What's going on? Pretty big drops 2 days in a row now.

....In the next several months (6) The Dow drops more than 20%? Will the POG go down with it or up to my wish of 900?

From what I see the market will follow history and many of the others on a down march.....

Or is it strictly pegged to the $ up's and down's?

Just have this gut feeling and maybe some of you do to?

BUY BUY!! (GOLD)

Way off topic.

http://www.nytimes.com/2006/06/01/business/worldbusiness/01oil.html?th&emc=thInteresting article from the NYT on Venezuela's heavy oil "sludge" reserves in the Orinoco Belt...possibly up to 235 billion barrels recoverable....comparable with Saudi Arabia....and there is lots of interest from the big boys!

:-)

http://www.bloomberg.com/apps/news?pid=10000080&sid=aV75beK4jSeQFrom Bloomberg News Service
Thursday, June 1, 2006

China should use its foreign-currency reserves, the world's largest, to buy gold and oil as a hedge to guard against the risk of a sudden drop in the U.S. dollar, said an adviser on the central bank's 13-member policy board.

The country has 1 percent of its reserves in gold, compared with more than 70 percent in the U.S., and rising demand may add to gains in the metal that pushed prices to a 26-year high in May. Booming exports and investment doubled Chinese reserves to $819 billion in the past two years, with economists estimating more than two-thirds of the cash went into U.S. Treasuries.

"China has more than enough foreign-exchange reserves," said Yu Yongding, who advises on policy as a committee member of the People's Bank of China. "While they cannot be reduced sharply all at once, China has decided to take measures to curb their growth rate and diversify investment of its reserves."

The central bank would likely use new reserves to diversify away from the dollar and into other assets, rather than shifting current holdings, he said in an interview in Beijing on May 26. China is the second-largest foreign investor in U.S. Treasuries.

"We don't want to cause dramatic fluctuations in the foreign-exchange and securities markets," said Yu, who is also the director of the Institute of World Economics & Politics at the city's Chinese Academy of Social Sciences.

China last year attracted more than $60 billion of foreign direct investment, while its trade surplus tripled to a record $102 billion in the world's fastest growing major economy.

The country's foreign-exchange holdings as of March 31 surged to $875.1 billion, up more than $50 billion from end-2005 and overtaking those of Japan as the world's biggest.

"Central banks will use gold as a fourth currency instead of the dollar, euro, and yen" to hedge exchange-rate risk, said George Kapasakis, a senior foreign-exchange trader at Mizuho Corporate Bank in Sydney. "Gold will be underpinned."

China should follow Singapore's lead in setting up a body to manage its reserves, said Yu, who spent three months there for a "private" visit from last December, including a "personal exchange" with friends at the island's central bank.

Government of Singapore Investment Corp., which handles more than $100 billion of the city-state's reserves, says it invests worldwide in equities, fixed-income and money-market securities. It has about 10 percent of its funds in property.

"China needs to establish a separate body to oversee and invest the reserves to seek higher returns and to avoid losses in case of a big depreciation in the U.S. dollar," Yu said. "We need to use some of the reserves to buy other assets such as gold and strategic resources such as oil."

Gold has rallied about 25 percent this year, reaching $732 an ounce on May 12, the highest in 26 years.

Foreign reserves have risen in Asia partly because central banks in countries such as China, Korea, and Taiwan buy dollars to keep exchange rates stable and protect exporters. The three economies are among the world's top five holders of reserves.

Finance ministers from the Group of Seven nations said in Washington April 21 that it is "critical" for governments in Asia, and particularly China, to let their currencies appreciate to reduce trade imbalances that threaten global economic growth.

Yu said his government will buy fewer dollars and reduce its influence over the exchange rate as Chinese exporters learn to cope with a stronger yuan.

"I think that China's export enterprises are more resilient than we expected; they will become even more resilient," he said. "Then the government will intervene less to allow the exchange rate to be decided more by the market."

The central bank yesterday said in its quarterly policy statement it will start to withdraw from the currency market, reducing the "frequency and strength" of its actions. U.S. lawmakers accuse China of artificially weakening the yuan to fuel an export boom that has expanded the U.S. trade deficit with the Asian country to a record for five straight years.

The yuan today rose to 8.0205 per dollar as of 3:30 p.m. in Shanghai, from 8.0215 yesterday, according to Bloomberg data.

"Yu's comments echo statements in the last monetary policy report that the People's Bank of China should change its way of thinking and adopt an innovative approach to achieve a balanced external account," Qing Wang, a currency strategist at Bank of America, said in Hong Kong. "They will adopt further measures to facilitate outflows and ease appreciation pressure."

The People's Bank of China sets daily reference rates for trading around which its currency is allowed to move, buying and selling the yuan to keep its value stable.

The Chinese government this year has allowed individuals and companies to increase investments abroad, and to keep a greater proportion of their foreign-exchange earnings overseas. The U.S. trade deficit with China reached $201.6 billion in 2005.

I bought some Au yesterday, happy to see the price had dipped $10. But since then, it's gone down another $20. Guess it's just an opportunity to buy even more at a good price! :-)

I'm debating moving our IRA's to Sterling's PM-based one. I want to ask what's probably a stupid question in this company! But do you see ANY possibility these declines will continue and gold may have peaked for awhile? If we're headed back to $500 or something, then I should probably wait on the IRA--or even not do it. There are no factual signs, are there, which would support no further increases in price? (I know there are plenty of signs which would suggest the opposite.)

This is kind of critical for us, so any comments will be appreciated!

The above is just my gut instinct of several weeks, corroborated by the Fed's noises and the falling POG in almost all currencies, not just the US dollar. A friend advises Bill Murphy is saying the same thing on his site. At some point, some non-compliant CB or government or big holder will counterattack.

What I don't understand: In the long run, these antics backfire. Why not let the POG do its thing, and use the natural gold price feedback accordingly. Works better in the long run.

First off: big props for Sir George at the castle and the gold IRA; very professional and sound investment (savings) advice.

Theory on recent gold price: Gold has a history of being "quiet" during the summer months. Perhaps there are some very large (and exposed) miners and bullion banks who are desperately trying to force the price of gold as low as possible before this "quiet period" begins. This would give them approximately three months to unwind some serious hedge overhang at prices of a more palatable (if not quite tasty) level. After all, when you are talking about millions of ounces, every $1 counts!

To borrow a well-worn phrase: "Just my $0.04 (inflation adjusted)

spikedog

http://www.safehaven.com/article-5276.htmYou might want to do as I do and, along with this forum, make the Financial Sense and Safe Haven websites part of your daily fare. The above link is from the latter and doesn't mince any words about what's to come.

The bottom line is that the suspension of economic reality -- i.e., the most massive fraud in human history -- is coming to an end and that when it does, gold will reclaim its rightful place in the scheme of things.

No matter, then, what price you buy gold at, as it is grossly undervalued and is destined to rise by many multiples of its present price.

So let this be your mantra:

Bye-bye, dollar,
Buy, buy gold,
Not to sell it,
Just to hold
Until it's money
Once again,
(just as it
has always been).

If the economy slows, as it might with a tired over indebted consumer, sluggish wage growth and high gasoline prices, then demand for all metals, including gold may decline. Prices for many metals are so high now, that even a small decline in demand might knock 35% off prices.

If interest rates rise any further, and they may, to defend the dollar, to cool off the economy, to pretend the fed cares about the value of the dollar, then this will pressure commodities, investment values including stocks. This will pressure the overextended consumer which again will reduce demand for metals, which are at such high prices.

The government deficit, the trade deficit and the unfunded medicare, social security and other deficits will continue to support the debasement of the dollar in the long run. But gold could easily revisit $500 before it reaches $2000.

So dollar average in.

Looking at the last few months, we have in play all of the fundamental factors that brought gold past the $500 and $600 thresholds. On top of that, we have sabre rattling over Iran along with oil prices that are kept high thanks to various pockets of unrest around the planet.

Iran and high oil prices have attracted much speculation in gold. With speculation comes weak hands that have no real commitment to gold as a long term holding. It was inevitable that such speculative froth would give way in the absence of an Iran invasion or some other debacle. This probably accounts for the recent swing from $600 to $700 and back again.

For the moment, the 'official sector' does not need to attack gold; they can save their gold bullets for another time.

There is good news in all of this: First, we have had a first hand look at how quickly the gold price can and will react to factors of unrest on the planet. Also, the correction provides a buying opportunity.

Gold: Get you some.

- Survivor

What effect could something like this have on gold?

http://www.mercola.com/2006/may/30/imagine_using_water_instead_of_gas_in_your_car.htm

At that site touch on "fascinating video". A websearch using the words - imagine using water for gas - will also bring info. up.

I realize that new technology often takes a while to become reality for the consumer. And also it is often quite costly when it first arrives. I just wondered if this could alter gold's future in any way.

Please forgive me if this isn't a very earthshaking post. I keep reading as I have time... but world markets and the language and forces involved often elude me. My world is currently filled to the brim with being mom.

OT - the Mercola site above has a really excellent search engine for health issues. Keep the goldbugs healthy! :)

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

@ Titan,

If I could answer that question, I would be playing the shorts myself, which I am not!

As we saw earlier in the year, when POG decides to turn against the shorts, it does so with a vengence, so "market timing" is one of the most difficult arts to predict.

Every time I try to optimize a high or low, I end up "blinking" and missig a big move one way or the other. It's darn near impossible.

Sinclair's methods of discerning trends are as good as any others I've seen.

http://www.telegraph.co.uk/money/main.jhtml;jsessionid=TIQ1ZLLAWWY2XQFIQMFSFF4AVCBQ0IV0?xml=/money/2006/05/31/cnotmar31.xml"Otmar Issing, Europe's high priest of monetary orthodoxy, has confessed that the euro was launched on flawed foundations and is now threatened by "big tensions" between north and south."

http://www.globalresearch.ca/index.php?context=viewArticle&code=KIM20060521&articleId=2486snip:

The announcement by President Putin of a Russian bourse trading oil and gas in Roubles threatens the stability of the US Dollar far more than Iran's bourse alone would do, and continues the slide in relations between the old Cold War foes.

In his annual State of the Nation address to both houses of parliament on 10 May 2006, Novosti reports President Putin said that work on making the Rouble an internationally convertible currency would be completed by 1 July 2006, six months ahead of schedule. To promote the currency, he announced that an oil and gas stock exchange will be created in Russia, that would trade in Roubles.

"The rouble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in roubles." - Putin

Russia's oil exports represent 15.2% of the world's export trade in oil, making it a much more significant player than Iran, with 5.8% of export volumes. Russia also produces 25.8% of the world's gas exports, while Iran is still only entering this market as an exporter.

GlobeAndMail.com is reporting that President Chavez of Venezuela is considering following Iran's move towards pricing oil in Euros. Venezuela has 5.4% of the export market, although since the bulk of his country's exports are of heavy oil to the US, where it needs special facilities to process it, it would be a very brave or foolhardy President that told the US to buy its oil in Euros, or else ... Nevertheless, you can see the attraction for any country wanting to apply some pressure on the world's superpower. And where Venezuela leads, Bolivia may not be far behind. You can see how this could quickly get out of control.

While the Iranians have been suffering numerous delays in implementing their bourse, Russia could have their oil market up and running almost as soon as their currency market is ready to take on the work load, which might only be a few months away.

Some commentators on the Iranian proposal have suggested that the impact on the US Dollar would not be so great because the greenback is used for all sorts of trade, not just oil, so 5.8% of the international oil trade is really only a small part of the bigger picture. This argument looks a bit weak if both Russia and Iran will be lowering the demand for Dollars to buy oil and gas.

In order to counter the reduced demand for US Dollars, the standard control lever available to the Federal Reserve is to increase interest rates, over and above what it was going to be doing. This has the usual unwelcome consequences of dampening the US economy, and squeezing people with mortgages, which in turn leads to rising wages, falling house prices and a slump in the construction industry.

At the same time, lower demand for Dollars will weaken its conversion rate, making imports more expensive. With rising wages, fuel bills and debt-servicing feeding through into prices for home-produced goods, the stage is set for either an inflationary spiral or a recession. In the short term, the inflationary route always looks to be the less painful, but it can only lead eventually to a crisis of confidence in US Dollars, when traders abandon the paper and rush for the exit . . .

Meanwhile the world looks on, hoping that the great powers really know what they are doing, and that World War 3 won't start because of a subtle miscalculation in brinkmanship.

-Goldilox

"Full faith and credit"?

http://www.opednews.com/articles/opedne_mike_whi_060523_vladimir_putin_and_t.htmsnip:

"If one day the world's largest oil producers demanded euros for their barrels, it would be the financial equivalent of a nuclear strike". Bill O� Grady, A.G. Edwards


On May 10, Russian President Vladimir Putin ignited a firestorm that is bound to sweep across the global economy. In his State of the Nation speech to parliament,, he announced that Russia was planning to make the ruble "internationally convertible" so that it could be used in oil and natural gas transactions. Presently, oil is denominated exclusively in dollars and sold through the New York Mercantile Exchange (NYMX) or the London Petroleum Exchange (LPE) both owned by American investors. If Russia proceeds with its plan, the ruble will go nose to nose with the dollar on the open market sending several billions of surplus greenbacks back to the United States. This could potentially send the American economy into freefall; triggering a deep recession and an extended period of hyper-inflation.

"The ruble must become a more widespread means of international transactions," Putin said. "To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for in rubles."

Currently, the central banks around the world carry large stockpiles of dollars to use in their purchases of oil. This gives the US a virtual monopoly on oil transactions. It also forces reluctant nations to continue using the dollar even though it is currently underwritten by $8.4 trillion national debt.

Putin's plan is similar to that of Iran, which announced that it would open an oil-bourse (oil exchange) on Kish Island in two months. The bourse would allow oil transactions to be made in petro-euros, thus discarding the dollar. The Bush administration's belligerence has intensified considerably since Iran made its intentions clear. In fact, just yesterday, Secretary of State Condi Rice said that "security guarantees were not on the table" regardless of any Iranian commitment to stop enriching uranium. In other words, Washington will not provide Iran a "non-aggression pact" whether it follows UN Security Council guidelines or not.

Surely, this is a sign that Uncle Sam is on a fast-track to war.

The United States must protect its dollar-monopoly in the oil trade or it will lose the advantage of being the world's "reserve currency". As the reserve currency, the US can maintain its towering $8.4 trillion national debt and $800 billion trade deficit without fear of soaring interest rates or hyper-inflation. Trillions of greenbacks are constantly circulating in oil transactions just as hundreds of billions are stockpiled in foreign banks. In effect, the Federal Reserve is issuing bad checks with every dollar printed on the assumption that they will never reach the bank for collection. So far, they've been right, and as the price of oil continues to skyrocket, the Fed just keeps cheerily printing more worthless paper sending it to the 4 corners of the earth. Regrettably, if Russia or Iran goes ahead with their conversion plan, then the bad checks will flood back to their source and precipitate a meltdown.

