no doubt, substantially reduce living standards.

David Ricardo's "iron law of wages" (wages fall to a subsistence level when an unlimited supply of workers compete in an unregulated market) is another. One cannot forget the exportation of the manufacturing base to slave labor states coupled with non-enforcement of immigration laws when considering that route.
(And the cultural destruction associated with a too rapid attempt to assimilate huge numbers of very poor people with no tradition of democratic government speeds the way.)

But the most rapid expressway has to be a government of purchased front-men who cannot be elected or retain their offices without taking money from the corporate forces who advance their own version of a feudal system.


I find it hard to believe that the majority of those who sell products or services to the public seek a society with the level of income and wealth disparity as the one at the end of the road the USA is now traveling, and I feel sure that those who are wage earners (white collar or blue) still in their working careers do not want that outcome.

For the elderly and retired, the constant purchasing power loss associated with the federal-reserve note does not paint a pretty picture of the future (an incentive to move into gold or other sound money).

http://www.larouchepub.com/eiw/public/2006/2006_10-19/2006-17/pdf/06-8_617.pdfAs of last month, I would say we've already boarded the hyperinflation train that's careening towards a disastrous crash. Larouche has a good article on this.

"The fakery of the outgoing Alan Greenspan administration, in burying the "M3" report, was clearly intended to conceal the fact that the rate of rate of increase of world prices of primary materials has the world as a whole currently on the same kind of "least-action pathway" curve of hyperinflation which gripped Weimar Germany during the second half of the year 1923.

Comparing the present rates of rates of increase of primary materials prices with the pattern for Germany 1923, indicates the likelihood that, under present U.S. and European policies, the world system could reach a point of collapse of the monetary system by not much later than September 2006, if not earlier.

Under the present trends in policy-making in the U.S. government, both in the careening economic-financial lunacy of the current Bush Administration, but also the "Alfred E. Newman"-like diffidence of a negligent U.S. Congressional fraction of the Democratic Party, the likelihood is that the world system as a whole will be in a U.S.-dollar-triggered collapse-phase before Autumn."

http://www.netdania.com/ChartApplet.asp?symbol=XAUUSDOZ%7Ccomstock_lite$670 breached at 11:30 PDT

And $675 a bit later, just as Hong Kong closed for the day.

At the beginning of the year we had an informal gold-price guessing contest on this forum. I figured a top of 30% over last year, or $672. Of course we are already above that level. Am I upset? Hardly.

I remember my guess was one of the lower ones among our participating forum members. Who's the next one to be taken out?

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

The Harvest
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

Gold & Silver hammered since 10AM but fighting back mightily...Go PM's...Rah Rah Rah!!
Just thought they could use a cheer for moral support

https://liteblue.usps.gov/news/link/2006may03extra.htmUSPS seeks price adjustments
Governors propose "forever stamp"

The Governors of the U.S. Postal Service today proposed a "forever stamp" as part of a broader rate adjustment plan that would go into effect next year. Customers would be able to purchase a special First-Class stamp that would be good for any future single-piece First Class letter mailing, no matter how prices might change beyond 2007.

"A forever stamp would help ease the transition to any future price adjustments," said Board of Governors Chairman James C. Miller III.

...

Flatliner � When (if) this comes out, this will be a better investment then government bonds (but not anywhere near as good as gold)! It will also make for a great way to preserve purchasing power for small amounts of cash. During hyperinflation, as people race to convert cash into tangibles, "forever stamps" will offer an alternative to cash. That is, as long as the post office can stay in business.

http://www.ishares.com/fund_info/detail.jhtml?symbol=SLVFrom the link:

Profile as of 05/02/2006

Total Net Assets $445,408,550, Ounces of Silver in Trust 31,998,959
Shares Outstanding 3,200,000, Tonnes of Silver in Trust 995.3

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

Gold is off on a tear again this morning, exceeding recent highs and over 25-year ago levels. The conventional wisdom is that gold is reacting the "growing tensions over Iran and high oil prices."

Have you ever heard such clap-trap? Look: Inflation is running at 9% internally, so if you want to forecast the year end price of oil, all you need to do is figure out how much 8-9% inflation will add to prices by the end of the year.

Today is 5/3. So by 1/3/07, at the present (most recent) 8/10th's of one percent per month rate, things will be 6.58% higher than they are now (at the 8% inflation rate) or 7.43% higher at the 9% annual rate.

Year End Current Rate Oil Silver Gold
Today's High $ 74.61 $ 14.6 $ 677.3
8% Inflation $ 80.58 $ 15.77 $ 731.48
9% inflation $ 81.32 $ 15.91 $ 738.26
10% Inflation $ 82.07 $ 16.06 $ 745.03

Personally, I don't see the powder keg (Middle East Messes/Petrostan) remaining anywhere near stable, so you can throw in whatever multiplier you want. When or if that blows up, again, we'll have the first nuclear winter all snuggled and warm. (The second one is bothersome, but let denial rule, will yah?)

Will gold and silver replay copper? My friend the Gold and Silver trader figures that at the beginning of 2003 copper's high was $.7915. Today, copper is $3.3950. Hmmm, a 4.28 times move. Now, if I apply that to $677.3 gold, that'd be $2,898 gold and $62.48 silver. Personally, I expect silver to best $100 shortly thereafter, as that would be the inflation-corrected echo of the $50 all time high in the 1980's...


Goldilox

George Ure's take on simple inflationary muplipliers and PoG.

Your comments on the matter reveal you to be of keener-than-typical insight. Thanks for sharing!

R.

http://www.goldensextant.com/SavingtheSystem.htmlHow the system was saved and why it may not work this time.

@ Flatliner,

How ironic, as The Costner movie "The Postman" was on the cable this week.

Maybe that, in their small way, is a plan to save the country.

http://www.safehaven.com/article-5089.htm"Rather than try to deal with the fact, it's as if the rise in gold simply hasn't happened or has no meaning as far as Wall Street and the global monetary authorities are concerned. Evidently the price of gold is one market signal that the so-called "free market" types would rather ignore."

Another quiet day... Nothing to see here... move along!

"to much of the world, the U.S. appears to be unilaterally, "pre-emptively" embarked on policies which seem to have the effect, well-intended, unintended or otherwise, of helping to destabilize key regions, such as the Mideast, Iran, central Asia, North Korea, the former Soviet republics, etc. East Asia and Saudi Arabia are in effect financing the ability of the U.S. to pursue these unilateral policies by holding huge amounts of very low-yielding U.S. debt securities which will most likely significantly depreciate."

So who says the Saudis are not doing their part in the war on freedom? Blah blah blah....

Yerch!

http://business.iafrica.com/news/289614.htmWed, 03 May 2006 -- Spot gold on Wednesday climbed to $677.60 a troy ounce, the metal's highest level since October 1980...

"Gold is higher due to the increase in Brent crude oil and the weaker US dollar as well as geopolitical tension. Gold could reach $700/oz tomorrow or very soon. There is nothing to stop gold going higher at this stage," Absa trader Byron Woods in Johannesburg said.

Dollar sentiment falling

"There seems little to stand in the way of further near term gains term as sentiment towards the dollar has deteriorated markedly and there is - so far - no sign that the measures taken by China to slow credit growth have hit investor sentiment towards precious metals," London-based UBS analyst John Reade wrote.

"We do remain cautious about announcements that could be made following the Chinese May week holiday which ends on Friday...

As the crude oil price edges towards $75 a barrel and tensions between Iran and the West continue to heat up, the likelihood of a test to $700/oz looks increasingly likely as investors turn towards more traditional safe-haven assets, UK-based TheBullionDesk.com analyst James Moore wrote on Wednesday.

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

Never forget that gold is global. This is what's currently running on the pages out of Africa...

R.

http://www.moneyweek.com/file/11958/is-gold-still-heading-for-1000-an-ounce.html(excerpts) -- Less than four years ago, in one of the first issues of this newsletter, when gold was trading at about $313 an ounce and only favoured as an investment by a few enthusiasts, I explained "why gold is heading for $1,000."

Now we're already halfway to that target, and the yellow metal is starting to attract the attention of the wider investment community....

Over the past year gold prices have strengthened in all currencies, without getting any lift from a weakening dollar. When the greenback resumes its slide, that could give new impetus to gold.

The fundamental imbalances in America's foreign trade remain, and indeed grow worse. For the moment, private investors and foreign central banks remain willing to continue financing the deficit by pouring money into the US, but for how much longer?

Any weakening in the greenback would be good for gold. But if a gentle slide picked up momentum on the downside, that would trigger a fireworks display in the gold market.

...Downside risk in gold is quite limited because there seems to be a substantial amount of demand from long-term investors waiting to buy in at lower prices. Citibank says in a new Industry Note that gold "will prove resistant to any catastrophic sell-off, due to pent-up physical demand in price-sensitive Asian markets."...

Gold should be a core holding in everyone's portfolio.

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

It still amazes me that a commentator can write so much about gold and yet still leave out the most important bits. Are these folks being paid NOT to sound the alarm? Or better said, are they being paid to ring the bell only ever so gently?

Fine. Here it is again, laying out what YOU need to know...

Some clever central bankers and private investors have realized that they don't need to endure the domestic depreciation and forex risks that come with chasing paper interest on paper debt when rising gold market value under a 'freegold' physically-based market regime can provide all the sought-after capital gains while maintaining the security of a wholly-owned asset which is itself unburdened by the risk of debt-ridden counterparty default.

Think long and hard on that one if you are new to these pages and to the best that gold has to offer.

R.

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

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

WEDNESDAY Market Excerpts

May 3 (from DowJones) -- The New York precious-metals complex finished mixed Wednesday after a roller-coaster ride, with gold and platinum managing to regain their legs and finish higher after a sudden midday drop-off, but silver and palladium wobbling to lower closes.

The metals alternately ran into profit-taking and bargain hunting in reaction to movements in the energy market, traders and analysts said. Otherwise, early in the day, COMEX gold hit a quarter-of-a-century high and Nymex platinum hit an all-time high.
June gold settled with a gain of $1.10 to $668.50 while May silver fell 41.5 cents to $13.795.

June gold hit a contract high of $679.80 Wednesday morning, the gains were linked largely to fund and speculative buying, with more safe-haven flows due to worries about Iran's nuclear program, as well as still-high crude oil prices and the recently softer tone in the dollar.

Some contacts also pointed to worries that Bolivia would nationalize its mining sector after doing so this week with the energy sector.

Around mid-morning, however, crude oil turned sharply south and the metals followed, floor traders and analysts said. The main catalyst appeared to be a report from the Department of Energy showing that U.S. crude-oil and gasoline stocks climbed in the latest week. This caused June crude to fall below $73 a barrel after it had missed $75 by a single penny overnight.

The metals often follow moves in crude, thus profit-taking set into gold and silver, with sell stops hit, traders said.

"It was definitely a reactionary day," said Larry Young, senior trader with Infinity Brokerage Services. But after bottoming at $660 at 10:35 a.m. EDT, June gold was back around $672 just one hour later and eventually got even higher than this.

"We had a massive buyback that was pretty impressive," said Young. Funds and other speculators used the decline as a buying opportunity, and there was support around the $660 low...

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

http://www.moscowtimes.ru/stories/2006/05/04/256.htmlHONIARA, Solomon Islands -- An abandoned gold mine in a jungle in the Solomon Islands, one of the richest veins in the South Pacific but shut due to ethnic violence, could be a lifeline for the troubled nation.

The government hopes the Gold Ridge mine, expected to resume gold production by the end of 2007, could spark vital investment and create jobs in an impoverished nation where just 9 percent of people are formally employed.

Finance Minister Peter Boyers said the youth of the Solomon Islands, half the island's 500,000-strong population, need a future if the chain of 992 islands is to end the cycle of instability.

"These youth want a vision and some sort of hope that they are going to have a future, whether it's formal or informal -- it's our responsibility to create it," Boyers told Reuters in an interview at parliament house in the capital, Honiara.

... There has been little economic recovery since ethnic fighting brought the country to the brink of bankruptcy in 2003, leaving many in the 500,000 population angry at what they see as continuing political corruption.

Dense lantana weeds cover rusted earth-moving equipment at the Gold Ridge mine, an hour and a half's drive from Honiara.

Worker camps and tool sheds are barely visible through the dense tropical foliage. Only a handful of squatters now pan the land in search of gold dust.

Before the warring factions in the province overran the mine and chased workers off with machetes in 2000, Gold Ridge was yielding 150,000 ounces of gold annually...

Gold bullion sells for as much as $636 per ounce on exchanges half a world away in New York and London, more than double the bullion price when the mine closed six years ago.

Boyers said the Solomon Islands, which relies on aid for 70 percent of its budget, has worked hard to restart the mine...

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

One can hope that higher gold values, more fundamentally driven on physical demand rather than 1st-World derivative pricing dynamics, can help mitigate some of the prevailing problematic economic asymmetries of the world.

R.

http://www.bloomberg.com/apps/news?pid=10000085&sid=a_lm0bF.JU8g&refer=europeSnip:

"...
Otmar Issing is coming into fashion -- just as he prepares to retire as chief economist of the European Central Bank.

Issing, 70, who attends his last interest-rate meeting tomorrow, argues that analyzing the flow of money through the economy helps central bankers identify asset-price bubbles. His view is attracting greater attention as property, stock and commodity prices surge globally.
..."

Sundeck: Well, that seems sensible to me...understanding how monetary infusion is partitioned throughout the economy would seem to be a necessary (but not sufficient) ingredient for determining "asset bubbles".

It is not "sufficient" because, having determined the flows, one must then judge whether those flows are appropriate, according to the "public want" in the short and longer terms. If the money is flowing into tulips, for example, who is to say that tulips are not going to become the next big thing, and stay that way in perpetuity...rather like religion, or houses, or fashionable modes of transport, or...even gold?

Issing and Bernanke's (Greenspan's as well) views appear to be a little bit at odds...but perhaps not so much. Having determined where the money is going, it boils down to what you (a central banker) do about it...if anything...and is it your (a CBer's) job anyway? Or do you just let the global public workit all out in their own way...sounds like an ge-old fundamental debate between the role of the free market and the role of the state (representing the "public good").

:-)

ge-old = age-old

666.4

Hmmmm...

I think King Gold just took a look at his adversary, got his number, and sang, "Pleased to meet you; hope you guess my name... So if you meet me, have some courtesy. Have some sympathy, and some taste. ... or I'll lay your soul to waste."

Or, is it, as Stevie Wonder sang, "When you believe in things that you don't understand, then you'll suffer. Superstition ain't the way."

Ever since 1913, and probably way before then, we've really been in that quandary. WHO is the Master we serve? Which is the Superstition we believe in?

The winnowing begins...

http://news.ninemsn.com.au/article.aspx?id=98620Uhh...oh, it looks like Bolivia's nationalistic hubris has set alarm-bells ringing over the hills in Brazil...so...it seems that Latin America is not all one big happy family with dove-tailing idiologies...

One can sympathise with poor nations wanting more for their resources, but, like in chess, it pays to look ahead for more than one move...

;-)

Good read on the Bob Landis article. Recommend it to all.

http://news.goldseek.com/RickAckerman/1146754800.php
SNIP
The recent rally in the euro is due to the anticipation of the introduction of the new Iran Oil Bourse.

http://www.spectator-online.com/vnews/display.v/ART/2006/05/03/445947fe04163
Tax needed to fund public transportation improvements
SNIP
Currently, OPEC (Organization of Petroleum Exporting Countries) and nearly all of the global oil trade is conducted in American dollars. Fears of a switch to the Euro has alarmed many economists in the United States. A switch would have a disastrous effect on our economy.

http://www.pbs.org/nbr/site/onair/transcripts/060503a/Snip: LARKIN: The dollar is the world reserve currency and to the extent that individuals, central banks and businesses find themselves with more dollars than they`re comfortable with, they diversify away from the dollar. And one of the instruments they may diversify into is gold. (end snip)

This is your wake-up call Mr. Sixpack. And how much more J6P can you get; NPR's main sponsor's commercial starts off with a close up of a smiling fish? I always get a chuckle out of that fish.

http://news.yahoo.com/s/ft/20060504/bs_ft/fto050420060203106717;_ylt=Ao9Rr9Z5298I9n.UZiPPt2P2ULEF;_ylu=X3oDMTA5aHJvMDdwBHNlYwN5bmNhdA--China Still Vulnerable Despite War on Bad Debt - FT - Richard McGregor - May 3, 2006
Despite official rhetoric, bad loans are increasing. Until the NPL(non-performing loan) problems are solved, "the banking system will remain vulnerable to potential liquidity shocks." Welcome to modern finance.

Good one. All those experts and STILL no mention of mark to market etc. We mustn't take on TOO much risk, diversifying into gold must we? ;)

http://www.businessday.co.za/articles/economy.aspx?ID=BD4A195098snip:

LONDON - Major gold miners significantly reduced their hedging commitments in the first quarter of the year, a report sponsored by Mitsui Precious Metals said today.

The report said the global hedgebook fell by 5,0 million ounces to an estimated 48 million ounces, mainly due to a massive reduction by the world's biggest miner Barrick Gold, which cut forward sales by 4,7 million ounces.

"This is the largest quarterly decline since Q1 2003, when the global hedge book was a much larger 78 million ounces and marks a turnaround in the much lower levels of dehedging seen recently," the report said.

Dehedging in the previous two quarters was below 500,000 ounces.

"Barrick's enormous hedgebook reduction provides a compelling explanation for the robust gold price in Q1 and Q2," said John Levin, head of marketing for Mitsui.

Spot gold was last at $666,60/667,60 a troy ounce, little changed from New York's late quote of $666,80/667,80 but well off an earlier low of $660,40.

Prices hit a fresh 25-year peak of $676,30 yesterday.

Barrick also announced it had made another cut to its hedge book of 1,0 million ounces since May 3 and said it intended to eliminate another 2 million ounces by the end of the year.

Barrick became the world's largest gold miner earlier this year when it took control of Placer Dome.

The Mitsui report, written by Virtual Metals and Haliburton Mineral Service, said full results would be available shortly.

"With many companies still to report, including AngloGold Ashanti, dehedging could be even greater than our estimate," it said.

-Goldilox

The lobsters are trying to climb out of the boiling pot. Are they in time to same themselves fom becoming "dinner"?

I'm sure there will be analysis of the Barrick report and their 4.7M oz. hedgebook reduction (in only 30 days!). Can't wait to here Bill Murphy's take. In the mean time:

How could they report a 220 million profit when the hedge book took a 1.2 billion loss? Don't they have to report any hedge losses or gains when closing out a position? Isn't this a 880 million loss?

Rather than slanting this hedge reduction as "gold supportive" isn't it wildly bullish that in a single month gold gains nearly $100 with only a 5M oz. hedge reduction? With 48M oz. left at this rate it would take a further $960 gain to clear the books. (48 divided by 5 = 9.6 or $960)

Since when did Virtual Metals and Haliburton become authorities on hedge management? Some Jessica Cross meets Dick Cheney Frankenstein?

The listed remainder of Barrick's hedge would be almost impossible to cover without stunning losses judging by this round of covering. What is their estimated hedge loss at $1,000 oz.? $1,500 oz.? Gold could be there next month if any cabal player hits the panic button.

Whew! They don't produce P&L statements like I do. It's like the hedge book is just something silly from the past and since they don't do it anymore they don't count it. That wouldn't "play in Peoria", or in my CPA's office.

They're throwing the kitchen sink at it yesterday and today- amazing action. Trapped shorts make for great entertainment! It reminds me of a horse reduced to swatting flies with its tail, while the lions are circling.

http://www.resourceinvestor.com/pebble.asp?relid=19433The New York Mercantile Exchange, Inc. today announced margin changes for its gold and silver futures contracts, effective as of the close of business tomorrow.

Margins for the May, June, August, October, and December 2006 gold futures contracts will increase to $2,750 from $2,250 for clearing and non-clearing members and to $3,713 from $3,038 for customers. All other months will remain unchanged.

Margins for the May, June, July, and September 2006 silver futures contracts will increase to $6,000 from $4,500 for clearing and non-clearing members and to $8,100 from $6,075 for customers. All other months will remain unchanged.
Flatliner � We've seen what this has done to the price before.

What happened to POG / POS the last time the margin requirements were raised? When did that last occur?

Thanks!
PA

Take a look at April 19th. Gold held up well, but silver went for a joy ride. In the archives for the 20th, you'll find the most likely reason � margins where increased for Silver. Now, margins are changing again.

The real question is, did the speculators get flushed out last time? Those would be the most likely to feel the squeeze of higher rates on their speculative source. If they did not, we might find them scrambling to cover - selling.

Note that these rates are said to go in affect Friday at close, thus Monday, those that have not paid attention � will.

http://www.nymex.com/press_releas.aspx?archive=2006Per the NYMEX news archives (see link) the margins have been increased seven times since the start of the year from $2,000 to $6,000.

With leverage effectively cut by two thirds, it is amazing that POS continues to march onward with little regard to these changes to the rules of the game except for the occassional hiccup.

Thoughts?

PA

Druid: In the not to distant future, there will come a day and time when these types of shenanigans will not work and at that point, the "GIANTS" will have taken over.

I completely agree. As the margin ratio approaches 1:1 (no leverage) all speculative value will be lost. Those gambling on the future price will find the return on investment unsuitable for the risk. At that point, the "ANTS" will hang on for the ride and we'll most likely find that the physical market will be more attractive then the contract market.

Time will tell.

It just occured to me the the "forever" stamps proposed by the USPS resemble the selling of US infrastructure (toll roads, bridges, and ports) to foreign management.

The wide spread goal seems to be to balance current budgets at any cost to future generations. The non-polital arms of government seem to be acting in a cery "political" manner.

When governments completely foresake future planning, what is the message to constituents?

Are they telegraphing the demise of current systems?

Is it entirely coincidence that the new margins are announced exactly as PoG approaches Sinclair's second price magnet of $682?

Chase the specs out, if you must, but it will take a lot more than a few margin increases to chase the gold and silver OWNERS out of their positions.

Of course, the talking heads will immediately commence their "Gold bull is over" song and dance!

doo dah, doo dah!

You lost me with your insight. I would like to follow if you're willing to share a little more of your thoughts.

@ FL,

OK, it might be a flimsy trail, but let me give it a shot.

The forever stamps are designed to take advantage of the scare of inflation, and for those not frightened, the "certainly" of inflation.

Other than the 1930 collapse, has there ever been a period of NO inflation? Not really, because the bankster goernment system is designed to fleece the sheeple twicw - once overtly by the Taxmen, and once covertly with constant inflation.Thus I believe the USPS is capitaliaing on inflation expectations to garner "future" revenues now.

The same is true of those selling toll roads, bridge and port contracts. They receive windfall start-up fees, in return for turning a large share of future revenues over to the lease holder. This allows the entities doing the selling to balance their miserable current budgets and look heroic, while actually selling out their progeny to more debt and fewer opportunities to cover that debt.

Is that clearer?

One has to wonder why TPTB fear deflation so much more than inflation. The simple answer is that inflation allows the money creators to maintain better control by compounding their debt with reflation, while deflation gives more power to potentially rogue short sellers.

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

May 4 (from Reuters, MarketWatch) -- U.S. gold futures settled sharply higher on Thursday, touching a 25-year high for a second day in a row, on investment buying amid a surge in the euro and copper prices, among other supportive factors.

"The euro rallied to a one-year high against the dollar and that is a huge buy signal for gold," said George Gero, vice president at RBC Capital Markets Global Futures.

"You absolutely saw speculative buying and short covering."

COMEX June gold closed the session up $8.00 at $676.50, after trading in a range of $662.80 to $679.80.

That peak, which also was Wednesday's session high, marked the priciest for gold futures since October 1980. In that year, prices set an all-time high above $870.

A flurry of bargain hunting began to lift gold early in New York after investors ditched positions previously with a fall in crude oil, traders said. Gold stretched higher in late trade as the dollar tumbled and after gold managed to hold above support at $670 to $675.

Gero added that concerns over greater political risk in producing countries in South America also fueled gold buying. Peruvians will go to the polls next month to choose between two leftist candidates, one of whom has pledged to rewrite contracts with Peru's mining companies and bring more of the economy under state control if elected.

The euro surged above $1.27 after European Central Bank President Jean-Claude Trichet strongly hinted that the bank will raise interest rates next month. A weaker dollar usually lifts gold prices as the dollar-priced metal becomes cheaper for overseas investors.

The NYMEX on Thursday will raise the margins for its gold and silver futures contracts, effective with the close of business. Separately, major gold miners significantly reduced their hedging commitments in the first quarter of the year, a report sponsored by Mitsui Precious Metals said.

Peter Grandich, editor of the Grandich Letter said he suspects the market will have a "$20 down day or even 10% correction any time now." But that "should remain a blip in an otherwise run away secular bull market that remains fundamentally sound," he said.

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

You stated that forever stamps are "designed to TAKE ADVANTAGE of the scare of inflation". [emphasis added]

That implies a profit motive by the USPS. However, it wasn't my impression from the prior brief blurb that these stamps were ever going to sell at above-market rates. My take (please correct me if I'm wrong) was that these forever stamps would always sell at current market rates. The difference from conventional stamps with a price denomination, however, would rest in the aspect that these stamps would be denominated as something akin to "good for one First Class delivery". That is, they wouldn't function like normal stamps as a form of postage currency for use upon the floating costs of future services; rather, they would function as a coupon for which a future service has already been paid in full.

It is very much like buying a pre-paid calling card that has been loaded up (credited) with actual predictable MINUTES rather than being denominated in terms of dollars.

Agreed, Flatliner?

R.

http://www.usagold.com/gold/special/2006may.htmlHeads up... the May Buyers' Group is being conducted even as we speak.

Have you gotten yourself enrolled in the e-mail notifications for this sort of thing?

Don't miss out, and don't be shy about calling, they're going fast.

R.

@ TC,

That was my first thought, as well, but when I found out they were not priced at a premium, I had to analyze why they would propose something that offered them no price margin benefit. It boils down what I opined in the previous post. They are hoping for windfall sales to cover current shortfalls, and the future be damned.

Would you not if someone offered you gasoline "futures" at a fixed price, buy all that you could reasonably afford in this current environment?

Just my opinion.

Some might answer, "Well, that's just insane," to which I respond, "no, it's government."

http://www.goldensextant.com/You are welcome.

More from Bob Landis: "After Monetary Collapse:
Strict Reconstruction or More Bork?"

I believe you are both correct. At the same time, I believe the problem they are trying to solve is related to the meltdown point for coins. As the intrinsic value (cost) behind the stamp exceeds the face value the stamp gets scrapped and they have to start over again. If they go to a forever stamp, the face value is dictated by the �office� at the time of purchase.

What they may (or may not) realize is that these are futures � or guarantees of future services. If the idea catches on, people will buy LOTS of these with today's strong dollar knowing that as the cost of delivery goes up they will really be getting a good deal.

This means that the USPS will see a huge influx of cash today. But at the same time, it means that as those stamps are used in the future when delivery is more expensive, the USPS will be taking losses - probably really BIG losses. These losses will most likely be at the tax payers expense.

The one good thing that I see here is that this concept of forever stamps means that their value will float with real inflation. You will get tomorrow what you buy today. That does not hold with currency. Unlike CPI numbers that don't really mean anything, the USPS will value the stamps at a price that will make it possible to do business. At least, they will try.

Gold does not act like this. Gold's value is determined by the market (at least that's what we hope for). Gold's value goes up and down based on how people feel about it. These stamps would be valued at the cost of doing business.

http://news.yahoo.com/s/nm/20060503/bs_nm/economy_manufacturers_dollar_dc_1snip:

WASHINGTON (Reuters) - A leading U.S. manufacturers' group said on Wednesday the dollar is still overvalued by nearly 10 percent and that even a fall of that magnitude would not be enough to bring global trade back into balance.

"The last time we had a normal value of the dollar was in January of 1997," National Association of Manufacturers President John Engler said in a statement.

The industry lobby group said the dollar (^DXY - news) has dropped 13 percent since its peak in February 2002.

"A further decline in the dollar is not a negative sign for the U.S. economy. In fact, with a correctly valued dollar, we should see a pickup in our exports, resulting in the growth of profits and jobs for U.S. producers," Engler said.

The group has been pressing for action on the Chinese yuan currency, which is kept under tight rein by Beijing and which U.S. exporters say gives Chinese competitors an unfair edge in global trade.

Faced with record trade deficits in the United States that could pose an economic threat if they correct too fast, finance officials from the Group of Seven rich countries last month issued an unusually specific call for China's yuan to rise.

Beijing has shifted from a dollar peg to a managed float with reference to a basket of currencies but has so far shown little inclination to hurry toward a market-set yuan.

"Since the dollar has been overvalued for almost a decade, merely bringing it back to equilibrium level with another 10 percent drop wouldn't create a sharp enough dent in the trade balance -- so the dollar would probably have to fall below that level for some period of time," Engler added.

- Goldilox

Now that the manufacturing industry has been almost completely gutted, TPTB want to "save" by allowing the dollar to devaluate.

Hmmm . . . the dollar is not dead; it just smells funny.

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

Dear Jimmy,

I make a motion that the grocers follow suit and come up with "forever" steaks, "forever" pork chops, "forever" fruit and vegetables, "forever" coffee and tea and most importantly, "forever" chocolate. They should also insist that their paper suppliers make "forever" paper available.

There is no doubt the price will be increasing so rapidly they will be unable to afford the stuff to make their signs with the prices changing hour by hour � a shadow of the Weimar Republic.

Your pal,
Dan

http://www.safehaven.com/article-5101.htmA good read from the good professor.

Snippets:

Exchange rules may be changed unilaterally favoring the shorts, prejudicial to the longs.

a 1979-80 style devaluation of all currencies against gold should be acceptable to all governments, even though the outcome would be the same. The dollar would be devalued against other currencies at various rates, higher for the yen, less for the euro, and least for the renminbi. The trading partners of the U.S. would tolerate that without retaliating with discriminating tariffs and quotas.

Come to think of it, a measured devaluation of all currencies against gold is the only hope to avoid an enormously destructive and protracted depression of the world economy that would be triggered by the sudden toppling of the Debt Tower of Babel. A planned melt-down, well-entombed inside of a golden sarcophagus, is the preferred way to go.

Yes, as you say, there is an iceberg of gold and silver which is unseen that never enters the market. Yes, the watchdog agencies know this (as well as the identity of the principals of the short sellers who fool the market in posing and parading naked while in full armor, in a reversal of Andersen's amusing tale) but they are sworn to secrecy

Goldilox: Today, you must be thanking your lucky stars that the fellow that you were trying to trade gold for his motorcycle a couple of months ago, didn't take you up on the deal. What's an old guy like you want with a motorcycle anyway...back problems?

Thanks for the more careful wording that the same stamps on any future day would be newly sold by the clerks at rates determined by the "cost of doing business".

That's exactly what I meant when I said that the stamps would "sell at current market rates", but in my rush to get my work done before an appointment at the barber's, I failed to state it more clearly as I should have with addition of the word 'then' --- the stamps would "sell at THEN current market rates"... for whatever higher prices are current THEN.

In the same way implied in the analogous cost for minutes that can climb whenenver you recharge your phone card.

Having a coupon for First Class Delivery and a minute of phone time are both distinct quantities of "ownership", and (barring a default by the service provider) that known quantity is what tends to attract people to buy more than their immediate need would call for. It becomes a form of savings.

In buying gold a person with paper savings is trying to accomplish a similar thing -- to convert some of their cash's purchasing power into a distinct and eternal tangible value at the prices available today. And gold is superior to stamps or minutes because there is no unique "service provider" upon whom the fate of the value depends. As gold is respected worldwide as the tangible superior alternative to paper and digital monetary savings, an owner of gold shall always have access to money at the THEN current exchange rate, thus he possesses eternal purchasing power in useful monetary units that give him access to a wide world of potential service providers.

Hence, because 'savings' of stamps and minutes each carry a risk of "service provider default", and also because even in the best of times each ultimately represents a strict limit upon the type of future service, they tend to reach a limit to the extent which people would hoard them up as savings (i.e., a society can only talk a limited amount of minutes in a lifetime or mail so many letters).

Gold on the other hand has no such natural limit to our desire to accumulate it as savings because via a simple exchange via the ubiquitious money markets it can ultimately be "redeemed" for any conceivable variety of goods and services available under the sun by any variety of productive human providers.

Further, one should not be inclined to think that a purchase of gold represents locking in a FIXED amount of purchasiing power for the future. In actuality it should perform much better, with any given mass of gold gaining in purchasing power as several factors combine. These include growth of the world economy (population, goods, services) faster than new gold can be mined. Another factor for promising upside is gold's present LOW exchange rate due to the current state through which our monetary system has been evolving, as finally resolved through a global rejuvenation of its role as the superior reserve/savings asset.

As Flatliner suggested, it's value shall be determined by the sentiment of people in the market, and a trememdous fog is lifting from the viewpoints of a large and currently goldless part of the industrialized world. The adjustment in gold's purchasing power against other real things promises to be stunning.

R.

The motion for a grocer's list of "forever" tangibles reveals that "Dan" hasn't quite gotten it the gist of it.

Again, once he, you, or I buy a "forever" First Class Delivery stamp at the going price, it remains forever a stamp for First Class Delivery.

Similarly, a steak is ALREADY a "forever" steak. Once you buy it and put it in your freezer, no matter how much the price may rise in the future, the steak remains forever a steak -- until you eat it. At which point the next "forever" steak you buy will probably cost more.

Now if Dan had been talking about "forever" steak COUPONS, truly then he'd be demonstrating that he's more closely gotten his mind around it.

Yes? No?

R.

http://fr.rian.ru/world/20060503/47168058.htmlFrom Novosti, the Russian news agency, May 03,2006
SNIP
Mrs. Chouchan Khatlamadjian, coordinator of the Institute of civil society and of regional development of Yerevan, speaking:
Iran cannot lose from maintaining peace and stability in the region of the Caspian sea. To this effect, it is prepared to give financial aid to other members of the Organisation for Economic Cooperation (OEC). For example, Iran proposes to build an oil-bridge (oleoduc) with Kazakhstan and Turkmenistan which later will link all the countries of the OEC
The realisation of the contract of elivery of Iranian gas to Azerbaidjan and the supplying of the autonomous Republic of Nakhitchevan (Azerbaidjanain enclave in Armenian territory) under swap conditions will constitute an important progress of the OEC in matters relating to energy.
The construction of an oil terminal in the port of Neka which will be integrated in the transport corridor of hydrocarbures in Central Asian countries is Another important Iranian project.
This will allow Iran to be the locomotive for the cooperation between OEC members in matters relating to energy. The opening of the IRANIAN OIL BOURSE will contribute to this project.

SORRY, COULDN�T FIND THE ENGLISH TEXT
"La r�alisation de ces projets permettra � l'Iran d'assumer le r�le de locomotive du d�veloppement de la coop�ration entre les pays membres dans le domaine de l'�nergie. L'ouverture d'une bourse du p�trole en Iran est de nature � y contribuer", a estim� Chouchan Khatlamadjia
"L'Iran a int�r�t � maintenir et � renforcer la paix et la stabilit� dans la r�gion de la mer Caspienne. A cet effet, il est pr�t � apporter une aide �conomique � d'autres pays membres. Par exemple, il propose de construire avec le Kazakhstan et la Turkm�nie un ol�oduc qui reliera ult�rieurement tous les pays de l'OCE", a soulign� Chouchan Khatlamadjian.
La r�alisation du contrat de livraison de gaz iranien � l'Azerba�djan et l'approvisionnement de la R�publique autonome du Nakhitchevan (enclave azerba�djanaise en territoire arm�nien - ndlr.) aux conditions swap constituera un progr�s important de l'OCE dans le domaine �nerg�tique.
La construction d'un terminal p�trolier dans le port de Neka int�gr� dans le corridor de transport d'hydrocarbures des pays d'Asie centrale est un autre projet iranien important dans cette sph�re, a poursuivi la politologue.
"La r�alisation de ces projets permettra � l'Iran d'assumer le r�le de locomotive du d�veloppement de la coop�ration entre les pays membres dans le domaine de l'�nergie. L'ouverture d'une bourse du p�trole en Iran est de nature � y contribuer", a estim� Chouchan Khatlamadjian

http://news.bbc.co.uk/2/hi/business/4974710.stmSNIP
The leaders of Argentina and Brazil have accepted Bolivia's nationalisation of its gas industry but want talks on future prices and foreign involvement

http://www.todayonline.com/articles/116603.asp...as Brazil and Argentina say: "Sooo-long, it's been good to know ya...", with Indonesia and Turkey considering doing the same...

Snip:

"...
Thus, ironically, the IMF profits from the very crises which its existence is supposed to help ward off.

The current system of funding was adopted in 1981. Together with the introduction of surcharges in 1997, levied on countries that fail to repay their IMF debts on time, it has helped keep the IMF liquid.

.....

The official said the diversion of IMF cash reserves [into bonds] had "absolutely nothing" to do with its gold holdings, which are formally valued by the Fund at nine billion dollars but at current high market prices are worth 60 billion.
..."

Sundeck: Mmmm...IMF profiting from the crises that it is intended to ward off? Funny about that...and then they attach an additional surcharge for late payment for good measure.

For an independent, "humanitarians" (versus an "economists") view of the IMF and World Bank, listen to Stephen Lewis's Massey Lectures "Race against time" on the tragedy unfolding in Africa and IMF/World Bank impositions.

Gordon Brown has been quiet lately about selling IMF gold...now priced at about US$60B...

:-)

I don't think Dan, in his dry humor, was trying to make a distinction between a frozen steak and a steak derivative, which is where you seem to be heading. Obviously, a "steak coupon" is only worth anything at all if there are steaks to be had, plus vendors who will honor the coupon. The phrase "Not worth a Continental" comes to mind.

But from that same perspective, a "forever" stamp is also a delivery derivative, and assumes that postal delivery is a "forever" available service.

The original question was, "Is the postal service forward selling its services, taking advantage of people's inflation expectations to increase current revenues at the potential expense of future revenues?"

If so, it reminds me completely of the lease of public utilities to foreign administrators to balance current budgets with the cash windfall at the expense of a portion of future revenues.

http://www.miningmx.com/gold_silver/292604.htmIt looks as if Barrick Gold has now decided to dehedge after being the apparent major conduit of FED gold suppression policy for years. News reports (above) stated that they dehedged 5.7 million ounces this quarter. A bit high for a company that only produced 1.87 million ounces in the quarter.

http://www.barrick.com/Theme/Barrick/files/docs_quarter/2006_Q1_rev2.pdf

Chalk this up to sloppy reporting by the media. Apparently Barrick has been reducing its gold "hedges" or forward sales quietly for some time. Yet, that 5.7 million is a big number (total production for 3 quarters). How did they meet costs? After several years of education in modern economics I have to question word meanings and definitions. Perhaps they mean they've derivatized 5.7 million ounces, or the FED (bless their hearts) has forgiven their loans of 5.7 million ounces of our gold.

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PWTADANRBO[PA][D][F1!3!!!2!20]⪯f=GThis move says $870. is possible !
Naw -- how about, TO THE MOON, Alice ?
<;-)

http://quotes.ino.com/chart/?s=NYBOT_DX&v=sBEAUTIFUL waterfall today !
<;-)

@ Gandalf,

The drop from 90 to 85 has been almost in the blink of an eye.

Just in case anyone missed this little video gem from the Columbia School of Business. Give a minute to download if you've got a phone line.

Thanks to Jim Puplava.
Hilarious.

From FT.com via Yahoo

Snip-----------------------------------------------------------
A report issued yesterday by Ernst & Young, the accountancy firm, puts China's total liabilities for non-performing loans at just over $900bn, even higher than its $875bn stack of foreign reserves, the largest in the world.

The findings of the E&Y survey are broadly in line with a report by professional services firm PwC, issued last week and similar in tone to another lengthy report released this week from McKinsey, the consultancy, on China's financial system.

"I think the numbers will be a big surprise because China has been giving the impression [with its banks listing overseas] that the problem is behind us," said Jack Rodman, a managing director with E&Y. "China has not really resolved the issue - they have just moved it from one state enterprise to another."

The three reports say the original stock of bad loans has not been dealt with and that a huge stack of new NPLs has been created.

"While there have been improvements in the banking sectors, and the government has sought to address NPLs, the core causes for the build-up have not been fully dealt with," said the McKinsey report.