America's economic supremacy depends entirely on its ability to compel nations to make their energy acquisitions in greenbacks. If the flaccid dollar is not linked to the world's most vital resource, then banks will dump it overnight. This extortion-racket is the system we are defending in Iraq, not "democracy". It is a huckster's scam designed to perpetuate American debt by forcing worthless currency on the developing world.

-Goldilox

Seems there is a lot of "gloom and doom" out and about concerning dollar hegemony.

By the way, watching a short piece on the National Spelling Bee, I was surprised that one of the words spelled was "hegemony". Must be them dang Commies infiltrating the re-education system again!

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

Gold and silver are getting their butts kicked today. Why? It's so that the gold suppression crowd can clear their hedge books of shorts because they know inflation is coming - a euphemism for the purchasing power of the US dollar is going to tank. Down comes the price and the big boys load up on the long side - just as I'm about to commit a few more declining value pieces of paper to PM's myself. I expect the dollar gains to be short-lived as the US doesn't make anything anymore except debt paper for export.
The Bush administration has appointed Henry Paulson of Goldman to head up Treasury. Why? Because he's a trader and may be able to string out the fall of the dollar to preserve some kind of order as the dollar collapses.

-Goldilox

Never fear, as US SecTreas, Dubya has picked a trader worthy of the robber barons that made off with Gazllions during the 1929-32 crashes. He'll save our bacon - NOT!

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

The PR barrage concerning Condi's proud offer to Iran has totally overshadowed Iran's answer, which happens to be "Stick It." The media is trying to convince any listener that Iran has not rejected the offer, and in fact will or has tacitly accepted it. The pounding of such statements would convince any market that what the US is willing to do is monumental and cannot be resisted by Iran. Meanwhile Iran repeats it's answer of "Stick It."

The dollar benefiting one day from interest rates going up flops the next day because they are not, only to rally the following day because they are. Fibonacci has become the battle ground as you can see from the posted chart.

Finally, the combination of Goldman Sachs� boss arriving at the Treasury and Super Hawk Professor Bernanke, regardless that no one can interpret a word he says, are the multiple white knights for an undefined something good.

Gold is going to and through $682, $887.50 and $1650. Right now it has a battle on its hands as black boxes go wild on the down tick as they did on the up tick.

-Goldilox

Anyone who thought riding the gold horse was anything but an "E-ticket" should be waking up about now.

http://www.stripes.com/article.asp?section=104&article=37591snip:

ARLINGTON, Va. � With Congress continuing to delay passage of the Pentagon's wartime emergency 2006 supplemental budget request, Army Vice Chief of Staff Gen. Richard Cody has ordered a four-step, five-week belt-tightening plan to keep the service financially afloat.

Military commanders had hoped Congress would approve the supplemental request to fund Iraq and Afghanistan operations before the Memorial Day recess, but the House and Senate could not agree on a common bill. The Senate came up with legislation totaling $109 billion, while the House version matched the Bush administration's $94.5 billion request.

With the supplemental still in limbo, the Army is facing a money squeeze, according to a memo Cody sent to all Army commanders Friday.

Cody issued a "tasker" for commanders to go through their budgets and report back regarding what could be cut, and the effects of doing so, said Lt. Col. William Wiggins, an Army spokesman.

Cody also ordered an escalating series of mandatory cuts, with the first set taking effect last Friday, to rein in spending.

Those cuts "are not going to impact on things that have to do with life, operational, and safety issues," Wiggins said.

"The priority goes to the missions in Iraq and Afghanistan, and anything soldiers need who are preparing to deploy and go overseas."

As of last Friday, all Army units were told to stop ordering "non-critical spare parts and supplies, unless the organization or unit has a published deployment date," the memo said.

The Army should stop shipping goods "unless they are essential to support deployed units," the memo added.

As for supplies, "requisition only what is necessary to accomplish assigned theater missions. All units should draw down on-hand inventories first," the memo said.

All nonessential travel, like conferences and training is also canceled, the memo said.

The next set of cuts take effect on Tuesday, and include a hold on all civilian hiring actions.

All summer hiring must be postponed until the Army receives supplemental, the memo said.

-Goldilox

"A billion here, a billion there, pretty soon you'e talking REAL money."
- E. Dirksen

http://www.ft.comECB Warns of Hedge Funds' Risk to Stability
By Ralph Atkins in Frankfurt - Financial Times - 06-01-06
"Hedge funds have created a "major risk" to global financial stability for which there are no obvious remedies, the European Central Bank warned on Thursday in one of the bluntest official statements yet on the rapidly growing sector.
In a clear hint of rising official nervousness about the multi-billion-dollar industry, the ECB ranked an "idiosyncratic collapse of a key hedge fund or a cluster of smaller funds" in the same category as a possible bird flu pandemic as the types of shocks that could trigger fresh disruption in financial markets..."
It seems "disruption in financial markets" is more a matter of determining which doom scenario will prevail rather than stopping the growth of the $1200 billion derivative pyramind. There are greater priorities than nitpicking over a few billion in losses, whether hedge funds as mentioned
or the pensions of a generation or a bubble here or there.

http://www.usagold.com/gildedopinion/RocketSchool/20060531.htmlTITLE: The significance of August 15, 1971

(excerpts) -- That was the day that President Nixon closed the gold window, ending the ability of other central banks to convert their dollars into gold at the fixed price of $35.00 per ounce.

...Needless to say the gold price increased 24 fold over the next few years, from $35 to $850 per ounce. The official benchmark as to the value of the dollar was removed; the unofficial one, the price of gold itself, remained. As we all know, the gold price declined during the 1980's and 1990's as the US managed to maintain the myth that their currency had value, and part of the maintenance of this myth was a declining gold price. Other central banks signed on to the maintenance of this myth, slowly at first, but countries like Japan, which really had no choice as they needed the US as a customer for their industrial manufacturing base, were quite happy to play the game. The Europeans were slower, with the Germans in particular, along with the French, being wary of this newfound ability of the US to run a 'deficit without tears.'

What a great game we now have! It's the 'you take my paper' game with a twist, which is of course the fact that officially it can never be redeemed. Meanwhile we have supposedly happy citizens, bent politicians, faulty monetary systems and seriously flawed promises to pay pensions and medical expenses in the future, all because of a reserve currency that is now the complete reversal of what it was when it became the reserve currency back in 1944.

...Perhaps if the gold supply had only increased at the same pace as the US monetary supply, which is now an ad infinitum supply, but this is of course not possible, and basically the official sector gold reserves are still about the same as they were back in 1971. It is even possible that they are less as we don't really know who holds what these days, given the leasing of Central Bank gold to various parties, and the sale of this gold to assist in suppressing the price by meeting the shortfall in supply and demand, estimated by some to be in the vicinity of 1200 to 1400 tonne per annum for at least the last 10 years. This is in addition to reported outright sales by CB's including Australia, the UK, Canada, Belgium and Holland and others.

So what does this mean for the gold price which has been rising in all currencies over the last few years? Are there any currencies that are gold backed? Not anymore! Today most currencies are faith-backed, depending only on the goodwill of the holders, which is a belief in the fact that they are worth something. But is it true?

How long can this game go on? At what point do holders of US $'s finally get the idea that they do need to swap out of paper into commodities? Or is this now what's taking place re the rising prices of all commodities?

Or are commodity prices rising because the US $ is depreciating in terms of its purchasing power by the fact that the world is awash with them? This is what happened in the late 1970's and I suspect it is what is happening now, but to a much larger degree.

...Perhaps the relevant question is, how much physical metal is there remaining to meet rising demand as a result of profits from rising oil prices and an increasing reluctance to hold US dollars?

---(see URL for the full article)---

I have a contest suggestion. The goal would be to guess if the Federal Reserve will lower, raise, or stay where it is on interest rates. The next interest rate meeting I think is scheduled in June sometime. From the winning entries a certain number of winners would be offered a prize like free shipping and handling on coin orders from Usagold for a certain period of time or other types of discounts.

Just a thought... :)

My first post. I have been reading a while and really enjoy this forum. I just recently started learning about monetary and banking history and I guess you could call me "awake" to realities at this point.

I hear many people here saying to payoff debt and buy gold.

I have all debt except 100k of a mtg paid off (fixed 30 - 5.5%). At this point in the US fiat pyramid scheme do you think it is more important for me to payoff the mortgage or accumulate more gold.

I have bought 10's of ounces in the last several months. Wondering if a switch back to paying off debt is wise, or buying at what may be the low end of gold before a continuation of a bull run is more important?

Thanks for your insights,

scott

Hi scottp999 (and others), welcome into the forum. This is a great place to announce your presence on the gold trail and to call out for like minded individuals.

If you have been reading for a while, you might see that there are others that have come before you with similar questions in a nearly identical situations. If you reflect back, you will most likely find that they all sum up to � it's your choice � you get to make the decision. No one else can for you.

But, that decision is one that many of us here in the forum will take pride in, simply because we all know what you will do. The funny part about it is that you have already made the decision and you're probably now looking for some type of support. I'm fairly confident that there are many here that have done the same thing and in time, found that they could sleep better with their own decisions.

The best part about this forum is not actually using it to ask for advice, but in using it to learn and build a strong foundation upon which you can make decisions that are sound giving strength to your economic future. I'm sure many here would concur that both paying of debt and acquiring gold are good things to do. But I would contend that both debt and gold are secondary to quality of life. I would set quality of life first and follow whatever scheme it is that will get you there the fastest (or at a rate that you will enjoy).

Now, where is that gold trail? Did someone take it through a man-hole this last weekend?

I have been buying gold while holding onto debt, debt that could have been retired three years ago by now. I do keep paying it down, but at a considerably slower rate than were my options some other wealth vehicle. The reason for me is simple, I don't know when gold will shed its paper mantle and revalue. This revaluing will be a one time event. The more than doubling of the price of gold in the past five years doesn't even begin to hint at what is coming. When the revaluation occurs everybody will be able to see it and wish only that they had bought more gold. For me, I will keep accummulating whenever I can and as much as I can. I don't give up on my debt repayments, and I won't add to them unneccesarily, but every ounce of gold now will make the unpaid paper debt look small, when gold revalues.

Your question is not unlike "Which do I pay off first, my 5.5% mortgage or my 15% credit card?"

"Money also chases highest ROI", so you decide, save paying the 5.5% debt or buy gold for a higher return.

I agree with Timbervision, gold is in phase 2 or a 3 or 4 phase revaluation. When the $54 trillion debt obligation of the USG begins to turn into reality between 2008 and 2012, we won't see 5.5% returns......unless you're referring to DAILY returns!!!!!

Add in the Peak Oil business and the 'Irans' and its a no-brainer, at least from my biased viewpoint.

Have a golden day.

31 May 2006 347.31
01 Jun 2006 351.63

The more I watch these numbers, the more they look insignificant to me. Here we have growth in the form a 4.32 tonnes or about 138,000 ounces. At current market prices, that's only about 85 million. Sure, that might be a lot of little investors, but there is no big trader anywhere in the vicinity.

Even the warehouse stopper numbers � June 1, 30,187 contracts for Gold, or 3,018,700 ounces which translates to only about 94 tonnes. That's still only about 1.9 billion. What makes these numbers look funny is that the warehouse stocks don't go down much each delivery month.

What seems most interesting to me is that those in control of the big corporations, that control the world, can't get in on the commodities boom that all the little guys are enjoying. Every time a big trader attempts anything, they find that the market is closed to them. They are forced to stay in dollars or move it into acquiring other assets. The worst case for them comes in holding cash in short term investments. They get to watch the value of their holdings drop while they're costs continue to climb.

Ah, it's a mixed up world, but I still can't find any counter examples to voting with your gold stash. Money talks feverishly, but golden money's words provide support for generations.

http://www.prisonplanet.com/articles/june06/060106iranstrike.htmFormer CIA Analyst Says Iran Strike Set For June Or July
McGovern: Staged terror attacks across Europe, US "probable" in order to justify invasion
Paul Joseph Watson/Prison Planet.com | June 1 2006 -Snippit:
"Former CIA analyst and Presidential advisor Ray McGovern, fresh from his heated public confrontation with Donald Rumsfeld, fears that staged terror attacks across Europe and the US are probable in order to justify the Bush administration's plan to launch a military strike against Iran, which he thinks will take place in June or July.
Appearing on The Alex Jones Show, McGovern was asked about the timetable for war in Iran and said that behind the diplomatic smokescreen, the final chess pieces were being moved into position.
"There is already one carrier task force there in the Gulf, two are steaming toward it at the last report I have at least - they will all be there in another week or so...""

These are some of the many grey areas of US overseas ME involvement. But as McGovern cites, political desperation could underpin a further expansionist agenda. And the petrodollar, not factored in here, appears to be taken for granted.
Actually all these assumptions would, if true be very dubious at best as China and Russia are allied with Iran and many nations would be so incenced that the petrodollar would lose all credibility. Russia signaled it's intent
to trade oil, gold and other commodities ( a couple weeks ago) using one of it's financial exchanges, in Rubles in a few days. Likewise the Iranians with their oil bourse, said to open in a few weeks, casts a pall over the currency markets and could spur a rush to secure
remaining strategic oil and safe haven gold.

The only other answer is Tyranny beyond Imagining.Why dont cars run on water? Because water is too cheap and oil is more profitable!

Why dont we have cold fusion? Because NatGas/Hydro/Coal/etc are more profitable for the mining industries- AND if we told the world that fusion/fission doesn't need radioactive sources, the Iranians would be synthesizing U238 out of lead billets, and gold bars out of aluminum engine blocks.

Why dont we have a cheap AIDS cure that Dr Beck promised? Because it wouldn't be profitable, and the earth's population would explode.

You see, all this is 100% bona-fide "pseudoscience"

Why do we have credit paper money instead of gold? Because credit is more profitable for some bankers somewhere. This is called a "conspiracy theory".

It is a mistake to conclude that there are huge technical challenges facing humanity. In reality there are only moral problems- the world has sufficient brain-power to solve its purely technical problems. The reason we have the monetary system we live with is due to our moral confusion. And so the reason that Gold is the answer is the same: we are barbarians. "If a man speaks of his honor, make him to pay cash."

For example: the world refuses to deal with its overpopulation problem so we now have a "technical" solution to a moral problem by slowly killing people with AIDS and other interesting programs. There was nothing democratic about it I assure you.

As the UN (or any other group of nations) refuse to deal with the morality of the monetary problem we have "technical" solutions. Europe has built a fortress called the Euro. The US has built a derivatives mess to backstop the dollar in a sort of grand unified "swapco" (see N Dunbar, "Inventing Money")

Gold suppression was a "technical" solution. That patch is no longer effective. There will be other patches; they will fail. We will have more tyranny; we will have higher inflation; the market will clear (that is to say, printing money will not make bread, eggses, wine and oil magically appear.)

We have made progress. The pope no longer openly plans to take over the world by force of arms. The first nations gave up tyranny through colonialism in the middle of the last century. They have yet repent of colonialism via the credit system. In this age we have new forms of conquest: bankers, covert bio-weapons, drugs (both the government-decreed-illicit type and the prescription type) and of course, technology suppression.

The US has lived in the easy shade of WWII. Cheap oil was never a birthright, only a passing season. Dollar reserve status was no more a birthright than oil; nor was american democracy some special divine mantel bestowing on its wearer World Hegemonic Supremacy (or full spectrum dominance if you like). We came out on top because the corruption of europe imploded.

Bush may succeed in restoring the world to decency and good order - but it will not come cheap. And the dollar MUST fail for it is immoral and corrupt.

Humility.

We admit to ourselves that we are NOT perfect and gold is the ultimate insurance and is always in season.

However, the timely blessing we enjoy is We have the good fortune to be at the beginning of a bull market where the carrying cost of gold is now "negative"

So the answer to the question is: the world is not "mature" enough for all that free energy technology. If we fail the maturity test we will have the hyperinflation followed by a peak-oil induced K-wave winter. Perhaps if we wise up, we will enjoy an early golden spring.

http://news.ft.com/cms/s/3bebd6a6-f192-11da-940b-0000779e2340.htmlBy Steve Johnson
Financial Times, London
Thursday, June 1, 2006

The spectre of Asian central banks sending the dollar into freefall by taking the axe to their vast reserves of the US currency has taken a back seat in the past 18 months.

The dollar's three-year slide up to 2004 was punctuated by reports of diversification away from the dollar. But the dollar's subsequent up trend, allied to ever-improving yields on US assets, pushed the issue into the background. However, the dollar's 7.5 per cent slide against the euro since the start of March has been accompanied by speculation that Asian central banks are once more selling dollars for euros. Only this time, instead of the debate centring on east Asian countries such as China, all eyes are focused on the increasingly cash-rich banks of the Middle East.

"The dollar moves smack of diversification. They have all the hallmarks of reducing dollar demand from oil exporters," says Chris Turner, head of currency research at ING Financial Markets.

"Diversification is happening, and it's happening much quicker than we thought it would," says Emma Lawson, FX strategist at Merrill Lynch.

At one level, Middle Eastern selling of dollars is not surprising. With oil trading conducted in dollars, high oil prices have brought a flood of the US currency into oil exporters' coffers.

The US Treasury estimates that the oil export revenues of the 10 largest exporters surged from $256 billion in 2002 to more than $600 billion last year, while their cumulative current account surpluses jumped 68 per cent to $331 billion. Even if exporters merely wanted to maintain the currency mix of their reserves, they would need to sell a slice of these dollars and buy other currencies. However, some observers believe there is more to the story than this, and that Middle Eastern nations are actively seeking to reduce the proportion of dollars in their reserves.

To some extent this has been flagged up by the banks themselves. The United Arab Emirates has said it might sell dollars and raise the proportion of its reserves held in euros from 2 to 10 per cent. Qatar said its policy was to hold up to 40 per cent of its assets in euros, much greater than the current weighting is estimated to be, and Kuwait is studying the appeal of the single currency.

Hans Redeker, head of currency strategy at BNP Paribas, believes this trend is being driven by two factors.

First, the underlying fundamentals of the dollar are starting to look less attractive, with yield differentials likely to start turning against it.

More important, Mr Redeker believes that the six members of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE), which currently peg their currencies to the dollar, will switch to a basket arrangement when they launch a unified currency, scheduled for 2010. He expects them to rebalance their reserves away from the dollar in advance of this.

Mr Redeker's forecast of a basket arrangement is largely based on the changing trading patterns of the region. Oil exporters sourced 8.4 per cent of their imports from the US in 2004, according to the International Monetary Fund, down from 14.1 per cent in 1981. In comparison, 30 per cent of imports are from the eurozone.

As the euro has risen against the dollar (and dollar-pegged currencies), this has led to higher inflation. The dollar peg means the Gulf region is likely to be forced to cut interest rates next year if the US starts to do so, Mr Redeker believes, sending inflation higher still.

Middle Eastern central bank reserves are comparatively small, with Saudi Arabia, Qatar and the UAE holding about $54 billion between them, compared with global reserves of $4,250 billion.

However, much greater sums are held in state-run investment funds, with Standard Chartered estimating that the Abu Dhabi Investment Authority manages at least $450 billion.

Ms Lawson compares likely central bank diversification out of the dollar to a previous shift out of gold, which lasted for 20 years until 1999 and weighed on the price of the metal.

"Such diversification is likely to weigh on the dollar until central banks reach their desired asset allocation and/or they generate a co-ordinated response to dollar weakness," she says.

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

June 1 (from DowJones) -- The precious metals complex reacted harshly Thursday to U.S. Federal Reserve comments released late Wednesday that hinted that another rise in interest rates is likely given rising inflation.

The comments sent COMEX benchmark August gold futures to a six-week low of $625.70 before settling higher yet off $15.50 for the day at $633.50.

In its minutes, the Fed said that "it seemed most likely that, with modest further policy action, including a 25 basis point firming (on May 10), growth in activity would moderate gradually over coming quarters, pressures on resources would remain limited, and core inflation would stay close to levels experienced over the past year," the minutes stated.

However, market players noted that inflation numbers have worsened since the May 10 meeting, leading to speculation that officials may tighten again in June.

Underlying inflation measured by the consumer price index excluding food and energy increased 0.3% in April, following an equal gain in March.

Amid the hawkish statements, traders said funds sparked a selling spree in gold.

Later in the session though, August gold pushed off its session lows amid some bargain-buying support as traders noted that investors who were not yet involved in gold were looking for buying opportunities.

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

http://news.ft.com/cms/s/a6da85b2-f19b-11da-940b-0000779e2340.htmlJune 1 2006 -- Hedge funds have created a "major risk" to global financial stability for which there are no obvious remedies, the European Central Bank warned on Thursday in one of the bluntest official statements yet on the rapidly growing sector.

In a clear hint of rising official nervousness about the multi-billion-dollar industry, the ECB ranked an "idiosyncratic collapse of a key hedge fund or a cluster of smaller funds" in the same category as a possible bird flu pandemic as the types of shocks that could trigger fresh disruption in financial markets.

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

Some things you can plan for, and some you can't -- like a bolt from the blue.

The best you can do is to have your preparations in place for reasonably anticipated contingencies.

Choose gold to weather any storm better than any form of paper ever could.

R.

Sorry for the unintentional duplication. I hadn't noticed your ECB-hedge fund wanring post from the FT until just now.

R.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060602:MTFH84479_2006-06-02_00-13-11_N01414745&type=comktNews&rpc=44From Reuters
Thursday, June 1, 2006

WASHINGTON -- The International Monetary Fund Executive Board on Thursday approved the appointment of JP Morgan Vice Chairman John Lipsky as First Deputy Managing Director of the IMF.

Lipsky, a U.S. national, will start his five-year term on Sept 1, succeeding Anne Krueger who steps down at the end of August.

IMF chief Rodrigo Rado proposed the appointment of Lipsky on May 18, saying he would bring to the position "an international reputation in macroeconomics, a first-rate record in leadership, and outstanding skills as a communicator."

Lipsky, 59, who worked at the IMF for 10 years until 1984, said in a statement announcing his appointment that it would be a homecoming to an institution he knows well.

The conditions in this world may have reached the point of peak security. My definition: Peak Security: A point at which, during a time of dire and impending economic upheaval, it becomes prudent to dump valuables which do not directly furnish and supply the basic necesities of food, clothing, and shelter. You can't eat, keep warm with, or live in gold.

Or maybe TPTB are just letting everyone know that they're still in charge.

http://www.adenforecast.com/Article_View.shtml?2I just wanted to thank you all so much for your helpful replies and comments. The last 24 hours could have been scarier for someone like me who's only recently been bitten by the goldbug. As I watched the price plummet today, my first instinct was to doubt if it was right to buy more gold yesterday, and then I started thinking about whether or not it's really a sane idea to go into PM-based IRA's. But the responses from some of you, and the pointers to other Web resources that try to explain the dynamics of what's going on these days and how it impacts investors in gold, have really set my mind at ease. I am more educated and don't have that stressed worried feeling anymore. I read a lot today, but I'll include a pointer to a piece by the Aden Sisters as one piece in particular that I really enjoyed.

http://news.bbc.co.uk/1/hi/world/africa/5040768.stmFriday, 2 June 2006, 11:37 GMT 12:37 UK

Oilmen kidnapped from Nigeria rig

Two snips:

"Some unknown persons boarded the rig at 0300 [local time, 0200 GMT] and took eight workers," an executive from one of the companies that operate the Bulford Dolphin rig told Reuters news agency.

There has been a spate of recent attacks in the region by militants, who want more local control of oil wealth.... The upsurge of attacks on foreign oil interests has cut Nigeria's oil production by 25% - a key factor in the high world price of crude oil.

***************

So, less supply continues to lessen while demand remains high. Sounds like "up" for black gold.

Caradoc

Melda Laure - Thanks for responding. I do hear you when you say that we're too immature for all that free technology. If anyone had time to view the video they would see that Congress has welcomed this energy source and they have contracted with the inventor to supply a military Hummer with this fuel source.

http://www.mercola.com/2006/may/30/imagine_using_water_instead_of_gas_in_your_car.htm

*Just touch on "fascinating video" to view.

I find it interesting that in the circle I grew up in... my dad was extremely right wing and headed a chapter of "The Committee To Restore The Constitution"... his friends were CIA and other "mysterious" groups and my dad was a major goldbug.... in that circle it was common knowledge that ways to power vehicles much less expensively than with oil sources had been discovered. However it was a discovery you could pay for with your life was what I was told. And I even found as I matured that I was hearing the same thing... energy sources that truly blew gas out of the water were heavily suppressed.

So I find it curious that the gov is cuddling up to this one now. Are you sure it won't be used in the future to suppress gold?

I guess I already know the answer.... time will tell. The merry ride continues! Gold I buy and in God I trust.

http://www.financialsense.com/fsu/editorials/wakefield/2006/0601.html
"As always, my thinking is influenced by a variety of sources. As such, a word of caution is warranted. The mention of any source or person does not mean that we adhere to all of that sources ideas and conclusions and should not be taken as an endorsement of that source, and visa versa. Let me remind you: Best Minds, Inc is a registered investment advisor that looks to the best minds in the world of finance and economics to seek a direction for our clients. To be a true advocate to our clients, we have found it necessary to go well beyond the norms in financial planning today. We are avid readers. In our study of the markets, we research general history, financial and economic history, fundamental and technical analysis, and mass and investor psychology.

A couple months ago, Joan Veon, head of The Women's International Media Group, suggested that I read a working paper written by William White, which was released by the Bank of International Settlements. Mr. White is the Economic Director and Head of the Monetary and Economic Department at the BIS, a position that he has held since 1995. If you are unfamiliar with the BIS, let me offer you a brief introduction.
"The Bank for International Settlements was established in 1930 to administer ("settle") the reparation payments imposed on Germany under the Treaty of Versailles following the First World War. It was also envisaged that the BIS would provide central banks with an institutional forum for cooperation. The Bank's name is derived from this original role. Amid the financial and economic crisis of the early 1930s, the matter of reparations soon faded, allowing the BIS to focus its activities entirely on cooperation among central banks." 1

Although much more sophisticated today, the BIS continues to act as an intermediary between central banks around the world.

"The growth and globalization of financial markets during the final decades of the 20th century shaped the nature of central bank cooperation at the BIS. The BIS has assisted � and continues to assist � the pursuit of global monetary and financial stability by providing emergency financial assistance to central banks in case of need; and by supporting experts from national central banks and supervisory agencies in proposing measures and developing standards aimed at strengthening the international financial architecture, and in particular international banking supervision." 2

As you can see, the BIS was established in 1930 to handle a national crisis, and it has continued in its role of providing financial assistance and acting to strengthen the international financial architecture. Though most of us do not realize it, 2006 looks to be an important year for worldwide banking.

"In 1988 this Committee issued the Basel Capital Accord, introducing a credit risk measurement framework for internationally active banks that became a globally accepted standard. A revision of this Capital Accord, known as Basel II, is due to be implemented worldwide from end � 2006. Such standards aim to achieve a better and more transparent measurement of the various risks incurred by internationally active banks, limiting the possibility of contagion in case of a crisis and strengthening the global financial infrastructure overall." 3 [Italics mine]

Coincidently, Mr. White's paper titled, Procyclicality in the financial system: do we need a new macrofinancial stabilisation framework, was released in January of 2006. In this paper, Mr. White basically outlines various financial crises and the growing stressors on the world's financial markets that have come with each "fix" over the last 20 years. Here, White takes governmental agencies to task for their increasingly myopic financial policies.

"As for domestic regulatory authorities, they might be advised to adopt a macroprudential regulatory framework, one that puts more emphasis on the health of the financial system as a whole, rather than the state of individual institutions as is currently the case. Finally, recognizing that �keeping one's domestic house in order� might not be sufficient to provide international stability, there could be need for a new international monetary order to help prevent the build-up of external imbalances that could eventually culminate in stress on a global level. Recall that, before they broke down, this is precisely what the gold standard and the Bretton Woods systems were designed to do. 4 [Emphasis his]

Again, these are not my words. These are the words of the Economic Director and Head of the Monetary and Economic Department at the BIS, William R. White.

In September of 1931 England came off the gold exchange standard � never to return. In January of 1934 the US came off the gold standard, and its citizens were no longer able to exchange their dollars for gold. In August of 1971, Nixon announced that the US was coming off the gold exchange standard and would never again exchange US gold reserves for the accumulated greenbacks of foreign central banks.

These events were historically significant and significantly impacted the people living in those times as well as the way our capital markets operate today. With the implementation of Basel II and statements like the one above, it would appear that yet again, plans are already being considered that could have a profound influence on our world."


Druid: Was ANOTHER an insider? Enjoy.

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

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=10It looks as if, "WE ARE BACK IN KANSAS" now !!
GO YELLOW !!!!
<;-)

http://urbanlegends.about.com/library/bl_pascua-lama.htmOn Monday, AuVenger posted about the Barrick mining project in South America. I just saw the above on About.com's Urban Legends site and thought I'd share it to provide a little perspective on the email campaign--and how futile it is...