"Until these problems are addressed, the problem is likely to persist, and the banking system will remain vulnerable to potential liquidity shocks."
----------------------------------------------------------

It seems to me the threat of a dollar collapse is even more likely than most think. A crisis in the Chinese banking system may force China to sell a huge amount of dollar denominated assets including U.S. Treasury bonds further driving down the price of the dollar.
China seems to have enough money to cover the Non-Performing loans if they used all their foreign exhange reserves and stopped buying U.S. Treasuries for a few quarters.

Any other thoughts on this?

http://www.financialsense.com/editorials/fekete/2006/0504.htmlTen Bears has already posted a link this article which I read earlier at Financial Sense. It is the best article by far I have read by the good professor because it explains in very simple terms WHY the shorts are NOT STUPID!

This article is a must read for those that have missed it. Here's a different paragraph from a highly interesting article.

SNIP:

"Contrary to popular beliefs, the shorts are not stupid. Nor are they suicidal. They are responsible businessmen well able to calculate, including calculation of the cost of transportation by the fastest conveyances available such as supersonic aircraft if need be to carry supplies half-way around the globe. Whenever they sell short, they are not acting on impulse. They act on cold facts. They know full well that the futures markets fail to be symmetric. They know that there is a built-in bias favoring the longs at the expense of the bears: the risk shouldered by the former is limited (as the price cannot fall below zero) while that shouldered by the latter is unlimited (as the price can theoretically go to infinity). Whereas an individual short seller might miscalculate,it is virtually impossible that the shorts collectively would."

Good questions. I don't think the world would recover from such a serious dollar(reserve currency) "collapse" precipitated by a major bank or government liquidity crisis or default.
Preventing(forestalling)this was one of the major drivers in the recent explosive growth of risk transference vehicles and schemes such as swaps and derivative "contracts" as you know.
I posted this FT link earlier to underscore the unsustainability of exponential debt growth patterns in China and elsewhere.
Why I think China has accumulated massive commodities stockpiles, gold and foreign reserves is strategic foresight and market prowess aided by western collaborators/partners. There is the will to transition into a new mark to market CB gold reserve structure, because one cannot conceive of any other peaceful, practical way to stabilize major economies in the developed and developing world.
The alternatives would impact completely beyond dollar and currency markets withy or without more fiat. Enough damage market dislocations and distortions have been done to induce hyperinflationary collapse
or unloading of dollars with the same result, or derivative(mortgage, currency, credit, gold or other derivative market(s)) counterparty default chain reaction collapse, or illiquidity in the bond market and other scenarios if enough time is allowed to elapse IMHO.

Druid: G, TC, FL, something that you have not brought up in your informative comments is that the USPO is a government agency just like the Dept. of Labor etc... In my humble opinion this is just another attempt at trying to hide inflation in the form of a derivative for service of delivery against raising the price of a stamp to levels that cover the cost of fuel.

Remember, the Postal Service is a very inefficient fuel intensive entity that is highly reliant on the low cost of fuel. They just can't go out into the futures market and go long oil, gasoline futures etc... to hedge their costs, thus they have to try and be creative in other areas to somehow justify any price increases. Postage prices like gas prices are obvious items that hit right in middle America's breadbasket. This is the Postal Service answer to how the BLS uses CPI. My comments anyway.

A lot of over analysis happening here and elswhere about this stamp. USPS only does 20% of their business by postage stamp. The forever stamp is just a simple and effective way for USPS to deal with the cost of publishing stamps in a monetary environment where spiralling inflation is anticipated.

In the current model, a new first class stamp must be published for each rate increase, along with 2 or 3 cent "make-up" stamps for folks stuck with old stamps. The forever stamp streamlines this model; the assumption is that any losses due to stamps in possession when the rate changes is made up for in efficiency. One who makes a large forward purchase of forever stamps is just loaning money to USPS at an interest rate that is never higher than "official" inflation.


The other 80% of USPS busines is done by metered postage, which is already positioned for frequent rate increases.

- Survivor

So Survivor,

The USPS is doing this NOW because:

1) they never thought of it before? or

2) The rate changes are expcted to accelerate?

After all, in the past the USPS has prided itself in the many variations of stamps it produced and even call it a service to numismatists.

Sounds too much like a typical rationalization to me.

Tomorrow should be a day to remember.

Regards to all,

Caradoc

http://www.busrep.co.za/index.php?fSectionId=&fArticleId=3233009May 5, 2006; Johannesburg - If companies mining the Witwatersrand Basin co-operated with one another, ways could be found to recover the 600 million ounces of gold still available after more than 100 years of mining.

If they did not co-operate, most of those millions of ounces would be lost to South Africa, Gold Fields chief executive Ian Cockerill said this week.

Even though the Wits Basin had produced 1.2 billion ounces of gold since the metal was discovered in 1886, the fact that there was still a further 600 million ounces challenged gold companies to co-operate in finding ways to mine at 4,000m and below...

"Extraction of even 10 percent, or 60 million ounces, would be almost a year's worth of global demand and a prize worth working towards," Cockerill harangued.

Asked to define what he meant by co-operation, he said it meant the relevant chief executives sitting down ['...as "miners" - without their lawyers and investment bankers...'], having a good cup of tea or a good bottle of wine, discussing co-operation in exploiting selected assets and arriving at terms of engagement.

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

On a fundamental note, this displays how preciously difficult the remaining gold will be to extract if in fact it can be worked out.

Then on a personal note, as a down-to-earth Miner/engineer myself, I certainly take an immediate shine to Ian's preferred way of doing business. Hopeless as it is, "Good luck fending off the 'suits'."

R.

http://www.bloomberg.com/apps/news?pid=10000085&sid=aaidJCoOOHQk&refer=europeMay 5 (Bloomberg) -- Gold in New York reached a 25-year high, rising past $680 an ounce, as investors bought the precious metal as a haven and a hedge against inflation.

Iran, the world's fourth-largest oil supplier, yesterday rejected U.S.-led demands that it halt uranium enrichment. Crude prices have surged to a record on concern over disruption to Iranian oil supplies, raising fears of inflation and increasing the appeal of bullion as a hedge.

...Some investors buy gold to hedge against inflation, which erodes the value of fixed-income assets such as bonds. They also buy bullion as a haven against instability in financial markets caused by geopolitical tension....

The U.S., U.K. and France yesterday circulated a draft United Nations' resolution that demanded Iran ``suspend all enrichment-related and reprocessing activities, including research and development.'' The three have said Iran is developing nuclear weapons; Iran has denied the charge.

The draft resolution ``is extremely unhelpful and won't get anywhere,'' Iranian Ambassador Javad Zarif said. ``Iran does not respond to threats and intimidation.''

Barrick Gold Corp., the world's largest gold producer, yesterday also said it is cutting forward gold sales, which lock in prices, to take advantage of rising prices.

``This is a signal that the producers are still expecting higher prices,'' said Dowsett.

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

Do you ever get the sense that this whole Iranian thing is not slightly more than coordinated orchestration of a superficial tune for the public to slowly dance to?

Skip the mind-numbing performance and go straight to the finale... own gold. You'll be in your car and home while others are still cueing endlessly in the parking garage.

R.

I have been a reader of the excellent analysis and commentary on this site and I lift my glass to Sir MK and the noble knights of the round. Your intellect and insight are known and appreciated far and wide. As for me, I have been actively invested in the elemental metals for some time with emphasis on gold and silver of late. I'm sure that the knights will agree with me that what our country is facing MUST temper our enthusiasm when counting our profits.....Direct,if you will, your attention to the American political and social order with gold at $5000.00 an ounce.

http://eng.gazeta.kz/art.asp?aid=74954The US dollar rate can fall to 1.3 euros for 1 "buck." It will happen if the US Federal Reserve System decides to freeze its funds-rate
+
Therefore let us wait for May 10 - the day when the FRS "politburo" meets next time to discuss the funds-rate. Then we will see whither the world market is going. And us as well.
==
The end of the world again!

http://earthquake.usgs.gov/eqcenter/recenteqsww/Maps/10/185_-20.phpAftershocks following on from the mag 7.9 EQ in Tonga recently seem to be increasing in intensity.
The area in question, an Island group known as Ha'apai is largely made up of coral atolls however there is also an active volcanic presence in the area.
The dark blue features on the map is what is known as the Tongan Trench, a VERY steep/deep area of the sea-bed.

Many moons ago I experienced my first EQ in this area, a most unnerving experience.

I share your concern for our country however, but must admit that I'm a bit desensitized to fears for our Social and political systems.

Let's skip what $5,000 gold will mean and discuss what $30,000 will do. As the gold reserve system takes hold a greater effort will be placed on sober currency management; by banks and individuals.

The costs of discretionary wars will have to be weighed carefully before they are entered into.

A deceleration in money supply growth will choke off the growth at any cost mindset that saturates our "culture".

I also expect a hard left turn to be made in the political area. We could look to South America for clues as to where that will take us. For that I lay blame at the feet of the "conservatives" currently in power. America's de-industrialization has been described as the natural order of things, as though free market principals have any application when money is created in a monopoly, from thin air. They have not missed an opportunity shifting the blame for job losses, pension defaults, etc, blaming "creative destruction", "market forces" "a more industrious OR better educated foreign workforce". Meanwhile those with a copy of the corporate/political playbook have profited handsomely. Their actions have proven to many Americans that the "free market" doesn't work. They deserve to suffer for it, it needn't have been this way.

Sir Alchemist, don't confuse the medicine with the disease. Ohhh... and welcome aboard, thanks for bringing the subject up.

@ Mikal � Thanks for your comments of yesterday.

http://economictimes.indiatimes.com/articleshow/1517464.cmsSnip:

"...
Brazil, Russia, India and China, referred to as BRIC group that currently manifests the world's highest economic growth rate, have surpassed G7 countries in their forex/gold holdings for the first time in history.

As of the end of March, the aggregate holdings of BRIC amounted to $1,292,200 million, according to estimates published on Thursday in Japan's leading economic newspaper, 'Nihon Keizai'.
..."

Sundeck: Russian reserves have now surpassed those of South Korea. While FX reserves of BRIC exceed those of G7, their gold reserves no doubt trail those of G7 considerably...let's hope they try to catch up ;-)

Question: "How many dollars does the USA have in reserve?"

Answer: "We have a technology called a printing press."

:-)

http://www.chinadaily.com.cn/bizchina/2006-05/05/content_583078.htmSnip:

"...
The office that coordinates national tourism predicts this week's golden week, to mark May Day or International Labour Day, is expected to witness a record high 120 million person-trips taken by Chinese tourists. If past trends hold true they will likely spend more than 40 billion yuan (approximately 5 billion US dollars.
..."

Sundeck: Those Chinese have a way with words and phrases..."Golden Week"...

Spot has had a golden week too, so far...starting the week around $655 and now above $680...sic 'em Spot!

:-)

John Engler is the former Governor of Michigan. IMHO, he is ladder climber in the Republican party. Having failed to deliver the state to the president is 2000, he took a job with NAM (no primo appointment). If that wasn't the message that the administration wanted to put out, He wouldn't be saying; "Since the dollar has been overvalued for almost a decade, merely bringing it back to equilibrium level with another 10 percent drop wouldn't create a sharp enough dent in the trade balance -- so the dollar would probably have to fall below that level for some period of time,"

There have been sharp divisions within NAM and some talk of smaller manufactures splitting away from the multi-national dominated NAM. In short, I believe that he knows a 10% depreciation won't make a bit of difference, but he doesn't want to rock the boat. Design work sent to India costs about 1/4 to 1/3 of what that work would cost here in the states. I believe that machine work is being done for 1/3 to 1/2 in Asia. How much sense does it make to do high value added work overseas then pay US wages to do the lower skill production work here? None. The dollar has a long way to fall, much further than TPTB would have us believe.

Enjoy your posts, thanks.

@ Goldilox, regarding the post below.

http://quotes.ino.com/chart/?s=NYBOT_DXThe dollar just went over another waterfall. Down to 85.18.
Ouch!

@ TC,

"Do you ever get the sense that this whole Iranian thing is not slightly more than coordinated orchestration of a superficial tune for the public to slowly dance to?"

I get a similar impression when reading Sinclair's coverage of Iran.
Especially when trying to relate it to PoG or USDX.

The Iran thingy has taken a life of its own and seems to be the media's answer to every question when they prefer not to complete their "due diligence."

http://quotes.ino.com/chart/?s=NYBOT_DXGoldendome (5/5/06; 07:30:57MT - usagold.com msg#: 143882)
"Lookout below"
===
That is not an ordinary WATERFALL -- That is more like a "FREE FALL" at the start of the Pit trading in NY !
Hold on to your YELLOW dearly.
GW

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

Tanks as in "gas tanks". The HUGE drop to 67.1% in early May is a huge drop from the 89.4% in April. Politicians should be wary. The sheeple are getting restless.

If you look at the top of our news links page, you'll see that while gold took a short hit from the numbers, the real damage is to the US dollar which fell dramatically against the Euro. The People's Economist thinks precious metals will keep going up as the dollar keeps sinking.

Fight the Bankster's Big Lie: Prices aren't going up: Your money is being watered down!

-Goldilox

The ConConf numbers may not bring Wall St down today, but they have to send some shudders through the retail sector pretty soon!

Does anyone know why the GLD ETF sells at a discount to spot, whereas SLV sells at a premium?

Is this reflective of the higher margins and handling costs in silver, or does it echo some generic difference in the funds' charters?

I would have to agree with Survivor - wa-a-a-y too much over-analysis of the motivations. Changing stamps (and recalling/scrapping the excess inventory) every year or two is a major pain for the USPS. And a major pain for their consumers,, when they try and finish off those sheets which they bought at Christmas time.

And asking why someone had the bright idea now is the wrong question ! This has been common practice elsewhere in the world for some time. A quick Google showed that all commemorative issues in the UK have had 1st and 2nd class denominations since 2000, for instance. A visit to La Poste shows the same thing in France, and I'm sure you'd find the same thing elsewhere. So the right question is why is the US so far behind other places ?

C!

@ Clink,

You also (as did the first poster) neglect to address the fact that myriad versions of stamps services their market to numismatists - one which the USPS has always claimed "paid for itself".

If they now come out with a "one-size fits all" stamp, their numismatic business goes in the toilet, or else they do it in parallel, which then saves them nothing, as they are still producing a complete "stable" of different stamps.

No offense, but both explanations have sounded like bureaucratic bylines to me.

Selling stamps to numismatists, that is ! OK, I knew you meant philatelists.

There has always been a distinction between the "one batch" commemoratives (which are always sold in priority until completely sold out) and the bread-and-butter standard issue (always there as a backup).

C!

@ Clink (& Survivor),

Thanks for the correction.

My "big word" depository obviously failed me at pre-breakfast hour. LOL

My point being that there is likely more than meets the eye here, although by itself it may be a fairly minor adjustment.

Witnessing a government agency actually taking steps to deal with potential inflationary explosion is something. Especially when their bretheren expend so much political capital and airtime trying to sell us on the mantra:

"There is no inflation. There is no inflation."

http://www.usagold.com/gold/special/2006may.htmlCommencing yesterday afternoon a "phone-in only" special has been put underway.

[Or perhaps is already sold out(???)]

The call is yours to make. TOLL FREE 1-800-869-5115

R.

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

Gold having traded this morning above $682 is bringing in some selling into gold shares exactly as it did when we first touched $612.

This is in a way a compliment to this site, but possibly an error in judgment by the position holders.


The reason I say this is twofold:

1. It is not the old gold community that has been responsible for the brisk move from $612 to the present. It is international investment banks whose funds relative to the tiny gold market and smaller gold share market are infinite.

2. The market, although helped by a falling dollar, is truly a product of the shifting dynamic in the political position of Iran and therefore the entire Middle East. All the fundamental damage in the dollar equation can be tracked back to this changing political dynamic and the "follow the money" financial impact it has had on the US while that country enjoys prosperity in all its markets and most of its industries.

There is little chance the Iranian situation, the Iraq situations or US economic policy will make abrupt changes from their present direction. Because of these factors the only selling one should do at $682 gold is to remove any debt you have against your position.

-Goldilox

Sinclair's comments on reaching magnet #2.

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=10DX 90 to 85 (6% drop) has occurred in the comparative "blink of an eye."

Six percent losses in one month are fairly spectacular for the "World's Reserve Currency"!

Not the performance I prefer from MY reserves.

Another way of looking at it:

If your paper-based assets haven't gained AT LEAST 6% in the last month, they are LOSERS!

(smeagol mode off)

@ Sir Goldilox,
The silver ETF says right in the prospectus that a percentage of silver held is sold to pay the "expenses" of the fund/trust, and that this reduces the value of the shares over time even as/if the metal rises in price. And, that the addition of more metal does not "make up" for this. Perhaps the gold ETF is structured in a similar manner?

ETFs = Eventually Transferred Funds (yours)

Caveat Emptor.

Smeagol

http://www.ishares.com/fund_info/detail.jhtml?symbol=SLVI'm hoping that someone where might be able to help me understand where the silver is coming from in order to satisfy the holdings of SLV. On their website, which is updated daily, they list the number of ounces that they hold. Right now, it's just under 42 million. At the end of April, they held about 21 million, thus for May, they have gathered another 21 million. Now, when I look at the nymex (http://www.nymex.com/media/delivery.pdf) (the only source that I'm really familiar with) at the delivery notices, I find that this source lists 6,966 contracts or just under 3.5 million ounces �so far for may� for all stoppers. Seems pretty clear to me that SLV is not shopping on this market. But, I'm sure they're shopping in London, or Mexico or someplace where someone has more silver then they know what to do with.

Thanks and sorry if this topic offends anyone. It just seems strange that SLV could buy so much so fast. One would expect that the pipeline to the little guy would be drying up or that someone would have mentioned that there has been a disruption in supply. But, I haven't seen any postings on that matter. Meanwhile, I'll hold onto my ounces of gold. They sure do shine.

If gold where included in the basket as a currency, one would see that the move is much greater then what you point out.

It will not be long before all things are compared against gold.

@ Smegol,

That would seem to explain why an ETF would be priced at a discount, but the opposite is true for the SLV ETF, which touts a positive margin to spot, while the GLD has dropped from $2.50 under spot to $3.60 under spot.

Maybe, being new, SLV above the 1.0 ratio of holdings to market value in order to pay early expenses and this ratio will deteriorate over time?

Got me.

@ Flatliner,

My question, as well.

Maybe Buffett found a buyer for his $7 silver?

http://www.afxpress.com/about488/index.php?lg=en&c=00.00&story=1467521snip:

SAN FRANCISCO (AFX) -- Gold's a substitute no more.

Sometimes known as an alternative currency, the precious metal has traditionally offered a means through which investors can offset financial losses or potential losses or hedge against inflation.

With the dollar recently trading at a one-year low against the euro and a seven-month low against Japan's yen and experts betting on further weakness in the greenback, gold has climbed more than $150 an ounce year to date.

"The only one who doesn't know the U.S. dollar is dead is the U.S. dollar," said Peter Grandich, editor of the Grandich Letter.

And "as the decline in purchasing power of fiat currencies is magnified, gold will start attracting even more interest from individuals that are seeking an alternate 'currency'," said Emanuel Balarie, a senior market strategist at Wisdom Financial.

Federal Reserve Chairman Ben Bernanke said last week that the U.S. central bank may pause its interest rate-increase cycle, adding to the misery of the dollar, and global concerns over Iran's nuclear research has sparked interest alternative investments.

Now there are "trillions of dollars floating around and as people flee paper money (dollars), gold and silver money become attractive competitors," said Peter Spina, a chief investment strategist at GoldSeek.com.

One could say, "gold IS money," he said.

Indeed, "while paper money is a liability with no intrinsic value, gold has -- in all situations," said Julian Phillips, an analyst at GoldForecaster.com.

"To have a stockpile of gold means to have a measure of financial security no matter where one is on this earth, and this will hold true no matter what price oil goes to or how high global uncertainty rises and confidence wanes," he said.

The market for the precious metal offers several investment options for traders, including gold futures, mutual funds, and gold bullion exchanged-trade funds. An ETF based on metals-mining shares is even in registration with the Securities and Exchange Commission.

Going for four digits?

The cost of gold at the end 2006 could even be at almost double the level it started the year at. That's what some analysts predict despite the lofty quarter-century highs the precious metal has been trading at since December.

Gold futures climbed close to $680 an ounce Thursday, a level not seen since October 1980. Prices started the year around $519.

"As more and more investors start allocating more resources in gold, we could see $800 and as high as $1,000 by year's end," said John Person, president of National Futures Advisory Service.

"All the elements are in place for such a move, and it would not be unrealistic to achieve in a relatively short period of time," he said.

Tensions in Iraq, new developments in Iran's standoff with the West on nuclear issues, as well as a U.S. Federal Reserve that sends "confused messages to the American public," are among the reasons gold is likely to keep climbing, Person said.

Overall, it's "simply demand" -- demand from investors looking for an investment or a hedge against rising inflation, or from a perspective of increased jewelry purchases from consumers around the globe," he said.

"In times of confusion, market participants head for safety, and right now safety is found in holding gold," he said.

At the same time, it's important to note that gold prices actually "started their life" at $35 per ounce in the early 1970s, said Jon Nadler, an investment products analyst at bullion dealers Kitco.com. From there, it went to $850-$875 -- a "twenty-five-times-over move."

Gold began its latest move up at $252, so prices at $6,250 can't be ruled out either, in terms of magnitude of the move, he said.

-Goldilox

The article goes on to explain why too much froth is specualtive, as well.

Overall, a good read.

http://www.freemarketnews.com/WorldNews.asp?nid=12473Gold is Going to Cost a Lot More - FMNN - May 5, 2006
Short comments on gold demand vs declining supply
within the context of environmental concerns and rising tech costs.

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

The talking heads are beside themselves with glee at this hour - they are talking UP the fact that the market is only "185 points from its all-time high!" Well, hold on buckaroo. Not, as we'd say here in Texas, "presactly." True the old all-time-high of the market was at 11,723. BUT that was in January 2000. If you use the Fed's inflation calculator (left menu down a ways) you will see that works out to 13,785 without taking into account another 2% for the inflation this year, year-to-date to just equal things. As I explained to subscribers a few weeks back, when you pencil it all in, we'd have to hit Dow 14,000 -something to equal the old high.

-Goldilox

Inflation hides so many ills, and also allows TPTB to parade a facade of success in the financial media.

DOW 11,700 still only equals 17 oz gold, whereas Dow 11,700 in Y2K was equal to 46 oz.

Not much question which "investment" preserved one's wealth better over the last 5 years.

Re: Silver supply drying up?

Anecdotal evidence from the left coast is twofold:
1. Most recent bag of junk silver got delivered as two bags with face value of $500 rather than one bag of $1000 face value. (Anybody else have same experience?)
2. A buddy in the business is seeing slight upsurge in what he calls "one-time sellers"; i.e., people bringing in a roll of Ben Franklin 40% silver halves or the handful of silver dollars that were in grandpa's sock drawer when he died. On the other hand, none of his regular customers are choosing to cash out.

Caradoc

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 Excperts

Gold gains nearly $30 for week

May 5 (from MarketWatch) -- Gold futures climbed Friday as worry about the nuclear standoff with Iran and fresh weakness in the U.S. dollar combined to bolster metal demand. COMEX June futures rose to a high of $686.50, marking an intraday level that futures haven't seen since October 1980.

The contract closed up $7.80 at $684.30.

Prices finished the session $29.80 above the week-ago closing level of $654.50, as the dollar slumped to fresh one-year lows against the euro and fell against Japan's yen.

The greenback's weakness came in reaction to U.S. nonfarm payrolls growth for April that was far lower than expected. See Currencies. "Gold prices have made new major-trend highs on each day this week, underpinned by geopolitical uncertainty and fresh waves of fund demand," said economists at Action Economics.

A lack of forward hedging by gold miners also has helped support prices, pushing the euro price of gold to a fresh record peak, they added. However, "extreme speculative account exposure" means that there's potential for a sharp correction on any gold-bearish development, they cautioned.

But Dale Doelling, chief market technician at Trends In Commodities, said that the metals market is only about four and a half years into what he called a "secular bull market in commodities," adding that "the likelihood of continued higher prices in these and other commodities is quite good."

"There are just too many good reasons to remain long on commodities for continued price gains -- but the most important reason is that the trends continue to gain momentum, and that's always a good thing for traders."

Commodities trader Kevin Kerr said that his new target for gold is $810 an ounce within the next two months, "if things persist as they are."

If they don't, then prices will pull back to $620 and then see a steady climb higher, predicted Kerr, who's also the editor of Global Resources Trader, a newsletter service of MarketWatch. Still, "the way things have been going, though, it's anyone's guess," he said.

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

http://english.bna.bh/?ID=44529 SNIP
Bako, May. 5, (BNA) Iranian President, Mahmoud Ahmadinejad announced here on Friday that within two months, his country will base its oil accounts on the EURO.

http://www.dominicantoday.com/app/article.aspx?id=13128HEADLINE: Bolivia: No Plans to Nationalize U.S.-Run Silver Mines

LA PAZ, Bolivia -- Bolivia's socialist government said Thursday that it has no plans to nationalize U.S.-operated silver mines in the Andean province of Potosi.

Development Planning Minister Carlos Villegas said Thursday at a press conference that "at no time did the government say that it would enter into a process of nationalization" of the operations of Apex Silver Mines Ltd. and Coeur d'Alene Mines Corp.

"Therefore, there is full certainty and legal security," he added.

[Now, here comes the kicker...]

The government will present to Congress modifications of the mining code, in which a hike in taxes and royalties for mining firms is expected.

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

A hike in taxes and royalties is what I call "a kinder, gentler" sort of nationalization.

All to the same end -- which is, ultimately, no joy to the investor who opted to be a mining shareholder rather than a metal holder.

Fair warning as you navigate the seas ahead.

R.

http://business.guardian.co.uk/story/0,,1768884,00.htmlSNIPS
The reasoning is that once everybody believes things can only get better, markets become gripped by a herd mentality, lose touch with reality and eventually come down with a bump.
Roach is clearly irritated by this kind of talk.
+
Even so, it's not hard to see why Roach's conversion to the belief that global imbalances can be sorted out without large-scale disruption has caused a stir. Markets have been in a bullish, even euphoric, mood.
+
Until recently, the rise in shares was matched by an even more spectacular rise in government bonds, as investors took the view that sustained, non-inflationary growth would be the norm in a globalised world. Gilt yields, which move inversely to gilt prices, fell to their lowest level in 50 years.
Commodity markets have told a similar story. The price of gold is at its highest level since the early 1980s, while silver has doubled in price over the past 12 months. In the world of fine art, a reasonable barometer of the frothiness of financial markets, a painting by Picasso was sold for $95.2m (�51m) in New York on Wednesday - the second highest amount ever paid for a painting.

==

Investors take the view that sustained, non-inflationary growth would be the norm in a globalised world? And all prices are rising, says Roach. Non-inflationary?
Is this guy crazy?

Russia � lightening up on the dollar.
Iran -- basing oil sales in euros
South America � paying off debt to the IMF

It's starting to look like The Three Stooges trying to go through a doorway.

http://news.independent.co.uk/business/news/article362302.eceSNIP
AngloGold Ashanti, the world's third-largest gold miner, posted a loss for the first three months of the year yesterday as bullion prices climbed to a 25-year high.
The South African mining group took a hit from losses on forward sales contracts, in which it had agreed to sell gold in the future at a fixed price.
It underestimated the rise in the market price, which is now higher than the level agreed in the contracts, meaning that the contracts are recorded as a loss in the company's accounts.

Thank you for your post regarding Iran's switch to Euros within 2 months. Gotta be the news of the day.

Wonder if this makes Ahmadinthehead a 'marked' man?

Have a golden weekend.

Duh ! Like he wasn't before?

http://www.safehaven.com/forums-18029.htm
Warren Buffett could be comedian, some pearls in here

http://www.safehaven.com/forums-18027.htm
Sharefin"
The Big Picture Chart of the Week 10 Year Yield, 30 year chart

http://www.safehaven.com/forums-18028.htm
Peak Oil is a longwave problem. Price is a shortwave problem. There is
no direct correlation between them.
Henry C.K. Liu

NT

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

http://www.expressindia.com/fullstory.php?newsid=67273Saturday, May 06, 2006; Lima, Peru, May 6 -- Soaring bullion prices are unlikely to end rising demand for gold as the jewelry industry in India, newly found investor interest and medicinal uses all continue to defy expansion forecasts, a top gold official said on Friday.

Global gold demand likely fell in the first three months of this year, but should rise in the second quarter as consumers adjust to soaring gold prices and place their faith in the enduring value of the precious metal again, George Milling-Stanley of the World Gold Council said in an interview on the sidelines of a gold symposium in Lima, Peru.

Gold prices are seen continuing to rise over the coming months as demand strengthens again, led by jewelry demand from No 1 consumer India and as investment fund interest booms.

The World Gold Council said earlier this week it saw prices for gold, also used in industry, challenging the $850/ounce level within the next 18 months. Others are setting their sights to well over $1,000 per ounce.

...contrary to popular logic, gold pundits say higher prices rarely hold off buyers for very long, with most even holding higher-priced purchases in higher regard.

"The private sector is making the decision to move into gold," said Milling-Stanley.

...gold has unique characteristics when broken down to the nano level which allow it be used to do everything from combat diseases to make it easier to make flat-screens on items like mobile phones more readable.

"Definitely, demand will continue to grow," said Paul Walker, the chief executive of GFMS.

The pace of demand will be determined by how much further prices rise and at what rate.

"There's no way to put a time on it, because we've never seen a market quite like this," said Milling-Stanley.

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

The higher price for gold will be driven by institutions (CBs) and private investors who value gold for its use as wealth reserve property (bullion, coins, eastern jewelry included). As an 'also ran', industry will simply make do and deal with that price for their nano quantities, etc.

R.

http://www.csmonitor.com/2006/0505/p01s02-usec.html?s=t5As foreign buyers shun the currency, it could be harder to finance the US trade deficit.

NEW YORK � For two weeks, the dollar has been hammered as foreign buyers shun the US currency.

As a result, the Canadian "loonie" is at its highest point in 30 years. The British pound is at its uppermost level since last September. Even the closely managed yen is at a six-month peak.

If the dollar were to continue falling, it could have wide ramifications:

-- It could imperil the economy next year because Fed Chairman Ben Bernanke might have to defend the currency with higher interest rates.

-- A lower-valued dollar makes imports more expensive, possibly ratcheting up the inflation rate. But it could also stimulate US exports, thus providing more jobs.

-- This summer, Americans traveling abroad will feel as if everything is expensive. However, foreigners coming to America will feel as if the country is one giant Wal-Mart.

Behind the falling currency is a changing global economy. As the US Federal Reserve appears to be near the end of its round of interest-rate hikes, foreign banks are starting to hike their rates - which puts foreign currencies in higher demand, thus making the dollar less attractive.

...central banks of some foreign countries, which are key in financing the US deficit by buying US Treasury bills, are now less willing to do so. Instead, they're diversifying their reserve holdings with euros and yen. [TC note: and gold!]

On Wednesday and Thursday, finance ministers in Japan and Europe tried to stem the dollar's fall. The Japanese Finance Minister Sadakazu Tanigaki warned that flexible exchange rates could cause speculation that could hurt the world economy.

...Financing the current US trade deficit is requiring increasing agility. "Every business day requires $3.5 billion of net new money entering the country to finance the current account deficit," says Jay Bryson, an international economist at Wachovia Securities in Charlotte, N.C.

Most of that money comes from foreign central banks, which own large amounts of dollars. Recently, however, the central banks of Sweden, Finland, and Russia have said they will diversify their foreign reserve holdings and reduce their US dollars.

Behind the shift may be concern that the dollar will be devalued, making their holdings worth less.

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

Diversify. Will you arrive early, or will you find yourself only outside on the doorstep at a standing-room-only event?

R.

http://www.financialexpress.com/fe_full_story.php?content_id=126153MUMBAI, MAY 5: �It was not long ago that the Sensex crossed the 10,000 mark. And now, Friday turned out to be golden for the precious yellow metal as its price crossed Rs 10,000 per 10 gram for the first time in history in both the spot and the futures markets.

Piggybacking on overseas prices, standard gold in the spot market closed at a record Rs 10,120 in Kolkata, followed by Delhi at Rs 10,050 and Mumbai at Rs 9,945. The Chennai market remained closed on Friday. In Mumbai, pure gold closed a tad below the 10K mark at Rs 9,990 per 10 gm.

"Prices in India are high purely due to rally at the global level. Besides, geo-political reasons, a weakening dollar, higher Chinese and Indian demand and increase in Russian reserves by about $1 billion worth gold are among the main drivers of the gold price," Suresh Nair, vice president, Kotak Commodity Services stated.

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

If, indeed, Russia has added that much gold to reserves (approx 45 tonnes), then they've only just done it within these last two weeks; before which time their gold reserves reportedly (officially) stood at 12.43 Moz.

R.

http://www.financialsense.com/editorials/fekete/2006/0504.html
Is the good Dr.Fekete, saying that large gold holders are using covered shorts in the futures markets to force down gold prices after sustained run-ups in the gold price, then buying back the shorts --and in addition-- at the same time buying more physical gold at the then lowered spot prices?

Sounds like a good strategy in a gold market with large price swings (2002 through August of 2005). But how's it been working since August 2005? Not so well, I would guess. The price since that time is about $250 higher today ($683 vs.$433) than where gold closed in August 2005!!!! There are very few significant pullbacks in price for any length of time in this latest march forward. Seems to me a wonderful opportunity for shorts to have lost big money or big amounts of gold! By the way-- if these guys are so smart, who wants to be shorting a market thats moved from $250 to $685 anyway? Seems pretty dangerous even for the most nimble and gifted! Nearly guaranteeing losses that would outstrip any gains.

Maybe the game has changed. Maybe the longs (long in dollars held, particularly) are taking control. Are we seeing this also in other commodity markets? Those that want the commodities and have huge dollar holdings, just buying the futures then taking delivery? After the hurricanes of last year, wasn't it common knowledge that the high oil prices were only a temporary blip upward--and this was shown by the fact that the oil markets at that time, I believe, went into backwardation? Well--what's happened since? The markets for oil went to contango at the higher prices, as buyers realized they could buy the commodity outright in the futures markets for a lower price than current spot, and then just hold and take delivery of the contract on the due date. Backwardation was history! Is the same thing happening with gold? I don't know. Though it never went to backwardation, is the spot gold price driving the futures here? The largest breakdown recently that I recall in the gold market was in March, I believe, when spot fell from about $575 to $550. Two days later, spot was right back over $570, and no major pullbacks since.

Are these just short sellers covering in the futures? Maybe so. I don't know. But anyone on the short side for nearly a year now has been consistently "spanked". Anyone truly wanting Gold would just be exchanging their dollars for Gold at spot or waiting for their next futures contract to come due to take delivery there too! I don't know jack about these markets, but were I sitting with hundreds of billions of dollars that I saw as vulnerable to currency risk and wondering what to do with it all...I think that I would happily be exchanging some of them for some of the shiny yellow! The fundamentals of worldwide fiat currencies have not changed. The spending proclivities of the U.S. Government and it's citizens have not changed. The long-term liabilities of this and all Westernized countries continue to grow and loom ever closer now.

For my dollars, I'll continue to buy and hold physical gold. My opinion is: that more and more individuals around the world, along with large governmental entity holders of fiat currencies, are increasingly waking up to the scam of unbacked, counterfeited paper currencies, and will continue to move to the safety of uncounterfeitable GOLD.

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42602&NewsKind=Current%20AffairsSNIPS
LONDON, May 6 (IranMania) - Iran's Oil Ministry took a step toward establishing an oil trading market denominated in euros, rather than the US dollar, by granting a license for the bourse, Iranian state-run television reported.
+
Iranian legislators �] criticized Oil Minister Sayed Kazem Vaziri Hamaneh, saying he had delayed setting up the bourse.
+
Iran's deputy oil minister, M.H. Nejad Hosseinian, said Thursday he doubted the UN Security Council would impose sanctions on Iran's oil sector because such a move would drive oil prices higher, AP stated.

An amazing post!
What an alpha mind-he might just have seen through it!

''It is a fatal mistake to underestimate your opponents, in this case the short sellers in precious metals, arguably the smartest lot on earth. They know how to do what Aristotle and latter-day economists have said was impossible: to make gold beget gold. I don't for a moment give credence to the fable that the commercials are selling short naked. Most of their short position is hedged most of the time, if not directly by metal in their possession, then certainly indirectly by metal in the possession of the principals, i.e., for whom they act as a man of straw. The commercials are agents. They act on behalf of their customers, be they wealthy individuals who want to sell call options or futures on their gold hoard anonymously, or banks and governments that do not want you to find out what they are up to. The fact is that selling covered calls and puts is a more efficient way for a bull to husband his resources than buying gold and sitting on it.

Consider the hypothetical scenario that the government of Israel wants unobtrusively accumulate gold. Or, to furnish an example of a more populous country, let's assume that the government of China wants unobtrusively to accumulate silver in any conceivable amounts. The task is cut out for both countries. They have respectable hoards to begin with. Gold is the most portable form of wealth and the most frequently mentioned word in the Bible after God. China has been on a silver standard since time immemorial and did not participate in the silver-demonetization farce of the 19th century. The best course of action for a government wanting to accumulate gold or silver is to mislead the market by fomenting the bearish case. The net short position in gold represents its stake that it is willing to risk in an effort to get more gold and silver through market manipulation. In other words, the net short position is only apparent, a red herring to throw gold bugs off the scent. It is the tip of the iceberg that you can see and touch. What you don't see and can't touch is the bulk of the iceberg submerged: the huge physical gold and silver hoards that the owner wants to increase further by hook or crook. It can be done by hiring agents in the commodity pits. The commercials sell the metals short in excess of visible supplies, acting on behalf of their faceless principals. They sell more gold than the future output of the mines going out five years. They sell more silver than the total inventory held in exchange warehouses. The longs take the bait eagerly. They buy and hold in the hope that the shorts are overextended and will not be able to deliver. The point is that this is exactly what the shorts want them to believe.''

Check his previous articles, good reading.

Mathew: I concur in favorable appraisal of the good Dr. Fekete. As with you, I have read and then re-read many of his papers. His is often an outside the box gold and economic analysis. He is always a stalwart in the gold camp.

After a couple of readings of his current paper, I just formed the opinion that though it might be an extremely effective and at the same time sly tactic, shorting gold (manipulating downward, profiting from it, to acquire what they really want after all--physical gold)...that tactic may have run it's course by August of last year. If used since that time, it's difficult to see how it could be productive (at least to me). A $250 upward movement in gold, taken in consistent upward steps with few backsteps, seems would make consistent shorting a losing tactic with increasingly mounting losses if persisted in. Since August 2005, those that wanted gold at the "best" price--just bought it--Now! We just haven't had the big pullback buying opportunities that we were seeing up until last Labor day. Everyone of us also were looking for these pullbacks to buy at lower prices, so in that regard the shorts weren't alone; they just profited from the short side, before buying physical gold, if the good Dr. is correct.

We might not be surprised to see that tactic used again in the future with effectiveness by huge gold whales; but can you and I at least hope that we don't see it until at least another $250 has been tacked onto the gold price? Cheers! G-dome.

http://www.zeenews.com/articles.asp?aid=293166&sid=BUS SNIP
``Gold may rise to $1,000 before June should the situation in Iran intensify,`` said Bernard Sin, chief trader at Geneva-based MKS Finance, a precious-metals trading and refining company.

http://news.yahoo.com/s/ap/20060505/ap_on_bi_ge/gold_prices_1Gold Prices Rise on Surging Euro
==
Some do understand!

http://www.nytimes.com/2006/05/07/business/yourmoney/07gold.html?_r=1∨ef=Is gold breaking into the mainstream media?

http://online.wsj.com/article/SB114675328154243771.html? Are Derivatives Weapons of Mass Financial Destruction? - WSJ - Trading Shots - May 5
Michael Panzner and Roger Nusbaum debate and reinforce our hosts longstanding position

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=54048snip:

Top ten signs that a precious metals bubble is actually forming:


10. Commodities trading jackets are the best selling items at Abercrombie & Fitch

9. George Foreman is the pitchman for an infomercial featuring a "Home Panning Kit"

8. The most popular major at Chico State is Geology

7. Due to high prices, Olympic metals are replaced by ribbons

6. Monster Park in San Francisco is re-named Glamis Field

5. Analysts upgrade shares of McDonald's based on mineral rights to its real estate holdings, bringing new meaning to its "golden arches."