Look at how the POG was just nailed, just in time for the London close. This market is so rigged. I wonder which CB is playing along.

http://www.gfms.co.uk/Market%20Commentary/Global%20Hedge%20Book%20Analysis%20Q106.pdf ........from GFMS.

Basically, hedged gold declined in the last quarter (mostly by Barrick) but the outstanding total is still just over 50 million ounces.

Does anyone know what Barrick used the money for? When they sold forward, they did so, I believe, to secure some bank loans. If they then bought in-the-ground gold (by acquiring other mines or mining companies), then perhaps the market value of what they bought has increased proportionally with the marked-to-market loss of the metal sold forward, no? What did they buy or use the cash for?

Also, I remember reading some info a long time ago that gave some stipulations regarding those forward sales. Barrick has the option to roll them forward even further by many years. Who knows, maybe they hedged the sales with options...? or, maybe they are in a world of hurt! Or, maybe they sold at $XXX while buying in the ground metal for the same price? I don't know.

Hey, it's Friday....happy weekend!

I'm trying to understand your comment, particularly that gold was nailed "just in time" for the London close.

Would you please elaborate on the significance of the "just in time" aspect of the nailing?

Frankly, I'm looking at a London PM fix that's sitting boldly $15 above the overnight low, and merely $5 down from the intraday highs. Again, what am I missing?

R.

@ Gandalf,

Talk about "volatility"!

Not a particularly stable picture of the "World's Reserve Currency".

This transcends "E-Ticket" ride.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-06-02T135424Z_01_BAN250076_RTRIDST_0_OZABS-MARKETS-COMMODITIES-BUBBLE-20060602.XMLsnip:

LONDON (Reuters) - The bull market in base metals is unlikely to collapse like the dot-com bubble of the late-1990s because the supply/demand balance for raw materials has tightened, broker Standard Bank said on Friday.

"The key difference is that the commodities boom has been underpinned by genuine fundamental tightness -- whilst corrections are likely in commodities, a dot-com-style collapse is not," Standard Bank said in its latest monthly report.

Major base metals copper, zinc, aluminium and nickel hit record highs last month, fuelled by demand in China and India, supply disruptions and relentless fund buying.

Copper hit $8,800 a tonne on the London Metal Exchange (LME) in early May, having started the year around $4,500. Prices on Friday had settled back around $7,800.

Individual investors were seeking to capitalise on a market that has suddenly acquired "sex appeal", due to the notion that it can provide the kind of returns not seen since the dot-com bubble, the bank said.

Standard Bank said many professional and institutional investors now saw the market's visibility in the public eye as being a valid reason for them to exit metals.

"Traditionally, public euphoria is the final and often most frenzied stage of a price spike or bubble, with only the sharp reversal or bursting of the bubble to look forward to," the bank said.

But the key difference between the two bull markets was the tangibility of assets in base metals markets, which was not the case in the dot-com boom.

Dot-coms had little in the way of fixed assets, no profit stream and a reliance on the value of intellectual capital. But commodities were subject to genuine supply and demand factors.

"Indeed, there is no debate that these fundamentals in the metals markets are as tight as they have been for decades with increasing consumer demand across the board, severe constraints on production of many metals, and industry stock levels that are at historically critical levels," it said,

Standard Bank said corrective phases such as in February and May, could not be ruled out in the market but that physical tightness would remain in place through next year, and prices would stay above long-run averages in the long term.

-Goldilox

I know this is a "yawner" for most here, but just to stay abreast of the MSM pablum. . .

I've been getting crazy numbers from the gold price sites.

Earlier today, it appeared that the POG went up to 650.80, and then was driven down to the low 630s right at the London close. However, later in the day, the daily charts do not show gold going up so high, and then being knocked down.

Maybe there were problems with the the gold pricing information earlier today?

http://video.google.com/videoplay?docid=-3333992194168790800@Christian Mom & Melda Laure

Apparently water powered automobiles has been on the minds of more than one person. Here's a video clip about an inventer of a water powered car in Ohio that reportedly was murdered. Unlike the fellow in Florida, this Ohio fellow, Stanley Myers, has invented a low temperature and low amperage electrolysis machine. He bagan his research back in the 1970's.

The question would be why don't we have water powered cars at the present time? Pay attention to the end of the video when they discuss the alleged political and economic hazards of water power to the oil companies and the government. Would the oil companies and the government allow water to replace oil as a fuel?

http://www.gigagone.com/video/view.php?video=6a6c1d04c6a09f09c9e4a7fba0a63784Here's another water powered vehicle. I haven't seen the entire video as my computer is giving me problems. I do get th3 audio. I'll work on it. You people hopefully will have better luck. Hey Bush, there goes your oil profits.

canamami (6/2/06; 10:35:01MT - usagold.com msg#: 144903)
Reply to Town Crier
===
I too saw that presentation at that OTHER gold board !
BUT, knowing the HISTORY of that board and the ERROR rate of the automatically updated chart -- I ALWAYS search for confirmation of ANYTHING that is shown at that SITE !
No confirmation was found, and THAT site's chart deleated the SPIKE that you were speaking about !!!
Just stay with the USAGOLD price quote and you can not go wrong !
<;-)

http://www.safehaven.com/article-5276.htm"Bringing in a guy like Paulson, or anyone else loved by Wall Street, is really no different than a losing football team bringing in sexier cheerleaders. The hope is that the public will be so fixated with the action on the sidelines that they completely ignore the slaughter on the field, staying put in their seats a while longer when they should have run for the exits long ago."

Just might end up being the delay to hyper-inflation that the bankers have been looking for. I'm just theorizing here, but the inflow of speculative capital into the commodities markets only seems to open the door for more price controls by the shorts.

This idea struck me as I thought about physical demand verses actually demand in a speculative frenzy. What if physical demand really hasn't spiked, but it's just tight. Then, if you take the stand that tight supply means the prices will rise, then you would expect speculators to jump in expecting to see a profitable return on capital. But, what if the tightening of physical demand simply meant that those looking for physical wait longer or go without?

If they are willing to go without, then for every speculator that enters the market not looking to take physical delivery, TPTB can counter that speculation with liquidity (go short) knowing that they will never have to deliver the physical and knowing that sharp sell offs trigger stop losses that offer position closing opportunities.

A telling example can be seen if you look back at last falls natural gas mania. What was once a little heard of market with little speculation started going parabolic as the speculators jumped in. At the end of November, some big bank was given the right to participate in that market and they successfully countered the speculative mania with liquidity effectively stabilizing the price back down to the more typical supply and demand lines.

As all commodities light up with speculation, it seems that the high percentage of non-delivery players makes it so that those who control paper get the upper hand. The liquidity needed to shake the speculators out cost them next to nothing. Likewise, when dealing with economies of scale, slightly tightening currency (raising rates) has a tendency to reduce demand.

I see no end in sight to the current games if things stay as they are today. Those in control of the currency supply have a strangle hold that we all may have to deal with for *many* years to come.

The only hope that I see for any type of large change will come from the individual commodity holder. The unfortunate part is that even though there are many ants in the hive acquiring physical, those that control the currency supply are in control of virtually 99.999% of all the currency holdings in the world.

I believe that as more speculators enter the commodities markets (not acquiring physical) they feed from the hands of those that have a vested interest in maintaining commodity prices that trade next to cost.

Break the cycle by taking delivery.

https://registration.ft.com/registration/barrier?referer=http://www.prudentbear.com/&location=http%3A//news.ft.com/cms/s/28595220-f198-11da-940b-0000779e2340.htmlUS Regulators to Review Futures Disclosure
By Jeremy Grant in Washington - Financial Times
Published: June 1 2006 20:19 | Last updated: June 1 2006 22:08 - Snippit: "Concern that a dramatic rise in the use of commodity futures indices by pension funds and swap dealers could be distorting prices has prompted US regulators to explore whether there should be greater disclosure about who is playing the markets.
The move could pit new breeds of futures traders against traditional users of commodity futures markets such as agricultural producer groups."

Just this news about US regulators, alone by itself increases transparency in the metals market. Add in the possibility of "greater disclosure about who is playing the markets" and you get yet another gold supportive element, even if some spec traders are left more befuddled than before.

http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20060602\ACQDJON200606020027DOWJONESDJONLINE000009.htm&selected=9999&selecteddisplaysymbol=9999&StoryTargetFrame=_top&mkt=WORLD&chk=unchecked⟨=&link=&headlinereturnpage=http://www.international.naANNANDALE, Va. (Dow Jones) -- To understand the significance of gold's recent plunge, contrarians argue that we need first to understand the psychology of bull markets.

Their goal is to rise while attracting as few adherents as possible along the way. If the bullish bandwagon gets too crowded, the market must first scare as many as possible of those adherents away from the bullish camp before resuming its upward path.

Bear markets take place when the occupants of that bullish bandwagon stubbornly refuse to jump off. Corrections, in contrast, are characterized by relative eagerness to do so.

From this psychological perspective, we must characterize gold's recent decline as a mere correction rather than the beginning of a new bear market.

In the wake of recent plunge of gold bullion (38099902) - about $100 per ounce since hitting a high of $725 in early May, including $15 on Thursday alone - gold timers have been quick to run for the exits.

Consider the latest readings from the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average gold market exposure among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Thursday's close, the HGNSI stood at 1.8%.

That means that, on average, these gold timers are almost completely out of the gold market right now.

...To be sure, it's worth reminding ourselves that there are no guarantees. Sentiment is not the only thing that makes the financial world go round.

But if this is the beginning of a gold bear market, it would be one of those rare occasions in which the gold timers in large part anticipated that bear market.

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

Flatliner, nice post. The upside of the volatility we're now seeing in the gold futures is that it chews up and spits out the majority of its participants -- who may then vow never to repeat their leveraged paper-based investment errors.

Of course, it comes at the risk of completely alienating the simpletons who can't subsequently differentiate between the physical gold market and the COMEX casino.

Fortunately, at the end of the day, the vast majority of people surely cannot be THAT simple. But then again, in herd metality people tend to behave more like animal than man.

R.

http://www.busrep.co.za/index.php?fArticleId=3273399&fSectionId=612&fSetId=662June 2, 2006; Cape Town - Goldman Sachs International UK managing director Jeffrey Currie, who is well-known for his bullish views on the gold price, said yesterday that strong demand for most metals meant that the long-term high price cycle was likely to continue.

Recent volatility in international markets, particularly in India, has sparked fears that the long-term commodity bull run could end with prices collapsing.

Interviewed on the sidelines of the World Economic Forum on Africa, Currie said high metals and oil prices were underpinned by strong demand as well as supply shortages.

...due to the high capital costs of commissioning extraction facilities as well as the relatively long time frames in constructing these facilities ... high mineral commodity prices have not necessarily translated into the super profits [to mining companies] that prices suggest, as apart from expensive development costs, corporations have had a raft of new regulations to deal with.

Many countries have passed tougher environmental laws and increased taxes as well as deregulating the minerals and energy sectors, leading to higher costs.

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

Bottom line: Choose the physical gold in hand -- not the gold in the ground nor the paper derivative of gold.

R.

http://www.nymex.com/press_releas.aspx?id=pr20060602aNEW YORK, N.Y., June 2, 2006 � The New York Mercantile Exchange, Inc. today announced that the COMEX Division has eliminated price fluctuation limits for all COMEX contracts beginning with the NYMEX ACCESS� session on Sunday, June 4 for trade date June 5.

This change was made in order to better facilitate the core functions of price discovery and hedging provided by COMEX products.

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

Prior to this change, for the exchange traded gold contract the maximum daily price fluctuation was limited through exchange controls as defined in the following (now effectively antiquated) guidelines:

---Initial price limit, based upon the preceding day's settlement price, is $75.00 per ounce. Two minutes after either of the two most active months trades at the limit, trades in all months of futures and options will cease for a 15-minute period. Trading will also cease if either of the two active months is bid at the upper limit or offered at the lower limit for two minutes without trading. Trading will not cease if the limit is reached during the final 20 minutes of a day's trading. If the limit is reached during the final half hour of trading, trading will resume no later than 10 minutes before the normal closing time. When trading resumes after a cessation of trading, the price limits will be expanded by increments of 100%.---


"Alright, little brother... let 'r buck!"

R.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060602:MTFH20127_2006-06-02_18-45-19_N02186327&type=comktNews&rpc=44June 2 (Reuters) - Unionized mine workers around the world have sought higher wages and better working conditions now that mining companies are profiting from record or near record-high prices for base and precious metals. Other issues that have led to protests and occasional violence are environmental damage from mining and revenue-sharing with local populations.

The following outlines the labor situation at some hot spots for mining companies around the world...

^---(see url)---^

BOTTOM LINE: For these and multiple other reasons, to reap all the benefits associated with gold ownership, the fully-considered investor chooses gold in the hand, not gold in the ground.

R.

Hum... Seems that limits have always worked as shock absorbers. Is the commodities market so stable now that we no longer need this delay technique? Or is it that pressure has been applied so as to make it so that more volatility can be generated � as if there are advantages to getting more (volatility)? Or is there need for massive movements that would be hampered by a time delay? (Q: are there limits on all other markets? In other words, if the comex were to shut down, would those with international connections stand to make/loose big by straddling international markets during the closure period?)

One would expect that we will all see the market pumped both ways now in a more violent manor. There is no better technique by which to get speculators out of the commodities markets then by swinging them violently from one extreme to the other. The other technique is to change the leverage rules. The end result is losses over losses.

Those holding physical will clearly have an advantage here. Changing the rules in the physical market is not so easy. In other words, if gold is called in, gold will have to be called in in all countries or it will most likely go into hiding.

IMHO, for those that play the paper markets time is not your friend.

Gandalf the White, I look at the dollar chart that you post and see steady demand for it � exhibited in the upward trickle of the price. I can't help but wonder, so I'm throwing this up here to spark feedback, that there is more demand for dollars then what those that manage international trade want. In other words, if you're trying to help support exports from the US, you want a dollar that's cheap � thus large sales in short periods of time.

But, when I look at the charts, I see a steady demand � just like I see in the gold market. The dollar market ticks up a little at a time over and over again and then Wham, there is a big sell off. It's as if there is someone big that knows when you flood the market in a short period of time you get wild swings in price. This can be seen with the downward gapping this morning. It's as if it's being managed down rather then going down through lack of demand.

If you look at it from an investor's point of view, if you didn't want to rock the market, you would buy or sell over time so as to weight profit in your favor. When I see spikes like this, it's obvious that profit is not the motive and someone it trying to move the market.

Also, if prices of commodities, priced in US Dollars, continues to go up, one would expect that it will take more dollars to buy these commodities thus there would be more demand for them in the long run. Thus, even though dollars are virtually being dropped from helicopters right now the press still can't keep up with the demand.

This makes me think about commodity markets around the world that are planning on trading in currencies other then the US Dollar. It would seem to me that it's only at that time, when a large set of the population no longer deals with dollars, that demand will slow down for the dollar and the elevator rides down will actually stick. But, the problem there is that if these other markets actually get a foothold in the market, they can disturb the entire effort too much, or worst case, cause international demand to drop to the floor.

Ah, large moves in the price of anything is not good. It makes losers out of the little guys. May we all hope for smooth and steady moves.

http://www.nymex.com/media/delivery.pdf30K for June already (3x normal) eek!
Having been away all week I'm surprised to see PoG mired in the low $600's ...and with Randy reporting Comex trading changes to limits, we should see some "stunning" action anon.
30k represents 3,000,000 contract equivalent Oz's of Au!!

TC I wonder if the next change will be to have margin requirements updated daily...

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

June 2 (from MarketWatch) -- Gold futures closed higher Friday, leading an advance across the metals pits as the dollar fell sharply following a weaker-than-expected May jobs report and traders awaited the next exchanges in Iran's nuclear dispute with the West.

COMEX August gold closed up $7.50 at $641. The contract was recovering from a six-week low hit Thursday that marked a third consecutive session of declines, as traders continued to lock in recent gains.

"Today's weak jobs report spurred buyers of the yellow metal back into the game after the falloff that some were naive enough to call the end of the commodities boom," said trader Kevin Kerr, editor of Global Resources Trader, a newsletter published by MarketWatch.

The dollar tumbled after the Labor Department said the economy added just 75,000 jobs in May, less than half the 174,000 expected by economists polled by MarketWatch.

Financial markets reacted sharply on renewed speculation the Federal Reserve may pause in its steady campaign of rate increases, with the dollar hit especially hard. The dollar was last trading down 1% against the yen and 1% against the euro. The greenback was flat before the jobs report was released.

Earlier, gold found support from reported comments by a Chinese central bank board member, who said the country should use its foreign-currency reserves -- the world's biggest -- to buy gold and oil as a hedge against further weakness in the dollar.

Yu Yongding later told Platts that the country is diversifying its reserves, but denied the reports in local and international news outlets that he recommends moving aggressively on gold.

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

It appears to my simple mind that gold mining shares are going to lead the way at the commencement of the next up leg in the gold price. The gold price will follow.

It appears to my simple mind that gold mining shares are going to lead the way at the commencement of the next up leg in the gold price. The gold price will follow.

I wonder about that... at least oil stocks have real earnings... not all gold stocks seem to have such rich earnings.

http://www.bridgew.edu/NewsEvnt/BridRev/Archives/99Dec/talent.htm

I have never been able to understand humans.

One of the great difficulties in approaching the AU market is due to the age of it. Microcomputers have only been a significant reality for some 30 years, the internet, for less than 20. And yet the fiat dollar has only been around since 1913, and really only since 1971 whereas gold has a history spanning the ages.

Frankly, the babylonians would be laughing at us sitting on our little piles: look at the sillies, those gold kooks would be richer if they put that stuff to WORK. But that is of course the whole point. They would not be immediately aware of our tax structure, our international commerce. They would gasp at the cheapness of gold and the cheapness of all basic materials, meat, bread, cheese, clothing. They would then FREAK OUT at the cost of labor in the US. They would go to the third world and try to start a business only to realize that basic materials, iron, stone and bread, are quite expensive in terms of third world wages.

Only then would our hypothetical time travellers understand the incredible dominance of the first world over the rest. But they would question it, and seek out its foundations. The would measure our weapons against our finance. They would measure the strength of all physical markets, and note all the imbalances and misallocations of production- too many factories here, too few there.

Our stranded time travellers would position themselves somewhere in the middle of the rebalancing, in a place far from collapsing markets (overpriced real estate, dollars. etc) and in a place where they could quickly enter underserved markets that are currently wildly unprofitable. And they would accumulate piles of yellow metal to be used in the day when it becomes freely useful to put it to WORK again.

Which is to say that everybody needs to have a source of current income, be it bonds, a business, or a job. This is wealth at WORK. I have personally owned several silver stocks that have done quite nicely in the last 8 years. I have also owned more than one that has gone totally bust. This work can be quite risky. Not to mention pricing the environmental costs.

Wealth at rest is quite different. Like most insurance, it is an EXPENSE. But in the current environment, your gold and silver will be an insurance policy with a real rate of return that is POSITIVE, albeit volatile. And THAT is why physical is the biggest no-brainer choice you can make: there are many ways to put wealth to work- silver stocks are merely one example, (and an insanely risky one at that). However there are very few methods to put wealth to rest and keep it safe from the comming flood where whole markets and currencies could be "Katrina'd" (the proper word is desolation: "that which dragons leave behind". Some time let me tell you how my Great Grandmother bought a mine (the Buffet Way- lock stock and barrel): Cost, a bag of beans, bacon, tin of coffee, etc. for the deed sold by the last guy to leave town just hours before the rebel army came in.... get the picture? (Note to self: lay in more gunny sacks)

Do not let fear of petty thieves deter you from protecting yourself from the BIG THIEVES of inflation. When the game is about to be lost, the great ones will tilt over the chessboard and set out the pieces anew- you cannot OWN dollars, no more than you can own a position on the chessboard.

Sir Titan, when the POG corrects downward, it is but the dollar bragging about its "honor". Make them pay cash! Take delivery. And later, take delivery again. When your pile is bigger your jitters will turn into non-chalance. You will become not a gold buyer, but a gold shopper.

And if Tesla supplanted oil, would not world growth explode and with it the demand for real wealth in all its forms? The consequences are so incredible, the bankers haven't even considered them fully! Energy is but the least part of this new physics. Or not so new, for much that was known has been forgotten.

Gonlyold: WE have reached- passed- peak security. Much of the rest of the world is far from it. But the point bears consideration.

AE
AL

Maybe no great dividends but massive capital gains that far outstrip the increase in the gold price.

http://english.people.com.cn/200606/02/eng20060602_270618.htmlVenezuela Supports Proposal to Sell Oil in Euros - Xinhua - June 2, 2006 - People's Daily Online
"Iran has an initiative that we support. They are going to start to do oil transactions in euros."

Snip
BOTTOM LINE: For these and multiple other reasons, to reap all the benefits associated with gold ownership, the fully-considered investor chooses gold in the hand, not gold in the ground.

--------------------------------------------------------------------------------------------
I'ts dangerous to be totally ONE EYED.

* It can be off putting to potential participants at this forum to be continually "told" how to think.It could be construed as a vested interest.

* It is obvious that without Gold in the ground (mining) -new investment in Gold would quickly become impossible for individuals --Govts & the spiralling cost would make it so. Mining is essential to allowing new supply.

Having said that I believe in a large holding of physical Gold & Silver to be held & added to on any dips.

I also believe in having an interest at least in a well researched non leveraged Gold/Silver producer/explorer.One such company has assured my financial future -through buying low & adding to over the past 4 years. The results have been outstanding-and I know I am not alone.Yes shares are exceedingly risky & some I have owned in the past I wouldn't wish on anyone.Totally bad/crooked management etc.

An OPEN mind & careful research + luck is required.

If you rub paper too strong it will catch fire.

Druid: The varsity team has been called in for the big finally. Now that Crimex is no longer setting limits, the gloves are coming off. Couple this with the lack of Fed transparency concerning M3 and an interesting picture starts to come into focus. From my vantage point, it appears that the CB's/Wall Street/Treasury are cornered and are getting prepared to come out swinging, American middle class be damned. If my crystal ball is correct, this should all play out prior to the 2008 elections. Good luck bugs.

So does that mean you are predicting gold to go down significantly next week? I assume that the shorts in key institutions need to cover their shorts by buying gold low.

Concerning your post 144925, I agree.

No matter how well substantiated or justified, unquestioning adherence to only one point of view becomes dogma, which severely limits any discussions outside of very narrow boundries.

Someone recently mentioned that many former posters may have become absentees after exhausting certain subjects of interest. I will add my opinion that I believe many refrain from expressing any views that they believe may be judged as contrary or not supportive of the accepted or sanctioned opinion that any gold investment other than physical is doomed to failure. I know that I now have very little to offer, maybe because I do not share the opinion that all money "will burn" or that futures markets are doomed to soon default. Change, yes, as is their nature. Cataclymic failure coming soon? This has been called for since the beginning of time, I do not plan my life with this thought foremost in mind.

Is happy weekend in order, or .....? Smile, it's good for the health.

http://www.dominicantoday.com/app/article.aspx?id=14102"Hugo Chavez, ... , suggested as host of the OPEC ministerial meeting here Thursday that the cartel forsake the weak dollar and switch to the euro for pricing crude."

Re: Intolerance, one-sided blindness etc.

Speak for yourself!
Look at the pot calling the kettle black!

Your posts smell wholy of self-righteous arrogance.

Please spare us your disruptive, unjustifiably long and obtuse (self-indulgent) tirades.

What (you and Pritcho) accuse in others is
precisely what you practice!
Tolerance is easier said than done.
Blatent, abrasive hypocricy is not.

It is also shocking that you come back again and again with the same handle, year after year, through the graciousness of our hosts(you must buy some big orders from them!).

This in order to preach over and over your trading acumen and remotest observations of options, futures etc, and to join the most convenient wolfpack that tries to tell
everyone what a poor job TC and the rest of us have done
at a GOLD forum (specifically dedicated to gold).

Polite, rational suggestions of what kind of forum this should be and what kind not were always invited, but alas some have better ideas.

Interesting that the Comex is removing the daily limits just a few days before Russia is set to launch its trading new, ruble-denominated oil / gold trading platform (this Thursday, June 8th). Throw in the fact that M3 is now no longer visible and you have the makings for a very interesting juncture in financial history.

Another / FOA mentioned that gold would be revalued with such rapidity that it would become unavailable overnight. Given that things didn't adhere exactly to their timeframe over the last few years I began to wonder if they were speaking metaphorically. These recent events, however, make me once again think that the stage could potentially be set for an overnight revaulation that would change the very nature of the international monetary structure.

Is Comex setting the stage for the revaluation? Have all the giants positioned themselves accordingly to let the revaluation occur?

Food for thought.

PA

Removing the daily trading limits does not prvoide an advantage, aside from added volatility to shake out the weak hands, to those seeking to suppress POG. You do, however, need to have daily trading limits removed if you anticipate POG increasing by some multiple overnight.

More food for thought.

PA

They may also be preparing for a paper avalanche of selling when the Comex gold (and silver) is called for delivery and not enough exists to fulfill contracts....liquidation only will commense....then as FOA and Another said, "Paper will BURN" and subsquently, on that realization of lack of value in contracts, a paper avalanche of selling down to zero will occur in Comex paper, with an equal and opposite lift- off of unhedged mining shares and physical. Gold , get you some of the REAL thing.
Bowing
Blessings
goldenpeace

Yeeooww! Kind of roughing up Rich a little, I'd say. I consider he and Pritcho valued posters on this forum. We don't all have to agree with them on everything but we should welcome their input.

Just my thought.

Druid: Without the safety net of the trading limits to help cushion some bad guesses within the bands of these limits, the volatility is going to really increase in both directions. Kind of similar to what happened to the Dow in 87 before the safety nets were put in place. Another words, our paper markets might actually be evolving back toward a "free market" where actual losers lost and went under. The savvy experienced market rigging old timers are going to teach the youngsters a lesson. What will be entertaining as hell will be to listen to the Carnival Barkers on CNBC try and spin the increasing volatility. This small dog might need to place a physical order pretty soon. Well, back to the Texas heat.

When you do post, (as I recall, it's been such a long time) it's usually to insult yourself.

Why is that?

http://www.timebomb2000.com/vb/showthread.php?t=199439"Japan's money base is now dropping at an annualized rate of 66% per year."..."The sudden removal of all this money from the world financial system will soon cause inexplicable price declines in stock markets - and possibly other markets, especially the bond market."

I too find the timing of oil for rubles and the removal of comex limit protection interesting and bullish for the physical gold advocate. After studying Another and FOA's posting, stored on this site during last summer, I'd come to the conclusion that any significant upward thrust in the price of gold, in a very short time would be greeted with awe by absolutely everyone � but time would be a hampering problem. Historically, nose bleed inducing upward movements in gold price discovery have always been hampered by limit protection. Thus, the emotional impact could never hit overnight or in a time frame that would allow for a revaluation high enough (and fast enough) to not allow for the end-of-the-world type of pain, but one that could happen while a solution can be presented and the earthly masses can see life continuing like normal.

Up until the other day, limit protection had stood in the way.

This now makes it possible for a life altering split between the physical market and the paper markets. What I would look for at this point is some Big Trader to state in some *very* public way that they will offer US Dollars for gold at some above market price on some given day in the future. Say, double or triple the current price. Maybe even higher. As soon as that news hits the wire, every contract will revalue to that price and hoarding will commence. Physical gold will dry up because the offer from Big Trader was for physical gold � not for contracts. Everyone will position themselves in physical as fast as they can. Unfortunately, those going through government sanctioned markets will most likely find all physical unavailable to them because it's a national security resource and the central bank will step in as lender of last resort to bail out the biggest shorts.

Having observed that Gold is a political metal, I would expect that any aggressive military move on the part of the US towards any oil exporting country would spark this kind of response. I would watch how the US treats the countries in OPEC for this is a united group that knows the value of gold.

Also, I can't help but wonder if a revaluation in gold in terms of US Dollars would absorb enough currency to tame inflation and maybe prevent hyper-price-inflation. It is an interesting concept, but in the end I believe a high price for gold will be found as a solution to many of the economic problems that the US is experiencing.

I will be waiting for that Big Trader's announcement.

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

Henry Paulson is not the second coming of Robert Rubin and those who say he is fail to match times and circumstances to probable policy.

Two obstacles stand between the most recent graduate from Goldman Sachs and Rubinesque stature:

1. The Bush administration and the Federal Reserve are pushing a 'weak dollar' policy (Rubin authored the so-called 'strong dollar policy' which underpinned the strong stock and bond markets of the 1990s.) It seems that those who make the Rubin comparison might be engaged in some heavy gauge wishful thinking.

2. The upcoming midterm Congressional elections. (If the Republicans lose the majority in Congress, you can almost be assured that Bush will be in for a brutal roasting including possible impeachment proceedings.) Like the rest of the administration, he will be on a short leash until the election is over.

Paulson was brought into the administration with his hands tied and some wonder why he even took the job. The mainstream reports emphasized his China connection, but anyone who thinks China is going to change its tune because Henry Paulson is now Treasury Secretary doesn't completely understand China's motivations. Others say that Paulson took the job because he could continue on in a future Republican administration. (His wife, by the way, it was reported in FT this morning, is a former classmate of Hillary Clinton and has donated to her campaigns. So he could carry on even if the Democrats won -- assuming of course Hillary gets the nod.)