4. Snoop Dogg introduces the "Bling Mutual Fund."

3. Hustle and Flow wins another Oscar [Grammy?] for their single "It's Hard out Here for a Miner"

2. The WB has a new hit show about teenage prospectors called "Dawson's Claim"

1. Tom Cruise and Katie Holmes name their newborn son Newmont.
[or maybe "Ashanti"]

-Goldilox

The only one close is number 7, as the Olympic medals have already been replaced with plated versions.

After breaking the satanised $600/Oz barrier, 99,99% of the gold observers face one big problem: WHAT KIND OF GOLD MARKET IS THIS?

Nobody has ever understood the fundamentals of the old gold market and the present gold market can thus not possibly be compared to the old gold market.

Some seem to get the point. They say that gold is being shorted in order to get gold metal.

They are trying to re-invent the wheel because this "shorting" was part of the old gold management of the last 25 years during which gold metal "had" to land with those parties who could fulfill their demand for gold metal.

It is very surprising that, as of a sudden, one would know that there is more than 10,000 tons of gold in India.

Nobody has however tried to guess the amount of gold which is owned by Saudi Arabia and other toddlers in the oil playground. The reason of this absence of guessing is that this gold is "invisible". Since 1971 this gold has been secretly bought and hidden by the toddlers under the sand.

The reason thereof is obvious. In a later stadium of the present gold price movement, when the sheeple will start to understand "some things" about this new gold market, this secret will be revealed.

If our opponents want to argue that the present gold market is not of a new and changing nature, they will have to knock gold down back under $600/Oz. They will fail in this attempt.



Here's the big news from uruknet.info, information from occupied iraq,

IRAN BOURSE OPENS NEXT WEEK

http://www.uruknet.info/?p=m23118&l=i&size=1&hd=0



In the meantime, here's a lunatic running for office or for nomination somewhere in the US of A:
One of Bayne's campaign releases says that U.S. debt could be manipulated by foreign powers to cause a spike in interest rates. If the dollar then stopped being the universal monetary standard and the Euro became the standard the price of oil could triple. The stock market and global trade could collapse. Governments and military alliances might then collapse, leaving the United States faced with a global depression and possibly a global war.
http://www.whig.com/288222473600534.php

http://www.iribnews.ir/Full_en.asp?news_id=212639Moscow, May 6 - Dollar is no longer a reliable currency, a Russian economic expert said, urging the government to replace the currency in business transactions.

In a Press Conference on Friday, Mikhail Deliagin also an official with the Russian institute of Managing Committee of Globalization's Problems said the fall in the rate of Dollar during the past few years is astonishing.
----------------------------------------------------------------------------------------------------------------------
Where have we heard that before ?

http://www.321gold.com/editorials/schiff/schiff050606.htmlSNIPS
� during the 1990s the NASDQ rose from 300 to 5,000
+
It seems fitting that on the first day of trading for the silver ETF, shares of Microsoft, once the quintessential "new era" stock, plunged by 11%. Trading as high as $60 per share in December of 1999, Microsoft shares now trade below $24.
==

From 1990 to 2000, the NASDAQ-bubble multiplied by 16.
After the fact, nobody is hysterical about this, times 16 in one decade.

Microsoft in the same period went from $60 to $24
No cause for alarm.

What kind of imbecile financial world is this?

All this happened while the price of gold has been frozen for 25 years and is still being priced ridiculously low.
This has nothing to do with invisible-hand-capitalism but everything with organised fraud and misleading of the sheeple by those who are allowed to manipulate the money levers.

No western stock-market gamblers would ever think about this. But other producers and owners of tangible wealth are thinking about this. Even the Chinese gambler will at the end of the day transform her gains into gold.

The financial industry (stocks-bonds) will never be able to do the past stunt (1980 � 2000) over again. They are trying at all costs not to show this by letting the gigantic bubble slowly to decompress without appearing to be crashing. This is the maximum they can do after the 1980-2000 lunacy.

Gold's time has come and to the same extent that the financial industry is suffering to maintain the appearances, to that extent gold can in a slow and orderly way display its ambitions.

The "crossroads" will be as follows: Crashing financials (stocks-bonds-dollar) and exuberant gold. Our masters are hoping that gold will not revaluate and put the whole collapsing financial-monetary dollar system out of balance. Because if, and indeed when, this happens, even our masters will have to realise and recognise that the gold market has fundamentally changed.

A trend has been set in motion. This trend no longer accepts plundering. Is it any wonder that in such an environment, wealth is being consolidated in gold and that gold can no longer be plundered through gold price freezing?

The consolidators, those who have consolidated their wealth in gold, will no longer accept that the dollar-regime tells them what is "wealth" and what is not. They want freegold to determine the answer to this question.

http://www.nytimes.com/2006/05/07/business/yourmoney/07gold.html?_r=2∨ef=∨ef=sloginSinclair is allowed to promote gold as long as he's silent about the concept of freegold.

Our masters want gold to rise in a vacuum, thereby making sure that the fundamentals of the dollar-regime are not affected.

The dollar-regime can tolerate a dollar-currency devaluation, but cannot possibly tolerate what We-the-People-of-the-World want, i.e., the collapse of the dollar system.

http://online.wsj.com/article/SB114675328154243771.htmlAre Derivatives Weapons Of Mass Financial Destruction?
Is a Meltdown Cooking in Exotic Assets,
Or Can Markets Handle the Next LTCM?
May 5, 2006
SNIP
On the eve of Berkshire Hathaway's annual meeting this weekend, it is worth remembering that, three years ago, Warren Buffett warned that the global financial system was held hostage to ticking "time bombs" and at risk of a "megacatastrophe."

==

This is a nice example of how one self-complacently trusts the existing liquidity and its diversity.

This all sounds very reassuring,
but, for simplicity's sake,
one forgets that the financial industry with its increasing liquidity has not yet been able to eliminate its arch-enemy GOLD, even if the said industry has been able to freeze gold.

The self-complacent financial industry forgets the concept of freegold which is being built up. There will continue to be global cooperation to maintain the necessary liquidity. But at the same time, non-dollar parties will continue to build their freegold concept and their asset diversity.

This means that the de facto dollarisation which has been imposed will be halted. The fall in dollar liquidity will not result from a failing component, but from the failure of the total dollar-system.

The reason why the total dollar-system will fail is the existing and growing freegold concept, competitor of the dollar regime.

http://vietnamnews.vnagency.com.vn/showarticle.php?num=01BUS060506High Local Gold Price Prompts Rethink

From Vietnam News Agency, Hanoi
Sunday, May 6, 2006

HANOI -- In the face of rising domestic gold prices that exceed world gold prices, the country's banks are planning to sell gold under a new system, according to the deputy director of the Vietnam Export and Import Bank, Dao Hong Chau.

Under the plan, buyers will buy gold through banks under a pricing system that is in line with the world market. The plan aims to gain control of escalating domestic gold prices.

Buyers will be able to pay banks money to get a bill of confirmation for their purchase.

The bill will allow buyers to purchase their desired amount of gold after a negotiated time period between the buyer and the bank.

For example, in a situation where the domestic gold price is in Vietnamese dong 13 million per tael while the world gold price is slightly more than VND 12 million, buyers need only send the equivalent amount of money to the bank and they will receive the equivalent gold volume from the banks after the negotiated time period, said Chau.

At present, it's estimated that local jewellery and gold companies haves imported about 10 tonnes of gold to Vietnam.

The plan will help customers to avoid the risks of the rising gold price, added Chau.

Currently, the world gold prices closed at $679 per ounce (28 grams) (VND 10.8 million). In Ho Chi Minh city, the precious metal closed at VND 13.25 million per tael (38 grams) and VND 13.20 million in Hanoi.

There was a loud bang and then another. This startled the creature and made him stop and focused his attention upon the door. He swayed back and forth under the protection of the Oaken Table. Given this opportunity Sir Topaz and Sir Toolie removed a tapestry from the wall and Sir Pritcho was ready to overturn one of the heavy chairs to trip this invader and thus hope to capture him alive. Sir M.K. and Sir Mikal removed a few candles and placed them on the Oaken Table to give them two sources of light. Finnaly the door gave way and Knights poured into the room bringing torches that lighted the room completly. Like unwanted guests to a feast,this clearly aggitated the creature and started to make sounds that produced that same high shrill. Only this time culminated into howling of a wolf. It filled the chamber and resonated out through the open door and down the hall.
Deep breaths could be heard from under the table and then he charged into the Knights. Seeing him for the first time, they jumped as to get out of his way only to be inflicted with wounds to their legs as the creature passed amoung them. Their swords were useless being close to each other and the speed and agility enabled the attacker to withdraw to the safety and cover of the table. Words of displeasure and retribution from the wounded Knights. "Take him Alive" ordered Sir M.K.
Spreading out and surrounding the Oaken Table completly, one would think the creature would surrender. This was not the case and he emerged to stand in full veiw upon the "Mighty oaken Table of Yore". "What on earth is that! one Knight exclaimed as other words of astonishment were uttered. He turned round to face each Knight, growling and clanging his small swords together in defiance.
The commotion had brought others to the chamber door and they too looked upon the creature.
"GET HIM" was shouted and the top of the table was a flurry of movement. Some Knights with sheilds formed a barrier. "Move him this way" shouted Sir Mikal. The table had taken a beating from club and mace, as they forced the creature to the edge. But Sir Topaz and Sir Toolie were ready and when he was in reach, pulled the tapestry over the creature. Knocking him down on the table, the Knights climbed up pinning him under the cloth before he could cut through with his swords.
" Now that we have him. What are we to do with him" asked Sir Pritcho. "Give him Two", said Sir Toolie.
A club was handed up to Sir Pritcho.
"With pleasure" he said. Wump. Wump.
Slingshot----------<>

http://www.billcara.com/archives/2006/03/gdm_as_an_etf_t.htmlsnip:

The Amex Goldminer's Index (AMEX: GDM) is a market cap weighted index of gold and silver producers that are listed on the AMEX and NYSE. GDM is about to become an ETF.

All the biggest U.S. listed goldminers are there, including . . .

But so too are much smaller goldminers that are in fact too small to qualify for trading by many of the mutual funds and pension funds. And many of these smaller companies would be ignored by the typical individual trader as being too risky.

With the arrival of GDM as an ETF, all that goes away. Interesting to me is that none of these companies senior officers who I spoke directly to yesterday were even aware, but they were all certainly interested after I broke the news.

So the significant beneficiaries of GDM will be the small and mid-cap goldminers. . .

-Goldilox

More ways for the "average" paper investor to participate in a gold bull without understanding the concept of "HOLDING" PMs.

http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=2006-05-06T215336Z_01_N06222878_RTRIDST_0_FINANCIAL-BUFFETT-COMMODITIES.XML"We had a lot of silver at one time but we don't have it now," Buffett said, speaking at Berkshire Hathaway's annual meeting.
----------------------------------------------------------------------------------------------------------------------
Oh, old Warren doesn't have his silver anymore...
Doesn't silver has no value anymore for old Warren ?
Was silver only 'a trade' for Mr. Buffet ?
Maybe he changed it for gold :) ?

From Richard Beales of the Financial Times (05/07/06)

snip:

Discussing commodities, Mr Buffett said he detected speculative participation in the recent run up in prices, particularly metals. He added that Berkshire had not benefited from the sharp rise in silver prices, despite at one time owning a lot of the metal.

"I bought it very early, I sold it very early. Other than that it was perfect," he joked.

end snip.

A lot of speculation regarding how WB's massive hoard of physical silver would play into this market is now moot. Or is it? The metal still exists. As Antal E. Fekete would have it-many naked shorts may have stealthily covered themselves with this physical. This would give them tremendous leverage.

How about this. Create demand. (The ETF?) Use about 1/2 the hoard to create paper shares. Ride the price up ($30-$40+) with speculative demand (withold physical). Short the paper market again. Flood physical market with the remaining metal thus popping the bubble (back to $7-$10). Cover $30-$40 shorts. Realize insane USD profits to close out old $5-$12 COMEX paper short positions. Still be far ahead of the game.

Coincidences?

1) WB hoard was estimated to be 130 million ounces.

2) SLV (ETF) files registration with SEC for 13 million shares which represents 130 million ounces.

3) According to Ted Butler the four largest commercials hold net short positions of, you guessed it, 130 million ounces.

Hmmm. This is getting interesting.

Their problem would come if they are too succesful in creating demand and the market easily absorbs the 130 million ounces and demands more. It would be the mother of all short squeezes.

Noble1

http://www.gold-eagle.com/editorials_05/dross022806.htmlHere is an article, that was published a couple months ago, that presents a theory regarding where the silver will come from with respect to the Silver ETF. I know its old news, but when articles come out that say that Buffet has sold his holdings at the same time that the Silver ETF goes into action, one can't help but think there is a connection. One can't help but also notice the number of ounces the ETF has consumed without actually participating in a public market. That is the most telling clue.

Taking this a step further, Buffet buys companies. I believe that what we may find is that the real gain that Buffet will realize with a move like this is that the 1) the metal remains locked up or off the physical market and 2) his capital is freed for doing what he does best � buying companies. If I were in that position, it would make total sense to work out a deal that kept the metal off the market while giving me the opportunity to buy solid companies that stood to benefit from the rise in silver price over time.

If such a deal has been worked out, one might also expect that SLV will stop issuing new shares once it reaches it's consumption goal of 130 million ounces. Thus, 13 million shares might be all that we will see. But... this is only a flatline guess.

We watch.

I have come to the conclusion based on my research that the current Fed/IMF strategy of dollar devaluation in order to prevent a larger dollar collapse will not work and will not balance the trade deficit. First of all China will not cooperate in such a sudden devaluation of the dollar against the Chinese yuan because this would cause massive unemployment and deflation in China. If China does not cooperate then all the dollar devaluation will do is make Chinese products more competitive against European and Japanese products assuming that the Euro and Yen are allowed to rise against the dollar. Second of all America's manufacturing and high-tech services have been so decimated by offshoring that economists like Dr. Paul Craig Roberts, who served in the Reagan Administration have stated that at no exchange rate can the American trade deficit be balanced because America no longer produces internationally tradeable goods in sufficient quantitites to be able to balance the trade deficit. The only way the trade deficit can be balanced is in a dollar collapse situation where foreign workers and businesses do not accept the dollar as payment for their goods and services because the dollar is basically worthless. This would force American companies to bring back the offshored work to the United States and these products can exported to the rest of the world to balance the trade deficit. Comments are welcome.

The thoughts of Endgame on silver makes much sense. The following is from Endgame's post at another forum:

---begin quote---

I think that there is no question as to whether or not a huge amount of silver exist above ground. Not only the silver hoisted upon China but also the billions of ounces of US silver magically disappearing have to be accounted for. And keep in mind that production did not drop dead once everyone had their fill of silver. Each pound of copper and zinc mined also added to the ever-flowing stream of silver. Kind of reminds you of that Disney movie with Mickey and the brooms.

So what is one to do if one has a few billion ounces of silver to unload? Especially if China is sitting there with enough silver to quash any attempt to drive the price up. Well why not cut a deal? And so China was invited into that whites mans club known as the WTO. And the price of admission was their silver. Much of this silver is now in England along with any other significant holdings belonging to players such as Warren Buffett. The 100 million or so ounces that were in the WTC were removed prior to 911 and are currently stored near DC. The market has been cornered.

This silver will not be sold off piece meal. If will all be unloaded at full price. It will be delivered as fulfillment to the vast quantities of silver paper clamoring for their pound of flesh. This is why much of the physical silver is stored within easy deliverable range of the major commodities markets. At the trigger point the silver EFT's will stand and deliver. By then they should have many hundreds of millions of physical ounces under their control. You will notice how easily their physical count expands by millions of ounces on any given day without barely a ripple in the silver price. This is because their LBMA account is easily adjusted with all of that Chinese silver just sitting around.

The silver aspect of what is going on is just one layer of a multi dimensional game. Although planning and negotiations had been going on for many years, a working consensus was finally reached sometime in 1994/95. That is when the endgame began.

But that is another bedtime story.

Regards,
Endgame

----------end quote--------

Ge: Sounds like Endgame's continuing "bedtime" story is just another fairytale, like, Jack in the Beanstalk.

Perhaps Endgame is one of the shorts currently impaled on the skewer and roasting on the fire, hoping for an out.

We notice his language, "why not cut a deal" so he doesn't know; he's only making up the story and adding into the juice a host of unconfirmed, unknown conspirators.

My own fairytale is that Silver price and bullion was about the last thing on any of the negotiators minds when considering China for WTO status in the mid-90's. The whole fairytale just sounds like another conspiracy tall tale.

But let's just say for argument, that someone would have 200 million ounces of silver that they would dump at once on the market at say $25/oz. That yields only a 5 followed by nine zeros if I'm correct--Five billion dollars. It's also not too difficult to imagine, that some oil sheik somewhere or another large holder of depreciating dollars, could swallow that amount whole, for cash, and not even burp!

http://www.newsmax.com/archives/articles/2006/5/5/175809.shtmlSNIPS
The vast political distances between Britain, France, Germany and Italy have doomed plans to rekindle the embers of the European Union's moribund constitution. Skepticism about a European Union keeps growing in public opinion polls all over the Continent.
+
Europe's integration theologians have long preached, all evidence to the contrary, that there is no contradiction between deepening their union and enlarging it. But pragmatists have gradually displaced canonists. EU Commission President Manuel Barroso, a former Portuguese Maoist who morphed into economic liberal, now says Europe needs a new "narrative" to sell the enterprise to countless millions of Europeans who have lost interest.
For leaders of Europe's major powers, giving up their sovereignty prerogatives would mean, down that road, voting for the status of a U.S. state governor. Not on this watch. Nor on many watches to come.

==

Arnaud de Borchgrave, theologian at large of The Washington Times and of United Press International, fails to distinguish between political or constitutional union on the one hand and economic and/or monetary union on the invisible hand.

He forgets that the political union in the EU will be achieved around the monetary union.

This is a process of becoming whereby freegold will provide the necessary continuing stability.

This explains why the AngloAmerican clique likes to amalgamate political/constitutional union with economic/monetary union.

Is the dollar standard not also a kind of monetary union on a global scale with dollar-unity but at the same time with diversity?

Even if it could be argued that there is a political unity in the US of A, it is clear that the dollar-management over there is a big failure.

This will break up the so-called political union, if any, of the US of A whereas the political union of the EU will increase.

Wouldn't mind getting a hold of some of that stuff you're smoking :) - -- or is this the first recorded trip?

http://news.independent.co.uk/business/comment/article362763.eceSNIPS
� gold provides an independent yardstick, an internationally traded precious metal acceptable to all that is not subject to the whims of monetary authorities, nor to their occasional errors - an argument in favour of a return to the gold standard, some would say
+
Over the last few weeks, the price of gold has hit a local peak not just in dollars but also in almost any other currency you could care to think of. Might it be that central banks the world over have, simultaneously, made mistakes that make gold a safer bet than all paper currencies? Are we about to find that pieces of paper - our trusted stores of value and mediums of exchange - are about to become worthless?

http://english.bna.bh/?ID=44529 Iran to Shift From Dollar to Euro-based Accounts - Bako, Bahrain - Bahrain News Agency - May 5, 2006

Third trip (story)and never left the farm (USAGOLD Forum).
Good to see you post. Things should get interesting in both story and PM market.
Enjoy,
Slingshot----------;0)

@ Pritcho,

Slingshot's gold battle novella has been going on for a couple years. TC may have archived the earlier episodes.

Welcome to the ranks of his gold warriors.

http://www.theinternationalforecaster.com/trainwreck.php?Id=122from Bob Chapman

I don't know what most people are thinking, but I have a gut feeling that a dollar collapse is imminent--will happen within weeks if not days!

http://www.newkerala.com/news2.php?action=fullnews&id=54158PICASSO PAINTING SELLS FOR $95.2 MILLION
NEW YORK, 05 May 2006:
Picasso's "Dora Maar with Cat" fetched $95.2 million at Sotheby's in New York -- the second-highest price ever paid for a painting at auction.
The record is held by Picasso's "Boy with a Pipe," which sold for $104.2 million in May 2004, The New York Times said.
Another Picasso, "Repose," went for $34.7 million Wednesday night, far above its estimated value of $20 million, the Times said.
The artist's "Portrait of Germaine," painted in 1902 during his "blue period," went for $18.6 million

==

What if gold were picassised out of its monetary context and became a wealth-reserve-asset just like and next to stocks, bonds, real estate, cash, etc.

Nobody understands the notion of "freegold".

Whereas our learned observers can recognise gigantic financial manipulations all over the place, they continue to babble about the illusion of free financial markets.

Everybody continues to link gold (and the gold market) to the dollar, whereas gold-pricing is precisely severing the link to the dollar.

Those who are accumulating gold-metal in their portfolios want this reserve-asset to be a "reliable" indicator.

The Picassos were sold to the price equal to the buying-power of the dollar and not to the dollar-currency. The sale of the Picassos was not meant to transform wealth into dollar-currency. Those dollar-units have immediately been converted to Another tangible asset which generates surplus-value. The new owners of the Picassos have acquired the Picassos because they wanted to consolidate their dollar-units and to maintain their buying-power. These new owners rely on the "free market" in valuable art-objects.

This is precisely what the holders of gold-metal also want. They get their inspiration from the market-to-market concept of the European Central Bank which wants to lift its gold-reserve-wealth OUT of its monetary context.

The Picassos continue to have wealth-value and are not caught in the bull-bear movements of the financial industry. The Picassos have an everlasting buying-power precisely because of the existence of a free market in such tangibles.

A free market is thus the corollary of balanced power relations and NOT the corollary of imbalances as they are now globally rising in the polarising market economy based on the dollar-regime.

In a free market, EVERYTHING must be allowed to participate. Free gold-pricing also. This is precisely that to which gold is now evolving.

The days of the monetary gold cartel are numbered.

If the US dollar collapses and becomes worthless, what will that do to the value of China's (and others') US dollar reserves?

>If the US dollar collapses and becomes worthless, what will >that do to the value of China's (and others') US dollar >reserves?


Obviously, China's dollar reserves will become worthless as well that is one reason many people are concerned about a rush to convert American dollars into some other form of currency or gold or commodities like copper, zince, etc that would start a dollar collapse. The idea being that the first people to convert their dollars into euros or gold will maintain all or most of the dollar's value. However, those that try to convert their dollars later after the exchange rate has dropped will loose alot more money. This is like selling a stock that is going down sharply into bankruptcy like Enron. Those that sold first maintained most of their money, those that sold later lost most of their money.

http://news.bbc.co.uk/2/hi/americas/4750473.stmsnip:


Hugo Chavez has used oil income to fund social programmes abroad
The tax paid by foreign oil companies operating in Venezuela will be almost doubled, says President Hugo Chavez.
On his weekly television programme Hello President, Mr Chavez said a new "extraction tax" of 33% would replace the current oil royalty of 17%.

He said the levy would raise at least $885m a year, some of which would be used to fund a housing programme.

Venezuela is the world's fifth oil exporter, and Mr Chavez has used oil income to drive his "revolution".

"We are going to create a new oil tax, called the tax on extraction," Mr Chavez told viewers of his marathon six-hour Sunday show.

"The companies that are pumping oil in Venezuela are making a lot of money," he said.

He said the details of the new extraction tax would be revealed in the next few days, but the figure mentioned by Mr Chavez and his oil minister is 33%.

Chavez applauded Bolivia's stricter terms for foreign energy companies

There will be a different arrangement for foreign companies pumping extra-heavy crude in the eastern Faja region, near the Orinoco River. They include Total, ConocoPhillips, Chevron, ExxonMobil, and BP.

These companies - who are combined in four joint ventures with Venezuela's state-owned PDVSA - are already paying 34% in taxes on income.

That tax will rise to 50%, Mr Chavez said. He said the new taxes would be subject to approval by the National Assembly.

-Goldilox

Resource wars heat up in this hemisphere. It can't be long until the SA socialists are accused of "harboring terrorists" and stockpiling WMD?

http://www.newsobserver.com/110/story/437125.htmlsnip:

ST. CLOUD, MINN. - Most motorists are feeling the pain as gasoline creeps toward, or over, $3 a gallon -- but not Art Altrichter.
"This feels pretty good!" Altrichter said as he filled the tank of his Ford F-150 pickup for $2.03 a gallon Thursday, when the average in Minnesota was $2.73. "Right now, to be a few pennies over $2, when it's as high as it is? That's a real deal."

A year ago, the retired milk truck driver bought 500 gallons of gas at First Fuel Banks, locking it in at the then-current price of $2.03 a gallon. He taps that reserve whenever gas rises above that mark. If the retail price drops below $2.03, he can leave his reserve alone and buy elsewhere.

First Fuel Banks bills itself as the only retailer in the country where customers can buy gasoline for the future and hedge against rising prices. It advertises no service charge and no storage charge, just a $1 lifetime membership fee.

Altrichter said one of his neighbors got in at First Fuel Banks several years ago and now is withdrawing from a reserve that cost him 99 cents a gallon. "How about that!" he said.

Individuals and businesses buy gas from the company, which has six stations in and around the central Minnesota city. The city of St. Cloud fills its fleet of cars at the company's stations.

The program is open to anyone who drives off the street. Customers buy whatever amount they want at the current price, then swipe a card and key in a PIN number when they draw from their reserve.

Chief executive Jim Feneis, who runs the company with his brother, Dan Feneis, said 300 members are still filling up with gas that cost them less than a buck a gallon as recently as 2002. Many more are locked in under $2.

"We're offering a pretty attractive concept to the savvy buyer," Feneis said.

Each station has a 50,000-gallon tank for each grade of gasoline -- regular, mid-grade and premium -- compared with 6,000 to 8,000 gallons for each product at a typical convenience store, Feneis said.

That's enough capacity to handle short-and medium-term demand, he said.

-Goldilox

Are gas co-ops a solution to rapid fuel price rises?

Looks like the headlines point towards an Iranian letter as the catalyst for the downward movement in the price of gold today. I would tend to discount that against the adjustment in the margin rate that was announced last Thursday. Those new rates are in affect today. But what's really interesting, is that the market hasn't hit a programmed sell point that would cause a freefall that would be attributed to speculator panic. This makes me wonder about the state of speculators in the market. Did the last freefall cause enough damage make the speculators act in a little more conservative manor? If so, one would expect that there is strength at this margin rate and another margin adjustment would be in the works.

Re: Another margin increase- Comex has no choice but to keep raising margins from what I hear. Short interest is steadily shifting to the greater fool.

It seems that you're confirming what logic would suggest. Leverage really equates to speculation. Those that speculate on the price of gold are not looking for delivery of the metal, but rather delivery of dollars. That leverage amplifies gains and losses adding fuel to the addition of trading. As margin requirements rise the potential gains are diminished.

As a side effect, the rise in margin rates will give rise to a rise in physical demand. Or skew the longs in the market to those that actually hold. What will be the advantage of buying a futures contract without margin over buying the physical metal outright? IMHO, I believe that as margin requirements move to 1:1 so arrives Freegold.

TIH, (and others), thanks for keeping the Freegold concept alive and kicking in this forum with your editorials on the articles that you link too.

I think there has been a shift in who is getting damaged by margin hikes. Back a day, when longs were always precarious, it was like shooting fish in a barrel whenever margins got raised. Today longs are flush with profit while shorts are getting crushed. The (non-cabal?) shorts are forced to raise huge sums of money to meet margin while most longs just sit back and stay patient. Raising margin has however reduced the leverage in silver. It is now about 8.46/1 at $13.90 an oz. with $8,100 margin per 5000 oz contract. It was up around 20/1 until this recent flurry of increases.

Probably some of the recent gold gains vs. silver is just because it now provides more leverage. Gold's leverage is still around 18.4/1 which means you can carry over double the contracts of silver. Bottom line silver futures has become a rich man's game. While I am sure the increases dampen small spec interest I also think it makes short covering more likely. And there's a ton of trapped shorts in there.

http://news.yahoo.com/s/ft/20060507/bs_ft/fto050720061642417110Market Preview: Dollar Pressure Will Continue | Financial Times | Chris Flood | May 7, 2006
Inflationary devaluation, lower exchange rates and adjustment to long-term overvaluation are a few of the reasons to diversify out of US $'s into gold in hand...

That gas bank looks like fun. Like the food co-ops and barter clubs.
It is funny how gold is rising in all major currencies even as the dollar's exchange rate corrects. Inflation in all currencies.
But with Chavez and others raising taxes, oil drillers pressed for new fields and workers, and the $ fetching fewer barrels via a lower exchange rate, alternative energy and scaled down driving plans become mandatory with more businesses, homeowners and commuters.
Truckers could see more diesel fuel additives and engine modifications. Chinese minicars could face stiff competition BEFORE they debut in the US.
Automakers could revamp entire product lines similar to the early 70's gas/oil crunch with new vigor.
Pension plans may have to become something from "the good old days" lest continued cuts and cutoffs create too much dissension over the federal government's retirement and health care plans, with eight-to-one in matching funds.
Ed Henry this week at etherzone.com asks 'Is this possible?' - "Japan and China, plus a few other countries, will decide that it's futile to continue loaning the United States money; that they are cutting this welfare program because the American people cannot afford to pay them back; that the dollar has fallen too far in value; and that there are better places to invest and sell their products. Two cars in every garage, better toilets, and five cent cigars will become India's slogans."
Clearly, at the rate liquidity is being force fed through the world economy and global markets(derivatives and exchanges) despite tariffs and trade cutoffs, a manic
resolution to the dollar standoff may be just what the bankers(and their doctors) ordered.

This was my conclusion after reading their prospectus.....many pages of it. It states that the metal must be deposited to the Trust before the shares are released for sale.....But, just for he-haws, I thought I'd ask Barclay's to confirm this. The following is their reply to my e-mail inquiry....

***********


Thank you for your interest in the iShares Silver Trust sponsored by Barclays Global Investors International.

The iShares Silver Trust is comprised of actual silver bullion, not silver contracts. As of the close of Friday, May 5th., the total assets were $619,011,263.

Please find the info sheet attached for the iShares Silver Trust.

For a copy of the iShares Silver Trust prospectus please click on link listed below:

http://www.ishares.com/material_download.jhtml?relativePath=/repository/material/downloads/prospectus/silver.pdf


The iShares Silver Trust is sponsored by Barclays Global Investors International (BGII). The Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act."

************

The description of the process of depositing 50,000 ounces to release "one basket" of 5,000 shares leads me to believe that this is an ongoing process and, probably......PROBABLY....not backed with Buffett's sold stash.

Just mho, again, but I'm guessing that Buffett's silver is long gone...back into the market. And, unless it was a lump sum sale that took the POS down so sharply in early 2004, then I've no idea when he sold it. If not then, then the market absorbed that 130 million ounces (if indeed it was that much!) with barely a hickup. My guess is that continuing demand for ETF shares will require continued deposits of the physical to the holding Trust.

This info is NOT an endorsement of this or any other ETF. Read the fine print....many pages of it. BTW, silver margin for the paper Comex casino is now $8,900 and imho, ought to be even higher. Unless you are a professional trader.....stay out of the silver market...buy the doorstops (100 ouncers) instead. Usagold sells them.
And no, I have not gone physical only....I hold both physical + paper metal. 8>)
rich

Again, from the e-mail reply from Barclay's

"The iShares Silver Trust is comprised of actual silver bullion, not silver contracts. As of the close of Friday, May 5th., the total assets were $619,011,263."


If we divide that number by the closing price of silver on that day....we should get the number of ounces of silver held by the Trust. We do not. It's close but the number is lower as the Trust is not free but is paid through the sale of some of the metal...again, read the fine print in the prospectus!

But, the number does indicate that Barclay's did NOT buy a huge pile of metal BEFORE starting to sell shares, instead, they are accumulating as time goes by and as demand for the shares dictates. They do not hold Buffett's silver. Can we assume that this silver ETF is similar to gold ETFs? If so, and given the number of gold ETFs and awakening demand for them (by long only, stock mutual funds), then it seems logical to me that the price of both silver and gold are in one humungous looooong term bull market with no end in sight. I see no reason to think that momentum playing mutual fund managers will not continue to drive this pony. They know not why but they will buy.

There are always more factors determining price than one can shake a stick at, no? Some are stronger than others and strength varies over time. Maybe right now, these ETFs, being a conduit for mutual fund money, are the strongest factor leading the charge. I don't mean to downplay a weakening dollar, war, new demand from overseas, safe haven buying, etc. but maybe right now....that conduit connects to more money than metals' markets can handle....especially at low prices.
Thoughts???

Anyone watching..??? ....!

It looks like you have a little interest in this area. I am curious, do you know how many organizations are dealing these shares to the public? The reason why I ask is that if they are doing business like many do in the precious metals industry, they've done business on a handshake. In other words, the dealers that deliver the metal (50,000 ounces at a time) to get shares probably did so on a promise to deliver in a fixed number of days. These dealers also probably prepared ahead of time in the interest of their customers. Thus, they'd probably already bought some of the silver on the market and stopped it so they could participate in this endeavor. One would also assume that they are counting the ounces before they actually arrive (Dealers are assumed to be true to their word) because no one that I know has ever gotten a physical delivery of precious overnight. That just doesn't happen.

If the order is � shares are shorted to fill customer demand, the dealer stops physical taking delivery, ships that to Barclay's and fills the ishares (that they have already sold), then one would expect melda laure to dance a jig for us with regards to the phosphorescent super-show that we will all experience in the near future.

I spent the time reading that prospectus with one big question in my mind. Could the shares be backed with paper contracts (Comex and other exchanges)? If so, I could imagine one gigantic short squeeze when so many contracts were NOT offset but instead called for delivery. This is definitely NOT the case.

The prospectus is very definitive, physical metal must be in the Trust's possession BEFORE the shares are sold. They even list the daily time limits for metal delivery to release shares for the following day. But they are 100% physically backed.

And yes, excellent question(!), where is the source(s) of that physical?

There simply is no where near enough available (in the registered category) on Comex to accommodate even what is now (one week's worth of trading) held by the Barclay's Trust.

Perhaps someone might want to study a gold backed ETF and report back to us. Are they similarly structured? These shares, like any equities can be shorted by hedge funds but, "long only" mutual funds is where the huge amounts of investment money is located. These new vehicles may have absolutely nothing to do with sound money but, they are backed by physical and they have and will continue to move the small market cap metals' markets. As always, just one man's opinion given from a trader's point of view.
More thoughts!!
rich

Equities rallied during the tech boom partly because new technology made the modern mutual fund industry possible - i.e., it became much easier and cheaper to manage mutual funds in terms of purchasing and selling units and managing the fund, which in turn increased demand for fund units and by effect for the underlying company stocks.

The ETF's similarly increase demand for physical, assuming of course there is a valid legal regime in place, there is no fraud in the management and the government doesn't seize the metal. Assuming all these factors are in place, the ETFs "even the odds" between the metals and equities, making shares in metals trusts as easy to purchase as shares in companies/mutual funds.

Ownership in physical itself will still enjoy advantages over owing shares in a metals trust. Those who already owned physical have benefitted from the increase in the currency value of the physical due to the effect of the ETF's.

BTW, when melda laure jumps up on the table to dance that jig, he'll find me already there dancing if there were contracts totaling 44 million ounce of silver that had to be settled in physical metal rather than cash. Wow, wouldn't that be a sight to behold!

But I do not believe this is the only scenario that can lift prices....drastically too as the paper contract margins + lease rates are indicating.

Those paper player short from anywhere under today's price are hurting with a losing position that also requires $8900 in initial margin! Even a long position, with some MTM profit, initiated when margin was say $3200, might not have enough unrealized profit to cover the new margin requirements + thus force underfunded small player to close out winning trades. This is one reason why open interest is declining. Volatile market positions held on margin are extremely....Extremely...dangerous. Both gold and silver have often been in "fast" markets lately where reasonable (honest) trading is impossible, especially in open pit conditions as opposed to an electronically filled one.

My opinion (and it's only that), buy the physical + trade only at your own peril. Possible nationalization of natural resources makes mining stocks somewhat of a gamble too, no?

I'm not trying to echo TownCrier here, but in these markets, for unexperienced traders, he's right. There is no leverage in physical but there's also no risk....and there are risks waiting that haven't even yet revealed themselves.
There, that should make Townie smile!

So where is this Barclay's warehouse? I would expect there to be a line of armored trucks stacked up out on the street full of silver. 1,368 tonnes is not something that someone can put in a briefcase and casually carry around. Is anyone in the forum in a position to view such a caravan or trucks?

I am one of those that has a hard time extending trust to bankers, thus I continue to take the stand that no physical silver is moving. It's all just a hand shake between the SLV people and the dealers. I'd be willing to bet that SLV has a number of acceptable warehouse locations and they happen to be the same warehouses that the dealers use. Thus, the act of delivery is simply signing over ownership of the metal on reserve � no trucks, no hassle.

This also gives control of the market to the dealers. Everyone knows that the dealers can short shares in anything that trades � and they do. There are more shares outstanding of very fortune 500 company they issued. I'd expect the SLV iShares to fall into this category. Thus, as long as the customer doesn't take delivery of the shares the dealer doesn't have to cover them! Does anyone actually know how many iShares have been sold by the dealers? I'll bet we will NEVER know. But, it does look like the dealers have been waiting for this ETF and they've been acquiring silver for a long time just so they could participate.

If iShares can be shorted by dealers to the public because the public doesn't actually ask for the shares, then one would expect that the dealers would simply cover they naked position by buying contracts. The contracts will give them the option to take delivery if they are forced to have to issue iShares to their customers. In that case, they deliver the metal and more iShares are issued. This idea make sense? Sometimes my imagination gets the best of me and I � well � think as if everything is a Hollywood action thriller that's only rates 2 stars.

Exactly, and well stated.

But again, read the prospectus! A very small amount of the only asset held by the Trust is sold, on an ongoing basis, to pay the expenses of running the fund.

These ETFs are a means for mutual funds to enter these markets and there are plans for many more such vehicles linking mutual fund monies to commodities. The need exists and this is the capitalist innovative answer. Mutual fund managers who jobs are directly linked to providing profits have been hard pressed to do so since the Nasdoggie blew up. They will sieze this opportunity, no? This can only support higher prices, imho and provide the means for a real tulip-type mania. But for those of us here, if you want metal, especially for any buy + hold strategy, why not pay the one time brokerage fee and hold your own...in your own trust.

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 dips for 1st time in seven sessions

May 8 (from DowJones) -- Despite hitting a new contract high overnight, Comex June gold lost its luster during the pit session on Monday at the New York Mercantile Exchange and settled lower following a potential ease in US/Iran relations.

June gold reached a new high of $688.20 an ounce - its best performance since 1980. But news of a possible ease in tensions between the U.S. and Iran appeared to cool the market leading to a $679.90 close, down $4.40 on the day.

On Monday, Iranian President Mahmoud Ahmadinejad wrote a letter to President George W. Bush proposing "new solutions" to their differences about Iran's nuclear program. The letter sparked profit taking in the precious metals complex with oil also trading lower while the dollar regained some of its lost ground against the euro and yen, noted analysts at TheBullionDesk.

Support was seen at the lows where buying moved in, noted one trader.

Analysts at MKS Finance said that even if the market sentiment remains upbeat, a consolidation is needed before gold can head to $700 an ounce.

"Buying on dips remains the main feature of the market and should provide some support along with the U.S. dollar, which remains under pressure hitting new lows against the yen and the European currency," MKS said.

In the short-term, gold is very likely to be influenced by the U.S. Treasury semi-annual report to Congress on exchange-rate practices due Tuesday followed by the FOMC meeting and its accompanying statement on the interest rate policy on Wednesday, traders said.

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

http://www.btimes.com.my/Current_News/BT/Tuesday/Corporate/BT566231.txt/Article/May 9 2006 -- Li Yong, China's vice minister for finance, said he had heard a "rumour" that the US dollar was headed for a 25 per cent drop. If the gossip was true, the consequences would be "shocking", he said.

Li's comment, which he made at a discussion on global financial imbalances last week at the annual meeting of the Asian Development Bank in the Indian city of Hyderabad, was aimed directly at fellow panelist Tim Adams, the US Treasury undersecretary of international affairs.

The unspoken message was: "Don't try to talk the US dollar down."

And Adams knew better than to ask, "Well, what are you going to do about it?" The answer to that question has already begun taking shape: Asia may be getting ready to fix its currencies to a local anchor, dumping the region's unofficial US dollar peg.

Even as they continue to pile up US debt in their foreign-exchange reserves to keep their currencies stable against the US dollar, Asian nations, China among them, are preparing for a scenario where the US dollar does indeed collapse under the weight of a record US current account deficit.