So what's really behind the appointment and why did this power broker leave a huge pay check at Goldman Sachs and Wall Street influence to go to Washington?

Most likely reason: His chief job will be to make sure the dollar decline is orderly, and to peddle U.S. Treasuries while the currency depreciates (hopemfully within some preconceived band). Also, his blessing on the weak dollar policy might give it some credibility on Wall Street.

I still believe a major international economic conference ( a la Bretton Woods) is brewing in the background. Maybe Paulson wants to make his mark on history by helping engineer the next monetary system. After all, according to the profiles, he is known for his dedication to the task -- whatever that task might be.

Flatliner: The ECB made it clear last week that it sees M3 as a key statistic for guiding monetary policy -- the same M3 the Fed intends to lay to rest. So what is the Fed going to use? Removing the daily limits on key commodities could be the Comex board's reaction to the possibility of double digit inflation's return. Also, there may be something to the notion that the current situation with key commodites including gold and oil are STRUCTURALLY, as opposed to cyclically, driven -- a key admission if I'm reading this right. Volatility is likely to be even more pronounced in the months ahead, hence taking the lid off.

May I float a question that is a little out of our main stream of discussion: Am I being too gloomy in concluding that a purist gold coin investor should buy only

(a) old, rare, coins that he or she understands ("numismatic" buying), or
(b) bullion coins at the lowest premium possible ("gold is gold" buying)?

In particular, do the premiums on common old coins and on modern rarities always evaporate over the decades?

In the US, it seems, any 1975 resale premium on Austro-Hungarian 100 crown pieces evaporated when the Krugerrands came. Any resale premium on Krugerrands evaporated with the rise of the Canadian Maples and US Eagles. And a few days ago, people reported on this forum that any resale premium on Maples was dependent on the coins' not being scratched when fitting them back in the tubes. US Eagles, I understand, still have a small resale premium, which gives them the lowest spread for bullion gold coins ... though this premium too may evaporate if the new US Buffalo coin is a success.

Our host's closing prices on Friday (click on "Buy Gold" above and then on "gold bullion prices") show 100 crown pieces on sale at 1.75% over the metal cost. To someone used to UK prices that seems like astonishing value for money. Why should the prudent and purist gold buyer turn down that offer and take the risk of paying 5.2% premium on US eagles?

Well I can see that a survivalist might. If you fear that there may be a depression far worse than the 1930s and that you may need to use your gold coins as currency, then it could well be a good idea to have the troy weight stamped on the coin in English by the US Treasury ... rather than having to explain that, in the later stages of the Austro-Hungarian Empire, a crown was the equivalent of 0.304878048 grammes of gold. And for purchasing convenience you might want some quarter-ounce (10% premium) and tenth-ounce (15% premium) coins as well.

But most of us own gold primarily as a defensive part of our portfolios, in case we become involved in one of the less catastrophic crises that seem to come along every 20 years or so. If there are still bullion or coin dealers, they will understand 100 crown pieces. And even survivalists could use Krugerrands (2.4% premium) for their one-ounce coins. Gold is gold.

Where does this leave common old coins, such as double eagles in the US or bullion sovereigns in the UK? Our host will sell you these of course, at the going market price. But that price is influenced by some organizations who push these, particularly double eagles, strongly. When that marketing pressure ends, will the premium end too? Probably: that's what happened to sovereigns. In the 1960s in the UK, bullion sovereigns were sold as a hedge against inflation (and, since they were technically numismatic, as a way round the Exchange Control Act) at premiums of up to 40%. Tighter regulations, the coining of more sovereigns and the arrival of the Krugerrand pushed that premium back below 10%.

And what about modern rarities, the Kangaroos (6.25% premium) and Pandas of the World? Once the series has ended and is no longer being advertised, will the coins retain any more resale premium than Gibraltar's Royal Dog series has? I have a horrible feeling that they won't, and that we would be better off paying the minimum premium and losing less. Gold is Gold.

Now, none of us is wholly consistent, and I'm certainly not. I want to look at my gold holding, not just hide it away, so I own a few Britannias and Kangaroos, which I find far more attractive than dull but reliable 100 crown pieces and Krugerrands. And I like to think that one day these will be old, rare, coins.

What think ye? For what reasons would you pay more than the minimum premium for your gold coins?

I tend to think silver would be the medium of exchange if ever a currency collapse happened, versus gold, as there is so much more silver around (hidden away in stashes, or cutlery draws, etc.). It seems a remote possibility, as so much business is transacted in plastic, but who's to know?

The removal of limits at COMEX seems like HUGE news to me. Could it be preparation, or the writing on the wall, of a dollar collapse? In other words, preventing a freeze up, revving up the engine, and getting the system ready for full throttle in the gold price (and dollar descent)?

The last gasp and final binge of the financialization of America's economy, where nobody really makes money from making anything, but from making paper bets like in a giant casino--the importance and truth of this, of course, confirmed by appointment of the supreme high priest of this new religion, Hank Paulsen of Goldman Sachs. Truly, Bush, Bernanke & Co. are desperate!

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/06/04/cnfunds04.xml&menuId=242&sSheet=/money/2006/06/04/ixcitytop.html
SNIP
Traditional City fund management institutions are using new legislation governing unit trusts to fight back against the rising tide of hedge funds targeted at retail investors

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/06/04/ccecag04.xml&menuId=242&sSheet=/money/2006/06/04/ixcoms.html
SNIPS
One of the leading factors contributing to the recent uncertainty in financial markets has been the weakness of the dollar and the fear that the currency could fall much further.
Indeed, preventing a dollar-related financial crisis is the greatest challenge facing Hank Paulson, the new US treasury secretary. But what exactly is there to fear? Is a weaker dollar part of the problem, or part of the solution?
+
Recent experience suggests that sharp declines in the currencies of advanced economies are usually followed by falls in bond yields.
A prime example is the experience following the Plaza Accord. As our charts show, US bond yields fell in tandem with the dollar for at least a year after the currency began falling sharply.

http://observer.guardian.co.uk/business/story/0,,1789686,00.html
Central bankers plot path through the minefields
SNIP
As the switchbacks in financial markets over recent weeks have illustrated, seeing into the economic future is especially difficult at present. But if the comfortable combination of strong growth and low inflation is about to be replaced by a nastier mix, criticisms from business will become more vociferous as the MPC (the Bank of England's Monetary Policy Committee) and the Fed take on the traditional central bank role.
And what is that? As one of Bernanke's illustrious predecessors put it, 'to take away the punch bowl just when THE PARTY STARTS GETTING INTERESTING'.

==

That chairman seems to have been William McChesney Martin (1906-98) who served as Chairman of the Board of Governors of the Federal Reserve System from April 1951 through January 1970.

http://www.findarticles.com/p/articles/mi_m1094/is_3_40/ai_n15371476
Martin's tenure, the longest of any Fed Chairman, spanned five presidents and ten Congresses--all of whom, to some degree, sought to influence monetary policymaking.

http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300105088
(He was] the first paid president of the New York Stock Exchange and the chairman of the Federal Reserve System under Presidents Truman to Nixon. The extent of Martin's influence on the course of American economic history was significant: arguably he has done more to strengthen and reform the nation's most important financial institutions than has any other individual.

As Cicero said, "The person who has a library and a garden lacks nothing."

http://www.thelatinlibrary.com/cicero/fam9.shtml
Si hortum in bibliotheca habes, deerit nihil.

http://www.nymex.com/press_releas.aspx?id=pr20060602a
NEW YORK, N.Y., June 2, 2006 � The New York Mercantile Exchange, Inc. today announced that the COMEX Division has eliminated price fluctuation limits for all COMEX contracts beginning with the NYMEX ACCESS� session on SUNDAY,JUNE FOUR for trade date June 5.
This change was made in order to better facilitate the core functions of price discovery and hedging provided by COMEX products.

http://english.people.com.cn/200606/03/eng20060603_270775.html
SNIPS
China's top securities regulator said China would step up its research and creation of financial futures to prepare for the listing of the financial products at an opportune time, Shanghai Securities News reported Saturday.
Shang Fulin, chairman of the China Securities Regulatory Commission, was quoted on SATURDAY, JUNE THREE by the newspaper as saying China would strongly push forward the expansion of the country's futures sector in a stable and healthy manner in the coming few years.
+
Meanwhile, China would also continue its efforts to consolidate and expand its commodity futures sector, said Shang.

==
Can you spell Paulsen, Paulson?
Howard Roark stood naked on a cliff. He had just been expelled from college.

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=LOWMost of the volitility in PoG occurs in that time period when Comex is open and the rest is closed.
I can't really see how Comex "no-limit" trading in Gold aids and abets the Long side when the fact they're trading Future Paper Gold has a natural limiting effect to the upside anyway.
No, this "no-limit" thing opens the door to the downside fer shore and certain.

Meanwhile, 'ol Buck struggles to hold on here and Bonds strive to get back to 120.
Bernanke will shortly start rate-cutting ...the next leg down on SM will do the trick imo.

@ Druid,

Your prognostication fits right with the web bots, which attempt to measure the pre-cognitive mood of many millions of active websites.

Of course, those who subscribe to NWO caviats might suggest that this is the plan, making way for the final abdication of outward democracy.

Wow! You must feel a whole lot better having got that long stored up load of angst off your chest.If it was a suck up to the PTB I doubt it went down well.After all an angry abusive outburst such as yours should at least have some excuse & I don't see any for you.Perhaps a labotomy may help?

I also doubt that no more than a few zealots(if any)would subscribe to your rude, blind opinion. A tirade which made no sense in relation to either of the two posts you used as an excuse for your abuse.

Rich has always been a positive & most polite poster with an interest in trading precious as well as holding physical
Your expressed views of him questions your credibilty because thats NOT who you're describing -perhaps it's yourself?

My original post was addressed to Townie -He's big enough to answer himself (if he chooses) and it would certainly not be in the despicable FALSE language you chose.Please do not continue this thread with me.I value having a say & would hate to lose it to a loser.

http://imagehost.vendio.com/bin/viewimage.x/00000000/hessfineart/avs0523b11.JPG?allow_mailing_list=1&owner_id=813500&allow_track_link=1&track=023498bce6-c69bc&sp=0(I've been wanting to post this picture for some days but wanted to let the auction finish lest I be accused of commercial promotion.)

Most of us like to look at, fondle and even clink our coins. Our good host even allows us to wear them as pendants (I bought a very nice angel for my daughter) but this is on another plane entirely. In case you are wondering, it's a brooch.

The total weight is 41.4gm (1.33ozt, although there are a number of gems in it) and 5.25" long. The coins are "1908 Indian Head 2 � dollar coin, 1898 Liberty 2 � dollar coin; 10 one dollar coins dated 1855, 1874, 1856, 1855, 1854, 1855, 1874, 1855, 1855, 1874; California gold pieces: 1853 d half dollar coin, 1852 star Indian head coin & 1837? G half dollar coin. Some coins are in bezels, some are welded." Went for $1500.

So, John the Jute, worth the premium ?! And you could easily just break off a branch if you needed change.

While I have to admire the audacity, I find its taste somewhat dubious, personally.

C!

I agree totally with the(b)part of your conclusion -- That
you should pay the "lowest" premium possible & get more Gold content for your dollar - IF that's what you want.

In fact I often wonder why I almost never see Americans or Canadians talking about buying anything other than coins. It's as though Gold bullion bars don't exist.Personally I have chosen to purchase 1kg bars & may look at some 10oz bars in the future.After paying fabrication charges these work out the most economical (at least here in Australia)
And- -NO BS later at point of resale about tiny scratches etc!

Check out USA Golds selection of Gold Bars -they have the FULL range available.

@ Pritcho,

My concern with the larger units of gold is the ability to make change, especially if it goes "to the Moon". Maybe not all that well thought out, but . . .

Did you buy GOLD?

Hi Pritcho: While we advocate buying gold as a store of wealth and purchasing power, it certainly makes sense for most of us to adhere to the standard advocated in your post. (To acquire the most gold for the money spent.)

Having recognized that; it remains astonishing to me at least, the incredibly small premiums over gold bullion that many genuinely rare, high quality, numismatic gold coins sell for!

Whether or not these premiums will ever be more greatly expanded as gold buyers increase in number is the question. As an example: Today, I was fortunate to purchase an uncirculated 1913-D U.S. Saint Gaudens 20 dollar gold piece for $683.00! That is a mere (to me) $70 over the bullion value of the coin that contains .96 oz. of gold. There were only 393,500 Saints coined 1913-D (and undoubtedly many were melted down after the U.S. gold recall). On the other hand, if one were to purchase and uncirculated 1909-S vdb -- U.S. one cent piece, with a mintage of 484,000 and a copper bullion value of about 2 cents...I suspect that little coin would cost over $1,000.!

The difference in premium paid---collectors. There are millions who can afford to be collectors of pennies, but probably a few thousand who are selective opportunity collectors of Gold coins. As more people turn to gold, it may be that the premiums for old collectable gold will increase the differential between modern bullion gold and old coin of the realm...Speaking of that, you must have some nice old Sovereigns there in Australia with Perth, Melbourne, and Sydney mints that must have some collector value over the gold content? To those with historical sentiment, it's comforting in a way to hold and gaze at history in your hand in the form of a gold coin and to wonder about the times and those that may have held the coin before you, a hundred years ago and longer.

However one chooses to do it (bullion and/or old gold) is a matter of individuel choice. The main thing is to have some gold and/or silver to protect and hedge one's accumulated wealth and savings against the conterfeited fiat currencies!

"My concern with the larger units of gold is the ability to make change, especially if it goes "to the Moon". Maybe not all that well thought out, but . . . "

Yes -I agree that the above has been a question I've also asked myself - - which is why I will get some 10oz bars as well.It all boils down to what we see our stash's of precious doing for us in the future. Another option is to sell 100oz bars of silver-still only worth around 1/4 of a 10oz bar of Gold.


Some purists here speak about buying Gold & NEVER selling it and say that their children & grandchildren will be the beneficiaries.This suggests to me that they don't have too many ozs,consider themselves too old to be able to benefit and/or believe that they have enough paper $ to last out their lives.They look at Gold ONLY as an insurance policy.

Mine has been a more full on approach (rightly or wrongly)as the insurance seekers may find they are substantially UNDER INSURED.Full on as in house sold & precious bought-a commitment thats not for everyone as it entails leasing a home & putting your hard earned where 95% aren't.I fully intend to be selling SOME precious in the next few years- -for a home and or for some money (paper) to live on. I see Gold & Silver appreciating for quite a long time so I will need to get coin of the realm to live from time to time by selling some of my stash.At 61 & retired it will have to be more than the odd coin.

"However one chooses to do it (bullion and/or old gold) is a matter of individuel choice. The main thing is to have some gold and/or silver to protect and hedge one's accumulated wealth and savings against the conterfeited fiat currencies!"

You couldn't have summed it up bettter.Those interested in coin, who know what they're doing will no doubt do well-- lets hope they have plenty of them:)

Things were being restored to their proper place in the Council Chamber. Sir M.K. still sitting at the Oaken Table carefully thought of all that had transpired. He focused on the covered mirror, remembering the images before the arrival of the unwanted guest. The tunnel and mountain pass were pictures from a legend of long ago.
Ishlar was a great mountain city with two castles. Vanderbaum and Isenrod. The three formed the triangle of trade. Islar was known as the Eye. Vanderbaum the Bow and Isenrod the Arrow. They were never conquered. Instead internal strife split the inhabitants and may be how the Valley of Clouds and its mountain citadel had its beginning. Sir M.K. knew the Road to Ishar was long and Dangerous.
The castle courtyard, nearly filled with supplies, awaited the wagons. Sir Slingshot, after a long search of the town and castle, rested at the gate awaiting the arrival of Cougar and Otish Mountain.
Tobias was confused by the Wizards answer. Gandalf knew he could not change Tobias back to normal and could not have him killed either. Gandalf returned to his chair and began to read from the open book on the table.

Slingshot--------<>

http://www.wlym.de/site/html/page102.php SNIP

[5.5.2006] FRANKFURTER ALLGEMEINE ZEITUNG QUOTES FROM LAROUCHE WEBCAST

Coming in the context of an ad of the "Finanzbuchverlag" for the 3rd edition of the book, "The Greenspan Dossier" (by Roland Leuschel and Claus Vogt), LaRouche is quoted from his latest webast, as saying:

"Das derzeitige Finanzsystem ist am Ende. Unser Land und die Welt stehen heute vor der groessten Krise der neuzeitlichen Geschichte, groesser noch als der Zweite Weltkrieg."

This is the German translation of LaRouche's initial remarks,
"This nation and the world are now facing, in the weeks and months ahead, the greatest crisis in modern history; a greater crisis than World War Two."

The phrase, "The present financial system has reached its end," is added from another section of the webcast.
The quote is accompanied by the characterization: "Lyndon LaRouche, US economist and leading head of the opposition in the American Congress."

Roland Leuschel, the co-author of the book, is acquainted with the LaRouche assessment and proposals, and Leuschel also several years ago coined the term, "salami crash," describing a crash coming in stages one after another. Leuschel, now a private consultant and author, is a retired top banker of Bancque Bruxelles Lambert.

==

Sorry, I'm one momth late.

Last week our hunt club was informed that our lease would not be renewed. The land was sold, 4600 acres, to some investment group. Lots of work to do. I will try to post the story as I have been.
Slingshot--------<>

http://www.nytimes.com/2006/06/04/business/yourmoney/04count.html?ex=1150084800&en=5080081e8c6f700a&ei=5040∂ner=MOREOVERNEWSsnip:

Remember "The Treasure of the Sierra Madre"? That classic John Huston film was perhaps the ultimate tale of an obsession with the gold in them thar hills. Well, perhaps today's remake could be titled "The Treasure of the Golden Junkyard."


Because, apparently, there's an awful lot of gold lying around, just waiting to be picked up, in them thar basements, Dumpsters, dresser drawers, even mouths. All it takes is a little incentive to look for it � an incentive like, say, a soaring gold price.

When the World Gold Council offered a breakdown recently of just where gold has been coming from, it was interesting to note that "old gold scrap" accounted for more than 300 tons in the first quarter of this year. Not only is that up 50 percent in a single year, it also now accounts for fully half as much as is being mined.

Where does that scrap gold come from? According to the council, in the United States it's mainly old electronic products (we certainly throw away plenty of those), and in the developing world it's mainly jewelry. And don't forget old gold fillings.

-Goldilox

While the big traders do what they can to shake the small traders off of the bull, it seems John Q is ferreting out scrap gold as well. Of course, it helps when they read financial stories that convince them that $730 was a 1980-style peak. How utterly unprepared for shearing are the sheeple.

http://seattletimes.nwsource.com/html/nationworld/2003038390_penny04.htmlDoes Keeping the Penny Still Make Sense?

By J. Scott Orr
Newhouse News Service
via Seattle Times
Sunday, June 4, 2006

WASHINGTON -- They accumulate everywhere, multiplying faster than bunnies, it seems, in pockets, purses and dresser-top jars. And you can't buy much with them.

So why doesn't the United States get rid of the penny, especially now, when, for the first time, the copper-coated coins cost the government more than 1 cent each to make?

At least one bill has been introduced in Congress to retire the coin, but it never gained traction. And the bottom line may be that when it comes to the penny, Americans don't want change.

"Americans want to keep the penny, it's that simple," said Matthew Eggers, policy director of Americans for Common Cents, which is fighting to keep the coin in circulation.

The most recent survey -- conducted last year by Coinstar, a Bellevue company that puts coin-counting machines in supermarkets and other locations -- found 66 percent of Americans want to keep the penny. It also found 79 percent will stop to pick up a penny.

But the penny's detractors have been buoyed by new figures from the U.S. Mint that show the skyrocketing prices of the two metals used to make the penny -- zinc and copper -- have pushed the cost of making the coin across the 1-cent threshold for the first time, to 1.23 cents. The penny is 97.5 percent zinc and 2.5 percent copper, according to the mint.

Jeff Gore, who heads Citizens for Retiring the Penny, said the mint's figures add to a solid argument for abolition of the nation's oldest form of currency.

The penny is a waste of money and a waste of time, said Gore, who has a doctorate in physics and is doing postdoctoral work at the Massachusetts Institute of Technology.

Using data from Walgreens and the National Association of Convenience Stores that show handling pennies adds 2 to 2 � seconds to each transaction, Gore calculated pennies cost each American four hours a year. If each person's hour were worth $15, that's $15 billion lost nationwide annually, according to Gore's formula.

Eliminating the penny, he said, wouldn't cause a ripple because many merchants already round off prices through "give-a-penny, take-a-penny" dishes. Indeed, the United States got rid of the half-cent coin in 1857 without consequence.

Rep. Jim Kolbe, R-Ariz., who sponsored legislation in 2001 to do away with the penny, said he will introduce new anti-penny legislation in light of the new cost figures.

Eggers, of Americans for Common Cents, countered that eliminating the penny would hurt consumers. Without it, transactions would be rounded off to the nearest nickel -- and, he asked, which way do you think most retailers would round prices?

"What you'd see is consumers would be hit with a 'rounding-off tax' of hundreds of millions of dollars in the aggregate every year."

Also feeling the pinch would be charities that raise millions of dollars, one cent at a time, though "penny drive" fundraisers.

Then, there's history.

Some 300 billion pennies in 11 designs have been in circulation since 1787. The design for the first penny was suggested by Benjamin Franklin and some of the copper was supplied by Paul Revere.

Last year, the government minted nearly 8 billion pennies, each with Abraham Lincoln's bearded profile facing right. (His colleagues on other coins all looked left, until Thomas Jefferson did an about-face on the nickel last year.)

Eggers said the costs of zinc and copper have fluctuated greatly over the years and are at all-time highs. He expects the market price to level off, bringing the cost of making pennies below the 1-cent mark once again.

If the penny is retired, the nickel might be next. In acknowledging that pennies cost more than 1 cent to make, the mint also had bad news for nickel lovers:

A five-cent coin costs 5.73 cents to make.

I'm thinking very seriously about converting our Roth IRAs to commodity-based IRAs, but am concerned about the possibility that all the PM backing the IRA is stored in a vault in Wilmington, DE. The company storing it has an insurance policy from Lloyd's of London for $100 million, but there is fine print that excludes coverage for certain things like a terrorist attack on the facility or some acts of God.

I'm not worried about putting lots of my eggs in one basket, but if those eggs are stolen by terrorists or something else happens at this location far from my home and ability to quickly get it out myself, this otherwise neat idea which our gov't allows us to take advantage of doesn't seem like as sure a good deal.

What do you all think? And any other strong pro's or con's in your mind about moving an IRA to something like this?

Appreciate the good feedback I know I'll get here! I want to move on this tomorrow if I can dispel the doubt about the safety of it.

Thanks...

The major threat to the security of ones wealth comes from the US gov't itself. Therefore, the best retirement plan is one that stays off the gov't radar screens. Owning physical PMs keeps things more under your own control. Nobody needs to know how much you have, where you store it or what you do with it.

"The state lies in all the tongues of good and evil, and whatever it says is lies, and whatever it has, it has stolen, everything it is, is false, it bites with stolen teeth, and it bites often, it is false down to its bowels."
� Friedrich Nietzsche, Also Sprach Zarathustra [1896]

Best Wishes

How does that play out? If I don't want the gov't to know what I've got in my IRA, is that because they could confiscate it more easily?

I accept my responsibility as a citizen to pay taxes at the same rate as everyone else, even though I may be unhappy doing so. So if I get this IRA, when the time comes to "cash it in" and spend some of it, I know I'll need to pay whatever taxes are due at that point.

But should I be concerned that I will never even reach that point?

You've fairly stated your concerns about the safety of your custodial gold, and ultimately, when you consider your various risk factors on both sides, on the balance you have to decide whether your current paper/digital IRA very truly represents any lesser risk of loss and/or vaporization.

And in the final analysis, Liberty Head has offered some very good words of wisdom (excluding the axe-grinding excess of Nietzsche).

R.

http://www.mises.org/money.aspYou may consider Liberty Head's quoting Nietzsche excessive, but I for one believe that history begs to differ, no more so than now, as the US state's nearly century-long war on the people's money (see link) comes full circle, to the enormous detriment of humankind.

Zarathustra knew whereof he spoke.

It is well within Liberty Head's political style to provide historical quotations such as that, I'm generally glad to have it, and would not call it excessive.

My assessment regarding an "axe-grinding excess" came from putting myself in Nietzsche's (not Liberty's) head, and concluding that, as he sat there with pen in hand to jot down his thoughts, he was having a particularly bad day. A real "axe-grinder", so to speak.

R.

Titan,
IRA's discourage early withdrawal. This restricts your ability to time the sale of assets with the market or your needs.
I assure you the tax deferment offered by these gov't designed instruments is but bait in a trap.
They were not designed for your benefit.

TC,
Nietzsche's character faults aside, the truth of ones words is independent from ones character are they not?


Best Wishes

No. No. No. Not the band. The food.

Red hot chili peppers as a metaphor for the US Dollar.

Consumed in moderation they can add flavor and spice to a meal. One can even aquire a taste and tolerance for them. But if one (a Central Bank, for instance) tries to make the majority of a meal (reserve) out of them. Watch out! They may sit in your stomach for awhile but eventually your stomach will begin to cramp. For what one consumes, one must eventually excrete (spend) and that's where the pain comes in. Usually ending with severe burning diarrhea.

Trying but failing to hide his actions and noises from the people around him, his involuntary muscles take over and he relieves himself in any way possible. The blowoff often comes without warning and can result in tremendous embarassment for the chili pepper glutton.

But the smart ones (some CBs, individuals) take their Pepto-Bismol (gold/silver) at the first hint of their irregularity and thus avoid much of the pain experienced by the gluttons. If you see one of the gluttons (China, Japan) attemping to take P-B, you will have a short forwarning of what is to come. For they may try to control their bodily functions but their previous behavior will make all attempts futile. Purchasing medicine at this point will be possible and is advisible as it's price will only go up as does it's demand.

But the biggest problem will come if one of the gluttons farts. Combined with the diarrhea, they're usually wet. The worst kind. For most, there will be no hiding from the ensuing smell. Only those that prepared themselves by obtaining gas masks (Previously purchased gold/silver) will be protected from the stench. For gas masks and medicine will be unavailable or only available at astronomical prices at that point.

The moral of the story is: There will come a time when being a merchant of gas masks and medicines will reap tremendous rewards to those who were good Boy Scouts.

P.S. Watch out for silencers.

Noble1

It's a good point regarding the truth in words, whenever and wherever it is to be found, as an independent agent absolute unto itself.

But that isn't to overlook the tendency that where ones character is heavily burdened for whatever causes, then it should not surprise us to find (if at all) only occasional needles of truth in their mighty haystacks of words uttered under the influence of that condition.

One need look no further than Jefferson and the Declaration of Independence to see example that a State can be honorable in its action and its aims as a couter-argument to Neitzsche's bleak comment. But certainly, woe to us all if/when that noble vision fails and the actions stray.

And happily through it all, physical gold has an incorruptable (even if sometimes latent) power to shine on and on, a sovereign, non-defaultable testiment of portable wealth in the hands of its owner -- a key to the eternal vexation of any (erstwhile) jailor-state.

R.

At the risk of conveying a tragic understatement by fault of my own underdeveloped elocution, I hereby declare yours to be, beyond any rational dispute, the very worst metaphor/analogy in the history of the world.

R.

http://www.jsmineset.com/Some useful comment from Dan Norcini :-

The reason for the limit and then the reopening is that it is supposed to give players a chance to cool down and think more clearly. The frantic action in the pit often runs emotions to extreme levels and panic sets in. If players have a chance to sit down and think, sometimes they can collect their wits as the emotion of the moment subsides a bit. At least that is the theory.

I see it as simply removing the cool down period and allowing the market to trade freely until it uncovers buying or selling and begins to see two way trades at a lower or higher level, depending on which direction the market has previously been moving. The volatility has been so great in these markets lately that it has forced many of the large players to head to the sidelines to wait until some semblance of sanity is restored. This results in very wide intraday swings due to the lower liquidity and air pockets both above and below the market that are being created. By removing the limits, Comex is hoping to provide a better method for price discovery during this period of volatility.

End snip.

C! OK, let's see if I have this straight. The limits were put in place to cool down volatile trading. However, the volatility has been so great recently that the market has become excessively thin, allowing even more volatility (but still less than the limits). So to ease this, the limits are being removed. Huh ? So it would appear that limits are self-defeating.
While you are at the Mineset, there are also a couple of interesting graphs of the POG, one in dollars, the other in Euros. Interesting in that the dollar one shows Fibonacci, while the seemingly more actionable Euro one shows a simple up-trend line.

Seconded ! W-A-A-A-A-Y too much information - I'm just getting ready to eat dinner, too ! (worse, it's a curry)
C!

Randy,

You wrote:

>you have to decide whether your current paper/digital
>IRA very truly represents any lesser risk of loss and/or
>vaporization

I really like the idea of the PM-based IRA with Sterling/FideliTrade, but since it says openly on FideliTrade's site that they won't cover all kinds of losses, it does make me a bit nervous. It's not the kind of loss that "might compare" with the loss I could experience with paper-based investments. It could be the TOTAL loss of all the gold/silver I have backing up my IRA.