The ACU [Asian Currency Unit] may well emerge as a viable currency for denominating export invoices, bank loans and bond issuances if the US dollar is no longer perceived as a safe storage of value.

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

Of note is that the ACU, again, "is an accounting unit; it won't change hands in the physical world".

If the dollar is no longer treated as a store of value and consequently plunges as an accouning unit, the ACU as a monetary accounting unit may certainly fill in for the purposes of invoicing and etc., but it surely has no proper place as a reserve asset in its own right. For that, there is gold. The ultimate reserve asset.

What else did you think was the primary driver behind the end of a 20-year bear market in gold and the upswing in its fortunes ever since the euro had its own successful launch as a currency in 1999?

R.

http://www.gulf-daily-news.com/Story.asp?Article=143025&Sn=BUSI&IssueID=29050(Bahrain) Gulf Daily News, 9th May 2006 -- A common GCC currency should not be pegged to the dollar but to a basket of different currencies, says a prominent foreign exchange strategist. BNP Paribas foreign exchange strategy global head Hans Redeker said that a peg to the dollar, which he expects to be a weak currency in the long term, would leave the Gulf economies too exposed.

"The regions with which the Gulf does the most business have changed in the last 10 to 15 years," he said.

"The region currently does more business with Europe and Asia than it does with the US."

Mr Redeker believes that the US dollar will continue to weaken against the Euro for various reasons, including the fact that real wages in the US are on the decline.

"Wages are increasing but not as fast as inflation. Without an increase in real wages, the economy loses one of its main pillars for growth," he said.

In Europe Mr Redeker expects the Euro to remain strong, but predicts an uncertain future for some European countries in the long term.

"I have a prediction which some may find surprising. I believe that there may be two Euros in the future, a normal Euro and what I call a 'Euro deluxe'."

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

Again, this is a currency issue, and again we see much of it is motivated by expectations for weakness in the dollar.

Bottom Line: If the dollar can't be expected to hold up under the minor duty as a numerical invoicing unit, is surely won't be able to shoulder the much heavier burden as a worthy reserve asset. For that, they shall increasingly turn to gold.

R.

Redeker's comments give pause. When the split comes -- between the "normal" euro and the euro "deluxe" -- I would think that the typical European citizen would like to know which of the two resides in his or her banking account. Is it the normal or the deluxe? And how did I come to own one or the other? I can't believe that the big banking corporations pay good money for this kind of tripe.

You hit a nail on the head with respect to the ETF.

My concern: If the underlying asset is sold over time, at some point there won't be enough physical to meet the potential redemption demand of the shares.

I guess alternatively the ETF could charge fees for the issuance and redemption of shares.

As listed, registered assets, the shares would be vulnerable to confiscation and taxation.

A long time ago, I wrote a piece here on how true believers and speculators actually needed and supported each other. In the same vein, I think the pure physical end of the business is helped by the EFT's....makes the pie bigger, so to speak.

This means you, Sir Smeagol !

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

(Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as the prizes offered are, NOTHING BUT --- GOLD coins !!)

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the JUNE, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST begin !
<;-)

http://www.financialsense.com/editorials/engdahl/2006/0508.html
Druid: I wonder if what I pasted below played any part concerning the comments about a 25% drop in the dollar?


"A Foreign Policy disaster over China

In this context, the recent diplomatic insult from Bush to visiting China President Hu Jintao, is doubly disastrous for the US foreign position. Bush acted on a script written by the anti-China neo-conservatives, to deliberately insult and humiliate Hu at the White House. First was the incident of allowing a Taiwanese �journalist,� a Falun Gong member, into the carefully-screened White House press conference, to rant in a tirade against Chinese human rights for more than three minutes, with no attempt at removal, at a White House filmed press conference. Then came the playing of the Chinese National Hymn for Hu. The �Chinese� hymn, however, was the (Taiwan) Republic of China hymn, not the (Beijing) Peoples� Republic hymn.

It was no �slip-up by the professional White House protocol people. It was a deliberate effort to humiliate the Chinese leader. The problem is that the US economy has become dependent on Chinese trade imports and on Chinese holdings of US Treasury securities. China today is the largest holder of dollar reserves in form of US Treasury paper with an estimated $825 billion. Were Beijing to decide to exit the US bond market, even in part, it would cause a dollar free-fall and collapse of the $7 trillion US real estate market, a wave of US bank failures and huge unemployment. It's a real option even if unlikely at the moment.

China's Hu didn's waste time or tears over the Bush affront. He immediately went on to Saudi Arabia for a 3 day state visit where both signed trade, defense and security agreements. Needless to say, this is no small slap in the fact to Washington by the traditionally �loyal� Saudi Royal House.

Hu signed a deal for SABIC of Saudi Arabia to build a $5.2 billion oil refinery and petrochemical project in northeast China. At the beginning of this year, King Abdullah was in Beijing for a full state visit. Hmmmmm�Since the Roosevelt-King Ibn Saud deal giving US Aramco and not the British exclusive concession to develop Saudi oil in 1943, Saudi Arabia has been regarded in Washington as a core strategic sphere of interest.

Hu then went on to Morocco, another traditional US sphere of interest, Nigeria and Kenya, all regarded as US spheres of interest. Hmmmm. Only two months ago Rumsfeld was in Morocco to offer US arms. Hu is offering to finance energy exploration there."

"Gold at any Price"

Those of us who have struggled from the bottom spot price of gold at $254 to the unflationary price of $680 per ounce, have truly withstood the test of time. I have never seen a more supportive group, both pro and con, that has provided documentive information as to the precious metal market. I truly have to reject those commentaries that paint us as doom and gloomers, for it may only be our wish that our close friends and family, examine the global markets of paper and promises. It might be sad to say that, with all the insults endured, that we in the electronic, digital and nano age understand each other more than our love ones. Alas we are a fractured society. One remembering what the dollar would buy and the other
consuming more by the acquisition of debt, aided by the never ending barrage of commercialism. Hold it true that each new generation should improve upon the last, but I ask at what cost. And if I am any resemblance of the small time investor, "Gold at any Price" will be out of reach for the common man.
Slingshot----------<>

http://www.financialsense.com/Market/wrapup.htm
"Barclays Global Investors� iShares Silver Trust [AMEX: SLV] began trading Friday, April 28. As of May 5, 2006 [six trading days later] � the trust reports it has acquired 1,368 tonnes of silver. For those of you who might be a little troubled with the conversion � that amounts to slightly more than 48 million ounces of silver bullion.

So this begs the question: how much is 48 million ounces of silver?

Because I thought none of you would ever ask, I would like to explain to folks what's involved in "physically acquiring" a good slug of silver. But before we do that � we need to understand that there is a big difference between "buying paper silver" and physically taking possession of the same.

To get an understanding of how this all works, I contacted Mr. Stephan Spicer, President and CEO of Central Fund of Canada [TSX: CEF.NV.A]. I explained to Mr. Spicer that I was having trouble getting my head around HOW Barclays Global Investors had acquired 48 million ounces of silver in 6 trading days. It seemed logical to ask Mr. Spicer since Central Fund has been in the business of buying and warehousing unencumbered, segregated gold and silver bullion � as a publicly traded entity for investors - in Canada since 1983.

On how silver bullion is shipped, Mr. Spicer revealed to me that it is customarily moved "long haul" via rail or ship and shorter distances by truck. Anyone who's had the experience of moving "ANYTHING" by ship would be more than aware of the time lags involved in doing so. Making arrangements for rail shipment pose equally challenging logistics. When silver bullion is delivered to Central Fund's vault, I was told it is "trucked" into the facility � million ounces at a time [per truck].

As I began feverishly doing a bit of "back-of-the-envelope-math," with visions of 96 truckloads of silver lined up outside of J.P. Morgan - London [SLV's custodian] waiting to be off loaded � I thought to myself, "at least it's a traffic jam with a silver lining!"

Actually, I only make light of this to highlight the logistical nightmare it is to physically move LARGE amounts of silver. So I asked Mr. Spicer how long he would expect it to take, from the time of purchase � to actually taking physical vaulted possession, of say, 20 million ounces of silver for Central Fund of Canada?

His reply was that 20 million ounces of silver could perhaps be positioned and purchased in a day � while acknowledging that such a purchase would most surely "move the market price." For Central Fund to take physical delivery [shipping] and process [weighing and documentation] that that quantity [weight] of metal is a logistical exercise that Spicer maintains could take "as much as 3 months." "


Druid: Barclays doing a hell of a job making sure the bullion is there to back the trade.

Since we are on the subject of silver I thought this tidbit might be nice.
See I went to the desert on a horse with no name. Felt good to be out of the rain. In the desert, you can remember your name, cause there ain't no one to give you no pain. Remember that song?
Anyway. One slot called Silver Strike gave out 1/2 oz silver provided you bet three coins. They are commendatives with a value of $10.00 game chips. Won ten coins and fifty in cashout on an initial investment of $20.00.
Slingshot-----------<>

9/11, the desparate war on Iraq, Homeland Gestapo and the re-election of a fascist president are the events that signaled the fate of the US dollar would be determined primarily by emotional decision making.

Best Wishes

The question(s):

"...Every bull market has had its flex point -- the event or combination of events that turned the market toward a primary bull trend for the long run. To your way of thinking, what was that event, or series of events, and how high to do you think gold can go, over the long run?"

The answer(s):

Well...we are on a gold bull trend, but when did we learn that we were on one "for the long run"?

Upon inspecting the 10-year gold price chart, it is apparent that the bull trend commenced about April 2001. However, there was for several years considerable scepticism that the trend would last. In fact, the chart seemed to be peaking at about $420; a level comparable to previous peaks over the last 20 years. Many players probably thought that "this was it"...the peak was in, and no doubt there was considerable selling of gold which probably accounted, in part, for the relatively long plateau (of nearly one year) in price at about the $400 level. The question in peoples' minds would have been whether the US-dollar would confirm its updraft with rising interest rates, accompanied by a turn-around in the deficits and renewed faith in US dollar assets as reliable reserves.

Doubts in peoples' minds seem to have been overcome around July 2005, when the gold price chart shows a steadily increasing gradient; leading upward to the present price-level of about $680...and the present general mind-set that gold is on a bull trend for the long term. What happened around July 2005? What signal was sent to the markets that tipped peoples' faith in favour of a long-term golden bull?

To my mind, this event was the CNOOC bid for Unocal that was blocked by the US government. This was probably the first major attempt by a large, powerful holder of US dollar reserves to spend some of those reserves on useful "things" rather than buying more US interest-bearing paper promises. The signal was accentuated by the fact that the attempted purchase was of a US oil company. The signal sent to the markets was two-fold:

(a) large US dollar reserves are unredeemable,

(b) oil production is truly critical and will be defended no-matter-what.

After about this time we see the price of gold rising steadily in ALL currencies, whereas hitherto there had been a fairly reliable inverse correlation between the dollar and gold. This was the point at which "inflation" became a global event in earnest. Gold is being propelled upwards because the treasuries of all countries realise that, in such a climate, it may be of little use to diversify US-dollar holdings into other currencies because they are depreciating along with the dollar. Reserves should be transferred to tangible assets...especially gold.

How high can gold go over the long term? My guess is $6,500 when the Dow sits at 13,000 and the Dow/POG ratio is 2.

:-)

A choppy time ahead with May 24 right in the middle of max agitation for June methinks.

I'd say June last year was when the Bull really lit up. We had seen the $PoG rising nicely up 'till then however the alt-currencies had experienced only minor PoG upthrust.
Aug and Sept '05 confirmed the nascent Bull in June and away we went.

Flex point

The statement by Russia's President Putin that their Central Bank should hold more gold. That was followed by both the Russian and Chinese central banks heads making similar statements. The amounts they will have to buy to have significant gold holdings puts a floor under the POG for years to come.

Long run

As to how high gold can go in the long run depends how long. Long enough and the sky is the limit. But as J.M. Keynes said "In the long run we are all dead." If the long run is a year, then $1500.

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)



$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)



$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)



$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)
===
<;-)

POG CONTEST ---
You BOTH owe us a LONG TERM PRICE statement!
<;-)

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !!
<;-)

Does any of the information from Barclay's indicate that the silver changed location as a condition of changing ownership?

- Survivor

http://www.fxstreet.com/nou/graph/liverealtimequotes.asp
Druid: The Yen has made a fairly significant move against the Dollar as of late.

I expect the POG will rise above $1000 within one year.
Longer term, the dollar may well be dead before this bull run is over.

Best Wishes

Interesting day for Gold! Now a contest to boot! A very nice day indeed! It is now obvious even to the Carnival Barkers on CNBC that this dog (Spot) can hunt! Let the real fun begin.

- Black Blade

A year or to ago, we had some interestng discussions on whether silver or gold occupied the driver's seat in the PM bull run.

While I don't buy the notion of complete severence, it does appear that gold has taken a stronger lead, especially since the recent release of the SLV ETF. Did SLV successfully cap the silver mania, at least temporarily?

Might this also be signalling that the "monetary component" driving these markets has overtaken the "commodity component" - perhaps more significant?

For those who enjoy an entertaining peek into our collective emotions about the near future, the latest web bot analysis is out (albeit a few days late). For non-subscribers, George Ure has posted an authorized summary at UrbanSurvival.com.

http://www.reuters.comGold jumps above $700 - May 9, 2006 NEW YORK (Reuters) - Snippits: "Gold futures jumped above $700 an ounce Tuesday, hitting a fresh 25-year high, fueled by relentless investor buying on geopolitical tensions and worries about inflation.
Dealers said talk that economists urged China to quadruple its gold reserves to 2,500 tons from the current 600 tons because its foreign exchange reserves had become the world's largest also stoked the gold rally."
[Dollar troubles, Iran and inflation continue to pop up in news stories like this. Other trouble spots include housing weakness and growth uncertainty globally.]

""The weak dollar certainly is not hurting - the steady selling of the dollar helps gold," said the gold trader.
Talk was swirling on Tuesday that Chinese accounts were active in spot gold after a report on China's reserves.
"China should raise its gold reserves so those reserves can account for 3 percent to 5 percent of the foreign exchange reserves, instead of current 1.3 percent," the China Gold quoted Liu Shanen, an expert at Beijing Gold Economy Development Research Center, as telling a conference.
Meanwhile, jitters over Iran's nuclear ambitions and inflated oil prices also bolstered the market as a safe-haven investment."
[As economists and experts debate optimum Chinese reserve diversification strategies, potentially unannounced gold purchases become as apparent as future ones. And as does China, so does the Asian sphere as a whole, aand on balance still sharing age-old cultural and commercial ties between themselves and with gold.]

http://sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/05/09/financial/f091735D76.DTLGold Prices Hit $700 an Ounce - Associated Press - May 9, 2006
Short article with generally bullish comments from Leonard Kaplan and several different views of gold's rise.

@ mikal,

This is as fun as watching Barry Bonds' home runs, but of course, we ALL know these markets are "juiced", but perhaps more alcoholically than hormonally!

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=10So long, 85!

It was a short visit, but fun, indeed.

Truly an "E" ticket ride!

If PoG rises with this vigor (20% in a month) along side "stable" markets, imagine how it will react if and when the horse-hooey hits the fan at full revolution and oscillation. That could make for one highly pungent "stable"!

Perhaps amid the summer "supply disruptions", as "just in time" (JITM) manufacturing and retail absolutely assume uninterrupted supply chains.

Just a wild-eyed supposition from the unofficial castle radical . . .

(:^} Goldilox

P.S. Got gold?

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

I believe the recent gold bull market eminated in and around the beginning of the start of the Bush administration. Once Bush came into office his domestic and foreign policies accelerated the demise of the dollar. His reckless abandon made all of the keen, forward thinking citizens of this world want to dump fiat currencies and jump straight into the best wealth preservation vehicle that is known to man today...GOLD! (and silver)

In the long run, I think that gold will have 3 or maybe 4 stages of appreciation, which we are still in stage 1. In the current stage we can reach has high as 850 or even surpass the previous high. The next (secound stage) around $1700 and then double again to $3400 in the third stage. Under normal market conditions the appreciation should stop there. However, it could move to a fourth blowoff phase because markets can be at times irrational and the market can climb as high as $5k or $6k an ounce in the final phase because of irrational and panic crowd buying. Timetable on this...only GOD knows...

Errr Gandalf...may I alter my guess to $797.0 ...'twas a slip of the finger on the keyboard, a mere lapse of concentration, mmmm....

(Just kidding!)

Dang! Out of date already...

;-)

I, for one, will be reluctant to try to call this market for the price guessing contest for a couple more days. After the last couple weeks, gold is showing how it can give us all the rodeo bull ride - today being a great example of one of those powerful leg kicks that gives a rider a real start and gives anyone who's short... a mouth full of broken teeth or worse!

The world has finally noticed that "The Emperor Has No Clothes". A combination of Iraq, Iran, the trade deficit, the budget deficit, the appearance of China and India as major economic players all point to the collapse of the empire as we knew it. With the collapse big money is hedging into gold, silver and other commodities. Where will gold go? To $1,000 this year and $2,500 within 3 years. If inflation really gets going these targets are probably low.

"More orderly" because the central banks now
strategically dishoard enough gold to prevent
explosions -- as former Federal Reserve
Chairman Paul Volcker wrote in his memoirs
should have been done in the late 1970s?

* * *

Gold Rally Similar Yet 'More Orderly' Than in 1980

By Allen Sykora
Dow Jones Newswires
Tuesday, May 9, 2006

There are a number of similarities in the gold futures now compared to when prices hit record levels back in 1980, yet analysts involved with the metal both now and then tend to describe gold as having more solid footing in 2006 so that any corrections lower may not be as dramatic as they were a quarter of a century ago.

For one thing, the rally has been more gradual, meaning a better base of support has been built on the charts.

"Right now, gold has been in a more orderly trading pace," said John Person, the president of National Futures Advisory Service who back in 1980 was a young trader working in the same office as the famed George Lane, known as "Father of Stochastics."

June gold has traded as high as $700.90 an ounce so far Tuesday on the Comex division of the New York Mercantile Exchange. This is a 26-year high for a Comex futures contract.

The record high trade for a Comex gold contract was $875 back on Jan. 21, 1980, according to Nymex. The market underwent considerable volatility back then, as it rose from a low of $424 in December 1979 to the $875 peak, then fell back as far as $453 again by March 1980.

"The fundamental stories are the same -- inflation, oil and concerns in the Middle East," said Person.

Much of the impetus behind the 1980 rally was inflation, analysts said. At the time, some related, investors had fewer inflation hedges than they do today, when investors can more readily use tools such as puts in the stock market.

"Jimmy Carter was president and inflation official rate was around 12%," said David Morgan, independent precious-metals analyst with Silver-Investor.com. "Because of that, many investors were concerned with how to protect their wealth."

While official U.S. inflation is currently nowhere near the levels reached a quarter of a century ago, for some time now many market participants have been buying gold on fears that the world's central banks have let money supply grow so rapidly that there could be more inflationary pressures down the road.

Analysts also noted that the Middle East worries then and now centered on Iran. Back then, Iranian militants had stormed the U.S. embassy and held U.S. citizens as hostages for more than a year. Current geopolitical tensions center around Iran's nuclear program.

"Back then, it was hostages," said Person. "Now Iran is possibly turning the world into a hostage with their capacity to produce nuclear weapons."

Peter Grandich, analyst and publisher of the Grandich Letter, commented that there were worries about nuclear war back in the 1980s, after Ronald Reagan had been elected president. And nuclear worries persist in 2006.

Morgan added that a quarter of a century ago, there were also worries about the dollar failing. The greenback this week has hit its weakest level in a year.

Still, analysts suggested that that gold may be better situated now than in 1980. For starters, said Person, the rally to the 1980 highs began from a low of $101 in 1976. The current rally began from a bottom of around $252 in 1999. "That opens the door at this point so that this market really could exceed that (1980) high, because the
base from which we are starting this new bullish cycle was higher," he said.

Person commented that there are some parallels in gold's rally to the sharp rise in the Nasdaq a few years ago in that a "frenzied buying spree" has occurred. Nevertheless, said Person, gold's current rise has been "more orderly" than it was a quarter of a century ago when it climbed and then fell a few hundred dollars within months. Thus, he and other analysts said they would look for any major correction from current levels to halt in the area from
$550 to $575, which would not be as dramatic as the $875-$453 two-month fall in 1980.

If the market did pull back $100, it may then go into a
consolidation phase and the uptrend would still be in tact, said Person. He added that a trendline from the November to the March lows, on a continuation chart, is around $570.

"It's possible for gold to correct substantially from here and still remain in a bull market," said Morgan. "Gold could come down to the $550 level and still remain in a powerful bull uptrend."

Morgan commented that gold's selloff from the 1980 high -- a peak which happened to occur on his birthday -- came when the Fed kept aggressively hiking interest rates to combat inflation. Furthermore, the gold market had run up so fast that technically "it had no legs to stand on" during a retreat after limited base building.

Morgan suggested the Fed would not be able to let the bond market suffer as much now as it did back then due to aggressive tightening. "There would be repercussions, such as potential trade wars or currency blocks where countries would quit accepting dollars," he said.

Analysts commented that the global wealth base is greater than it was a quarter of a century ago, as countries like China and India have seen significant economic improvement, which could also help underpin assets in general. And, Morgan pointed out, gold has been a "store of wealth" for thousands of years.

Grandich said that while gold hit the $870s back in 1980, it was up there only briefly and spent more time around $650 to $700. Thus, he said, he had listed this as his price objective during much of the current rally. While he eventually does look for gains beyond the old record highs, some consolidation first may be necessary, said
Grandich. Then one of three events may have to occur to spark record prices, he continued.

"We will need even more heightened geopolitical fears where not only are we beating the drums, but some actions start taking place like military movements," he said. "We have to see it go from rhetoric to some form of action." If the dollar index should break down below 80, he said, "everybody in the world will get a sell signal on the
U.S. dollar and that in turn will be extremely bullish for gold."

Lastly, added Grandich, mining and other resource companies are having a harder time upping production, in part due to political concerns, such as Bolivia's move to nationalize its energy sector. There has been political unrest around foreign mining operations in Indonesia.

"The environment to explore and develop metals, particularly gold, has become very tough," said Grandich. "So supply doesn't look like it's going to increase (significantly) any time soon. Any furthering
of that inability to get supply would be another bullish factor to get us over this hump of $700 or so.

"I think we'll go through the old high of $875. I just think we'll have to do some work to get there."

http://asia.news.yahoo.com/060509/3/2kabr.htmlFrom Reuters
Tuesday, May 9, 2006

BEIJING -- Some Chinese economists are urging Beijing to quadruple its gold reserves to 2,500 tonnes from the current 600 tonnes because the country foreign exchange reserves had become the world's largest, an official industry newspaper reported on Tuesday.

"China should raise its gold reserves so those reserves can account for 3 percent to 5 percent of the foreign exchange reserves, instead of current 1.3 percent," the China Gold quoted Liu Shanen, an expert at Beijing Gold Economy Development Research Centre, as telling a
conference.

He said the suggestion was made in light of the country's economic strength and the size of its foreign trade.

China's foreign exchange reserves rose to a record $875.1 billion by the end of March on the back of a surge in its trade surplus and an increase in foreign direct investment.

"More gold reserves will help the government prevent risks and handle emergencies in case of future possible turbulence in the international political and economic situation," the paper said, citing Tan Yaling, a researcher with the Bank of China.

A weak dollar had also made more gold holdings necessary, it quoted Liao Yingmin as saying. Liao is a researcher at the Development Research Center of the State Council, a government think-tank.

China has been trying to gradually diversify its reserve holdings away from the dollar. But economists say fears of a collapse in the U.S currency will prevent any dramatic shift.

Central bank official figures showed China's gold reserves have remained unchanged since December 2002.

Gold has gained 32 percent this year due to tension in the Middle East, firm oil prices and a volatile dollar. Spot gold was quoted at $679.90 an ounce by 0959 GMT.

Traders in London anticipated the price to test 25-year high of $684.70 an ounce.

It is interesting to see so many articles about gold in main stream papers. It is also interesting that so many of them don't have a clue as to why it's going up. But, most all of them will convey the feeling that it will go down. At the same time, there is absolutely no talk at the watering hole about gold. To me, that is a good indication that it's a small minority that are enjoying this ride.

I found it interesting that when I brought up Google, followed the link to "all 163 related" articles and then searched on that page for foxnews I did not find a single article. Curious, they must be Silver advocates or something.

TownCrier, One can't help but see the genus in the way the Euro was designed. If the gold reserve out valued the US Currency reserve when gold traded for 500/oz, then one can only assume they are smiling a little more today. While they smile, I do not see them having to use gold to defend their currency any time soon.

Those who have not allocated some gold will find it harder and harder to do as time goes on.

Just in case anyone is loosing their minds ! Such a sweet thought as we break $700 !!!

Looking at the London PM fix, there was a double top at $709 on Feb 6, 1980 and $710.50 on Feb 11, 1980. Break that and away we go to the old $850 mark.

I saw a post on closes over $700 a while back:

Jan 16, 1980........$760
Jan 17, 1980........$750
Jan 18, 1980........$835
Jan 21, 1980........$850
Jan 22, 1980........$737.50
Jan 24, 1980........$717

Then a dive below $700 and a short revisit:

Feb 6, 1980.........$709
Feb 11, 1980........$710.50

......as mentioned.


So what's going to happen?

Well $800 is not 1980 $800 so regardless of the semantics of breaking $700 and/or approaching $850, it means not a thing. I think even goldbugs are not going to go beserk at $850.

I say........let's poke away at $20 a day in a somewhat methotical fashion and when $1,000 is broke by year-end we BEGIN to get out knickers in a knot.

Have a golden day.

It looks like my short-run PoG guess has been trashed already Gandalf so FWIW, here goes with the LR prognosis.

It seems to me we need to try and figure a point on the PoG line whereby Currency of all stripes becomes worthless ie: when no Gold will be available at ANY price.
I'd say that time will be nigh when PoG approaches US$3,000/Oz.

http://www.financialsense.com/stormwatch/geo/analysis.htmJack be nimble
Jack be quick!

Jack jumps under the margin schtick!

Dont quibble nor quarrel just push the stops!
Drain the pitcher before the cops!

Set out the dartboard, uncage the chimp,
Golden banans, bankers and pimps!

Gimme an ulcer and pop these here pills,
Straddle and dribble the paper shills.

Dramamine lotion and nicotine patch.
Casino's on fire, they're locking the hatch.

Dont bother re-loading, just give him the gun.
Abandon the chips, take the money and RUN!

Sunsets, verandas, Uncork Gandy's wine.
(Unless of course we cut it too fine.) . .(somebody pleas stuff-a-donut in his face)

Congressional gabfest, graybar hotel.
Greenpaper burning, gawdawful smell.

Gondolin burning, gawdawful mess,
Violins screeching, nuclear chess. . . (make it stop!...)

A happier ending you'd like to see?
Here take my hand and climb up this tree.

I'm tuning my harp, I've no time to trade;
Paper's for dixie cups and cool lemonade. .(I can think of other uses for paper too, so what?)

Apple pies baking and stars all a glitter.
Hobbit feet dancing, WHUMP! patter pitter.

Tap a new keg, sun sets in the west.
Stick to the shiney, gold is the best!

Sir flatliner, I have a special helm for that occasion- a special titanium-depleted-passivated-mithril alloy with silver irridited welding goggle face shield. I'm not going to WEAR it (I'm not that stupid) but maybe the digital camera will last long enough to transmit a few frames before it vaporizes. Anybody know where I can hire a pygmie oliphaunt? This stash is getting hard to move around.

Anyone still waiting for the correction to $480 should just divide their fiat pile in two and commit half of it now, the bus is rolling down hill and it wont go in reverse. (You'll need the rest for horsefeed.)

Meanwhile, I'm all for abiotic oil. Just tell us where to drill that's all. Hmmmm, visions of Tiamat.

Ah, I see you've already tapped the keg. There are points along the way at which everyone should tap the keg and share your good fortune. After we get past this revaluation, we'll move on to abiotic oil. Can't have free oil until you remove the currency link. Freegold.

$$$$ 652.5 $$$$

This is my first posting. The contest hooked me. I date the "change" from my perspective to when I began buying gold about a year ago. Wish I had started much earlier, but that was when I got truly scared that the U.S. financial system can collapse. I was never a goldbug; stayed with CNBC and believed that "someone" would always rescue us in a crisis. But I live in DC and I know there is no one currently in power who has a clue. In my 40 years in this town, I have never seen a situation like this one where there is truly no adult supervision. In Watergate and other crises, we still had a functioning federal government. We no longer do and I see this up close. I am very scared. I think in the short run, gold will jump around and I don't have a clue where it will close, but it costs nothing to guess. Having gold will not be salvation if our financial system collapses. My hope is that I may be able to preserve something that may be of use to my grandchildren. Gold is a type of insurance for the very long run. But no matter how much gold anyone has or what the price is, when any economy collapses it is horrible. When an economy as big as ours collapses, we are going to be in totally unknown territory.

$$$$8,752.0$$$$ The Invisible Hand (2/18/02; 01:46:17MT - usagold.com msg#: 70296)
Confirmation and discussion ****$ 8,752****
I do hereby confirm my guess of ****$ 8,752 ****
Discussion: Although in an earlier post of the last fortnight I said that A/TG predicted an upward surge of 50 bucks a day, I think it would be more precise to say that the gentlemen argue the unexpected move towards $ 30,000 can occur at anytime. It must thus start once. Why not within the 'time limit' of the contest?
==
The event or combination of events which turned the market toward a primary bull trend for the long run is the Dow Jones breaking fresh records.
"No power on earth can stop an idea whose time has come". Victor Hugo

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=
Just flicking through my "favourites" I stumbled on a Long-term alt currency Chart not visited for some time.
For 15 odd years the two lines were hip-jointed, virtually representing little in the way of separation in Gold pricing vis Euro, Yen, Pounds and etc.

The current chart however, to get the lines to fit on the page, has had to re-jig the scalings to such an extent that no relationship is now evident, in fact if the old scalings were employed, the Gold (blue) line would be well off the chart....WoW!

@ Topaz,

Not to worry. That's what logrithmic charts are for!

Plus, they'll assist TPTB in their message that "everything is "under control".

$$$$$829.50$$$$$$$
How high will it go? I believe that Gold is devaluing the $Dollar to bring it down to a balance against other curriencies and eliminating a large part of our Foreign debt. Who is going to pay the price? The American people are going to pay the price with extreme high inflation which we are already seeing the evidence of in oil prices.

I think that the most important event that happened which led to current and future gold prices was the introduction of the EURO. lOOK BACK AND SEE WHAT ANOTHER AND FOA SAID IN THEIR POSTS. The only mistake I can see they made was some of the timing of events but the TRAIL has been steady and led us to todays $700.00 per oz. Nobody, but our enemies, wants to see the $Dollar crash but rather a slow steady devaluation until it reaches a point of balance with the worlds monetary systems. White Hills

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/10/cngold10.xml&menuId=242&sSheet=/money/2006/05/10/ixcitytop.htmlBeijing Whispers Push Gold to $700

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, May 10, 2006

Gold has surged to $700 an ounce for the first time in 26 years after Chinese economists suggested the country should quadruple its bullion reserves to protect against a falling dollar.

Speculators have been alert to any sign that Beijing may be planning to switch a portion of its massive $875bn reserves into gold, a move that would electrify the market.

They seized on comments yesterday by Liu Shanen, an official at the Beijing Gold Economy Development Research Centre, who said China should raise the portion of gold in its reserves from 1.3 percent today to between 3 and 5 percent. Such a move would entail the purchase of 1,900 tonnes of gold, equivalent to gobbling up nine months of global mine production.

Washington's cold response to Iran's move to defuse nuclear tension also helped fuel yesterday's rally. "No one is buying Iran's overtures," said Frank McGhee, a metals trader at Integrated Brokerage Services. "This is a purely geo-political move for gold. We've been here before. The difference is that this time, there are nukes involved."

June gold futures jumped $20.10 an ounce in New York, briefly touching the $700 line before falling back slightly.

Tan Yaling, an economist at the Bank of China, backed the call for higher gold reserves to "help the government prevent risks and handle emergencies in case of future possible turbulence in the international political and economic situation".

John Reade, a UBS analyst, said neither economist had any official role but hints were enough to drive prices in the current climate. "This is an investor frenzy, and China has become the biggest rumour in the gold world right now," he said.

Mr Reade said gold had changed stride since the middle of last year, the key moment when it broke out against all major currencies and began to attract investment from the big money brigade.

"Speculative and investment interest has replaced jewellery demand. The last time that happened was in 1979 to 1980," he said.

He said it was likely that Middle Eastern investors were switching petrodollars into gold after burning their fingers in local stock markets.

Ross Norman, director of the BullionDesk.com, said China may already be a silent buyer on the open market.

Central banks are supposed to record their gold purchases with the IMF promptly, but they have been known to move stealthily for months before declaring.

"This market has been bouncing back so quickly after each bout of profit-taking that it looks as if somebody big is trying to get in. It's too darn hot for my liking," Norman said.

Mr Norman said there was a fair chance that gold mining equities would start to play "catch-up."

-END-

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The Daily Gold Market Report has beenupdated.

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TUESDAY Market Excerpts

Gold leaps to $700

May 9 (from DowJones) -- A confluence of bullish factors fueled a sharp rally in the precious metals complex on Tuesday at the New York Mercantile Exchange as gold breached the key $700-an-ounce level for the first time in 26 years. Amid inflationary concerns, a soft dollar, a rally in oil and ongoing geopolitical tensions, gold produced its best performance since 1980 as it reached a high of $702.20.

The most-active June contract later settled just off that level at $701.50, up $21.60 on the day.

The rally was initially sparked by the euro's gains against the dollar while the move by the U.S. to reject a letter sent by Iran suggesting "new solutions" to differences between the two countries set off renewed buying interest early in the session.

Crude oil's top of the $71-a-barrel level on the heels of the news also led the way for gold to break higher, traders said.

Entangled in Iran/U.S. news is the U.S. Federal Reserve meeting on Wednesday that could give the market clues as to whether a pause will be seen in the consistent increase in interest rates.

Also in the mix which led to a mad dash of the $700-an-ounce level for gold was talk that China might move to increase its gold reserves, market players said.

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

Re: "China may quadruple reserves, Gold market acts more orderly and Gold market seems like someone big is trying to get in"
Good information.
Isn't it interesting how rumors evolve after official and unofficial statements from pros in various countries such as Sweden, Korea, India, Russia and China.
Why one would think that the west did not have any interest or tradition in gold at all which is blasphemous!
But if we take matters into into our own hands, surely that'll be quickly remedied- Who was it you said told you Warren Buffet was adding to a secret hoard? No problem
if you cannot recollect. :>)

Re: Sweden ... Well that should have been Bahrain because you can't include western countries that go over to the other side. :)
And besides, they didn't ALL mention the "G" word- some just "hedge against abrupt shifts, discontinuity etc", "prudent and timely diversification" and "preventitive risk management" and such- nothing noteworthy at all -
we all know this can't POSSIBLY imply something barbarous
which any civilized or thinking person would rule out,
and there's WAY too many truly cool asset classes out there, and GADS of SWEET (and smart, you genius!) ways
to finance and invest in them!

Here we go.
Competitive fiat currency devaluation world wide has been in progress for long time.
This is the only effective tool unelected charlatans, who call themselves Central Bankers, have to tinker with economies of various countries. Since all this worldwide mass of liquidity is not backed by services or newly produced goods it must burn one way or the other. Historically in economically lesser countries this means overnight government/ bankers decree that reduces purchasing power of a given state fiat currency by a factor of 10 or more followed by new type of paper notes. They can not do that with USD which is widely held. Nevertheless the road, journey and destination for $USD is same.

Once Robert Rubin (Clinton's treasurer ) had his proposal (foreign exporters recycle USD back in to treasuries preserving forex USD value) implemented, the last nail in dollars coffin was done. Since then Charlatans have no clue how to fix it and do not care fixing it.
47 trillion debt will be paid with watered down $USD equivalent to writing off such obligations altogether. I wonder if Clinton new what he was signing. Meantime spend while you can.

Winners are: elite closest to fiat printing machines worldwide.
The rest are all losers.
And then there are those who protected themselves from money changers by storing their hard earnings in tangibles: metals, art, select real-estate.

O yes, inflation, devaluation, hyperinflation is all good news for all borrowers.

http://groups.yahoo.com/group/gata/message/3487Mikal, at the Internet link above is one
official statement from last November that
was as plain as it could be even though
little heed was paid to it then and little
heed is paid to it now.

That is, the Bank of Russia said it would
be buying gold "on all markets," foreign
and domestic.

This statement followed by three months
GATA's presentation to Andrey Bykov, the
unofficial representative of the Russian
government, economics advisor to President
Vladimir Putin, at the Gold Rush 21
conference in Dawson City, Yukon Territory.

For some months now the big sellers of gold
have met some equally big buyers ready to
take as much gold as the West wants to
unload. These buyers almost certainly
include some governments with enormous and
quickly depreciating dollar reserves they
are even more eager to unload. So gold now
may have all the friends it needs --
official friends who don't seem to mind if
we go along for the ride.

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-05-09T191159Z_01_N09295039_RTRUKOC_0_US-MARKETS-GOLD-COMEX-PRICE.xmlsnip:

LONDON/NEW YORK (Reuters) - Gold spiked up to a new 25-year high above $700 an ounce on Tuesday on dollar weakness, while platinum set a new record on strong industrial demand and fund buying.

Other precious metals also gained from the bullish environment in commodities, which saw copper setting a new record and aluminum surging to an 18-year peak.

"We have a combination of overlaying sets of momentum here. More and more of genuine investors have become convinced that some portion of their assets should be put into the sector," said Sean Corrigan, chief investment strategist at Diapason Commodities Management.

-Goldilox

Usual bruhaha, including warnings of "correction", but worth it for the PICTURE!

Sir Goldilox.... you said...

"A year or to ago, we had some interestng discussions on whether silver or gold occupied the driver's seat in the PM bull run.

While I don't buy the notion of complete severence, it does appear that gold has taken a stronger lead, especially since the recent release of the SLV ETF. Did SLV successfully cap the silver mania, at least temporarily?"
...............

As of last Friday (per the Rude Awakening).... Year-to-date
Gold up 31.52% .....nice move
Silver up 55.16% ....much nicer move

My conclusion:
Silver is comfortably driving the bus at nearly DOUBLE the gain IMHO.

@ ski,

For the longer period, you are completely correct, but as silver was spanked heavily recently, it is not necessarily keeping up in the CURRENT month's move - perhaps only temporarily.

Read the rest of my reasoning to see why I think this is true.

The next month should demonstrate if this is still true, or only a one-month anomaly.

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

I discussed when gold broke to the upside in the big move the short of gold derivatives will be almost totally forgotten by the new buyers. It is only natural when the gold price leaders are also the major derivative-granting entities.

I strongly recommend you do not forget what the short of gold derivatives are doing. Every major amalgamation in the gold producing industry has been driven by the damage done by short of gold derivatives.

There is a call provision on these arrangements not tied to the price of gold, but rather to the liquid position of the producer's balance sheet and bond ratings. Rather than spreading the position which would even today rescue them, they retrench their operation to producing properties and do anything to gain cash in a futile attempt to protect against the above described margin call provisions.

Short of gold derivatives will cause havoc as gold makes its way to $1650. This damage will not be limited to the gold industry.

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

Anybody notice that on a percentage basis palladium moved more than gold today? Further, if you use paper profits to buy the metal/metals of your choice, palladium offers a couple orders of magnitude fewer stocks to absorb any buying interest.

Implication: If/ when the mob tries to get into precious metal stocks (i.e., loose capital sloshing in our direction), the doorway into palladium stock ownership is a lot narrower than the broad entryway into ownership of gold stocks.

True, with many NYSE stocks having a market cap sufficient to buy up every gold company and every silver company on the planet at current prices, if/ when even a small percentage of overall investment funds heads in our direction, gold and silver stocks will automatically have to move to substantially higher prices; but with palladium offering a smaller doorway for any amount of demand, the price of admission will accellerate even more briskly.

Caradoc

http://news.ft.com/cms/s/a1676740-df75-11da-afe4-0000779e2340.htmlsnip:

Fannie Mae, the US mortgage giant, will spend more than $800m this year on efforts to restate its earnings following the exposure almost two years ago of accounting errors totaling up to $11bn, the company said on Tuesday.

The mounting bill for the restatement - which includes the cost of consultants, accountants and lawyers as well as technology investments and some employees - pushed administrative costs up 66 per cent in the first quarter compared with the same period last year.

The company had already revealed that about a third of its employees would spend more than half their time working on the restatement and that an additional 1,500 consultants would be brought in to help.

"[The scale of the task] underscores how massive a portfolio they had built up and how unprepared they were from an accounting infrastructure perspective," said Robert Lacoursiere, analyst at Bank of America.

In a filing with the Securities and Exchange Commission, the company also disclosed that it had discovered two new types of accounting errors, but said it expected to continue to meet its regulatory capital requirement. The requirement includes a 30 per cent surplus imposed by its regulator, the Office of Federal Housing Enterprise Oversight, after the accounting errors were discovered. . .

Fannie said it had now "substantially completed" its internal accounting investigation. It still plans to file restated accounts for the years to 2004 in the second half of this year, with 2005 statements to come later.

-Goldilox

When governments and GSE's spend massive proportions of their capital on spin doctoring, the "confidence factor" is often irreparably damaged. This is likely to have wide ranging effects on the RE bubble and the American homeowners' equity-ATM machine. Neither Iraq nor Iran will likely affect the US electorate as deeply or personally as this situation. Add this to the prediction of another record hurricane season, morality scandals, war plan setbacks, and miserable un-doctored employment reports, and we have all the factors in play to threaten the admin's "confidence factor" with world rocking amplitude.

A healthy economy may cover a multitude of sins, but a failing economy often bares them mercilessly, and when the perps have touted a holier-than-thou fascia as the NeoCons have, the backlash can be terrific.

http://moneycentral.msn.com/content/P146055.aspThese figures look more believable. My dad used to say that; "Figures don't lie, but liar's figure."

http://www.crbtrader.com/data/default.asp?page=quote&sym=SIH6&mode=dWe're gonna inflation ya even if it kills us ...it prob'ly will.
Silver is looking the goods imo. Having only paid scant attention to goings-on of late it's interesting to revisit Aggie ...and I'm liking what I see.
7,000 (HUGE for Ag) Contract equivalents for May ...and it's only the 9th ...and 1300 still up the spout ...And in Backwardation (see list) ...AND nowhere near overbought.

It'll be a long time till you see anything apparently looking this good again IMO.

On the Gold front it's similar, we've worked off the Au/Ag disparity evident at the monthly roll-over and both now look ready to rumble.
On looking for a reason for yesterdays uptick, hiding behind the $ downdraft we appear to have had a decent reduction in OI which, being a Tuesday, will show up in the CoT on Sat. I'd like to call it a S-covering rally ...and we'll know soon enough if it continues today I suppose...!

Jim Sinclair has been right so far. So I will go with his next big major upleg. Go speedracer!!!

http://www.ecb.int/press/pr/wfs/2006/html/fs060509.en.htmlItems not related to monetary policy operations
In the week ending 5 May 2006, the decrease of EUR 916 million in gold and gold receivables (asset item 1) reflected the selling of gold by three Eurosystem central banks (consistent with the Central Bank Gold Agreement of 27 September 2004) and a sale of gold coins by another Eurosystem central bank.

The net position of the Eurosystem in foreign currency (asset items 2 and 3 minus liability items 7, 8 and 9) increased by EUR 0.9 billion to EUR 157.2 billion on account of customer and portfolio transactions.

The holdings by the Eurosystem of marketable securities of euro area residents denominated in euro (asset item 7) increased by EUR 0.2 billion to EUR 94 billion. Banknotes in circulation (liability item 1) rose by EUR 3.9 billion to EUR 572.7 billion. Liabilities to general government (liability item 5.1) decreased by EUR 14.8 billion to EUR 44.1 billion.

The series of events (IMHO) that kick-started this Gold Bull Market, ranked in order of importance (not chronological order) are as follows:

1. The Bush Regime's economic policies ~ cutting the taxes on the rich, creating a war to institute handing out taxpayer money to friends and cronies, deficit spending for the pharmaceutical companies, etc., etc.
2. Runaway deficit spending to create new Government Agencies for the War on Terror.
3. The 9-11 attack.
4. The coronation of Bush by the Supreme Court in 2000.

All these reasons and many more, too numerous to mention, have led to Joe 6-pack loosing faith in the system, the dollar, and the leaders. J6P started buying into gold in 2002.

I don't see a "maximum" to the dollar value gold can reach; but I do predict that ~ this time around in the not-so-distant future ~ GOLD (and silver) will be used as money by the survivors while PAPER money will become a long forgotten relic of The Age of Wars.

http://www.mineweb.net/sections/gold_silver/306487.htmsnip:

LONDON (Mineweb.com) -- Mitsui Global Precious Metals, in conjunction with Virtual Metals, has released its latest assessment of the global gold mine hedge book and concludes that the market impact of the change in the book in the first quarter of this year was a contraction of 5.0 million ounces. That equates to 155.5 tonnes or the equivalent of almost exactly the output of Barrick over the whole of last year (which was 154.2 tonnes). Alternatively it is roughly equivalent to the quarterly output of South Africa, the United States and Papua New Guinea put together.

The study asserts that the decline was due almost exclusively to the activity of Barrick Gold, which reduced its book by 4.7 million ounces in the quarter. This is equivalent to 23% of the company's global book and is the largest single company hedge reduction on record. Barrick has since reduced its book by a further million ounces (between the need of the quarter and May 3) and intends to take another 2.0 million ounces off the book by the end of the year, thus accounting for 7.7 million ounces or 239 tonnes.

The report estimates that the global hedge book now stands at 48.2 million ounces (1,499 tonnes), less than half the peak position in the first quarter of 2003. On a committed ounce basis, the reduction was slightly lower, at 4.9 million ounces.

The Barrick reduction comes hard on the heels of the company's acquisition of Placer Dome in which the company inherited 7.5 million ounces of hedging commitments. Note that Barrick's de-hedging plans for this year therefore just exceed the size of the book acquired via Placer. The Placer book consisted of 6.5 million ounces of forwards and one million ounces of calls with roughly 1.4 million ounces of puts. The company had closed out the call options of 0.5 million ounces of what the study assumes were forwards by February 22. The book calculates that the average hedge reduction from Barrick works out at 76,000 ounces for every business day, leaving Barrick with a hedge book equivalent to 20 months� production. Central Bank sales, meanwhile, are estimated at 4.4 million ounces over the period.

The study estimates that de-hedging over the remaining three quarters will amount to another 6.7 million ounces or 208 tonnes, in substantial contrast to recent quarters, where dehedging had slowed "almost to a standstill". The hedge impact, net of the Barrick activity, amounted to roughly 300,000 ounces, inclusive of the AngloGold Ashanti position, which has been rising as the high gold price has increased the hedge impact of the company's net calls. Excluding the AngloGold Ashanti positions, dehedging was approximately 600,000 ounces.

Of the 102 companies covered, 54 had a price protection programme in place at the beginning of the quarter. Of these, 39 reduced their hedges, with eight increasing their hedging commitments, of which the Aurizon Mining hedge activity was from a previously flat position. Other hedgers included Avocet Mining, Bema Gold and Sino Mining. Avocet and Aurizon both increased the numbers of sold calls and bought puts, with the edge impact of roughly 100,000 ounces.

Among the other de-hedgers, second behind Barrick was Newcrest Mining with a cut of 400,000 ounces and Kinross, which reduced its option by 160,000 ounces.

In regional terms the Americas remains the foremost hedging region at 22.6 million ounces (703 tonnes), a contraction of 4.5 million ounces or 140 tonnes. The African hedge rose by 300,000 ounces as result of the increase in the AngloGold Ashanti position, while the Australian region fell by 800,000 ounces to 11.1 million ounces (345 tonnes), although part of this is due to Gallery Gold's hedge book transferring to the Americas region following the purchase of the company by IAMGold.

The construction of the hedge book is now estimated at 37.7 million ounces of net forwards (1,173 tonnes of 78% of the total delta-adjusted hedge impact). The net call position amounted to 9.0 million ounces 280 tonnes), 1.2 million ounces of other products and 300,000 ounces of net puts. On a committed ounce basis, net forwards are estimated at 38.5 million ounces (1,197 tonnes) with 10.5 million ounces of net sold calls and 1.3 million ounces of other products.

The mark-to market value of the global hedge book is estimated at a negative $11.9 billion at the end of the quarter (gold at $582/ounce) against a revised estimate of negative 9.8 billion at the end of the fourth quarter. The study estimates that the global book would only break even at a gold price of $324/ounce. At $700/ounce, the mark to market is closer to $18 billion.

-Goldilox

Lots of "commitments". Almost enough to finance a war for a couple weeks.

http://charts-d.quote.com:443/1002980432830?User=demo&Pswd=demo&DataType=GIF&Symbol=DX00Y∬erval=10&Ht=600&Wd=800&Display=2&Study=MA&Param1=13&Param2=0&Param3=&FontSize=10The USDX continues its "E-ticket" ride.

That is definitely a very strong positive for the precious metals! It is a very bright signal that producers (the industry experts) see much higher prices for gold going forward. Should make short sellers like past industry mega-hedgers and gold auctioneers (like Gordon Brown) feel rather foolish right about now.

- Black Blade

http://www.theaustralian.news.com.au/story/0,20867,19095191-643,00.htmlMore in Store as Gold Hits a Record | Robin Bromby | May 11, 2006
Ideas on what's in store short to medium term. Store it up...

http://biz.yahoo.com/ap/060510/fed_interest_rates.html?.v=11WASHINGTON (AP) -- The Federal Reserve on Wednesday raised a key interest rate to the highest level in more than five years but signaled that it may pause to assess the impact of its string of rate hikes.
ADVERTISEMENT


The Fed boosted its target for the federal funds rate to 5 percent. The funds rate, the interest that banks charge each other, stood at a 46-year low of 1 percent when the central bank began raising rates in June 2004 to keep inflation under control.

In its statement announcing the decision, Fed policy-makers indicated they may take at least a brief pause in pushing rates up further. It said the "extent and timing" of further rate increases would depend on future economic data.

The Fed's rate hikes have raised the borrowing costs for millions of Americans on everything from adjustable rate home mortgages to auto loans. Commercial banks were expected to quickly match the Fed action by boosting the prime lending rate to a five-year high of 8 percent.

Fed Chairman Ben Bernanke had raised expectations that the central bank was getting ready to pause when he said in congressional testimony on April 27 that the central bank might take a break for "one or more meetings."

Bernanke, who succeeded the legendary Alan Greenspan as Fed chairman on Feb. 1, said a pause would give the central bank time to assess the impact that its long string of rate increases was having on the economy.

In the statement announcing Wednesday's rate increase, the Fed said that some further rate hikes "may yet be needed." That marked a slight modification from the March statement when it stated that further rate increases "may be needed."

It added another phrase in the latest statement saying that "the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information."

Bernanke had created confusion about the exact meaning of his congressional remarks when he was quoted by CNBC as saying that financial markets had misread his congressional testimony.

That comment came after bond prices, always sensitive to inflation worries, had fallen on fears that Bernanke would not be as tough as Greenspan had been in fighting inflation.

Private economists are split over whether Wednesday's rate hike will be the last for awhile or whether the Fed may pause for one or two meetings and then raise rates another one or two times to make sure that a recent jump in energy prices does not spill over into more widespread inflation problems.

In assessing the current state of the economy, the Fed's brief statement tracked the comments Bernanke had made to the Joint Economic Committee.

The statement said that while economic growth had been "quite strong so far this year," the central bank still expected growth would moderate to a more sustainable pace, "partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices."

The overall economy grew at a sizzling pace of 4.8 percent in the first three months of this year, the fastest spurt for the gross domestic product in 2 1/2 years. But private forecasters believe growth has slowed in the current quarter, reflecting in part rising mortgage rates, which have dampened home sales.

On inflation, the Fed said that the surge in energy prices so far had had "only a modest effect on core inflation" with inflation expectations remaining contained.

The statement noted a unanimous vote for the quarter-point increase in the funds rate



Druid: The Currency specs. seem to be taking the latest rate hike rather well. Shiny's keeping pace.


http://www.fxstreet.com/nou/graph/liverealtimequotes.asp

http://www.futuresource.com/charts/charts.jsp?s=GC&o=DXY%20*GC/89&a=D&z=610x300&d=medium&b=bar&st=DXY is a measure of how many baskets of currency you can get per dollar. By scaling the POG and normalizing you can adjust.

Lately, it seems that the dollar moves have little to do with the POG- POG is dancing solo.

http://www.futuresource.com/charts/charts.jsp?s=DXY&o=DXY%20*GC/650&a=D&z=610x300&d=medium&b=bar&st=The previous graph may be a bit confusing. In essence adjusting for dxy doesnt change anything, so of course the graphs look the same.

Here's another view of the same idea: The green line shows the rise in how many baskets of DXY it takes to buy the same ounce of AU.

http://www.federalreserve.gov/BoardDocs/press/monetary/2006/20060510/default.htmMay 10, 2006

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 5 percent.

Economic growth has been quite strong so far this year. The Committee sees growth as likely to moderate to a more sustainable pace, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.

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.

The Committee judges that some further policy firming may yet be needed to address inflation risks but emphasizes that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information. In any event, the Committee will respond to changes in economic prospects as needed to support the attainment of its objectives.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Jeffrey M. Lacker; Mark W. Olson; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 6 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Dallas, and San Francisco.

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

Fed rate-hiking program now to sit back and take a wait-and-see, play-it-by-ear approach.

R.

http://www.futuresource.com/charts/charts.jsp?s=GC&o=GC/CL&a=D&z=610x300&d=medium&b=bar&st=Begging your indulgence for one more picture. POG is trouncing POO. From 6.5 bbl per ounce to almost ten now.

I suppose you could say the recent moves are NOT dollar price driven (which is not to say they aren't dollar confidence driven).

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20060510\ACQDJON200605101427DOWJONESDJONLINE001057.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.naSAN FRANCISCO (Dow Jones) -- Moves by Venezuela and Bolivia to nationalize their countries' natural resources could soon spill into the mining sector, likely boosting prices for metals that are already at multi-year or record highs, while pressuring shares of companies with interests in Latin America.

"A great leftwing, socialist rising is occurring in Latin America, which will push higher all mineral prices," said Ned Schmidt, editor of the Value View Gold Report.

"Venezuela and Bolivia are only the beginning," he said.

Indeed, early this month, Bolivian President Evo Morales said the move to nationalize the country's hydrocarbons sector was just the beginning. "Tomorrow it will be the mines, the forest resources and the land," he said.

...Peru may even enter the picture with the 2006 presidential candidate Ollanta Humala already saying he would force foreign-mining companies to renegotiate contracts and candidate Alan Garcia saying mining companies could face higher taxes and royalty payments..

The prospect of nationalization could further feed a rally in metals that's already lifted gold futures to more than 26-year highs...

In Bolivia, the biggest concerns are for silver, tin and zinc production; in Peru -- it's copper and gold; and in Venezuela it's gold, aluminum, copper, nickel and zinc.

Miners with exposure in Peru include Newmont Mining (NEM) , Barrick Gold (ABX) , Phelps Dodge (PD) and "potentially Inco (N) should its acquisition of Falconbridge (FAL.LV.T) proceed," he said.

All in all, while mining stock investors "have reaped huge profits this year," a "leftist political trend in Latin America is forcing many to consider political risk before investing, or suffer costly consequences," said Gold Newsletter's Lundin.

Analysts argue over whether the threat to metals production is extensive, but tend to agree that mining companies will suffer the greatest blow.

"If anything, the potential nationalization of mining companies bodes well for the outlook of the metals," as the "transition from privately held to nationally held will most assuredly bring about supply disruptions," said Emanuel Balarie, a senior market strategist at Wisdom Financial.

"Expect any producer country to follow Peru and Bolivia," says Julian Phillips.

In fact, if nationalization occurs, it would likely be done to gain access to the cash flow generated by a mine, so the government would "endeavor to keep the mine operating to maximize the cash flow," said Lawrence Roulston, editor of Resource Opportunities, an independent investment newsletter.

Therefore, "it's the mining and exploration companies and their shareholders who will suffer the most..."

John Stafford, editor of Stafford's Investment Strategy Letter, said that " political incompetence ... always restricts production [and] these Socialists represent the debtor class -- so they will hyper-inflate away the small remaining value of their worthless paper currencies to pay off debts in cheaper paper currency units."

Against this backdrop, prices for metals will "skyrocket," so he advises his clients to invest in North America, not Latin America.

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

This point can't be overstressed, so I'll shamelessly say it again. When you're looking for the type of protection of a diversified portfolio that only gold can provide, it should naturally follow that that protection will come only through actual gold ownership wherein you acquire gold coins and bullion -- the metal. As this article makes quite clear, investing in mining shares is a completely different kettle of fish -- or should I say, a can of worms.

R.

When are we going to stand up to RED China? They are going to take our automobile industry apart in the next 5 years! Not a currency manipulator? How can Snow say that, the communists fix the rate right against the buck and it doesn't adjust for the trade imbalances! That is 100% manipulation. When are we going to get some honest politicians and administators who represent US and not communists and illegal aliens?



UPDATE 1-US says China not manipulator; wants currency rise
Wed May 10, 2006 4:29 PM ET

WASHINGTON, May 10 (Reuters) - The U.S. Treasury Department ruled on Wednesday that China was not a currency
manipulator but pledged to "actively and frankly" push Beijing toward faster exchange-rate flexibility that would let its yuan rise in value.

Treasury's decision was certain to anger lawmakers who claim China is dragging its feet deliberately while flooding U.S. markets with cheaply priced goods, but Treasury said Beijing was moving, albeit too slowly, on currency reforms.

"Given our strong disappointment and the importance of China to the world economy, the Treasury Department will closely monitor China's progress in implementing its economic rebalancing strategy...and continue actively and frankly to press China to quicken the pace of renminbi flexibility."

http://online.wsj.com/article/SB114726053926948792.html?mod=googlenews_wsjSome See Gold in China's Reserves

Metal Gets a Boost
From Talk of Switch
Out of U.S. Dollars

By James T. Areddy
The Wall Street Journal
Wednesday, May 10, 2006

SHANGHAI, China -- China is again underpinning commodity prices -- this time with bullish comments about gold.

The People's Bank of China, the country's central bank, has long been coy about its management of gold reserves. But in recent days, comments attributed to a part-time Chinese economist that a weakening U.S. dollar should prompt Beijing to hold more gold helped send the price of the metal to levels not seen in more than 25 years.

Unlike metals used for industrial purposes, gold historically is owned as an investment hedge against inflation -- or as an alternative to currencies like the U.S. dollar. Beijing is particularly exposed to weakness in the U.S. currency since much of its $875 billion in foreign-currency reserves is believed to be held in U.S. dollar-denominated assets.

"This is a fact in front of everybody," said Liu Shanen, the 61-year-old part-time economist at the Beijing Gold Economy Development Research Center, a government organization closely affiliated with state-owned mining groups. Some traders say his comments helped spark the latest jump in gold.

In global trading Tuesday, gold hit its highest level since 1980. On the Comex division of the New York Mercantile Exchange, the most-active June contract broke $700, rising $21.60 an ounce to $701.50, just off the day's high of $702.20. In Comex trading Wednesday, June gold settled $4.20 higher at $705.70 an ounce.

Some traders seized on comments by Mr. Liu that China's government should quadruple its holdings of gold as a reason to buy the metal, though concerns about high crude-oil prices, global inflation, a weakening U.S. dollar and a standoff over Iran's nuclear program were more oft-cited reasons for the price move.

The comments also emerged as China's Ministry of Land and Resources said this week that it would build strategic reserves of some minerals in the next several years, though gold wasn't mentioned. As China has emerged as one of the world's biggest buyers of commodities, traders are eager to factor its policies into market prices.

In recent years, China's bulging foreign-exchange reserves have prompted a number of economists to suggest that the investment could be diversified into other currencies and into gold.

Mr. Liu, who said in an interview he is officially retired, called the market response to any sign of increased demand from China an "excuse" by traders to bid up the price. He noted he has long promoted the attributes of gold and said he has no knowledge about the central bank's actual policy, which is a closely guarded state secret.

A report published Tuesday by China Gold News quoted Mr. Liu from a speech he made to an industry conference late last month, where he said the government should raise its holding of gold to 2,500 metric tons from 600 tons now. The report quoted Mr. Liu saying China holds less gold than other countries, only about 1.3% of its foreign-exchange reserves, compared with 3% to 5% of reserves in other, unspecified countries.

Similar statistics were cited in a commentary carried in a state newspaper late last year written by Teng Tai, chief economist of Chinese brokerage house Galaxy Securities Co.
"Over the longer term, the yellow metal is a rare commodity, and its price tends to rise further," said Qin Weihuan, an analyst with Beijing Gold Economic Research Center, which publishes Gold News.

The People's Bank of China, which manages the country's foreign-exchange reserves, says gold holdings haven't been adjusted since December 2002 and now stand at 19.29 million troy ounces, or 600 metric tons. It doesn't put a dollar value on the reserves. A central-bank spokesman couldn't be reached to comment on gold reserves. ...

http://news.ft.com/cms/s/c404c338-e04c-11da-9e82-0000779e2340.htmlGold and Silver Rally Will End, Trader Says

By Richard Milne
Financial Times, London
Wednesday, May 10, 2006

The bubble-like levels of gold and silver prices cannot be sustained, according to the head of the world's largest precious metals trader, as bullion surged through the $700 a troy ounce mark for the first time in 25 years.

But Helmut Eschwey, chief executive of Heraeus, a family-owned German trading and technology group, said prices in platinum and some rarer precious metals, all at or near record highs, were justified by demand and low stock levels.

"The rally has been enormous [but] it can't go on forever," he told the Financial Times. "Silver will be the first to fall. Gold will not last at this level. It is different with platinum because there is industrial need."

His comments carry weight because Heraeus, based just outside Frankfurt, has been in the precious metals business for more than 150 years and makes annual revenues of about 7 billion euros from trading.

It is also unusual in that it has positions in all parts of the metal cycle, from refining and recycling to making products for industries such as automotive, semiconductors, and telecommunications.

The group also has divisions making sensors for the steel industry, dental products, optical fibres and specialist lighting.
Gold prices have risen from $600 an ounce in the past month and by more than 250 per cent in the past five years, while silver and platinum have recorded strong gains.

Speculators such as hedge funds have been blamed for a large part of the rises and Mr Eschwey said he thought, by jumping on a bandwagon, that they had had an effect.

He said it was "impossible to predict" when the bubble would burst for silver and gold but that it would take place. The situation is clouded because industrial buyers are trying to put back their purchases of precious metals but cannot do so forever and are starting to buy at the record levels.

The easiest way to prick the bubble would be for central banks to release some of their huge holdings in gold, Mr Eschwey said.

"There is a big stock in gold; there is none in platinum," he added, justifying his belief that platinum prices will stay strong. "I believe in the long run there will be a shortage of platinum."

The metal is predominantly used in the production of catalysts for cars and other devices as well as jewellery.

As a privately-owned company with 188 family shareholders, Heraeus, which trades from Hanau in Germany, New York, and Hong Kong, is careful to monitor risks when it trades and closes each of its positions every night.

"Our business model is defined in a way that we have no price risk and a high stability in earnings," Mr Eschwey said.

@ Federal Reserves,

Who is NOT a currency manipulator? When the FED takes an active trading role in the FOREX, they are openly announcing they can bring down any currency any time they wish as they did in Argentina and so many others.

All the Chinese are doing is refusing to play the FOREX casino game, when they know that the western banks have the game rigged in theri own favor.

While I am not a fan of globalist manufacturing, as it makes transport and labor inequalities the basis for too many policy decisions, not participating in the FOREX casino is the smartest decision the Chinese have made, and actually makes them less of a "currency manipulator" than those who do.

Your argument is like that of the casinos, who ban card-counters as "cheaters" for simply applying their expertise at playing the game of BlackJack.

Re: Metals trader
Again the media touts it's own expert and slants a story to a target audience. This mainstream and high-brow segment believes this, a contrary validation of traditional investments, because it reassures and comfortably confirms their own investing assumptions (and ingrained bias).
Because the CRB shows a gain of over 5 pts today, commodities in general could be frothy for some time to come.
But unlike gold, commodities are a potential trap IMO.
This forum has become much more tame, since it's inception when myself and many others were more frequent and vocal with warnings of sharp, unexpected and widespread financial crisis. To an extent it is our silent acceptance of implications and the conclusions we've reached. But it may also be a bit of complacency, though at orders of magnitude less than those unprepared with gold in hand.

I should also add that the FT promote the metal's trader's credentials as if it were enough to prove his allegations.
No evidence, no details, no fuss needed.

Mikal, I couldn't agree more. The media
slant the story from the first word by
deciding whom to quote and whom not to
quote. That the Financial Times could
do through that whole story with the
metals trader without asking him
whether his business was typically long
or short is pathetic. But I suppose
that's why we're here in our parallel
universe!

There will come a point when gold will make a long term top. At this point, if the cycle is right that will be in
the next 10-15 years and this top will preceed the bankruptcy of the United States and the outright loss of the dollar as the defacto currency reserve. My guess is gold will be priced around 10k/oz by then.

The fundamentals favor gold:

1) Huge and growing trade deficits
2) Huge and growing fiscal deficits
3) Far flung interventionist military campaigns with little effect
4) Slowing innovation (e.g. MSFT's Vista/OS - late and not great) hurting productivity
5) A nation state built on an empire of debt backed by fading tax powers
6) A relatively fixed supply of gold that grows slowly relative to currency

The current move is a resemblance of the 1980 parabolic move, but is starting from a higher base. Some say the
price is topping out now, that a horrible retracement is in order. I'm not sure about that.

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 climbs to $705, Fed hikes rates

May 10 (from DowJones, Reuters) -- After reaching a fresh 26-year high overnight of $706.80, Comex gold traded quietly Wednesday in New York before popping higher just before the close. Most-active June gold settled $4.20 higher at $705.70.

During the day session the contract drifted near the unchanged level as traders got their bearings following a sharp rally on Tuesday and another overnight high.

"It was quiet throughout the day. I think a lot of people were waiting on the FOMC meeting," said a trader referring to the Federal Open Market Committee meeting at 2:15 p.m. EDT.

During that meeting, the Fed raised interest rates a 16th-straight time by 25 basis points to 5%, but also paved the way somewhat for a possible pause by changing key language in its accompanying policy statement. The Fed said further "that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook."

That statement sent Comex gold in after hours trading lower, but a rally to a fresh 26-year high of $707.80 was seen after the dollar headed south.

Inflation pressures have been part of a mix of bullish factors fueling the rally in the precious metals sector along with ongoing geopolitical tensions and dollar weakness. "(Those factors) continue to provide a firm footing for gold. The investor's interest to allocate part of portfolio to commodities also offers a support," said analysts at MKS Finance.

Gold has climbed 38 percent in the year-to-date and 57 percent since the start of 2005, as investors diversify their accounts with more of the hard asset.

Jeffrey Christian, managing director of research firm CPM Group, said dollar softness has bolstered gold because investors are more and more seeking a greenback alternative.

"You're finding a lot of uncertainty and volatility in the currency markets and that's good for the precious metals," he said in a phone interview.

"You're seeing a lot of buying on the dips as opposed to profit taking," he said, adding that upside targets would now be at $50 increments.

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

http://www.energy-business-review.com/article_news.asp?guid=ABB2683D-C5C6-4537-99F0-7147BC70411DMay 10th -- German chancellor Angela Merkel has entered the debate on the future of Europe's energy markets by backing the idea of continental champions in the industry.

She attacked both excessive red tape from Brussels and the protectionist leanings of some member states as major factors impeding the development of a truly pan-European energy market.

...In an attempt to get round these hurdles, Europe's energy regulators have come together to propose a plan for regional markets covering different parts of Europe in a bid to catalyze greater trading in power and gas.

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

If progress is indeed made, shaill "greater trading" within regional European markets tend to be pro-dollar, or pro-euro? The answer, I think, should be obvious.

Step out of the fray and diversify into gold for restful days and nights ahead.

R.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/10/cngold10.xml&menuId=242&sSheet=/money/2006/05/10/ixcitytop.htmlTelegraph By Ambrose Evans-Pritchard (Filed: 10/05/2006)

Gold has surged to $700 an ounce for the first time in 26 years after Chinese economists suggested the country should quadruple its bullion reserves to protect against a falling dollar.

Speculators have been alert to any sign that Beijing may be planning to switch a portion of its massive $875bn reserves into gold, a move that would electrify the market.

John Reade, a UBS analyst, said gold had changed stride since the middle of last year, the key moment when it broke out against all major currencies and began to attract investment from the big money brigade.

He said it was likely that Middle Eastern investors were switching petrodollars into gold after burning their fingers in local stock markets.

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

Similar to reports that have already been aired.

R.

I work as as statistician for the federal government, but any views I express here are my own personal opinions. That is the standard disclaimer that is required. I could write forever about federal statistics; statisticians are probably more aware of the deficiencies than anyone else. But that is a topic for another day.

From the outside, people see faceless, incompetent bureaucrats, they often develop conspiracy theories, they see lots of manipulation (which does occur) and on and on.

From the inside, I see a large number of competent, well educated, smart people who try to do a good job in their fields. There are the usual slackers, there is lots of red tape, and the usual office politics, but it isn't too
different from other kinds of workplaces.

We have had a system which has worked reasonably well for the last half of the 20th century. The media looked for the outlandish examples and always found them, but almost never covered the fact that we had a functioning government that could continue to function, even when Congress and the White House were in disarray.

That has already begun to change and will change radically in the next 5-10 years. 60% of the federal workforce will be elegible to retire within five years; at least 40% will leave. There is no middle generation ready to take over as in the past. Young people, when they enter the system at all, use it only long enough to build a resume and get a higher paying job in the private sector. The concept of public service, which once actually meant something, is long gone.

What does this have to do with gold prices? The various policies which many people discuss are all contributing to the gold price increases, since people either buy it out of fear or they trade it in hopes of making a profit. But ultimately all of these policies, good or bad, have to be carried out by someone. Many times an experienced, faceless bureaucrat can take a totally stupid policy and implement it in a way that is less stupid (the reserve occurs also, of course).

As various federal or quasi-federal programs begin to fail and run out of money (Fannie Mae, the Pension Guaranty program, the flood insurance program, not to mention Medicare, which is in much more serious trouble than Social Security, the system which makes banks "safe", to name only a few), large numbers of people who understand these programs will be gone. The crises will be turned over to student interns, very inexperienced employees, contractors and political appointees. This convergence of bad economic policy, demographics of the population, and the exit of the federal workforce all at the same time has the makings of the often used phrase "the perfect storm". Gold will go sky high as the system becomes progressively more unstable and more people become scared. My guess is that the government at some point will do something to prevent people from continuing to rush to gold; whether they will try to confiscate the existing holdings can and often is debated.

There is a sense of unreality to me at times on this board. Everyone gets so focused on the price of gold and how high it will go. There is the implied or stated assumption that the gold holders with their one year of food supply will be okay. Those are good precautions, but probably very insufficient.

I think about living in a world in which nuclear weapons could be set off, in which there will probably be widespread civil disorder, anyone who has anything will have to protect it from the "have nots", the basics of civilization as we know it--running water, sanitation, electricity, protection from basic disease--will be gone and life will be miserable, if it is sustainable at all.

Am I the only person who has these kinds of worries?
Do other people really believe that they can live through anything that occurs? For me, none of this is academic. It may not happen; I hope and pray it doesn't happen; but it is real to me that it could.

Wouldn't it be thought provoking to surmise that the Chinese already have 2,500 tons nicely stashed away securely in their vaults? Let er rip!

goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)
===
You owe us all some more words (min 30), AND the answers to the QUESTION !
<;-)

http://www.gata.org/CentralBankCooperation.htmPAK, you are far from alone in your concerns; they have
been shared by gold advocates from the beginning.
Indeed, gold bugs practically invented them.

AngloGold's CEO Bobby Godsell used to say he wanted
"a good gold price in a good world." Most of us in the
Gold Anti-Trust Action Committee would settle for a
free-market price of gold in a world where we didn't have
to spend most of our capital gains on ammunition,
freeze-dried food, and ventilation equipment.

Which world will it be? Damned if we know. But the
point of a free gold price is precisely to restrain
governments and individuals alike from going too far,
as they tend to do under what the gold bugs call the
fiat currency system. U.S. Ron Paul may put it well;
fiat systems, he says, lead to the "welfare/warfare state," with government surreptitiously taxing people
for things they'd never endorse if they had to be
paid for clearly and directly, from childbearing
outside marriage to the colonial adventure in Iraq.

The gold world does have more than its share of
cranks and bigots but at least one of the
"conspiracies" they see is real -- the joint effort
of Western governments that have been only too
competent in one respect: suppressing the gold
price. These efforts are actually far more than "conspiracies"; they are matters of public
record and public policy, sometimes even announced
at press conferences. They just don't get
acknowledged or reported about much, or construed
as they are.

At least it is hard for me to understand how
anyone would dismiss any of this as "conspiracy
theory" after reviewing the public records laid
out at the link above. As you're new here, they
may interest you.

As a long time lurker, your post brings reality into the current world we live in. I see the same things that you are talking about. I'm not so sure $1000 gold would be something to celebrate.
Gold Hill

PAK, I, for one, appreciate your heart-felt words in this forum and do look forward to seeing many more of them as time goes on. Everyone has a different point of view and sense of what is beautiful. I am sure your thoughts will be of well-crafted words.

I would like to encourage you to look beyond the "See Spot Run" comments and help us all survive and thrive into the future. Anyone can cheer for the price of gold, post trading tidbits and news clips, but the real meat of this forum comes from seeing that everyone really is out to help each other. The world is bigger then any small collection of people could ever understand � the puzzles are all just too big. But, do to the wonders of the net, all of us are like nerve endings in a much larger entity that, if we're lucky, will be able to see the images from a collection of all the points.

As odd as it may seem, there have been some real gems that have come through these archives over the years. Even if those gems are not front and center today, the images resonate in the minds of those that have participated. To me, that is the value one finds in this forum � the words of another can ring true and make one's life a little lighter in the process.

Your vision of the future is not rosy. I would be willing to bet that 99% of the people that visit this forum believe that all those bad things may and will happen. Even if Superman were to arrive, we would all find that some things in life cannot be solved by relying on a single individual � a hero of the people. But, rather, they must be solved by a collective consciousness - a group of people with a similar vision and an extensive scope of influence. In other words, we the people must solve the problems that lay before us. We must stand up for ourselves and stand up for our way of life. Take matters into our own hands � in a collective kind of way.

The one thing that I find related in most every catastrophic item that you mention is money. All these future problems really seem to come down to money mismanagement. The escape that I found this chaos was gold. But it wasn't until I found USAGold and was directed to the Thoughts of Another (top of page) that I finally started seeing that their might be a plan that people could take advantage of to help soften the blow in the coming years. If you have not, I encourage all to take a weekend and read the thoughts of another and the words of FOA. Then, share.

I have gained hope from the concept of Freegold. If you study and believe that this is truly in our future, then you would want everyone that you know to hold an ounce or two (or more) of gold. Then, the next step is to really understand what it means to hold that gold. Very few people understand this. Very few understand how physical gold will empower them.

Meanwhile, we all watch the transition that is occurring. Things will be different in the future and if we all play our cards right, our little sections of the universe will be better off because of the decisions that we've made and the effort that we've put into educating others. There is much to learn and so little time.

Hold physical, get out of debt and teach people how to avoid inflation. Every person that learns the power of gold will find life worth fighting for.

Flatliner.

I don't recall your handle before--if not--nice first post!
Stick around and it won't be long before a discussion breaks out involving the very worries that you point out...All of them. That's why many...probably most of us tune in here...we see BIG problems building and building, with little being done to correct them. This is a good place to air some of them out, because most will involve how you're affected financially down the road. One worry we all have in common is fear of fiat currency and how best to preserve wealth and future purchasing power. Have you been thinking about that?

For me, gold stands for Truth (and Justice).
You think, life is sustainable without Truth (and Justice).
Truth (and Justice) have been trampled long enough, mainly by government.
Wouldn't it be fair that the pendulum switched?
Is this unreality?
You want to keep the imbalances forever? Or you're hoping that they will somehow disappear. How, is not your problem I suppose.
Are you dreaming?

Basic realism rests
not only on RESPECT FOR FACTS OF HOW THE WORLD IS AND HOW IT WORKS
but also on a view to the effect that realism and the CORRESPONDENCE THEORY of the truth are essential presuppositions of any sane philosophy, not to mention any sane science.
(Barry Smith, "John Searle - From Speech Acts to Social Reality" in: Barry Smith (ed.), "John Searle", Cambridge UP, 2003, 1, p.2)

I am one who has no tale to tell
I made myself a gibbet of my own lintel.
Dante, Inferno, Canto 13

I did not die, and yet I lost life's breath:
imagine for yourself what I became,
deprived at once of both my life and death
Dante, Inferno, Canto 34

I don't mind it if I am to only one to think like that. Quite to the contrary, I would be proud.

Nevertheless, all falsehood set aside,
let all that you have seen be manifest,
and let them scratch wherever it may itch
Dante, Paradiso, Canto, 17

http://www.solari.com/@ PAK,

Welcome to the forum. As others have suggested, your concerns are far from unique.

Many of us know that stereotyping "bureaucrats" is as foolish as any other stereotype, because good and bad apples are to be found in any organization.

What we are beginning to see, however, is a slate of government statistics that are slanted and skewed by policy that comes from the top. Just as you are witnessing an exodus of quality people in your particular branch, similar events are occuring in branches like the CIA, where a disproportionate number of career intelligence analysts have chosen to retire rather than be forced into a purely political role.

I'm sure it's difficult to make sense of some of the statistics when hedonics, pre-conceived "causes", and lop-sided policies are enforced from above.

A good history of the issues regarding government and banking can be found by reading Catherine Austin-Fitts, who was the Sec of Housing under Bush I, until her whistle-blowing found her forced out and under indictment pressures for about ten years. Her "Solari Network" site can be linked from the URL field.

From another perspective, one might suggest that the lack of separation between business/banking and government is as dangerous as a merger of religion and government, because the "level playing field" is destroyed. This makes the most important political game "protection" of insider status and renders many "free" enterprises immune from the effects of their own mismanagement - forcing taxpayers to bear the brunt of their failure.

When burdening the taxpayer is the "fix" for all that ails the system, it becomes no more than a game of musical chairs, where the last man standing is left holding the bag, so to speak. That last man, is of course, the taxpaying public, though insiders like to call this "speading risk". What they don't tell us is they re not "spreading reward" equivalently.

While you suggest that the current system functioned well for most of the 20th Century, I would offer the caviat that the illusion of functioning well has likely been at the root of the very imbalances we are all concerned about.

Another reference that covers this subject can be found in the Feb 17, 2006 archive, and it's a video entitled "Money Masters". While we don't all agree on the solutions they present, it does outline the history of banking and western government quite well, especially the trail of deficit financing and the specific ills it enables.

Finally, as already suggested, the "Gold Trail -Thoughts" linked at the top of this page contains some awesome insights and discussions gathered over the years here at the forum, and archived gratiously by our host.

Happy reading - we're all here to learn, and questions are usually met with gratious explanations and mutiple perspectives. Don't expect complete agreement - just a lot of healthy discussion.

So "The bubble-like levels of gold and silver prices cannot be sustained" but then he goes on to plea CB's "The easiest way to prick the bubble would be for central banks to release some of their huge holdings in gold, Mr Eschwey said."

First,this sounds like a contradiction of terms.
And second,why should CB's lower Goldprices-he should think think about why the majority MTM's its Gold reserves.

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

Markets have been lackluster throughout the morning as traders await the announcement from the Federal Reserve later today. It is widely expected the FOMC will raise the fed-funds rate for the 16th consecutive time to 5.0%. The markets are really waiting for the accompanying statement to look for clues whether or not the Fed will change their language to imply a pause in rate increases. Most analysts are expecting the Fed to pause at 5% after today's increase, but with the failing dollar they may have to continue higher.

In one of today's Bloomberg articles they say a majority of Wall Street's biggest bond traders believe the Fed will pause on rate hikes until at least August as they wait to digest more economic data. We are certainly getting mixed data from the economy with a rising stock market, higher interest rates, a slowdown in the housing market and sluggish wage growth. Commodity prices have been going through the roof and trade tensions are on the increase with China. Later today the Treasury Department will release their budget statement and comment on whether or not China is considered a "currency manipulator."

The markets seem to be fixated on the Federal Reserve's policy toward interest rates, but the real issue is their rampant money creation. We are now hearing lots of talk in the financial press about inflation fears, but the mainstream media never talks about the real roots of inflation which is the supply of money. In fact, the Federal Reserve doesn't even want to discuss the money supply since they decided to stop reporting the M-3 money supply figures. They continue to inflate the supply of money, but work hard to shift the focus on the cost of money � interest rates.

I heard a report yesterday on CNBC where they identified five "cash-rich" companies including Berkshire-Hathaway, Ford, Microsoft, Exxon-Mobil, and one other that are sitting on over $200 billion in cash. They are not spending the money to increase plant and equipment, and they are not passing the cash along in the form of wage increases. What we are seeing is a large flood of money pouring into commodities. The price of gold over $700 per ounce is indicative of way too much cash chasing way too little tangible assets�paper, paper everywhere!

-Goldilox

Paper, paper, everywhere, and nary a buck to save! The discussion around FED rate enforcement is entertaining, as the "rock and hard place" scenario brings out completely opposite prognosticators and their pet bubbles to protect.

"Goldilocks" economy, or is it just being manipulated to the point of strangulation?

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

In response to Sir MK's question, I believe that there were aseries of events that led the way for the primary bull market trend in gold. As we all know, the sale of 400 tons of gold by the Bank of England in 1999 led to the first bottom in the gold price at around $252. The flex point event was the announcement of WAG 1 in 1999. The limitation of gold sales to 400 tons per year. The double bottom in the price of gold occurred in 2001 at about $258. This was an indication from a technical viewpoint that a major event had taken place. At that particular time, all the stories in the newspapers were detrimental to gold on many fronts and I noted that the pessimism was similar in proportion to the optimism shown for gold in 1980. The next event was the constant linkage of gold to the US$ and the slow rise of the gold price in that arena. Then came the major event of the gold price breaking out above all currencies in a rather swift and sudden way. This was quickly followed by the announcements that many CBs were anticipating the likelihood of restructuring their reserves towards gold even though the word gold was not mentioned in some instances. And here we are. Projections for gold over the long term have to be relegated to pure conjecture at this point in time. Yet if the forces are put in place to return gold to the position of the primary reserve currency based on the function of its rarity as opposed to the limitless printing of fiat currencies, then I would speculate that the price of gold could rise to a level of $5,000 per ounce and remain there for many years until the the miners exhaust the world's gold supplies in the ground. After that, it would be anybody's guess. The ascent of gold since 2001 has been a slow and steady rise and should continue to follow this route as I see it. Spikes in price will occur but I would think that they will be offset by the corresponding corrections along the way. As the FORUM members say, this is a great time to own physical gold or numismatics. Even platinum, silver and palladium will be beneficiaries of the secular bull market in gold.

Gold Hill (5/10/06; 22:28:40MT - usagold.com msg#: 144061)
PAT entry#144057
As a long time lurker, your post brings reality into the current world we live in. I see the same things that you are talking about. I'm not so sure $1000 gold would be something to celebrate.
Gold Hill
-------------------------------------------------------------------------------------------
Gold Hill you need to understand that US$710 in todays money is equal to only $293 inflation adjusted to 1980.Thats using the highly suspect US Govt inflation chart
so what's to be afraid of?

We've been ripped off for a long time --I'll celebrate when it gets to triple the present rate to reflect the larger deficit that hangs overhead.

We have a few milestones coming up and frankly I don't mind if you guys smoke them all tonight.
A$1,000/Oz ...A$30,000/Kg Gold and A$600/Kg Silver.
One or more would be fine by Friday morning (here) thanks Comex!
It only seems like yesterday we saw NZ$1,000 ...she's now doing $1,125.

@PRITCHO and Gold Hill et al.,

PRITCHO, you may be correct in assigning $710 dollars today to $293 in 1980...presumeably based on a CPI adjustment... But what if we applied a "housing price" adjustment? Houses have increased in price by about seven times since 1980. In housing terms, $710 today was $101.43 in 1980. $1000 gold today in housing terms was $142.86 in 1980...sounds almost puny, doesn't it... Gold-the-metal has a long way to run before it catches up to House-'n-home in the Bubblefield Derby...

@Topaz

I saw a graph the other day that showed the Australian dollar versus the US dollar since 1910. In 1910 the Oz dollar (10 shillings equivalent in the currency of the day) was worth about US$3.50. Today it is worth about US$0.77...and it has relatively recently been as low as US$0.48. Given that the US-dollar has lost about 95% of its value (??) since 1910, the Australian dollar has lost about 99% 0f its value since that epoch. Is it any wonder that gold is at record prices in Australian dollar terms?

Additional comment:

Sliding value in fiat currency does not necessarily equate to a bad economy. History is full of examples (it is, in fact, the rule) where economies prosper as currencies trend towards worthlessness. It is all a question of how rapid and how ordered the descent is. There is the risk that large sections of society will become greatly disadvantaged while other sections prosper for no particularly just reason. Best to be amongst the winners, however, and own things...like gold...while all this is happening around you, rather than keeping money in the bank.

:-)

Still no investigation of what the central banks
and their bullion bank agents do, but a small start....

* * *

Gold Bugs

By Peter McKay
The Wall Street Journal
Thursday, May 11, 2006

Investing pros have begun pondering the possibility that gold will hit a record over $800 a troy ounce soon. This means that the gold bugs -- that patchwork of sometimes offbeat investors who love the shiny stuff -- are happier, and louder, than ever.

Gold futures for May delivery have risen this week 3.2%, or $21.50, to a 25-year high of $703.70 per troy ounce. In the past two years, prices have soared 86%.

"We all said what was going to happen and why," says Bill Murphy, an ex-professional football player and trader who heads up a group that goes by the name Gold Anti-Trust Action Committee, or GATA.

There are lots of reasons behind the move: For one, the dollar has weakened, and seems headed lower. When people lose confidence in paper currency some turn to gold, which is still seen in some parts of the world as an alternative store of value, despite many years in disfavor. This reputation as a store of financial value means it is also seen as a hedge against inflation, which shows signs of picking up, and against political turmoil, like say, turmoil in Venezuela, Iran and Iraq.

For some gold bugs, though, it's rarely that simple. Back in 1999, when gold was at multiyear lows around $250, GATA argued the metal's price was being artificially suppressed by a cartel of large private banks selling borrowed gold, much of it on loan from powerful central banks. The latest stage of the rally, Mr. Murphy says, is because Russia has become a heavy buyer, helping to squeeze the alleged cartel.

"They're a little conspiratorial, for me even," says money manager Peter Schiff, an outspoken gold bug himself. "I don't know if there was any real orchestrated event."

Whatever the case, the gold bugs aren't alone anymore. The investment audience for the precious metal is broadening as hedge funds and others seek alternatives to stocks and bonds. Because the gold market is relatively small, in terms of physical metal available and the number of investors who have traditionally participated, even a small increase in mass appetite for the metal can result in more price increases.

Pick your reason. Gold seems headed higher still.

-END-

Look at that gold price run up up up. Go speedracer!

So, are we in the early stages of the Weimar Republic yet?

"The one thing that I find related in most every catastrophic item that you mention is money. All these future problems really seem to come down to money mismanagement. The escape that I found this chaos was gold. But it wasn't until I found USAGold and was directed to the Thoughts of Another (top of page) that I finally started seeing that their might be a plan that people could take advantage of to help soften the blow in the coming years. If you have not, I encourage all to take a weekend and read the thoughts of another and the words of FOA. Then, share.

I have gained hope from the concept of Freegold. If you study and believe that this is truly in our future, then you would want everyone that you know to hold an ounce or two (or more) of gold. Then, the next step is to really understand what it means to hold that gold. Very few people understand this. Very few understand how physical gold will empower them.

Meanwhile, we all watch the transition that is occurring. Things will be different in the future and if we all play our cards right, our little sections of the universe will be better off because of the decisions that we've made and the effort that we've put into educating others. There is much to learn and so little time.

Hold physical, get out of debt and teach people how to avoid inflation. Every person that learns the power of gold will find life worth fighting for.

Flatliner."


Druid: Flatliner, incredibly brilliant post. Understanding the true meaning of gold ownership is to embrace what it represents as a way of life where you literally own something of tremendous value (the real essence of property rights practiced in this country so long ago) that preserves the efforts of your labor.

For to long this concept has been watered down to an "investment play" on par or less then owning a typical stock, bond etc....and now, just maybe, a new paradigm of "thoughts" is being ushered in to redress this MONUMENTAL imbalance of collective Western thought concerning these matters. IMHO.

The Table Round (USAGOLD Forum) is looking for recruits. What we are looking for is people who like to speak their mind and who are unafraid to advance a theory or two on the state of the world economy and what it means to gold. Applicants do not have to possess a degree in economics, finance or political science. What is required is a good sense of humor, respect for the opinion of others and a healthy, open-mind.

Over the past few days, since Gandalf's contest began, we have seen a glimmer of the possibilities this forum holds for all who visit, participate or siimply read to learn. The new posters have been a welcome and valuable addition to the discussion.

Contest time is a good time for all those looking for an excuse to make their first post. It's easy and once you start -- great things are possible!! Access code requests are in the many thousands yet only a few actually go to the posting page and make their first entry. I assure you its easy and that the other posters look forward to what you have to say.

And who knows you might even be the one to bring home the gold.

This forum needs YOU! WELCOME to all and good luck.

Let the contest continue!

Regarding the POG correlation to 1980 might I add the lowly postage stamp?

1980 = 15 cents
2006 = 42 cents (by August)
Rate of inflation: 280%

Now gold:

1980 = $840 (or pick any other price point that year)
2006 = $710
Rate of inflation: <-15.5%>

If adjusted to the postage stamp:
$850 X 280% = $2,380

Maybe we need a gold oz./postage stamp ratio index. Currently an ounce of gold will buy 1,690 stamps.

In 1980 an ounce would buy 5,667 stamps.

The low $2,000 area seems to be the best point to find correlation to many things in life- food, cars, houses, college tuition, insurance. That's not to say with hyper-inflation it can't go much higher than that figure. With the money supply expanded by around 700% since 1980 an argument could be made up to $6,000 I suppose. But heck, maybe by then the CPI will hedonically deflate gold because everybody will be switching to pot metal and tin for jewelry.

http://www.financialsense.com/fsu/editorials/2006/0509.htmlWe all keep hearing about new highs that the commodities are making. Let's take a look at some of them to see where the prices have been and where they are going.

What does one use as a measurement as the purchasing power of the dollar keeps dropping, how can you measure something when the yardstick keeps changing? The government numbers on inflation are taken from Alice in Wonderland or maybe from Disney World. I am not sure, but they are not of the real world which most of us have to live in.

In 1973 a gallon of gas cost about 60 � 65 cents, today in Canada it is over $5.00. I bought a new pick-up for $4,000.00 in 1973. My truck last year was $52,000.00 MSRP.

In 1973 I was selling starter homes for $18,000.00, today they sell for just about $200,000.00.

To keep things simple let's multiply 1973 prices for commodities by ten as most things have gone up by a factor of ten. Also remember there is a lot less of these commodities available today as compared to 1973 as we consume them [especially silver].

Link to commodity prices http://minerals.usgs.gov/ds/2005/140/

Aluminum in 1973 was $582.00 per m/t or $.26 per pound
Aluminum in 2006 is about $1.24 per pound Needs to double
A new high for Aluminum would be about $2.70 per pound

Cobalt in 1973 was $6480.00 per m/t or $2.95 per pound.
Cobalt in 2006 is about $16.00 per pound. Needs to double
A new high for cobalt would be about $30.00 per pound

Copper in 1973 was $1312.00 per m/t or about 59 cents a pound
Copper in 2006 hit $3.25 per pound. Needs to double
A new high for copper would have to be over $6.00 per pound.

Gold in 1973 was $3,150,000.00 per m/t or $98.00 per ounce Gold in 2006 was up to $640.00 per ounce
A new high for gold would be about $990.00 per ounce. Will be there shortly

Lead in 1973 was $359.00 per m/t or about 16 cents a pound
Lead in 2006 is about 55 cents a pound. Needs to triple
A new high for lead would have to be over $1.60 per pound.

Moly in 1973 was $3985.00 per m/t or about $1.81 per pound.
Moly in 2006 is about $24.00 per pound
Moly has made a new high by exceeding $18.00 per pound.

Nickel in 1973 was $3370.00 per m/t or about $1.54 per pound.
Nickel in 2006 is about $8.75 per pound. Needs to double
A new high for nickel would have to be over $16.00 per pound.

Silver in 1973 was $82,310.00 per m/t or about $2.55 per ounce.
Silver in 2006 was about $14.79 per ounce. Needs to double
A new high for silver would have to be over $26.00 per ounce.

Tin in 1973 was $5018.00 per m/t or about $2.28 per pound.
Tin in 2006 is about $9320.00 per m/t or about $4.23 per pound. A long way to go
A new high for Tin would have to be over $23.00 per pound.

Zinc in 1973 was $456.00 per m/t or about $.21 per pound.
Zinc in 2006 is about $3360.00 per m/t or about $1.52 per pound.
A new high for Zinc would have to be over $2.15 per pound.

Most commodities are a long way off from making new highs; I would say all that is happening is they are playing catch up. Or maybe they are losing control and the commodities are not as manipulated as they once were. When one sector of society can create money at will, while others have to trade their labor for it, how can we have free markets?

My main focus is silver. Where is the price of silver heading? Higher -- way higher -- or as Bill at www.LeMetropoleCafe.com says "TO THE MOON."


Druid: Sundeck, Pritcho, Hoople, here's a pretty good read reference the loss of purchasing power and the road ahead to be traveled in catching up.

http://www.usagold.com/gold/coins/mexican-20.html

All right, MK, since you insist:

Perhaps what started it all was a kind of millennial awareness that, as Nobel Laureate Robert Mundell said in his 2000 acceptance speech, "The absence of gold as an intrinsic part of our monetary system today makes our century, the one that has just passed, unique in several thousand years." For once this astonishing fact sinks in, one realizes that the last century is going to REMAIN unique, as its premise -- Omnipotent Government (http://www.mises.org/etexts/mises/og.asp) -- proves false in the extreme. Thus are we in the "last throes" not of insurgency in an occupied land but of the empire that occupies it, of a welfare-warfare state that is collapsing under its own weight -- or rather, the weightlessness of the paper that it has been able to push on the rest of the world for 35 years but will not be able to push for very much longer.

Where will gold go as a result? In the end, nowhere, as the most massive fraud in human history comes crashing down around it and a truly New World Order is built on its foundation. In the meantime, the Monopoly money upon which the welfare-warfare state depends for its existence will be recognized as such (as it's just now beginning to be) and, in Reichmark fashion, will flame out completely. Thus will gold go from three digits to four, from four digits to five, and so on and so on, until granny gets mugged on the way to the bakery not for the Monopoly money in her wheelbarrow but for the wheelbarrow itself.

That's an ugly and terrifying thought, of course, which is why PAKman is right "to think about a world...in which there will probably be widespread civil disorder." That is also why Flatliner is right to say that "we the people must solve the problems that lay before us. We must stand up for ourselves and stand up for our way of life. Take matters into our own hands -- in a collective kind of way." As opposed to a COLLECTIVIST kind of way, which is to say, as opposed to a STATIST kind of way. For as Einstein rightly said, "We can't solve problems by using the same kind of thinking we used when we created them." That, after all, is what he defined as insanity: "doing the same thing over and over again and expecting different results."

Price Prediction: $$$$ $788.10 $$$$$$

Answer to MK's question:
A single event eventually awakened investors to consider gold; 911. This event forced investors to recognize the volatility of intangible stocks and invoked a dose of reality pointing towards tangible goods such as real estate and precious metals. These same investors have mocked the metals over the last 10 years as antiquated and blindly sunk placed their faith in any stock that had the prefix "tech". However these recent self proclaimed genius investors will never concede that their about face was attributed to realizing their investments were being managed by people just like themselves.

The turning point seems to me, focused around the first Washington Agreement about Euro gold sales. The Euro zone was the first economic bloc to recognize the inherent weakness of the dollar financial structure and seems to have built a nice protective wall that may help their currency zone in a short term war with the dollar bloc. In the end though, it will ultimately fail against gold as the denominator of wealth going forward. How far can gold go? It depends upon how far currencies drop until a new international monetary standard is agreed upon. I will be surprised if it happens within the next 50 years. Going forward I would say that gold could hit $3000 in the next 5 years in the present dollar regime. In "nuevo dollars" it might be only $300 again!
I have been a reader of this forum since 2001 and a sparse poster. One thing that I have taken from this forum, and especially from the writings of Another, is that the truly wealthy do not denominate their wealth in terms of dollars. Dollars or "credits" are for the small frys like myself. The truly wealthy determine their wealth by what they can truly hold and own outside of the banking system. I will follow those footsteps and choose the only true wealth that I can readily get my hands on. I choose gold.

With gold over $720, silver over $15, and oil back to $73, it seems their paper proxies, the mining and oil companies are not moving in lockstep.

The HUI is unch'd, and the oil stocks I follow are down with the rest of the SM.

DOW -136
NAS -41
S&P -16

Got gold (IN HAND)?

http://www.nymex.com/media/delivery.pdfIf a Silver contract is 5,000 glorious ounces that would give control of 41,275,000 ounces to the stoppers on the New York Mercantile Exchange. But hey, don't worry, there are 51,058,880 eligible and 72572815 registered. And, if you think there is a shortage, I'm sure Barclays will come to the rescue. They seem to have a huge pile stashed away somewhere.

Oh well, at least the gas stations have plenty of gas, and the banks have plenty of cash! My debt card still works and I can still drive to work.

Goldilox, ski, There are gold ratios and Silver ratios, it's starting to look like it's time for copper ratios.

If you look back a couple days, you both discussed that gold is up about 31% and silver up 55%, well, copper seems to have gone from 2-4 or about 50%. If you go back over a year, copper has more then doubled, whereas silver has just doubled and gold is waiting to double.

Price inflation is hitting. If you haven't already, you should be seriously looking at ways to ride the uptrend and survive into the future. Wealth moves over time and this time it's not into technology.

http://www.bloomberg.com/apps/news?pid=10000087&sid=aVU1ZtfZqxNs&refer=top_world_newsMy take on it is that currency must be crated in order for people to find something to use for servicing debt. A debt based system forces the creation of cash. An asset based system wouldn't have this problem. Manage your debt wisely.

From link:

U.S. 10-Year Treasury Notes Fall After $13 Billion Auction
May 11 (Bloomberg) -- U.S. 10-year Treasuries fell the most in more than a week after the government sold $13 billion of the securities, adding supply at a time when the Federal Reserve is signaling that it may raise interest rates further.

...

The price of the 4 1/2 percent security due in February 2016 fell almost 3/8, or $3.75 per $1,000 face amount, to 94 7/8, the biggest drop since May 1.

Can someone come up with a good explination as to why the retail price of gasoline is lagging so far behind the price of oil? In the past, this has not been the case to the point that it is now.

@ Flatliner,

"My take on it is that currency must be "crated" in order for people to find something to use for servicing debt."

Is that before or after the wheel barrow phase? LOL

@ Minero,

Maybe because the oil companies aren't always paying the Nymex wholesale oil price. Much of the Iraq oil is essentially free as "spoils of war", with only transport and wages burdening the delivery.

I think they are under enough scrutiny for record profits already, and don't want to push their luck!

Exxon-Mobil posted more PROFIT this last year than most major companies' TOTAL REVENUE in 1996. Since typical profit margins are about 10%, we're talking 1000% growth in ten years, or about 80% per year.

Government inflation figures would adjust that to about 70% PA, with REAL inflation reducing it to more like 50% PA. Still astounding.

http://www.csmonitor.com/2006/0512/p01s03-uspo.htmlAt the same time, House Republicans propose raising the debt limit to nearly $10 trillion - its fifth hike in the Bush years. When they took back the House in 1994, the debt limit was $4.9 trillion.

"The trouble for Republicans is they are going to be forced to increase the debt limit again, having just done it [in March], and this time to an embarrassingly large $10 trillion," Mr. Ornstein adds. "It's hard to argue that these tax cuts will cut the deficits, when they have had to raise the debt limit so many times."

The soaring national debt, some $2 trillion of which is in foreign hands, troubles lawmakers on both sides of the aisle. "If you want to explain how much our national debt is, it's handing out a $100 bill on a street corner every second of every day for 2,500 years," said Sen. Christopher Dodd (D) of Connecticut, speaking in opposition to the tax bill on the floor of the Senate Thursday.

Flatliner � Had to dig for this one, seems the press really didn't want to tell us about it.

http://www.freemarketnews.com/Analysis/201/4870/2006-05-11.asp?nid=4870&wid=201$1000 Gold: It May Be Here Sooner Than You Think
Emanuel Balarie - May 11, 2006
Some everyday excuses people use as gold encounters widespread denial and reasons for gold's undervaluation.

I'll tell you what I think is happening: I think the big hedge funds smell
blood in the water and are attacking the shorts now like a bunch of sharks!
The hedge funds, combined, have more money than the shorts can afford to lose is my
guess...even if the shorts are some large banks. The hedge funds are
keeping the pressure on relentlessly...knowing that the shorts at some point
will have to capitulate...driving the market dramatically higher...or they
die. If
true, what a grinder the shorts are in. We know the price could
theoretically go up a long-long way. (Infinity)

Combined with the short squeze mentioned previously, there may be some other big dollar sharks on the long side that REALLY do want the Gold.

Rumors abound that groups that have wanted resources (like the Chinese) have been buying futures contracts over a period of time...then taking delivery on the due date for the originally contracted price. Done slowly, this tactic was used to acquire huge amounts of oil and copper without roiling the markets too much when the contracts were first placed.

Some here keep an eye on delivery information off the futures markets. Hopefully, they can keep us informed...Will be interesting to see if there are also large amounts of Gold and Silver deliveries requested off previously purchased futures contracts, as the Chinese have spoken of acquiring more gold. If a large buyer wanted to acquire significant amounts, seems that some quietly laddered buys in the futures months ago, could now payoff handsomely in acquisition, for any entity wishing to exchange dollars for gold or silver.

MK's Questions:

More than 4 bilion people on this planet, to pamper these folks the earth is and has been exploited as never before by the western alliances. Monetary systems have been gradualy exanged for a academic roberary systems who once will run out of credible amunition. The precious arbiter GOLD is telling us the exact situation where we stand now. The "flex point" to me is the start of the accelerating velocity in the POG, presents to me the indications of what to expect in the future.

How much inflating and depreciating or derivative fiat in this world is or will be at searche for a (virtual) profit��? If only X percent is switching into GOLD the guess may well far beyond imagination. To get a not too upsetting number for now US$ 7,777

top 10

911 - Could it happen without prior knowledge? Congress gave away all power because they did
not want to be accountable and miss being re-elected.
IRAQ WAR- Let the global oil war begin.
TORTURE- never thought "my" country would participate so enthusiastically.
CORPORATIZATION - Successfull infiltrattion and control of every level of government.
STOLEN ELECTIONS - national and local - not so hard to do with the right contracts.
KATRINA - Mythbuster, Gov't cares and actively works toward the common good.
MORTGAGES -ballon, interest only, reverse; seemingly sane people now economically enslaved.
ILLEGAL ALIENS- part of new economics built on the assumption of low-cost labor. Next best thing to
slavery, but great profit generator.
IRAN - fool me once�..
FEAR - we are all be socially engineered by conscienceless power-mad "deciders". Our Republic is
not only in peril, but on the brink of extinction.

Pak nailed it though, get to know your neighbors, get active in neighborhood meetings, these are the people that can make a difference when things go bad.

"My take on it is that currency must be "crated" in order for people to find something to use for servicing debt."

There's yer web bot hit right there !

Gold Bugs

By Peter McKay
The Wall Street Journal
Thursday, May 11, 2006

Investing pros have begun pondering the possibility that gold will hit a record over $800 a troy ounce soon. This means that the gold bugs -- that patchwork of sometimes offbeat investors who love the shiny stuff -- are happier, and louder, than ever.

Gold futures for May delivery have risen this week 3.2%, or $21.50, to a 25-year high of $703.70 per troy ounce. In the past two years, prices have soared 86%.

"We all said what was going to happen and why," says Bill Murphy, an ex-professional football player and trader who heads up a group that goes by the name Gold Anti-Trust Action Committee, or GATA.

There are lots of reasons behind the move: For one, the dollar has weakened, and seems headed lower. When people lose confidence in paper currency some turn to gold, which is still seen in some parts of the world as an alternative store of value, despite many years in disfavor. This reputation as a store of financial value means it is also seen as a hedge against inflation, which shows signs of picking up, and against political turmoil, like say, turmoil in Venezuela, Iran and Iraq.

For some gold bugs, though, it's rarely that simple. Back in 1999, when gold was at multiyear lows around $250, GATA argued the metal's price was being artificially suppressed by a cartel of large private banks selling borrowed gold, much of it on loan from powerful central banks. The latest stage of the rally, Mr. Murphy says, is because Russia has become a heavy buyer, helping to squeeze the alleged cartel.

"They're a little conspiratorial, for me even," says money manager Peter Schiff, an outspoken gold bug himself. "I don't know if there was any real orchestrated event."

Whatever the case, the gold bugs aren't alone anymore. The investment audience for the precious metal is broadening as hedge funds and others seek alternatives to stocks and bonds. Because the gold market is relatively small, in terms of physical metal available and the number of investors who have traditionally participated, even a small increase in mass appetite for the metal can result in more price increases.

Pick your reason. Gold seems headed higher still.

http://yahoo.reuters.com/investing/FinanceArticle.aspx?type=economicNews&storyID=urn:newsml:reuters.com:20060511:MTFH31889_2006-05-11_15-11-36_N11242837&rpc=44Open market interventions by the Federal Reserve are commonplace when they add liquidity through temporary monetizations via repo operations, but they should always cause at leasted a raised eyebrow when those repos are large, and especially when the Fed opts instead for permanent, outright purchases of Treasuries.

Today they demonstrated a little of both.

On the temporary front, the Fed single-handedly boosted the money supply with an increase in cash reserves of our nation's banking system through two round of repurchase agreements, the first being a two-week RP to add $9 billion, the second being an overnighter to add $8.5 billion.

Both were generously provided at rates below the FOMC's latest policy directive of 5%. Apparently the publicly announced new rate is not yet ready for prime time, so to speak.

More significantly, the Fed also entered the open market as an outright buyer of Treasury coupons, this time targeting maturities out on the yield curve in the vicinity of December 2008 to September 2009. In the process, our banking system becomes flush with an additional $1.098 billion in 'permanent' cash created fresh in the process of the transaction.

The key point to absorb is that there is no practical limit on the amount of new money that can be created by the Fed through this process and more just like it.

Choose gold as the sound form of savings to provide you with tangible security as a form of purchasing power that can stand the test of time.

R.

$$$$ $769.01 $$$$

It seems to me that real estate is now in a Ponzi type setup. The most important aspect of any Ponzi is confidence that the traded item not only has value but that it is increasing. What better setup than that most important asset of where you live? The difference between a sound security be it stock or bond and a Ponzi type investement is that a real investment has a cash flow basis driving the value. Housing doesn't seem to be based on cash flow. Comments anyone.

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 continues its upward march

May 11 (from Reuters, MarketWatch) -- Aggressive buying by funds and speculators drove the latest gains in a long-time rally fueled by strong demand, a weak U.S. dollar and growing diversification into commodities, dealers and analysts said.

"Silver and gold have been in a trend for about two or three years, but the market has really only now made an incredible, incredible move," said Scott Meyers, an analyst with Pioneer Futures in New York.

It took gold two years to rise by $100 to $500 an ounce in November 2005 and another five months to hit $600, but it bolted to over $700 in less than a month.

Overall, "a global readjustment is taking place, and the short of it is -- the U.S. dollar is losing its dominance," Peter Spina, chief investment strategist at GoldSeek.com, said earlier Thursday.

"Clearly, the shift from the U.S. dollar is accelerating," he said.

"Combine this with other driving factors in the gold market, [and] you have the recipe for much higher prices."

John Person, president of National Futures Advisory Service, said, "Crude oil is above $70 per barrel, wage costs have increased ... and the dollar is sharply lower since the beginning of the second quarter -- this gives the gold bulls more reason to buy now, especially since many believe gold could hit $800 to $1,000 per ounce by year's end."

COMEX June gold futures finished up 2.2 percent, or $15.80 higher, at $721.50 after trading from $701.20 to $728, marking the highest for futures since September 1980.

Gold has risen 40 percent in 2006 and 65 percent since the start of last year as investors diversify into the metal as a hedge against global tensions, including those over U.S.-Iran relations, oil prices and doubts about the dollar.

A $1 jump in crude oil futures to helped spark some of the gold buying as a hedge against inflation, dealers said.

Less hedge selling by miners, strong interest in exchange-traded funds, soaring copper, and near-term supply tightness in platinum also supported gold, analysts said.

"It is a general flight into real assets," said Steve Platt, a broker with Archer Financials in Chicago, who also noted a huge amount of fund buying lifting the metals.

Platt warned that metals were ripe for some profit-taking with prices having climbed so far, so fast. "I think what we need is some correction just to take some of the froth out." As to the dollar, analysts said its upside was limited as investors increasingly expect U.S. interest rates to peak soon, after the Federal Reserve raised rates for the 16th straight time Wednesday.

The dollar fell to a 12-month low against the euro on Thursday, benefiting gold as a U.S. currency alternative.

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

Ah ha ha ha ha ha ha ha ha ha ha ha ha

Debt Ceiling

Ah ha ha hahahaha!!!!!!!!!

Best Wishes

The replublicans all joined hands to give a tax break until 2011:
House Democrats described the bill as slanted to the superrich. "Under this legislation, middle income families receive an average tax cut of $20, about half a tank of gas, while those with over a million receive $42,000," said Rep. Louise Slaughter (D) of New York, during Wednesday's House debate. "It's a telling indicator of where their priorities really lie." Republicans said that such arguments represent "the ideological baggage of the past."
Bankrupt the country for the already well to do. It is just wrong, and don't give me that trickle down voodoo econ crap. The shit will hit the fan soon.
Buy and hold what you can in gold.

http://www.safehaven.com/article-5139.htmAnyone care to comment on what the good professor has to say?

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $777,7 $$$$ Shanti (5/11/06; 17:22:22MT - usagold.com msg#: 144097)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $818.0 $$$$ bouncer (5/11/06; 17:29:28MT - usagold.com msg#: 144098)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $799.9 $$$$ Thoreauly (5/11/06; 10:36:56MT - usagold.com msg#: 144083)

$$$$ $788.1 $$$$ Midas Man (5/11/06; 11:03:56MT - usagold.com msg#: 144084)

$$$$ $769.0 $$$$ Wonko (5/11/06; 19:51:32MT - usagold.com msg#: 144102)

$$$$ $762.4 $$$$ Briale (5/11/06; 11:05:04MT - usagold.com msg#: 144085)

$$$$ $743.5 $$$$ Beamer (5/11/06; 01:52:15MT - usagold.com msg#: 144070)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

My mind missed your use of a comma instead of a "." !
(You do not live in Kansas !)
Your entry should be moved downward in the listing, and shall be on the next edition.
Tks
Gandy

"What to expect now? Sooner or later exchange officials will declare "liquidation only" policy. Thereafter the longs can close out their profitable positions only through cash settlement. The shorts are absolved of their obligation to deliver as contracted. At that moment all offers to sell cash gold will be withdrawn around the globe. Gold is not for sale at any price. Producers of essential commodities such as grains and crude oil will refuse to accept payment in dollars and will demand gold in exchange for their product. The same goes for providers of essential services such as doctors and lawyers. Scales will fall off their eyes and they will decline to give up real goods and real services in exchange for irredeemable promises to pay. The dollar, and all other paper currencies along with it, will go the way of the assignat and mandat.

Nowhere in this argument did we have to refer to supply, demand, or "more money chasing fewer goods". At any rate, Friedman's theory of monetarism won't tell you when exactly the metamorphosis of the dollar from money to trash will take place. Nor will the COT reports give you a clue or advance warning. The gold basis will. I hereby challenge all gold and silver analysts to start educating the public on this subject. I call on all PM websites to run yearly, monthly, weekly, daily, and hourly charts showing the variation of the gold basis."

Flatliner � The words that the good professor states are very much a echo of the thoughts of Another. The rise in the gold price fans the fire that keeps the price rising. I can't help but feel that the fire may no longer be under control.

$$$$724.50$$$$
IN RESPONSE TO THE QUESTION POSED BY MK:
The turning point event in my mind was the British Govt sale of gold reserves followed by the withdrawal of the Rothchilds from
the London Gold fix. these 2 events marked the end of the low in gold at the $250s.

Then Sept 11/2001 and the subsequent action by America as world policemen in Afghanistan and Iraq pushed down the value
of the US dollar.

I have been in this gold market since 1995 and through the depressing lows in the 250s , now we will see $850 within the year.

I will predict $724.50 based on the 20 day mean plus 10%.

@ TC,

"It took gold two years to rise by $100 to $500 an ounce in November 2005 and another five months to hit $600, but it bolted to over $700 in less than a month."

Now that's momentum! I've still got friends telling me it's all because of the Iran scare - LOL!

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


Dear Friends,

I could post today's economic reports on retail sales, inflation and so on but nothing says it better than the accurate illustration I have named the High Wire Cinderella Economy.

Remember when inflation was not happening? Well that has gone up in flames. Remember who touched the match to the inflation fuse? It was our own Professor Bernanke and his Helicopter Electric Printing Press money drop into the pool of world liquidity that set a new high for low forethought.

When you take huge amounts of cash coming from outrageous currency intervention by the Japanese central bank and blast it instantly into the international market for US treasuries via the NY Fed, there is no way on earth to drain it out. This created the new monster of money that seeks market after market around the world. It is in the commodity market now and will stay at least as long as it did in the equity market.

With this understanding how much inflation to you think the "Puppet Fed" is really going to do? The answer is not much.

-Goldilox


With the BOJ commiting currency hari-kari to keep their Yen cheap, who is calling them "currency manipulator"?

All this "bugger thy neighbor's currency" BS is political clap trap to keep the bankster elites in power, and the citizens enslaved to their "pay us - work ethic".

http://news.ft.com/cms/s/a5cf086c-e086-11da-9e82-0000779e2340.htmlsnip:

China's relationship with the US will be determined by how it responds to Iran's nuclear programme, a senior Bush administration official warned on Wednesday as Washington continued to press Beijing and Moscow to back a tough UN Security Council resolution against Tehran.

Robert Zoellick, deputy secretary of state, elevated Iran's alleged nuclear weapons development to the single most important issue at stake in US-China relations rather than the usual concerns over the strength of China's currency and its ballooning trade surplus.

Although less blunt, Mr Zoellick's prepared remarks on China mirrored those voiced by Dick Cheney, US vice-president, towards Russia last week when he berated Moscow for using its oil and gas as a tool of blackmail and intimidation on the international stage.

Speaking to the House international relations committee, Mr Zoellick said the US acknowledged China's need for access to energy resources but that it had urged China to use its oil and gas investments in Iran, Sudan and Burma as a lever for the international good, rather than narrow national interests.

He described China's next move on Iran as "exhibit A" and "critical" in its relationship with the US, which he said was "going to be determined by how they act in Iran in dealing with this nuclear issue".

Condoleezza Rice, secretary of state, returned to Washington on Wednesday having failed to persuade the foreign ministers of China and Russia to support a Security Council resolution that would require Iran to stop its uranium enrichment programme.

-Goldilox

Forget the World Poker Tour. This the real high-stakes game, with you and me as the " poker chips". I guess chess is too mundane for this beer and pretzels crowd.

http://www.crbtrader.com/data/default.asp?page=quote&sym=SIH6&mode=dCoughing up the fir-ball looks to be getting mighty hard this month ...it's only the 12th, 8K (5K+or- more than a whole "normal" month which, I might add, takes a full 30odd days to get sorted) ...and Barclays haven't been directly involved yet ...hang on!

http://www.larouchepub.com/eiw/public/2006/2006_10-19/2006-17/pdf/06-8_617.pdfGoldilox--
It appears we've entered hyperinflation, as suggested by LaRouche in looking at commodities (see link). I think $1000 gold is a fait accompli, and $1650 by year end would not surprise me. LaRouche predicts a world system US dollar-triggered collapse by autumn this year, which also seems a fait accompli.

Another good article espousing $1000 gold: http://www.safehaven.com/article-5144.htm

The price of gasoline is currently affected by the phase in of ethanol additive and the discontinuance of MTBE as anti knock components. Ethanol is difficult to work with and must be dewatered just prior to being added to the gasoline. The refiners might typically use a molecular seive for this final dewatering. the process is causing a bottleneck and supply disruption. Why the price is higher? recovery of equipment and processing costs? the ethanol coming from Brazil for example must be cleaned at least twice...once in the carribean on its way in (perhaps to daisy chain around the stiff importation tax)and again at the refinery.

I was wondering if anyone knew of any rare gold coins to avoid buying? My intentions are both for my personal collection but also for investment. I consider my rare gold coins to be "emergency money" in case of a big disaster where I would need to sell them for things like food. I want to avoid gold coins that are especially hard to re-sell or would need to be sold in a specialty coin-action instead of on ebay in order to get a fair price.
Thanks.

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $818.0 $$$$ bouncer (5/11/06; 17:29:28MT - usagold.com msg#: 144098)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $799.9 $$$$ Thoreauly (5/11/06; 10:36:56MT - usagold.com msg#: 144083)

$$$$ $788.1 $$$$ Midas Man (5/11/06; 11:03:56MT - usagold.com msg#: 144084)

$$$$ $777,7 $$$$ Shanti (5/11/06; 17:22:22MT - usagold.com msg#: 144097)

$$$$ $769.0 $$$$ Wonko (5/11/06; 19:51:32MT - usagold.com msg#: 144102)

$$$$ $762.4 $$$$ Briale (5/11/06; 11:05:04MT - usagold.com msg#: 144085)

$$$$ $743.5 $$$$ Beamer (5/11/06; 01:52:15MT - usagold.com msg#: 144070)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $724.5 $$$$ balzac (5/11/06; 23:03:22MT - usagold.com msg#: 144110)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

@ Topaz,

I'm enjoying the typos as much as the posts recently. Yesterday's most apropos gaff was "crated" money. This might be today's (the day is still young on here). . .

"Coughing up the fir-ball looks to be getting mighty hard this month"

As in Douglass fir trees? It would take a mighty large cough to expectorate that, one might think.

But as we're talking about a paper-system clog . . . well, you get the picture.

Cheers.

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=1083.xx breached. More slide ahead?

http://www.dailypfennig.com/currentIssue.aspx?date=5/11/2006snip:

Well... The Fed did raise rates as expected yesterday, and... The U.S. refrained from naming China a currency manipulator... Both of these items have given some strength back to the dollar... The euro, which traded above 1.28 most of yesterday morning has moved back to 1.2715, and the yen, which traded in the 110 handle most of the day, has moved back to the 111 handle...

Applying the brakes... That's all that has happened... The currencies have applied the brakes in order to slow down for that speed bump! But before I get into all of those thoughts, let's talk about the two items at the top of the letter...

First of all, the Fed did indeed raise rates another 25 BPS, but more importantly, Big Ben's press conference afterward showed that he and his Fed Heads are not ready to stop there... Yes, after 16 consecutive rate hikes started by our friend (NOT!) Big Al, Big Ben is not ready to stop. I guess he doesn't believe the inflation reports that the Gov't prints each month either! HAHAHAHA!

Big Ben did say that the data would determine future rate moves... Which data? The awful showing of jobs creation last month? Or... The strong GDP from the first quarter? The collapse of mortgage applications last week (-5.8%) or increase in Productivity? Come on Big Ben throw us a bone here... Oh! Now that would be a "Fed First" ... I just think we're still nearing the end... And Big Ben wants to play this "game" as long as he can, given what he's seen happen to the dollar recently!

OK... As I expected, the U.S. refrained from naming China a "Currency Manipulator"... But warned that it was "extremely dissatisfied with the slow and disappointing pace of reform of the Chinese exchange rate regime". Of course this was disappointing to the Currency participants and those of us that would love to see the renminbi float to its fair value... But what this report really did was give the Japanese a get out of jail free card...

As I explained the other day, with the U.S. and Europe (and IMF) coming down hard on China for currency manipulation, Japan had to take its hand off the intervention gear shift... They didn't want any fingers pointing in their direction... But now that the U.S. backed off of China, it has put the fear back into traders that Japan could intervene and wipe out profits... Bawk, Bawk, Bawk... What's that? Did I hear a chicken? Hmmm...

However, I think this fear will pass soon enough... You see Japan's economy is growing, consumers are spending again, and Corporate Japan is well situated to absorb a stronger yen... So... As opposed to 3 years ago, when the Bank of Japan made a daily visit to the intervention arena... Japan is stronger and ready for a stronger yen!

I found some data that was interesting to me last night... One of the negative darts thrown at the Japanese yen the past few years has been the strong appetite of Japanese investors for foreign bonds... Therefore these investors would be selling yen, and buying (in most cases dollars) the cross currency to purchase the foreign bond... However, recent data shows that Japanese investors have shown almost no appetite for foreign bonds in 2006, and surveys suggest this trend will continue. This obviously removes a negative dart that can be thrown at yen! Just another reason to keep thinking that the Asian currencies, led by Japanese yen, will continue their positive move VS the dollar...

Almost lost in the shuffle of yesterday's events, was the printing of the April U.S. Monthly Budget Statement, which printed worse than expected at $118.9 Billion! OK... I read somewhere recently that the Budget Office had issued a report calling for a reduction of the Budget Deficit this year due to strong tax receipts... What happened? April's result was DOUBLE the March figure of $57.7 Billion! And... I don't even want to get started talking about how the Iraq war expenses aren't even a part of the Budget numbers!

Today, we'll see Retail Sales for April, and as I said earlier in the week, the BHI tells me that we should look for some real strong numbers! So... If that plays out, the dollar will continue to hold onto gains it made yesterday, today... However, tomorrow, we're going to see the March Trade Deficit... And here is where the buck stops with regard to dollar strength!

The dollar strength yesterday didn't deter Gold from moving higher... The shiny metal is now trading at $708, a 26-year high! You know, I say all the time that Gold continues to move higher on demand, world instability, and inflation fears... And at the $708 figure, Gold has now moved 29% since January 9th, when Iran resumed nuclear research, and the tough rhetoric with the U.S. began...

http://en.rian.ru/russia/20060510/47915635.htmlRuble-denominated oil exchanges could launch in 2007 - expert
http://en.rian.ru/russia/20060511/48003539.html

After witnessing the privileges of Dollar hegemony for the last few decades, everyone wants to be in place to reap the bennies of a bourse in their native or customer's currencies as the dollar loses global control.

These events could hit NYC harder than 911!

http://en.rian.ru/russia/20060511/48003539.htmlFrom another link on the same site there is quote that I would like to quote - "Trade in rubles will create a demand for rubles. This will be a real step to achieve ruble convertibility,". Let's see, "Trade in Euros will create demand for Euros" or "Trade in dollars will create demand in dollars". Logic seems to hold in a very simple way (they've stated the obvious maybe?).

What also seems pretty obvious is that Russia is stepping up to get in a position to take advantage of the coming vacuum that the falling dollar will leave. It seems logical that they will find strength in their natural resources and if they play their cards right, not only will they enjoy the same financial support that the Euro will get from gold, but they will have oil to trade for it.

It will not be long before Canada looks to create an exchange for its resources using the Canadian Dollar and Mexico looks to exchange oil for Peso's and Bolivia makes the same claim! But, in the end this will just create chaos as each country tries to create demand for it's fiat on a world scale. Unfortunately, the world has already been fooled by the US Dollar as the reserve. In a world where any number of different counties could come out on top as the next world reserve currency, the only way it will happen is through another world war.

I do not see this happening.

Instead, we will go to the brink of destruction and all will agree to accept a currency that is no one else's liability � gold. Gold will be what everything is compared against. Deficits will be counted in tonnes and currencies will be measured upon the success of the counties economy. Taxation through overprinting of Fiat will create local inflation and only raise local taxes. There will no longer be international taxation through the use of a world reserve currency.

Save gold and physical property, price inflation is rearing it's ugly head.

http://www.smh.com.au/news/business/beware-the-perils-of-a-parallel-price-universe/2006/05/12/1146940732642.htmlBeware the Perils of a Parallel Price Universe - Sydney Morning Herald - May 12, 2006
"Rises in prices on all fronts have economists scratching their heads, write Richard Adams and Patrick Collinson. --
The ultra-rich are investing millions in original works by Warhol or Picasso, others in gold, silver or rare stamps. Money is pouring into almost every type of asset - commodities, property, precious metals, shares, bonds and even art are testing dizzying new price levels - and economists are puzzled."

@ mikal,

That's a crock!

They go "in-admitted until they pop" is more like it.

Sort of like not jinxing a no-hitter, so the elites can "take the money and run!"

Proliferation of exchanges in local currencies of resource rich nations could be another milestone to watch for as this bull market progresses. Such a development would slow down the world trade, I guess. The following questions may be asked: Do US, Russia, Canada, Mexico and Bolivia have comparable geopolitical weight in the international scene? May the world be split into a small number of currency zones, echoing the early years of 20th century? May be the world may be split into two zones in a replay of the cold war of late 20th century?

Whatever happens, gold as the premium international reserve looks like the most logical solution.

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
For the second day running we see both Equity and Bond Markets in negative territory.
There once was a time when "flight-to-safety" from equities meant good news for the Bonds ...not so nowadays it seems.
PoG was usually good for a spike on Fridays back then as prudence over the week-end would have you holding more rather than less Gold ...ah the good 'ol pre spell-checker days eh G'lox! ...Fir-ball?? what was I thinkin ;-)
I suppose todays Comex Gold trade IS only a Paper venue this month, we could still expect a Friday uptick in a delivery month I'm sure.

Does anyone have any insight with regards to the South American and South African currency moves against the US dollar today? Is it just that the fed hinted that it will continue to raise rates?

IMHO, all who bet that the fed will not raise rates will be robbed of everything that they own. It seems that they have two options � save the bank or save the economy. Which do you think they will choose?

Take a stand and get everyone that you know to allocate physical and hold.

http://english.people.com.cn/200605/12/eng20060512_265044.htmlVenezuelan president says oil prices to continue to rise

Venezuelan President Hugo Chavez said on Thursday that he expected world oil prices to continue to rise, saying U.S. President George W. Bush's policies contribute to oil price hikes.

"Every time Bush speaks, the price of oil goes up one dollar," Chavez told a press conference during his visit to Rome. "Bush should remain in his ranch and be silent."

Chavez added that he mainly blamed Bush, who he said should be "taken in front of an international court for genocide" for the war in Iraq.

The Venezuelan president again accused the United States of preparing an attack against his country, expressing concern about U.S. naval exercises now underway in the Caribbean.

"It's a threat. And they're making plans against Venezuela," he said.

Chavez reiterated that Venezuela would cut its oil sales to the U.S. if Washington were to launch an invasion, which could lead to a sharp rise of the oil prices, possibly at 100 U.S. dollars per barrel.

Venezuela, the world's fifth-largest oil exporter, is a major supplier of fuel to the United States despite tensions between the two countries.

Flatliner � What did the world do before Google? Oh, and these seem like strong words. I'm glad I'm not a politician.

People will look back at the spring of 2006 as the starting point of the most destructive hyperinflation the world has ever seen. When all the young investment bankers look back they will reflect "That spring I made millions upon million in a matter of months, but I had no idea that the value of those millions would turn out to be but steel pennies left on the ground at an abandoned amusement park." The euphoria of the initial phase of hyperinflation makes people think that they are getting wealthy in a blink of an eye. We are in that phase. Search the net yourself - there are hundreds of headlines stating that we're in the upstart of a commodities super-cycle. The unfortunate part is that the headlines make this super-cycle look like another investment opportunity. It is not. One needs to evaluate the steps needed for self preservation.

This commodities super-cycle is going to, and has caught, businesses around the world completely unprepared. Manufacturing is always the first to go during hyperinflation. The meager few percent return on goods and the lag time between buying supplies and replenishing supplies will lead to a rapid evaporation of capital. The only way companies can survive, is to play the commodities bull and stop manufacturing until the price's of commodities stabilize. This is not something to look forward too!

Time is your enemy. The longer you hold onto cash, the faster your ride to the poor house. To survive, you must be in an asset that is tradable. Physical metals fit the bill here.

Expect price controls and supply shortages. Controls don't work and they create mega imbalances for speculators (that will be you and me). Items that are price controlled will not be for sale. When price controls are lifted, prices skyrocket and assets are shuffled to new owners.

The middle class will be robbed blind. Expect labor to organize and strikes. Expect more free money from the government in an effort to keep people from rioting.

Expect, in five years, to have to rebuild your life.

Fortunately, the euphoria phase of hyperinflation empowers those that know it's coming with a little extra buying power to prepare. Fix your debt. Move to Gold and Silver in tradable units. Re-evaluate what's important with regards to revolving debt and don't get caught without food or water.

Your gold is absolutely the most precious thing you could be holding right now. Guard it well.

Re: "crock" - I'll repeat the heading I gave my last post, Bubbles Go Unrecognized Until They Pop.

I don't have to say bubbles go "in-admitted"(unadmitted).

My version is true in many cases, and apt and ample commentary for a lead in(heading).

If one wishes to include MORE relevant commentary below the snippit, that would be their prerogative.

It's actually required under the Fair Use Doctrine of International Copyright Law, prescribing substantive comments (for educational purposes, etc.) on small excerpts.

So your brief comment on the article, paired up with mine, should meet the legal word quota that saves my arse! Thank you.

(Note to self- "Hmm, notice spacing adds something to my status! )

I also saw your good stuff offered Tuesday. I really wish I could chat but extra duties for the next two weeks are taking their toll. No time. (To accentuate that point, I've averaged just one quick meal per day since Sunday -- but not meaning to imply that I'm not greatful for that one, as I know some people are forced to get by on even less.)

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 softens on day, $28 higher for week

May 12 (from MarketWatch) -- Gold futures fell more than 1% Friday but tallied a gain of almost $28 an ounce for the week as traders bet on longer-term weakness in the U.S. dollar.

The dollar was mixed Friday, gaining ground against Japan's yen and paring losses against the euro following a report that showed the U.S. trade deficit narrowing in March. The Federal Reserve's policy statement Wednesday may have deflated the equity market, but it hasn't halted the momentum in metals, observed Edward Meir, analyst at Man Financial.

"Tireless as a Tour de France cyclist, the gold market has now appreciated better than 70% over the past year for a $300 dollar gain," said Jon Nadler, an analyst at bullion dealer Kitco. "To say that gold is climbing a wall of worry is to understate the situation quite a bit -- this is starting to look more like a wall of panic," he said.

"But, like the cyclists, gold must also rest occasionally."

COMEX June futures pulled back to $711.80, closing down $9.70, following an intraday $728 peak.

The contract had rallied sharply this week, rising more than 6% over the past three sessions on the strength of heavy fund buying.

Even if the commodity undertakes a correction that's been predicted for nine weeks, according to Nadler, "the [background economic and geopolitical] conditions will persist and continue to bolster the case for diversifying out of paper for the sake of safety."

Even with gold prices in sight of $750, Dale Doelling, chief market technician at Trends In Commodities, said he doesn't see any 'topping formations'.

"Not only do I believe that we're not at a major top, but I think this bull market may just be building a full head of steam," he said, adding: "I will be very surprised if gold doesn't break the $1,000 barrier before summer turns to fall."

Jim Wyckoff, an analyst at TradingEducation.com was much more bearish -- at least for the short term. "Metals are ripe for big downside correction. It may come as soon as Monday," he said.

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

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News⊂section=market+news&month=May2006&file=Business_News200605132599.xml5/13/2006; REUTERS
Mumbai -- Soaring precious metal prices have led to a palpable change in the world's biggest gold-consuming market, with jewellery-loving Indians now buying more bullion in the form of bars and coins.

"The current investment-led buying is unprecedented," said Madhusudan Daga, consultant at Gold Field Mineral Services Ltd. "Jewellery shops are now openly displaying the one kilo bar in their showcases."

Daga said bullion, once favoured by wholesalers, is getting popular with two different types of consumers: one set buys to convert it into jewellery for family weddings, while another group, newly rich professionals and investors profiting from India's expanding economy, buys it purely for the capital appreciation, he said.

"Depending on their budget, people have been buying coins and bars," said a salesman at a large jewellery shop in busy Dadar, a middle-class central Mumbai suburb.

While rising prices have opened many Indians� eyes to gold as a financial instrument, the view of gold is also changing, especially in urban areas.

"Gold has become one more item in the investors� menu," said Rajan Venkatesh, marketing director (bullion) at Bank of Nova Scotia. "It is definitely here to stay and in future people would invest in it by comparing its rate of returns over other financial products."

However, the desire for gold as both an investment and jewellery overlaps in rural India.

---(from url)---

The market simply MUST respect the weight and momentum behind the sentiment of a population one billion strong.

R.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/13/cncopp13.xml&menuId=242&sSheet=/money/2006/05/13/ixcitytop.htmlBy Ambrose Evans-Pritchard
The Telegraph, London
Saturday, May 13, 2006

The spike in copper prices over recent weeks has left a group of banks and operators on the London Metal Exchange (LME) nursing vast losses, raising concerns about the stability of the commodities market.

The banks have been caught out by a sudden widening in the gap between the price of three-month futures and that of long-term futures, for December 2010 or April 2011.

"The dramatic differential we have seen over the past six weeks has cost them a huge amount of money," said a market source. "The bigger players can absorb the losses but smaller operators have nowhere to hide."

Copper surged this week to an all-time high of $8,875 a tonne, rising almost 10 percent on Thursday. Yet futures prices for April 2011 are just $3,778 a tonne.

Barclays Capital denied reports that it faced losses of �500 million on copper trades, saying that it would have issued a statement if such claims were true.

Banks help to finance the LME's $3,000 billion trades each year, often taking on long-term hedges from metal producers, which they cover by selling short-term futures. If the two suddenly diverge, it plays havoc with their books.

Adding to the intrigue, the LME's chief executive, Simon Heale, unexpectedly said on Thursday that he would be stepping down by the end of the year. His spokesman denied that there was any link to the metals mayhem this week, insisting that Mr Heale wished to spend more time with his family.

Copper has doubled in price this year even though industrial demand is flat.

"This is fairyland," said Richard Elman, head of the Noble Group. "We have never seen such a disconnect between reality and pricing of raw materials. The long-term story is sound but the short-term froth is patently frightening."

William Adams, an analyst at BaseMetals.com, said demand for copper tubes was collapsing as producers switched to PVC plastics. The market in Germany has halved from 90,000 to 45,000 tonnes. "There's a very rapid switch from copper. When it turns, copper could easily drop $1,000 a tonne in one day," he said.

David Threlkeld, a veteran copper trader, said the market had been "out of control" for months, allowing speculators to run roughshod over industrial producers and users. "The LME has been seduced by hedge funds," which have "pushed prices to levels unsupported by fundamentals. There's a vacuum below and the crash could set off a chain of margin calls running through the whole commodities sector. We've got a crisis on our hands and it is a lot bigger than copper," he said.

http://www.321gold.com/editorials/willie/willie051206.htmlVarious sources, probably using different analytical approaches, arriving at the same or very similar conclusions based on current economic facts. I hope there is just some kind of philosophical feed-back loop existing in the sound money, gold, anti-neocon community, and that things are not really as bad as we think. Unfortunately, this is probably a forlorn hope.

Jim Willie,is another voice in the chorus.

And from Fekete, "What to expect now? Sooner or later exchange officials will declare "liquidation only" policy. Thereafter, the longs can close out their profitable positions only through cash settlement. The shorts are absolved of their obligation to deliver as contracted. At that moment all offers to sell cash gold will be withdrawn around the globe."
Remember poor Bunker Hunt. Notice how the rules are always changed to favor paper. Greenspan's irrational exuberance�all he had to do was raise margin requirements, but he did not! How many times have margin requirements been raised on metals lately? And did not gold trade after noon prior to 9/11?

http://www.usagold.com/goldenchalkboard/gc_John-Locke-2nd-Treatise.htmlThose who are contributing to the wreaking of "mayhem" on the various industrial metals markets should give Locke's little treatise a once-over and then gravitate toward gold for the greater good, inclusive of their own.

R.

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

@ mikal,

"inadmitted" is the proper word, as in "inadmissable evidence". SOunds weird, doesn't it?

I have no idea what your response meant, but I was directing my comment at the original author. No slight to you was meant.

My point was that the bubbles are quite recognizable, which is why they are called "speculative bubbles".

The paper specs rush in and profit immensely before running off with the cream. In the cases of the tech bubble (even GS called it 'irrational exuberance') and the RE bubble, which thousands of pundits have written about, there has been no issue "recognizing" them.

It may likely happen to PMs, as well, as it did in 1980, so I suspect that the post-froth "value" of PMs will be significantly lower than during the spec bubble period, whenever that ends. However, I haven't a clue how to evaluate that in the current climate, since actual survival of th dollar is at stake.

Admitting bubbles has been an altogether different story. Once the froth subsides, admission surfaces, but no one dares interrupt the feeding frenzy, or risk the potential of "crying wolf" in case they are later proved wrong.

Just my $0.04, infaltion adjusted.

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42823&NewsKind=Current%20Affairs
LONDON, May 13 (IranMania) - According to an AFP report, a suspended car deal between Iran and FRENCH giant Renault has been finalized and vehicles will soon start to roll off the production line, the deputy industry minister said.

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=42833&NewsKind=Current%20Affairs
LONDON, May 13 (IranMania) - FRENCH President Jacques Chirac said Europe should seek the imposition of UN Security Council decisions on Iran over Tehran's refusal to give up its controversial nuclear programme, AFP reported.

==

What's happening here?
I thought Renault was a state-owned entreprise.

http://ww1.dowtheoryletters.com/DTLOL.nsfRichard Nails It Down - -Again!
May 12, 2006 -- The toughest time to write about the markets is following a "sudden" wild day like yesterday. For the edification of new subscribers, I don't like this stock market, and I haven't liked the stock market over recent months. The reasons I don't like the stock market are simple -- it's overvalued and it's been exhibiting poor technical action. I've gone over the poor technical action so often and so thoroughly that I'm almost sick of talking about it.

Conversely, I've liked the gold market -- a lot. You can say that I've been a long-term cheerleader for the gold market -- all the while almost bullying my subscribers into buying gold.Now gold is overbought, but the situation in gold is so powerful that I honestly don't know exactly what to say about it. OK, I'll say something -- gold is now in one of the most powerful bull markets that I've ever seen, and I've seen a lot of bull markets in my 81 years. This gold bull market far surpasses in strength the gold bull market of the 1970s. This bull market is far bigger, it's far more international, and it has much stronger and broader fundamentals than did the bull market of the '70s.

Suffice it to say that gold is in a powerful primary bull market, and my advice in a bull market has always been to put on your chaps and leather vest and boots and ride the bull. But wait, you prefer to trade? You think you can beat the bull via in-and-out trading? Then good luck. However, I'm betting you can't out-trade the primary bull trend. I'm betting that if you insist on trading, you're going to end up on the sidelines just when a major move is underway. Big bull markets gobble up and spit out in-and-out traders. I've seen it happen in every bull market since the 1940s.

The way to make money in a bull market is to load up early on the favored items, buy a bit more on the corrections, and hang on to the bull like grim death. The bull will do everything in his power to shake you off his back. To hell with what the bull wants--- you stick with what you want, and what you want is to harness the full power and profitability of the primary bull trend.

For the last couple of hundred upside points we've heard nothing but caution and warnings from those who don't understand gold and worse, from those who don't have a clue as to what's happening. Yesterday gold and silver both closed at new highs, but because the metals were so overbought, I wrote that I thought the time had come for some kind of a correction.

After all, gold had been up 16 out of the last 19 days, an incredible performance and possibly an all-time record for any item. Stocks and commodities and precious metals tend to act like living organisms, meaning that they exhale (go higher) and they inhale (go lower). Gold and silver have been exhaling for 84% of the last 19 trading days. Talk about amazing bullish power, we've been seeing it..

The capitalist world is very "unbalanced" these days. The US has been getting away with what some of us refer to as "financial murder." How so? Well, the US has been devouring the world's merchandise and services and savings at a furious rate. But the "murder" part of it is that the US has been paying for all this good stuff with paper that doesn't cost the US a damn thing. The US just creates the paper out of thin air, and damned if the rest of the world doesn't accept it -- for now.

You can get away with this chump's game for just so long, but at some point the US's creditors are going to look at all this junk paper that they've collected, and they're going to say -- "Enough, we can't keep taking in this garbage paper. Because what's behind this paper? Nothing -- except just more paper. We're selling the US real items -- food, furniture, machinery, clothes. It's about time we got something real in return -- some tangible US assets or some real, intrinsic money like gold."

Of course, the US won't give its creditors any gold -- the US stopped doing that back in 1971 when Nixon closed the "gold window." So what are we giving our creditors now? I'd say mostly arrogant advice, bullying demands, and well, a whole lot of unadulterated BS. But we may be close to the time when our creditors are tired of all of those "free" items. They may even be tired of paper dollars, which is one reason why the dollar is sinking. Worse, the US openly wants the dollar to fall -- maybe by about 25%. But hold it, a lot of our creditors are loaded with billions in dollar-denominated securities, and obviously they don't want to see the dollar fall. Maybe they should (pardon the expression) diversify. Diversify into what? Euros and yen -- and even gold comes to mind.

http://www.miningmx.com/gold_silver/316373.htm"We are seeing unbelievable demand for Krugerrands. The South African public is looking at the gold price movements and they want to be in gold," Rand Refinery's Johan Botha said. Rand Refinery had planned to produce 100,000 oz of Krugerrands in the financial year from October to September 2006, but demand had already overtaken this, he said. Last year, Krugerrand output was 85,000 oz.

"If we could produce 200,000 oz of coins we would have no problem selling them," Botha said. "Demand has outstripped what we were anticipating for this year."
----------------------------------------------------------------------------------------------------------------------
Hmmmmm, it seems they suddenly remember the Sleeper-speech in South-Africa...

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

As you watch CNBC or other financial media, you'll notice a great deal of hype about the fact that the Dow Jones Industrial Average (DJIA) is once again approaching the all-time high it hit in 2000. You also might witness the coverage about gold as a "mania market" as it approaches its all-time high reached in 1979. However, neither of these analyses of the current situation takes into account the destruction of the dollar's worth due to inflation.

The DJIA peaked at 11,722.98 in January 2000. As of 05/11/06, the price of the DJIA was 11,500.73 and the inflation adjusted price (CPI adjusted) for what this value would be in 2000 is 9,779.88. That is 16.5% below the 2000 peak and yet the financial media is ready to declare victory?

DJIA on 05/11/06 - 11,500.73

05/11/06 Value in 2000 Dollars - 9,779.88

Now let's take a look at where we are with gold and its previous historic high. The high reached in gold was $850 an ounce seen in January 1980. Adjusted for inflation, that would correspond to $2088.90 for an ounce of gold today!

Gold in 1980 - $850.00

In 2006 Dollars - $2088.90


Let's look at it from a reverse perspective. The recent (05/11/06) price of gold is $715.10 an ounce, which would correspond to $290.98 an ounce in 1980 adjusted dollars, nearly 66% below its previous peak.

Gold on 05/11/06 - $715.10

In 1980 Dollars - $290.98

My question to the financial media is this: how can you call the current action in gold a mania when it is selling for a 66% discount to its 1980 peak and be elated about the current price of the DJIA when it is still 16.5% below its 2000 high?

Since 2001 the dollar has been devalued by 60%.

In 1934 FDR devalued the dollar by 41%.

In 1971 Nixon devalued the dollar by 7.9%.

In 1973 Nixon devalued the dollar by 10%.

The return of the DJIA to its previous highs is misleading as mentioned above due to the decline in the value of the dollar. Gary Dorsch points out in his editorial, "Central Bankers� Worst Nightmare � The Gold and Bond Vigilantes," that "while the DJI is celebrating its hard fought recovery to record highs, the DJI has also lost 60% of its value to gold since its peak of 42.5 ounces in 1999. Investors were much better off owning an ounce of gold, than a share of the Dow Jones Industrials over the past six years."

-Goldilox

How does one tell a "mania" from "pure inflafla"? One try looking at the fundamental bigger picture.

In my perception, the key events leading to the increase in the US $ price of gold began in the mid to late 1990's with a decision by global financial interests that the US was incapable of reigning in its monetary/credit creation excesses. Clearly the US dominated global financial system was running roughshod over the major participants with little remorse and even making demands that foreign governments intervene in the currency markets to maintain stability (read life support system for the US $).

The script for change was implemented quietly and without the consent of the US. We were only able to observe symptoms of the ongoing malaise. The evolution of the Euro and its actual dissemination as a real working currency throughout the Euro-zone was but one salvo in the currency war. Tied to a "mark-to-market" pricing of 10-15% real gold reserves, the European players were basically announcing that they were no longer going to play the US structured game. They were no longer on the same level playing field, they started a new game on a completely different field. In the interest of maintaining "stability", they continued with interventions but were clearly no longer amused by the activity.

The virtual requirement that all global oil sales would be executed in US "petrodollars" is the lynch-pin of the aging and decrepit monetary system and was the avenue through which the US maintained its upper hand. There was after all no other currency on the planet that existed in sufficient depth to handled the transactions of the oil trade.

A recognition of the oil/gold relationship was inherent in the new game and as such it was only a matter of waiting for the old system to collapse under the weight of its own excesses. The new game players felt that the gold mining interests were sufficiently under their wing that there would be no trouble from that quarter. The bankers practically owned the major players by holding forward delivery and financing deals on the majority of key mining interests. The others such as those in South Africa could be brought to their knees easily by manipulation of the SA Rand.

What the global interests did not foresee is the lengths to which the US government would go to stay on top of the old game and keep it going. The invasion of Iraq precipitated on the announcement that it would trade oil for Euros was a shot across the bow of the stealth currency war. Here was a warning that the US would not tolerate becoming unseated as top control agent for the world's financial ambitions. Another shot across the bow was "pulling the rug out" from under Argentina�again, upon the announcement that it would begin to diversify the basis of its currency away from 100% backing of the US dollar to "a mixture" sure to include a major component of Euro holdings. Not an invasion, per se, but a dramatic exposition of the fact that Argentina had already been invaded and conquered long ago. Invaded by the US banking system to which Argentina had handed over the keys to its financial independence. What a rude awakening for the Argentine population. They should have gotten wise to the fact that their destiny was no longer in their own hands when the Argentine government announced it was selling its gold reserves.

The lynch-pin of petrodollar dominance rested on keeping the price of gold contained/restrained. The future of the new game depends on the release of gold from its bondage. Here in a free gold pricing structure, the "inflation" required by banking interests to create and maintain growth, can be channeled into an increasing "currency value" of gold reserves�something "real". Under the old system, growth was dependent on the expansion of the number of currency units in circulation.

The unlocking and expansion of Russian petroleum reserves was a key strategy in the new system. The wealth of the Caspian sea oilfields could be exported by pipeline over the geologically unstable mountains to the Turkish port on the Mediterranean or through Russia to the Blak sea and thence through the treacherous Bosphorus straits into the Mediterranean or even better across the Afgan frontier down the valley through Pakistan to the Indian ocean where it would have wide open access to Indian and Asian developing markets. The Russians hoped to "piggy-back" this deal and export their own reserves through this channel. The Pakistan was already a willing player, only the poppy fields of Afganistan stood in the way.

Many years were frittered in the scuffle for access through Afganistan and Pakistan. Meanwhile plans for pipelines directly to China from the Russian oilfields were being implemented.

We gained an insight that the US was invited to participate in the new game and the US showed its intention and desire to do so by taking its seat along with the other players at the directorate of the Bank for International Settlements (BIS)�an organization they had thumbed their noses at for decades.

Recognition that the new game was drawing increasing numbers of important players came when the BIS opened their first new branch office in downtown Hong Kong after the British lease on the territory was terminated. As no one "currency bloc" could effectively combat the US dollar block for currency supremacy, perhaps a coalition of major players can with no one player being able to be aggressively targeted as was done in Argentina.

The Asian contagion was albeit a pre-cursor to the Argentine massacre, not much different in flavor. These countries had made the grave error of allowing western banking interests into their soft underbelly. An Asian currency bloc bringing the Malaysian ringit (Maylasia is a brave hold-out to this trend having witnessed what has transpired in the other countries it continues to resist the opening of its borders to foreign banking interests) back into play is something the US dollar bloc will resist tooth and nail. Russia has learned well from these events and seen that Malaysia is holding its own despite its isolation. Russia continues to resist opening its borders to western banking interests. Russia It is now very close to being out of debt to other countries and has meanwhile become a viable player in the new game.


Another thing the global interests did not foresee was the successful efforts of the Gold Anti-trust association (GATA). This small but noble band of gold advocates severely loosened the death grip strangle hold of the banking interests from the mining interests and precipitated a very much quicker rise in the currency price of gold than was ever anticipated by the new gamers.

The new gamers also did not foresee the rapid rise in the price of oil. This is wholly the result of middle-east meddling on the part of the US government for the exact purpose of driving the petrodollar price of oil out of reach of any potential competitors by the sheer magnitude of resources needed to facilitate the trade. The announcement that Iran was going to open a bourse for the sale of Oil in euros resulted in an immediate focus on their fledgling nuclear power program. Well somebody has to be first to sell oil in something other than petrodollars.

It is in a nutshell as if the world has re-embraced the notion that "He who holds the gold makes the rules". Is it any wonder that the currency price of gold is increasing?

Now for my prognostication of the currency price of gold. I think the price will be substantially different in Euros and dollars. I can foresee a range of 10,000 to 30,000 US dollars/troy oz. and a concurrent range of 3000 to 10,000 euros per troy oz. My projection is only until the year 2012 since that is the date that the Mayan calendar ceases to acknowledge the existence of time. And as we all know "time is money" and so after that date there will be no need for currency or gold.

In response to Sir MK's question. The turning point... many things have transpired in the last 4 years that have caused gold to rise and almost hit the 70's highs. 911, the washington agreement,the dollar sinking and the FED running the printing presses 24 X 7, runaway deficit spending,the Rothchild's announcement and central banks selling gold. But the turning point in my opionion hasn't happened yet..
I would have to say if i bought a stock back in 1980 and payed $850 per share and that stock in 2006 is almost back to where i bought it in 1980, is that a bull market?
Once gold passes the 70's high then we will see something that will turn everyones head. Gold will continiue to fly and not look back. That's when i'm calling the turning point. For gold prices in the forseable future, i am not even going to make a call on that one.

cytek

@ Henri,

If there were a prize offered for best essay re the contest question, I would have to vote for yours so far.

Thanks.

http://freeserve.advfn.com/news_Silver-ETF-Hits-Critical-Mass_15403026.htmlsnip:

SPOKANE, Wash., May 13 /PRNewswire/ -- Silver ETF hits critical mass and most in the financial world don't even know it. Silver expert David Morgan of silver-investor.com has just released news that is critical to silver investors worldwide.

"Authorized Participants that wish to redeem a Basket of Shares will receive the Basket Silver Amount in exchange for each Basket surrendered. JP Morgan Chase Bank, N.A., London Branch will be the custodian for the Trust and responsible for safekeeping the silver." Followed by footnote 29.

Footnote 29 states: "If the total value of the Trust's silver held by the Custodian exceeds $1 billion, then the Custodian will be under no obligation to accept additional silver deliveries. In such a case, the Trustee will retain an additional custodian."

At this point in time, May 11, 2006, the Silver ETF has 58 million ounces of silver in trust and is selling at a 4.5% premium. The Silver ETF has a current value of approximately $877 million which means we are already about 88 percent of the level that JP Morgan will be "under no obligation to accept additional silver deliveries" emphasis ours.

What will this mean for the silver market? What if physical demand continues at the current pace? The amount of physical silver put into trust from Silver ETFs first day of trading to present time is nearly 60 million ounces of silver. This is in ten days of trading.

Many have commented that it is nearly impossible to deliver the amounts of physical silver into the vaults without the silver already resting in place. Berkshire Hathaway's silver was in London and Barclays Silver ETF is in London, is it the same silver?

-Goldilox

Dave Morgan adds his insights to the silver ETF questions.

"My projection is only until the year 2012 since that is the date that the Mayan calendar ceases to acknowledge the existence of time."

You mean time runs out as the Fed approaches 100?

Sounds about right to me.

Pres. Nixon's decision to detach our currency from gold is, I believe, the beginning of the modern ascent of gold. The spike of 1980, the mark we all aspire to again see, will pale to the new highs this and furure generations will so ardently seek.

http://www.netcastdaily.com/fsnewshour.htmFor those who are still interested in the movie, "From Freedom to Fascism", Aaron Russo, the writer/director/producer is the second hour guest today on Puplava's Financial Sense Newshour.

The first hour market wraps, given this week's volatiity, offer some very interesting perspectives.

Brew a pot, or pop some corn - your choice.

Embry said he would not be surprised if gold $85,000. Lord Jim says Embry may be surprised. I'll go with $892.20 for the month.

First it was stock, then when that headed down people moved into what they thought was the safety of bonds then when both tanked they moved into real estate. Each time they borrowed money into existance in the hopes that the asset would advance more rapidly than the liability. Meanwhile the currency has been leaving the economy via imports which convert the money to US bonds. Alan "the wizard" Greenspan kept the economy liquid by lowering rates. Now rates are going up so the liquidity creation is gotta slow. What is going to happen?????

To begin with, let define what I consider the "long term", before I address inflection points.

During the height of Western imperialism, and the confusion leading to the first Great War, the motions were set in place to unseat the Constitutional United States. Almost in tandem, the 16th amendment (which many believe was never legally ratified) and the Federal Reserve Act were ramrodded into law. In order to back them, Emergency War Powers were enacted a couple years later.

As the "free" populace of the US was not malleable enough to allow a coup all in one fell swoop, the solidification of power was accomplished slowly with some powerful landmarks along the way.

First and foremost, JP Morgan convinced the US government to absorb the war debt of the failing British Empire, so that US entry into the European war for colonies was virtually guaranteed to ensure Morgan would be repaid his British war loans.

Then the power to tax the people was established (not without challenges in the Supreme Court) by the IRS acts. Soon after that, the power of the industrialists was weakened by the 1920's stock bubble and subsequent crash. This ensured Wall Street's complete power over industrial America, and again insured entry into WWII, as the weakened industrial base was re-tasked to supply first the British (again), and then the US war efforts. The final result of this transformation was the rise of what President Eisenhower called the Military-Industrial Complex, very much akin to Mussolini's "Corporate Fascism".

Along the way, the US dollar was handed over to a consortium of banks called "Federal Reserve", but one of its "limitations" remained in its constitutional attachment to PMs. Roosevelt used the 1929 crash and subsequent bank run to hand over the wealth of the entire US electorate to the banks by declaring $20 per ounce gold "illegal", confiscating as much as he could, and handing it back to the bankers for FRNs, raising its value to $35 immediately after.

When Nixon completely the severance of US $ from any standard a generation later, the world response was a near immediate demand growth, especially by the growing Opec nations, who found US paper promises less than adequate compensation for their natural resources. Most of the world have been taught that the ME conflicts are about "religion", when, in fact, the rape of oil resources and the presence of a Western intelligence outpost in Jerusalem were both unacceptable to the OPEC leaders.

The answer by TPTB was to set up the US$ as a "world reserve currency", so there was no excuse not to take it "as payment of all debts, public and private". Any grumbling about the above found "economic hitmen" operating within one's borders and more than happy to finance any dictators who would toe the IMF/CIA line at any cost to their people. As George the First once put it, "We must maintain 'business as usual' at all costs."

The turn of the millennium brought dissenters to the dollar in new economic battlefields. Iraq, still reeling from their belief that the US would support their annexation of Kuwait, responded to the about face of US policy by declaring it's "Oil for Food" program would accept Euros only starting in 2002. We've seen what devastation that dissention cost.

More behind the scenes, other Opec nations touted formation of an "Islamic Gold Dinar" and accompanying silver currency. Indonesia was a big proponent of this, along with Iraq and Iran. The heavily US influenced House of Saud, however, was very quiet about any participation. Christmas 2004 brought a rather nasty Santa to Indonesia, in the form of a 9.0 quake and accompanying tsunami, with no working warning systems in place. What was in place, however, was the largest US Navy task force in history all anchored in the China Seas, not far on the leeward side of the tsunami. With this catastrophe, the hopes of an Islamic Gold Dinar were swept away alongside the millions of Indonesians and Indians who were caught in the wake.

Iran, the only remaining Islamic Gold Dinar backer, is under huge pressure from the western banking states due to "uranium enrichment". A country with no nuclear war capability is supposedly holding countries with hundred to tens of thousands of nuclear devices "hostage", once again.

At the same time, "Reich-stag Fires" in NYC and FEMA "failures" in New Orleans have reduced the "fat and happy" benefactors of the "Strong Dollar policy" to cowering paranoids willing to give up their freedoms to the next generation of elites that manipulated Weimar Germany to bankruptcy and subsequent "corporate fascism".

Now that I've set the stage, what is my "flex point"? The point at which the western powers abdicated to the war financiers, whenever that was. Some link that to Lincoln and the Civil War, and even earlier to the Napoleonic Wars.

However, it seems that fomenting Russian revolution (the only Western Monarchy that would not give CB powers to the Rothschild cartel), the Weimar collapse, and creation of the US Federal Reserve all occurred near simultaneously, and can all be pointed to as beginning points in 20th Century New World Order politics.

During that time, gold has been on an embattled path to regain the monetary power forced out by the FIAT War Financiers, progressing from a point where currencies were "fixed" to its value to today's second attempt at re-compensation for the runaway FIAT presses.

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

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $892.2 $$$$ jorgito (5/13/06; 13:14:37MT - usagold.com msg#: 144154)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $818.0 $$$$ bouncer (5/11/06; 17:29:28MT - usagold.com msg#: 144098)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $799.9 $$$$ Thoreauly (5/11/06; 10:36:56MT - usagold.com msg#: 144083)

$$$$ $788.1 $$$$ Midas Man (5/11/06; 11:03:56MT - usagold.com msg#: 144084)

$$$$ $777,7 $$$$ Shanti (5/11/06; 17:22:22MT - usagold.com msg#: 144097)

$$$$ $769.0 $$$$ Wonko (5/11/06; 19:51:32MT - usagold.com msg#: 144102)

$$$$ $762.4 $$$$ Briale (5/11/06; 11:05:04MT - usagold.com msg#: 144085)

$$$$ $749.0 $$$$ Henri (5/13/06; 10:02:17MT - usagold.com msg#: 144147)

$$$$ $745.0 $$$$ Goldilox (5/13/06; 14:32:14MT - usagold.com msg#: 144156)

$$$$ $743.5 $$$$ Beamer (5/11/06; 01:52:15MT - usagold.com msg#: 144070)

$$$$ $737.5 $$$$ Stoney Rivers (5/13/06; 12:05:21MT - usagold.com msg#: 144152)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $724.5 $$$$ balzac (5/11/06; 23:03:22MT - usagold.com msg#: 144110)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $674.0 $$$$ Cytek (5/13/06; 10:19:42MT - usagold.com msg#: 144148)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
THANKS all for the interesting ANSWERS to the Question.
(Some are worthy of a PRIZE, IMHO.)
Keep them coming, as we have not seen anything YET !
GO YELLOW
<;-)

@Goldilox - I note that in your contest entry, you neglect a prognostication as to the future price of gold. However, I enjoyed the rest of your essay. Are you an avid reader of The Daily Reckoning and Bonner/Wiggins books? They've taken a similar tack of late, with much talk of the American Empire and imperial corruption, along with an historical examination of the path taken by the American Empire builders, leading to similar conclusions to those you make.

Personally, I concur on many of these points as the road to destruction of the United Empire of America as we know it now, including their dollar. However, my peers and the rest of my demographic significantly discount this possibility. My friends think me terribly pessimistic and even foolish when I speak of the dire circumstances facing the western world, and when I talk about what that could mean, and these are good friends who trust my judgement regularly with respect to our classes and things in which we are involved. Currently, I attend university for my bachelor's degree, and a university is supposed to be a center for knowledge, wisdom, and thought, yet so many people here are unable to open their mind for a second to consider that the world as we know it in an economical sense and in a political sense may be unravelling, much less attempt to find a way to smooth the transition or prevent personal ruin. It is almost as though the world outside has no bearing on our lives; we are isolated from the financial world (and other worlds) by the boundary around the campus.

Part of why I discuss my situation as a university student is because of the debt that I hold and that I am incurring as a result of attending my classes. As a Canadian whose income is small enough to make me eligible, I carry government student loans which are interest-free for me until after I have graduated. I do not have to make any payments against the principle, and no interest is accumulated until my graduation date. While I was leery to enter into the debt, it was necessary to finance my education, and one cannot become an engineer without a degree. What I would like to know is something along the lines of the following: if the system of fiat collapses and is completely abolished in the United States, our near neighbours and close trading partners (thus our currencies closely tied), would the outcome be approximately the same in Canada, and along the same timeline? I admit, I haven't the time to spend poring over the status of the Canadian dollar and government finances and financial policies, so I shall pose my question more generically: How will other paper currencies be affected by a complete collapse of the world reserve currency?

The second part of my question isn't really relevant unless the collapse is accelerated significantly from its current pace, since I expect to graduate in two years. However, given that I owe my government money that they have loaned me as a student, what would you expect them to do with that debt in a period of hyperinflation? The loan's status as interest-free precludes the direct application of outrageous interest rates (although they could probably renegotiate the loan or insist that I pay it instantly if such a period were to occur). Obviously, if they keep the number that I owe them as it is, they lose significantly, because the value of the money I owe them would be much less than when they gave me the money, or even meaningless if the dollar system is eradicated. Do you think it possible that they may convert the debt to an amount of gold equivalent to the dollar "value" of the debt at some point? What point might that be?

These are the thoughts that I've been pondering of late, along with my readings of Another's Thoughts and Bonner's book. Unfortunately, I haven't the time to read and absorb everything, since I am busy with studying and class, but I thirst for understanding of what exactly the gold that I own means beyond preservation of wealth. I read the forum regularly, although I haven't contributed for over two years (I lost my password so I have a different username now; that and I feel that my understanding of the situation pales in comparison to that of the intellectuals who routinely discuss here, so I read and absorb in hopes that I may someday contribute uniquely). I will try to put together a commentary suitable for a contest entry soon, although my guess of $737 has been stolen. In the meantime, I look forward to any thoughts you may put forward regarding my debt.

Thank you,
Jay

Jay when T S H T fan .... My guess is many people will have trouble .... they may try to lock up your pay ..... dont worry ... Im sure you could get a manufacturing job ........ ( fast food ) ... so said W ..... I also need to get my guess in .. many good post .. I agree you will pay back with $$$ of less value .. Good Luck Beerman

I think all of us, young and old, are sitting around trying to predict the future. From my commodities trading days, I remember just how difficult that is. The possibilities are endless. What does this big run-up in gold really mean? Is this the beginning of the end for the American Empire? I often find myself thinking of total destruction, Armegadon, etc. Certainly anything is possible, just look through an old World History textbook.
As for your concern about your student debt, I see that as rather trivial. If we do lapse into hyperinflation, you will be one of many in that same boat. They surely can't eat you, and I think they have also done away with debtors prisons in Canada, correct?
In all seriousness, I am a bit concerned that this whole gold thing could get out of control and cause much irrepairable damage, loss, and pain for one and all (even those with large PM holdings). The fundamentals for a total collapse of the US econemy are in place. I don't think that the American populous is at all prepared to deal with any "hard times". As a nation and people we have had it too good for too long. We are soft! I say this having traveled extensivly through parts of the third world. I have seen how we react to less than perfect living conditions. Americans become upset when the airlines cut back on the munchies on a two hour flight.
I certainly hope that somehow "the powers that be" do not allow anything radical to occur. And then I remember reading in a recent post something about "no adult supervision in Washington D.C,"

jnshirtl,

I omitted a discreet number for the "gold top", because I believe we are witnessing the dissection of the current means of measurement. The US dollar may well survive in name, but it very likely will have little or no resemblance to the current FRN definition, perhaps rendering any comparison completely moot.

http://reese.king-online.com/Reese_20030409/index.php
Comparing the postings at various blogs, gold, sound money, and other internet sites with postings at similar sites over the past several years, reveals that posters now are more likely to believe that; a. Financial capitalism has destroyed industrial corporations, reduced American living standards, and initiated wars. b. Deregulation and privatization of utilities and transportation has lowered quality and increased consumer prices. c. Government statistics are inaccurate and politicized.

In fact the legitimacy of government at all levels is now widely questioned.

Three and one half decades ago, Charley Reese was considered a conservative commentator, the US Government had not defaulted on gold obligations, financial engineering and the explosion of derivatives (side bets) had not yet taken hold, and a substantial number believed in the truthfulness of their representatives.

Check out Charley's, May,10 2006 commentary.
Snippets:
"Ordinarily, I believe that a property-based capitalism is the best system. Unfortunately, that has been replaced by finance capitalism, and so we have to face the fact that when the super-rich and the giant corporations buy up all the assets and then sit on them, opportunity for average people shrinks almost to nothing."

"The old German Oswald Spengler, predicted in his book "The Decline of the West" that the Age of Money would be replaced by the Age of Caesars."

The real upturn for gold hasn't happened yet. It'll begin the day that Joe Sixpack is rudely woken up by having to pay more than $150 to fill the tank of his pickup. Yes, Joe will look around and figure that a lot of things aren't the way he has been led to believe. Meanwhile, May 25 figures to be a nasty day for news, taking gold beyond $887. My figure of $855 is just an approximation of where gold will be the day before it brteaks past $887.

Caradoc

http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWThe last few weeks have seen a gradual build-up of EQ's ...quantity wise anyway. 222 is as many as I can recall at any one time ...post the Indonesia big one anyway!

http://earthquake.usgs.gov/eqcenter/recenteqsww/After a turn northward our Bonds resumed their decline but without any real conviction. With such good fertile ground to the upside both Buck and Bond should rally here "with" Gold, but maybe closer to June rollover ...Oh for a spectacular repeat of Sept '05!

http://www.informationclearinghouse.info/article13030.htm"In July Iran will ditch the dollar in favour of the euro as the currency in which it will accept payments for its oil and natural gas exports, Iranian president Mahmoud Ahmadinejad announced Friday."

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $892.2 $$$$ jorgito (5/13/06; 13:14:37MT - usagold.com msg#: 144154)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $855.0 $$$$ Caradoc (5/13/06; 22:54:32MT - usagold.com msg#: 144164)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $818.0 $$$$ bouncer (5/11/06; 17:29:28MT - usagold.com msg#: 144098)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $799.9 $$$$ Thoreauly (5/11/06; 10:36:56MT - usagold.com msg#: 144083)

$$$$ $788.1 $$$$ Midas Man (5/11/06; 11:03:56MT - usagold.com msg#: 144084)

$$$$ $777,7 $$$$ Shanti (5/11/06; 17:22:22MT - usagold.com msg#: 144097)

$$$$ $769.0 $$$$ Wonko (5/11/06; 19:51:32MT - usagold.com msg#: 144102)

$$$$ $762.4 $$$$ Briale (5/11/06; 11:05:04MT - usagold.com msg#: 144085)

$$$$ $749.0 $$$$ Henri (5/13/06; 10:02:17MT - usagold.com msg#: 144147)

$$$$ $745.0 $$$$ Goldilox (5/13/06; 14:32:14MT - usagold.com msg#: 144156)

$$$$ $743.5 $$$$ Beamer (5/11/06; 01:52:15MT - usagold.com msg#: 144070)

$$$$ $737.5 $$$$ Stoney Rivers (5/13/06; 12:05:21MT - usagold.com msg#: 144152)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $724.5 $$$$ balzac (5/11/06; 23:03:22MT - usagold.com msg#: 144110)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $674.0 $$$$ Cytek (5/13/06; 10:19:42MT - usagold.com msg#: 144148)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

Waiting for a few moments to see if there was movement beneath the covering, this unveiling was rapid and the intruder became the prisoner before he recovered from his induced sleep by Sir Pritcho. He was bound with cord and an flat iron bar cage was brought up from the dungeon and he was placed within. The injured were being cared for and the wounds cleansed and bandaged. Even with their injuries, a few approached the small prison to look in at the creature, drawing satisfation as the welt grew upon enemy's head.
News of the occurance spread throughout the castle. Although this engagement did not last long, those that entered the Council Chamber gasped at the sight. Chairs strewn about, a vacant wall and a fallen candle stand. Blood on the floor and the damage done to the "Mighty Oaken Table of Yore".
Sir Black Blade and Gandalf entered the chamber and seeing the cage, Sir Black Blade asked, "What do we have here"? Gandalf, now peering in from the top of the cage said only one word. "Wolfling". Sir Black Blades attempt to ease the air was overcome by new concern.
Wolfling? could be heard from those in the room.
"Bring him to my room" said Gandalf. With that Gandalf left as quickly as he came.
"Sometimes I wish he would be a little more forthcoming with what he knows?"'said Sir Mikal. Sir M.K. uprighted his chair and sat down at the table. "Ishlar",he spoke.
"What is this? A day for one words?" exclaimed Sir Topaz.
"That is where he hides and where we must go", answered Sir M.K.
Slingshot---------------<>

Sir Slingshot,

I always look forward to the next chapter in your ongoing novella. Your writing style is a pleasure to read. What an enormous talent (gift?) to have!

Best Regards,

Noble1

The dollar has been going down rapidly, gold gaining to around $710 per ounce on the spot market, the stock market was down on Friday and Thursday and the chart action for the Nasdaq appears similar to the Nasdaq chart action on the 1987 Black Monday.

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

Armageddon--
I wouldn't be so sure! Imagine the deafening sound of helicopter rotors at 10,000 rpm. Imagine a pyroclastic cloud of billions and billions of paper notes, engulfing anything in its path. Imagine light fiber communication lines to the Caribbean melting. Imagine computer terminals brightly illumined with flashing buy signals like Broadway marquees. Imagine the glorious hosannas of a multitude of just us folks as the markets miraculously rebound and salvation is assured. Imagine Ben Bernanke descending in a cloud of glory!

I guess it would also depend on how big the panic is. If it is widespread and also involving foreign central banks then Helicoper Ben may need "trillions" to prop up the markets.

Either way inflation will be certain.

http://www.safehaven.com/article-5148.htmThis article was the one that showed that the Nasdaq is behaving like 1987 before the crash that I mentioned in my previous post.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/14/ccliam14.xmlBy Liam Halligan
The Telegraph, London
Sunday, May 14, 2006

On Friday the dollar plunged to a 12-month low. With sterling close to $1.90 and further dollar falls likely, we could soon see a $2 pound.

Good news, then, if you have booked a holiday in America. But that is where the good news ends. The dollar -- after a period of sustained decline -- is now dangerously fragile against all major currencies. That presents serious risks.

Friday also saw a one-year low against the euro. The dollar has, in fact, sunk by almost 7 percent in just six weeks against America's main trading partners. A slip of just 1 percent more, on the same measure, will mark a 33-year low.

At the centre of this story is the large and widening US current account deficit. Since 1995, as America has sucked in imports, this trade gap has grown eight-fold. It now exceeds �800 billion -- almost 7 percent of the national income of the world's largest economy.

Inevitably, this record-breaking "global imbalance" puts the dollar under pressure. But in recent weeks its decline has been more pronounced.

One reason is that while interest rates are rising around the world, they are set to go up relatively more in Europe and Japan than in the US. That makes the dollar less attractive.

The US Federal Reserve increased rates to 5 percent last week -- its 16th rise in less than two years. But the dollar kept falling anyway, in part because of narrower "rate differentials."

But there is something far more significant. The dollar is resolutely heading south, and will continue to do so, because of what you might call "regime change."

Central banks around the world -- led by the Fed -- are tacitly co-operating to bring about a managed dollar decline. The first signs of this came at last month's Group of Seven finance ministers' meeting in Washington.

That was followed by an unusually stark statement to Congress by Ben Bernanke, the new-ish Fed chairman, who said America's "international debtor" status "cannot continue forever." The International Monetary Fund chipped in too, warning that the "resolution of global imbalances" may require a "substantial" dollar decline.

An even weaker US currency is the least painful way to address America's yawning deficit. A cheaper dollar helps US exporters while pushing import prices up.

But previous attempts to lower the dollar have been frustrated in Asia. Reluctant to give away competitive advantage, countries in the region -- notably China, but others too -- have intervened to stop their currencies rising too far against the dollar.

But there are signs that the mood is shifting. This latest dollar selloff has seen the greenback fall against the yen and the South Korean won. Also, the US government, in its semi-annual currency report, last week stopped short of accusing China of "manipulating" the yuan. That paves the way for Beijing to revalue without losing face.

The markets are referring to this perceived "deal" to weaken the dollar as "Plaza lite." Back in 1985, faced with a similarly bloated America, the industrial nations united to manage a smooth dollar decline. That agreement was called the Plaza Accord -- after the New York hotel where the meetings took place.

Speaking to Congress last month, Bernanke outlined the dangers of defusing America's deficit. "While it is likely that current account imbalances will be resolved gradually over time," he said, "there is a small risk of a sudden shift in sentiment that could lead to disruptive changes in the value of the dollar and other asset prices."

In other words, the dollar could collapse -- causing more systemic concerns that spread into equity markets. Could such a scenario happen?

Well, with the markets becoming more convinced of "Plaza lite," traders are already quitting the dollar in droves. The currency's sharp fall in recent days, in turn, has sparked fears about US inflation. We are now seeing the result -- shares on Wall Street have dived, a trend now affecting the City.

The dollar desperately needs to come down. But if Plaza lite goes wrong and the currency becomes a one-way bet, we will be in serious territory.

Last week Mervyn King, the governor of the Bank of England, did his bit to convey that Plaza lite would work, precisely because it is not explicit. "As the global imbalances start to unwind," he said, "I think you'll find the major countries want to talk to each other." I hope he's right. Because if this much-needed adjustment goes wrong, it will be no holiday.

What you are witnessing is real.

It is the logical result of natural cycles too long subjugated, distended, distorted and disturbed.

In the time when the strong dollar policy was king, you could make money by buying stocks, bonds and their paper derivatives.

In this time, when the weak dollar policy is king, you are experiencing the equal and opposite reaction -- the time when the real is king.

What was then is no longer now. And what is now defines the opposite.

It is not difficult to understand what to do next.

Simply realize that nature has its cycles despite the best laid plans of man.

Go with the flow, not the propaganda.

Gold will carry you through.

Please accept a pronounced tip of the hat and a sincere thank you to all the knights in this castle, both past and present, active and retired. I am most thankful for the knowledge and wisdom that has been so freely shared within the electronic walls of this mighty fortress.

My post is prompted by the hope that this knightly fellowship might be kind enough to consider a few questions about "foreign exchange reserves."

How is it that nations "hold" what is called foreign exchange reserves? Do they stack paper currency in thousands of warehoused pallets or do they deposit electronic digits into the invisible world of modern banking computers? Or do they do a bit of both?

Is gold a foreign exchange reserve or something altogether different? And, where are most nations' reserves of gold bars physically stored? Are the vaults in London, Switzerland, and the USA stuffed with the gold of the "lesser" nations?

In any case, how does a nation actually acquire foreign exchange reserves? Being a simple pilgrim, I thought world trade was handled primarily by private corporations -- how do transactions between private entities result in additions to a nation's' reserves? Or is it only so with regard to those nations (like China and Russia) where the nation (or should I say "government"?) appears to own the corporations which do the deals?

Whew!! That's it! Thanks for your indulgence and I take my leave!

Thank you Noble1 and hope you enjoy future episodes. As before I want to say that it is not just my story. It is OUR STORY. Eventhough I have not mentioned everyone, you are still part of the story. There would have been none without all who post here at USAGOLD. And no forum without our host USAGOLD.
Thank you all at USAGOLD/CPM for all you have provided.
May you all enjoy the story as I endeaver to provide some entertainment along the Golden Trail.
Slingshot---<><><>

Love the story. Appreciate being a character in the play. Many thanks. The knights have much to overcome. But dealing with the threat is part and parcel of our character.

http://cbs.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B41604753%2D25CC%2D45E0%2D956C%2DF51CE72E052D%7D&symbol=Gold grinds in | Peter Brimelow | MarketWatch - 12:01 AM, Monday, 05/15/06

http://observer.guardian.co.uk/business/story/0,,1774162,00.htmlThe International Monetary Fund is in behind-the-scenes talks with the US, China and other major powers to arrange a series of top-level meetings about tackling imbalances in the global economy, as the dollar sell-off reverberates through financial markets.
==
From Sunday's Observer
Sorry if posted before

Banks face huge losses in the commodity mayhem,and what happens a few days later?The stuff gets crushed at an unusual time,at the same second.

Anyone still against FreeGold??

How does the increase in gold price affect hedged positions and how would this affect earnings?

So was that the gold $688 and silver $13.40 correction we were all expecting? Was that it? Or are we going to have a really good stomach at the back of the throat plunge downwards?

what was the reason for the gold price decrease?

If they were hedged at $500/Oz ie: some time ago they locked in a forward sale to deliver Gold today @ the (then) Spot of $480 plus $20 time premium based on Interest Rates. They would have sacrificed the difference between actual PoG increase and a pre-determined calculated increase based on IR's.

The current downdraft is largely a function of dematerialising Gold through the same IR and DX mechanism FWIW...a practice the world by and large has had it's fill with.

This is a healthy pullback that happens in all bull markets. Take the opportunity to top up your holdings in the next week or so.(or maybe longer!)
Take a look at the 1980 gold charts...........been there done that! I have been charting gold since 1961 so I am quite relaxed.

G'day Gindex...............I can tell you that gold hedging has already accounted for one prominant Australian gold mine and has caused acute sickness in another. I am surprised how Barrick manages to survive with their huge hedge book. Their management must be very very worried.

So, what do you think abt AngloGold Ashanti's hedge book. Covers circa 35% of production. How will the increase in gold price affect them. That is equal to a huge loss position. Already the hedge position as at Dec '05 was negative USD1.94bn.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-05-15T063249Z_01_ALL523557_RTRIDST_0_OZABS-MARKETS-PRECIOUS-20060515.XMLSNIP
SINGAPORE (Reuters) - Gold firmed on Monday after the dollar sank to its lowest level in a year against the euro
==
8:30 GMT was an hour or an hour and a half before the London opening.
Wad is ze probleme?
You worried about dollar?

Silver $13.10. I've backed up the truck....let me know when you're ready to go!!!!

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

Note from Gandalf ---- This is the RICHEST USAGOLD Forum "PRICE of GOLD" GUESSING CONTEST in HISTORY, as prizes offered are NOTHING BUT --- GOLD coins !!

We shall have a price guessing contest on the closing (Settlement price) of GOLD for the June, 2006 COMEX contract (GCM06) on Wednesday, May 24, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Saturday, May 20, 2006, AND ALL ENTRIES must answer SIR MK's QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a pre-1933, (therefore, NOT a "restrike" coin), uncirculated Mexican 20 Peso GOLDPIECE, showing the Aztec Calendar, which contains Actual Gold Content of 0.4823 fine ozs. of GOLD. These are spectacular coins!!!

There will be also be two runners-up prizes for the next closest prognostications --- each winning a prize of a Mexican 5 Peso Goldpiece, which contains Actual Gold Content of 0.1205 fine ozs. of GOLD.

The QUESTION -- <;-) -- (Put on your THINKING HATS !)

SIR MK says;

We all know by now, that gold is "on a roll", and those who have been involved
in this market for a number of years, have enjoyed every tick higher. Every
bull market has had its flex point -- the event or combination of events that
turned the market toward a primary bull trend for the long run. To your way
of thinking, what was that event, or series of events, and how high to do you
think gold can go, over the long run?

---
NOTICE to all LURKERS and NEWBIES ! Time to ask the Towncrier for your posting PASSWORD, so that you may enter !! DO IT NOW ! <;-)


===

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

1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active)
June 2006 Gold Contract (GCM06) on the date of Wednesday, May 24, 2006.

2) (NEW Rule) IF, any ties occur, the prize winner shall be determined by the earliest entry, which shall win the prize.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $700.0)

4) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $700.0 $$$$$$$ )

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

6) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on:
Saturday, May 20, 2006.

7) AND MOST IMPORTANTLY (as this part MUST accompany the Price prognostication)
--- In order for your entry to be valid, entries will need to have a 30 word (or more) paragraph discussing;
"THE QUESTION" <===== NOTE !!!
---
LET the CONTEST continue !
<;-)

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

OFFICIAL CONTEST ENTRY LISTINGS
----

$$$ $8,752.0 $$$ The Invisible Hand (5/9/06; 19:15:18MT - usagold.com msg#: 144013)

$$$$ $892.2 $$$$ jorgito (5/13/06; 13:14:37MT - usagold.com msg#: 144154)

$$$$ $887.5 $$$$ goldpuppy (5/10/06; 04:04:54MT - usagold.com msg#: 144033)

$$$$ $855.0 $$$$ Caradoc (5/13/06; 22:54:32MT - usagold.com msg#: 144164)

$$$$ $829.5 $$$$ White Hills (5/9/06; 19:37:57MT - usagold.com msg#: 144016)

$$$$ $818.0 $$$$ bouncer (5/11/06; 17:29:28MT - usagold.com msg#: 144098)

$$$$ $812.0 $$$$ Federal_Reserves (5/10/06; 17:08:01MT - usagold.com msg#: 144053)

$$$$ $799.9 $$$$ Thoreauly (5/11/06; 10:36:56MT - usagold.com msg#: 144083)

$$$$ $788.1 $$$$ Midas Man (5/11/06; 11:03:56MT - usagold.com msg#: 144084)

$$$$ $777,7 $$$$ Shanti (5/11/06; 17:22:22MT - usagold.com msg#: 144097)

$$$$ $769.0 $$$$ Wonko (5/11/06; 19:51:32MT - usagold.com msg#: 144102)

$$$$ $762.4 $$$$ Briale (5/11/06; 11:05:04MT - usagold.com msg#: 144085)

$$$$ $749.0 $$$$ Henri (5/13/06; 10:02:17MT - usagold.com msg#: 144147)

$$$$ $745.0 $$$$ Goldilox (5/13/06; 14:32:14MT - usagold.com msg#: 144156)

$$$$ $743.5 $$$$ Beamer (5/11/06; 01:52:15MT - usagold.com msg#: 144070)

$$$$ $737.5 $$$$ Stoney Rivers (5/13/06; 12:05:21MT - usagold.com msg#: 144152)

$$$$ $734.0 $$$$ Freedom (5/10/06; 09:42:01MT - usagold.com msg#: 144035)

$$$$ $729.5 $$$$ Tate (5/9/06; 20:48:18MT - usagold.com msg#: 144021)

$$$$ $724.5 $$$$ balzac (5/11/06; 23:03:22MT - usagold.com msg#: 144110)

$$$$ $723.6 $$$$ solosza (5/9/06; 14:49:56MT - usagold.com msg#: 144000)

$$$$ $714.9 $$$$ Rustee (5/9/06; 16:49:53MT - usagold.com msg#: 144003)

$$$$ $711.0 $$$$ mdgc (5/9/06; 02:34:37MT - usagold.com msg#: 143985)

$$$$ $697.0 $$$$ Sundeck (5/8/06; 23:44:03MT - usagold.com msg#: 143983)

$$$$ $674.0 $$$$ Cytek (5/13/06; 10:19:42MT - usagold.com msg#: 144148)

$$$$ $666.6 $$$$ Liberty Head (5/8/06; 23:35:29MT - usagold.com msg#: 143982)

$$$$ $652.5 $$$$ PAK (5/9/06; 18:18:47MT - usagold.com msg#: 144012)

$$$$ $646.5 $$$$ Topaz (5/9/06; 00:07:00MT - usagold.com msg#: 143984)

===
<;-)

IN CASE a number of readers missed these postings from LATE LAST NIGHT --- Sirs Contrarian and Armageddon had it NAILED ---
Helicopter Ben and the Banksters did their job ! BUT, this can not happen EVERY DAY !!!!
<;-)
===

Armageddon (5/14/06; 15:21:35MT - usagold.com msg#: 144176)
Bernanke's Test Has Arrived?
http://www.safehaven.com/article-5148.htm
This article was the one that showed that the Nasdaq is behaving like 1987 before the crash that I mentioned in my previous post.

Armageddon (5/14/06; 13:57:46MT - usagold.com msg#: 144175)
@contrarian - You got a point there. :)
I guess it would also depend on how big the panic is. If it is widespread and also involving foreign central banks then Helicoper Ben may need "trillions" to prop up the markets.

Either way inflation will be certain.

contrarian (5/14/06; 12:42:40MT - usagold.com msg#: 144174)
Black Monday
Armageddon--
I wouldn't be so sure! Imagine the deafening sound of helicopter rotors at 10,000 rpm. Imagine a pyroclastic cloud of billions and billions of paper notes, engulfing anything in its path. Imagine light fiber communication lines to the Caribbean melting. Imagine computer terminals brightly illumined with flashing buy signals like Broadway marquees. Imagine the glorious hosannas of a multitude of just us folks as the markets miraculously rebound and salvation is assured. Imagine Ben Bernanke descending in a cloud of glory!

I think the only thing that will collapse the stock market is a dollar crash. I used to think that the SM had a conventional life of its own, but lately it's become entirely obvious that SM is managed, irrespective of what a female pundit from Bloomberg might say (but look at who pads her pocketbook), but when the dollar collapse happens, it will make any monetary management tools entirely impotent, like trying to kill an elephant with a pebble--and maybe actually will make the SM crash worse I think. But again, after and only AFTER the dollar collapse. We shall see!

http://www.latimes.com/news/printedition/la-sci-observatory14may14,0,4623612.storyMore evidence that our civilization has been preceded by advanced civilizations that predate our own sociolological origins. . . just the kind of evidence that can erode faith in the main premises of "divine right of rule" touted by the world's "royal families" and theocracies.

It also lends support to the theories of the cataclysmists, something gaining more ground in the "rather shaky" realm of modern archeology.

Add this to the list of things that inspire gold acquisition in "troubled times."

Looks like PPT have averted the Dow crash, as it's now up 8 points. Brilliantly executed! Dollar up, stocks up, gold down, isn't it a beautiful day! But keep your umbrella and raincoat handy. Storm clouds still brewing!

If anyone comes across a current article that graphically demonstrates how ETF holdings spike on every major sell off, can they post it here? Please. I remember reading an article a few months back that showed clearly how ETFs snatched up gold during every correction cycle. One would expect with the ride that we're taking today that they would once again give them the opportunity to pile it on (and deep).

For some reason, I've come to believe that there might be a correlation between correction cycles and periods of time when really bad news is scheduled to come out about the US economy. It's as if the escape route is being managed at just the right time thus making everyone looking for an exit to question gold as the correct place to be. Well, the fundamentals driving the exodus into gold have not changed. Gold is a great place to be. If one reviews the big picture, one might conclude that this is a great opportunity to acquire physical (IMHO).

Another interesting concept is that if TPTB really are managing the stock and bond markets in order to prevent the *perceived* exit of capital, the only way they can really do this is to add liquidity as the buyer in the market that they are supporting and as a seller in the market that they are discouraging. Thus, two things happen 1) more money is pumped into the failing market that preserves capital for those that exit and 2) those that have already decided to leave that market are finding their way into their destination markets at a discount. This is a deadly combination of actions. It basically empowers those that have already committed to changing markets by maintaining their capital as they exit one market while also giving them a buying opportunity as they enter the next market.

Maybe the players are demanding a return of their gold deposits...

IMF an organization the world looks to for help in a crisis?

Ha Ha Ha Ha Ha ROTFLMAO

In answering Mr. K's question, much depends on interpretation of "long run". My answer will assume "long run" means 50 years or more, in either direction.
So I can go back to the early 1970's when the pressure of war funding finally induced President Nixon to repudiate US exchange of gold for dollars in international payments. When that happened, gold was destined to rise.
How far it will rise depends on whether the US dollar will survive. To survive, it at some point will have to be at least indirectly tied to gold. My guess is that it will be tied to gold at some point, but that connection will be temporary, and at some point the dollar will go the way of all fiat currencies.
How rapidly that will occur, I cannot know. But for the purpose of this contest I will say $1,000,000 per ounce.

My guess of $550 for May 24 is based on my guess that the PTB has a long-standing agenda to ruin paper gold longs, and that their power is such that in the short term, for limited times, they can control the market. My suspicion is that this is another time when the longs are going to be driven out of their positions because the drop will be greater and longer than rational people will credit beforehand.

http://www.thestreet.com/_more/markets/metals/10285605.htmlGold Finally Gets Selloff - Nick Godt - The Street.com - 05/15/06 Snippits: "An early trigger of metals weakness on Monday was a rebound in the dollar after news that foreign investors had bought enough U.S. stocks and bonds in March to cover the soaring current account deficit. In addition, the Bank of Japan, concerned that a stronger yen might derail Japan's economic recovery, hinted that it might postpone plans to raise interest rates."

Along these lines, Nell Sloane of NSFFutures mentions that gold was "technically overbought", but doesn't expect the dollar to keep gold down unless it undergoes a string of increases. But the fundamentals and technicals argue otherwise -the dollar would have to reverse it's recent technical breakdown and long-term would need to correct the triple deficits, an impossible feat without a CB gold mark to market reserve backing and balanced budget policies in place. Also gold is rising in all currencies, whether or not the dollar rises or falls. Enough
liquidity and inflation and imbalances exist in the system,
plus exponential daily increases to drive gold demand(foreign central banks, global investors, pension funds, hedge funds and large money center investment banks)

"Meanwhile, a report in Monday's Wall Street Journal says that Treasury Secretary John Snow and the Bush administration are "quietly acquiescing" to dollar weakness as a way of boosting the sale of U.S goods. The report, which cites people familiar with the administration's thinking, says officials don't want to attract attention to their stance to avoid a plunge in the greenback."

It's hardly "all in the greenback", but the wasting away of fiat figures prominently in the generational, cyclical appeal of gold. More and more new powers given to "manage exchange rates" have balloned beyond the
Fed, the Treasury, the Banks of Japan and England etc. to the ESF(Exchange Stabilization Fund)to the IMF and World Bank and associated global coordinating teams.

http://www.thestreet.com/_more/markets/metals/10285605.htmlGold, silver start to lose their luster - Reuters - May 15, 2006 Snippits: "This was caused by the falls on Wall Street [equities] last week. Now we've got a good old shake-out taking place, but it is just blowing the froth off it," an investment fund source said."
Despite the misleading insinuation in the title, this article contains some balanced reporting. Also doesn't mention some of the rumors that helped trigger the selloff, or the relatively small number of speculators in the market, but several goodies and a grudging admission that the bull is young.

"Traders said investment funds, which have been the drivers behind a two-year commodity-wide bull market, were uniformly selling on Monday.
Price falls took place in a jittery atmosphere, where talk swirled of some trading firms having suffered heavy financial losses in recent weeks, caused by heightened volatility and increased margin calls.
"You will get this sort of thing when markets are neurotic -- and people think there is no smoke without fire," the fund source added."

http://money.cnn.com/2006/05/15/markets/precious.reut/index.htmHere's link to Reuters story

From CNN Money's Website:

-----------------------------------------------------------
The two-headed monster under the bed
Economists say investors are right to be worried about the economy, but they don't agree on what the worry should be - slower growth or higher prices.
By Chris Isidore, CNNMoney.com senior writer
May 15, 2006: 12:53 PM EDT

NEW YORK (CNNMoney.com) - Economists agree there are worrying signs about the U.S. economy. What they don't agree on is what should be the major worry.

Some economists are pointing to signs of inflation ahead of this week's Producer Price Index and Consumer Price Index reports.

They point to factors such as wage growth outpacing prices in the most recent employment report, and a weakening dollar as an underlying inflationary pressure beyond the impact of high energy prices. And they say those factors are raising concerns that the Federal Reserve will continue to raise rates at its June meeting and perhaps beyond.

"I think the markets are finally realizing that inflation is in them thar hills and the Fed will have to continue to tap on the brakes," said Rich Yamarone, director of economic research at Argus Research. He's looking for a 0.7 percent rise in the CPI in April, and a 0.3 percent increase in the so-called core CPI, which excludes volatile food and energy prices; both estimates are above the consensus increase of 0.5 percent for CPI and 0.2 percent for the core.

Yamarone said that a dollar weakening compared to the yen and the euro, as well as the Chinese yuan, can only add to the inflationary pressure.

"We haven't seen that yet, but we should be expecting to be importing higher inflation," he said.

But others point to factors such as weaker-than-expected retail sales, lower-than-expected retail employment levels and a sharp drop in consumer confidence in the most recent reports as signs that it's a slowing economy, not inflation, that is the biggest concern for investors.

"Right now the focus of the whole world is the U.S. consumer," said Drew Matus, senior economist with Lehman Brothers. "If the consumers roll over, the Fed will have to react."
Housing concerns

Some of those economists point to the slowing U.S. housing market as one of the factors that will put a brake on the economy and consumer spending. The National Association of Realtors reported a drop in median home prices in the first quarter from the fourth quarter, although they were still up year over year.

Generally, inflationary pressure and a slowing economy are not problems that exist at the same time. Strong economic growth creates increased demand for goods, while slowing growth cuts that demand.

Even the economists focusing on a slowdown acknowledge that price pressures need to be watched.

"I think the market knows these inflation jitters came as a result of faster economic growth," said Anthony Chan, chief economist for JPMorgan Private Client Services.

And even the economists who are worried about prices acknowledge there will be slower growth ahead, they just see it being strong enough to support prices.

The combination of rising inflationary pressure and slower growth can lead to a condition known as "stagflation." But most economists say that even with the current concerns, it's too soon to worry about stagflation, or even a milder form dubbed "stagflation light."

"Trend-like economic growth and 2.2 percent (annual) core inflation is very difficult to call stagflation," said Jason Schenker, economist with Wachovia.

One thing that economists agree is that the April and May inflation readings will be particularly important to the Fed and the markets ahead of the June 28-29 meeting.

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

A slowing of growth in the U.S. will lead to a declining dollar which will add to inflation because alot of manufactured goods and even services are made overseas. This inflation will slow growth further in the United States because the consumers money will not be able to buy as much thus weakening the U.S. economy further which will weaken the dollar further in a vicious cycle. Hyper Stagflation anyone? Hmm. never think you could see 50% inflation and 50% unemployment at the same time in America? I can see George W. Bush right now on TV saying that "Who would have known this would happen?" I hope gold goes to $100 an ounce so I load up on it. I probably would even get a second or third job to earn extra money to buy $100 an ounce gold. :) When the hyperinflation starts and a loaf of bread is $100 then I will sell my $100 ounce of gold to get a few loaves of bread then.

http://news.ft.com/cms/s/6c7d1b50-e3ef-11da-8ced-0000779e2340.htmlCommodities slump on demand jitters
By Neil Dennis - Financial Times - Published: May 15 2006 09:48 | Last updated: May 15 2006 09:48 Snippits:
"Prices for crude oil, industrial and precious metals all retreated sharply from near-record levels on Monday over fears that soaring prices may soften demand."
[Further evidence of the change in gold market to one of utmost importance is the coordinated movements in all markets, with some up, some down. And big money is made by officially sanctioned market "enforcers". ]

"On Friday, the International Energy Agency said the long run of soaring prices was likely to hit consumption and it cut its global oil demand growth forecast for 2006. The IEA said it now expected average daily demand of 84.8m barrels, down from its previous forecast of 85.1m. Also on Friday, Michigan University said its measure of consumer confidence fell to lows not seen since September, when Hurricane Katrina hit the US, due to near record gasoline prices.
Meanwhile on Monday, Ali al-Naimi, Saudi Arabia's oil minister said expansions in capacity from the Organisation of the Petroleum Exporting Countries may lead to supply outpacing demand."
[Commodities including oil are being buffeted from all directions as the winds of change were long in the making.]

Jim Sinclair this morning commented on the major gold-bullish Treasury inflows data released today. I will post some of it after this, related analysis from gold-eagle.com forum:

"Tic, Tic, Tic, Tic, Tic, ......
(SeattleSun) May 15, 11:28
...net foreign purchases of long term securities
were $69.8 billion according to Treasury Dept TIC released(this) morning. Consensus was $79.9 billion, more importantly foreign central banks only accounted for 1.7% of net inflows. Japan actually SOLD about $18 billion as their net holding fell from %658.3 billion in February to $640.1 billion in March."

We've seen how Asia's securities purchases have been falling off over the last year and now FOREIGN CB's as a whole appear to have joined in big time.

http://www.jsmineset.comJim Sinclair's morning comments on
the major gold-bullish Treasury inflows data released today:
"You have not seen the top in gold by a long shot. This is only the beginning of how ferocious the gold market will get.
The TIC report came out today. For the first time in 6 months central banks are net sellers of US treasuries. That is an event that will significantly impact the US dollar on a second occurrence and create new lows on a third consecutive repeat.
The importance of the TIC report is that a deceleration of buying US treasuries is serious in itself, but net selling is a fundamental weakness of the dollar that condemns any technical rally.
The gold price has fully rejoined the dollar so unless some magic can be done to make the markets forget today's TIC report this reaction could easily be just a fierce knee jerk event caused by the action funds, the original bulls in a China shop."
[Sinclair correctly sees volatility as a feature of this bull market and the dollar at a significant milestone (among many) whose market interactions can work in a viscious cycle with other markets including gold. His
noting that "action funds" are "the original bulls in a China shop" accurately identifies the predicament they've
created for themselves.]

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?section=news≠ws_id=dji-00034720060515&feed=dji&date=20060515&cat=INDUSTRYsnip:

LONDON -(Dow Jones)- The gold market was in a 75-metric-ton deficit during the first quarter of 2006 due to an unexpectedly high volume of dehedging by Barrick Gold Corp. (ABX) (ABX), consultancy Virtual Metals said Monday.

Total identifiable supply, an amalgamation of mine supply, scrap recycling, hedging and central bank sales, stood at 991 tons while demand amounted to 1,066 tons.

This includes jewelry demand, legal tender coins, electronics, demand from exchange traded funds, central bank purchases and de-hedging.

This figure doesn't include the "strong yet immeasurable investment demand known to have occurred," Virtual Metals said.

"With the investment buying into a deficit physical market, it is not surprising that the price has exhibited such runaway strength," Virtual Metals said.

Barrick cut its hedge book by 4.7 million ounces, or 23%, during the first quarter, the largest single reduction in hedging on record.

In physical demand, Indian imports were currently showing some recovery off the lows of November, December and January, Virtual Metals said.

"This is possibly a sign that these market participants are growing accustomed to higher prices. If this is the case, it augurs well for the market, suggesting that the floor for the gold price might be at higher levels than the $500-$550 range we had previously been suggesting," it said.

-Goldilox

Gold bull over? Not hardly!

May and June futures in copper today appear to have filled the gap up of the latest trading sessions paving the way for another leg upward...or a confirmatory plunge in the metal. Shills have pointed out that demand for copper piping/tubing is being replaced by PVC and had pointed out that this was a factor in recently alleged run of copper against fundamentals.

What is not mentioned is the billion miles of copper wire needed to electrify rural china. Do ya think this may be a factor?

Electrifying China would probably be the wrong way to put it. Much of the electrical power system is aluminum, except maybe until you get into the house, and I doubt there's a mile of cable in one house.
Copper is still the last mile in the communications field though, so there will definitely be demand for it there. Probably more demand for communications than for power purposes, given the importance of communications in this globalized world. Then again, the field of communication is moving to wireless, eliminating the need for copper. It's hard to say where the demand will come from, but that it will come is a good bet.
Jay

The typical new vehicle consumes some 20 kilos of copper��..tosters, radios, electronic motors, microwave systems�.ect�..metals will continue to soar��..silver moon flights anyone?????

The industrial world consumes between 10 and 20 kilograms of copper per person, ten times more than the developing world.

But consumption could increase. The 137 million coimputers a year of 2000 will become 220 million in 2005, which will use 550 thousand tons of copper. Cell phones will go from 405 to 926 million units, containing 720 million tons of copper.

Will there be enough copper to meet the the demands of the future?

Precious and demand ......

The most recent inflection point, I believe, was the implementation of the "American Jobs Creation Act". The world saw the results--few if any jobs created. Instead the money was used for mergers, acquisitions, stock buy-backs. So what does that do to the creditability of large corportions and to the Government that passes a "Jobs Creation Act" that creates no jobs? I believe it continued to erode whatever faith was left in the American system of Government and business.

Words mean nothing. The "money" that backs these words, by association, means nothing. Gold never says anything---but it "speaks" the truth. The world is re-discovering this age old fact.