I'll end this thread now because I don't want to be seen as trying to discourage business for your company. I know you provide a lot of people with these IRA's, and maybe I'll still be one of them. I just need more reassurance that the PM is really safe once I buy it and send it to Wilmington.

The alternative that's seeming more viable to me at the moment is to just cash in my present Roth's, pay the tax penalty, and buy/store my own PM. I previously thought this wasn't a good idea because of the tax situation, but that probably is minimal compared to other risk factors by doing nothing with the IRA's!

>IRA's discourage early withdrawal. This restricts your
>ability to time the sale of assets with the market or
>your needs.

I realize that. But just like I can convert the equities behind our current IRA's and buy gold to back them up, I could sell the gold if it peaked (and I could tell in time that it had!), and put the capital in something else--before retiring and cashing them in.

>They were not designed for your benefit.

I'll definitely consider this more thoroughly before acting.

Thanks!

Sorry TC, Clink,

Didn't mean to offend.

Feel free to delete my feeble sick attempt at humor. Just trying to provoke some response though. I guess I did succeed at that.

Noble1

Point taken, though I'm not certain that the day Nietzsche penned the aforementioned remark was any different from his others. :-)

I'm a little surprised that there is so little information/comment on net news about the removal of Comex limits across all commodities:

TownCrier (6/2/06; 14:07:47MT - usagold.com msg#: 144912

A Google search turns up almost nothing. Is it really such an ho-hum event?

Puzzled ?-)

Holy Frijoles Noble1. That was on the cutting edge.
Bernacke sings in the shower every night,

Give it away, give it away , give it away now!
Hot Chili Peppers
Slingshot----------;0)

There was playfulness in the responding posts by me and Clink! that you've seemingly missed, however, in your msg#: 144978 calling for a vote, your use of the "five-h!tty" thing wa5 exce55ively more than we can po55ibly 5tand in the intere5t of maintaining a clean and 5ober forum. Under5tood? 5uper.

R.

Yes, I had been a little surprised myself too. Murphy didn't even mention it on Friday. And I have to admit that Topaz' comment yesterday had a ring of truth to it. However, the Norcini piece which I posted earlier (and I usually value his trading insights) tends to confirm a professional yawn. But call me paranoid, I have difficulty in taking this at face value. Since the crash of '87, all I have heard is the placing of limits on exchanges, or their modification, but never, NEVER their total removal. There is more to this than meets the eye, I think. Maybe I should try out a new by-line :-
Coincidences don't exist !
C!

Offense ? Nah, I can do scatological with the best of them !!
C!

@Titan

my miners returned 147% over the last 26 months.....cASH out!!!..paid the tax / penalty(IES) ..........bought door stops.............PM in hand.....I see chins a scratching......just a drip today.....
DEBT STEALS,, GLOUTONY BLINDS.......

http://business.guardian.co.uk/story/0,,1790262,00.htmlProsecute bad lenders over debt suicides, says whistleblower
Executive calls for curbs on profit-hungry banks
String of deaths linked to mounting loans
Rupert Jones
Monday June 5, 2006
The Guardian
SNIP
Some of Britain's high street banks are almost "putting profits before human life", a senior banking executive claims in a BBC1 programme to be broadcast today.
The unnamed executive said that following a string of cases in which people have killed themselves after running up big debts, the law should be changed so that banks shown to have loaned money irresponsibly can face criminal charges. In the past two years, at least eight cases have been reported of people taking their lives after debts spiralled out of control

==

compare:
The Invisible Hand (6/4/06; 08:14:19MT - usagold.com msg#: 144959) Roland Leuschel: a greater crisis than World War Two

(I should have written Lyndon LaRouche instead of Roland Leuschel)

Will some lunatics also ask legislation to protect the present gold shorts (from suicide)?

Why does homo sapiens think she can do whatever she wants?

The Latin word for kosmos is universum.
It is because there is a kosmos that there are universal laws which impose constraints on what woman, including legislators, can do.

Some can't accept this.

The origin of the belief in man's supremacy over universal laws (as a the consequence of the negation of the existence of a kosmos) is Gnostic Christianism
(see Henri (5/27/06; 11:26:35MT - usagold.com msg#: 144700)
@ Invisible Hand Msg # 144691).

As Elaine Pagels put it in the conclusion of her 1979 book "The Gnostic Gospels"
(In 1979, Pagels expected those Gospels only to be made available publicly in 1980):
the Gnostic tended to mistrust the body, regarding it as THE SABOTEUR that inevitably engaged him in suffering.
Nor did the Gnostics trust the blind forces that prevail in the universe.
+
In the process, the Gnostics celebrated - their opponents said they overwhelmingly exaggerated � the greatness of human nature.
+
The philosopher Plotinus, who agreed with his master, Plato, that the universe was divinely created and that non-human intelligences, including the stars, share in immortal soul, castigated the Gnostics for thinking very well of themselves, and very ill of the universe.

People don't accept the existence of universal laws and then they need legislation to worsen (although they will pretend it will improve) the situation.

Hindsight is 20-20, said you? I'm afraid, "we" had too much experience of what government intervention leads to.

See my latest post in the thread "Gold bashing � Truth hurts"
http://radicalacademy.com/cgi-bin/eboard30/index.cgi?board=Main&message=3047

http://abcnews.go.com/Business/wireStory?id=2039369&page=2Snip:

"...
Among Monday's big events, at 1815 GMT Fed Chairman Ben Bernanke, ECB President Jean-Claude Trichet and BOJ Deputy Governor Toshiro Muto all participate in a panel discussion in Washington at the International Monetary Conference.
..."

Sundeck: Wonder what they are gonna say...an exercise in non-speak? All ears will be pricked for the tell-tale nuance, or the loose word...but, you never know, something dramatic might occur...

Mmmm....there is at least some talk that the Fed may pause rate increases at its next meeting, but there is also talk that the ECB may increase rates by as much as 500 basis points this week. Such a move might be expected to precipitate a strengthening of the euro against the dollar...all else being equal (which, of course, will not be the case). Trichet appears to have been more comfortable of late with a strengthening euro. A brighter German economy has probably eased some of his concerns. Japan still making rumblings about raising rates.

Where to from here? Erect dart-board. Blindfold players. Insist right-handed throwers use their left hand. Stand clear!

:-)

While stipulating that the responsibilities for even excessive borrowing/lending ought be viewed as an equally shared two-way street, here's some timeless and socially-realistic sage advice for borrowers that find themselves woefully on the hook for more debt than they can service...

They would do well to learn to clearly enunciate the following phrase (for the fiscal enlightenment of themselves and the political enlightenment of their lenders): "Go pound sand."

Amen.

And because it remains a social reality that cumbersome debt-defaults are always allowed to escape without so much sand pounding as all that, the prudent course of action for any thinking person is to CONSOLIDATE their IOU-ish savings as non-defaultable tangible wealth. Gold.

R.

http://www.bangkokpost.com/News/05Jun2006_news19.phpsnip:

His Holiness the Dalai Lama has called for reform at the UN and for independence for Tibet, which was invaded by China in 1959 (Bangkok Post, June 3).

China is one of the big boys who can do virtually anything they want in the world, driving gold prices to the sky and owning enough US Treasury notes to hold the American economy hostage. The US is the biggest boy, invading Iraq while violating the Geneva Conventions and ignoring the UN.


The US desperately wants the North Korean nuclear problem solved and China is the only country which can make that happen so it seems the big boys need each other. The question is, do they understand they need all of us?

-Goldilox

In a word, "No"

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/06/05/cnrussia.xmlBy Ambrose Evans-Pritchard
The Telegraph, London
Monday, June 5, 2006

The world's big money brigade is snapping up gold bullion at eight times the rate originally thought, according to a report by UBS, the world's biggest gold trader.

The huge sums entering precious metals below the radar are likely to help to put a floor under the gold price after the dramatic fall of $112 an ounce in late May -- the sharpest correction since the bull market began five years ago.

The Swiss bank said information from its trading floor suggested that funds and investors were allocating 20 percent of their commodity portfolios to precious metals.

This is far more than the index tracking funds run by Goldman Sachs, Dow Jones-AIG, and others, typically taken to be a guide to overall investment flows.

UBS said these indexes gave a deeply misleading impression, obscuring a silent shift of funds from oil into gold.

The Goldman Sachs GSCI index, for example, has a gold and silver weighting of just 2.27 percent, compared to 73 percent for energy.

"If our traders' experience is representative of trends in the wider market, this has very important implications for metals investment," said the bank's gold expert, John Reade.
The UBS gold reports are watched closely by the markets. The Zurich bank is the world's leading gold trader and manages the biggest known stash of private client wealth, surpassing $1,000 billion.

The extra volume in gold buying has been channelled through the London Bullion Market Association, eclipsing the Comex futures market in New York usually monitored by speculators for clues.

Gold recovered from lows of $618.50 an ounce last week to end at $637.30 after weak US jobs data renewed fears of a dollar slide.

"The sort of money that is chasing this market higher is not hot money," Ross Norman, director of the BullionDesk.com.

"It is slow, steady investment by pension funds and long-term buyers. Anybody who thinks this market is about to head sharply lower is reading it badly," he said.

Mr. Norman said there was a chronic dearth of new mine supply across the world due to eco-regulations and a lack of discoveries.

Output in South Africa, the world's biggest supplier, fell to 10.9 percent in the first quarter of 2006 despite high prices. The country's production has reached its lowest level since 1923. "It's becoming very hard to get gold out of the ground," he said.

Oil states armed with an estimated current account surplus of $480 billion in 2006 are thought to be feeding the "stealth demand" for bullion, led by Russia.

President Vladimir Putin, a frequent critic of dollar hegemony, has ordered the Russian central bank to raise the gold share of foreign reserves from 5 percent to 10 percent.
Russia's reserves have surged to $237 billion -- the world's fourth biggest -- after rising 61 percent in 2004 and 40 percent in 2005. With a current account surplus of 10 percent of GDP, it must sweep up a big chunk of global gold output just to stop its bullion share of reserves from falling.

In China, monetary committee member Yu Yongding last week issued the most explicit call to date for Beijing to diversify its $875 billion reserves into gold to protect against a tumbling dollar. "We need to use some of the reserves to buy other assets such as gold and strategic resources such as oil," he said.

Ah, MK, I must say that slingshot's story honors your work here on the net in a most delightful way. There are many that will most likely forever remember the confidence, education and security that you made(make) available so generously. I stand amongst them.

I do enjoy a good puzzle and can't help but wonder about the removal of the limit protection on the comex. Do I think that it's related to future double digit inflation? Absolutely not. We both know that orderly moves in the price discovery of gold could easily occur with limits in place. 2-3% up days, day after day, could happen very orderly. The limits are clearly there to force overly emotional markets to think about what they are doing and slow down volatility.

IMHO, this removing of limits is a key step on the gold trail and a roadblock that had to be removed in order for gold to absorb the excess currency in the world. But don't think of this as removing the lid quite yet. At least, I'm not seeing it that way yet. I believe that Topaz as hinted at the bad news ahead. In the short run, I see the limit removal as possible means towards trying to re-establish strong dollar policies before things get totally out of control. As you've pointed out, I believe that the Fed is all about containing inflation expectations as it's part of the structural engineering.

Structural oil and gold. I'm not sure what you mean here, but there are many words stored in the archives about economic engineering that some great one's shared with this forum. It seems to me that the engineering that was setup many, many years ago is no longer functional for Oil. When I read the headlines today, it seems to me that Oil no longer needs the military security that the US has provided and is seeking to trade in a currency of Oil's choosing. I believe this is very significant and worth a close look.

In a few days, the world will witness the emergence of an Oil exporting country that does not need the security provided by the US � Russia. We have watched for months even years as OPEC countries continue to keep the status quo with the US even though a few very vocal members are defiant of the US. The agreement seems to hold that Oil flows in US dollars, the US provides military support and gold is held cheep (Strong Dollar policy). But how does Russia fit into this grand scheme of things?

That is what I'm on a quest to find out. I believe that the reason why Iran has backed down from trading oil in anything other then US dollars is because they don't want to jeopardize their position in OPEC more then anything else. The collection of countries are not willing to break the arrangement at this time. One would think that they are trapped and don't like it one bit but they are playing by the rules waiting for someone else to break the arrangement. Even though there are two very vocal OPEC countries standing up against the US, they have not broken the unspoken agreement.

Now Russia comes along. Here is a country that does has been screwed in the past and have put the pieces back together again. They know how they were played and are executing a bold economic plan that many have overlooked by looking towards China. As if springing a trap, Russia has not caused any shock making a world reserve currency claim, but did cause a shock when they tried to re-price their oil at the turn of the year. Even though Russians themselves may not have confidence in the Ruble, if the current plans are successful, Russians will drop dollars and give the world confidence to do so.

A few months ago when it was rumored that Iran was moving money around, I seem to remember some key EU banker standing up and saying don't try making the Euro a new world reserve currency because there isn't enough of it. The idea that I got from those comments basically read - don't treat the Euro like you treat the dollar. We *will not* overprint the Euro in order to make it available as the US dollar is available. It was pretty clear that they do not want to setup the same structural problem that the US lives in today.

At this point, we have OPEC that has a deal with the US dollar and OPEC is not in a position to stand up other then through heated word (no action). Also, we have a European organization that refuses to stand up and let the Euro be a world reserve currency. They will not print it so it will not be suitable for Oil trade. And, they seem to be sitting and waiting for the system to break down in some way without actually standing up against the US.

Now, along comes Russia. They are in a unique position and, I believe, they have been setup. They are actively willing to print the hell out of their currency and back it with Oil. Just like the US did. At the same time, Russia has also followed Europe's lead at marking their gold to market. This basically means that they are willing to take down the system by working to replace the US dollar.

Now, if there was design behind the Euro to bring out a Freegold type of system, now would be the time to act. Inaction will mean that Russia will build demand for the Ruble and it will find value because it's backed by oil. In Europe, all will be subject to the policies that come from the east. I wonder if Europe would like that?

I believe that the limit lifting may lead to server downward movements in the price of gold. Now that Limits are off, I'm expecting sub 500 gold � in very short time. The panicked selling will be the way the shorts will close their positions. At the same time, if the US gives up on issuing security to OPEC countries, we may find they will put the Gold for Oil card revaluing gold many times higher then it currently is in US dollars. The markets would then adjust up without limit. All the shorts will have cleaned house during the crash and the fraud in the paper markets will be exposed with the rush to take delivery on the price rise.

We are at a crossroads. The physical gold holder has the advantage here. All you that have just recently bought gold, if I could give advice, it is to don't panic. The reason why is because the Euro doesn't want to be the next world reserve currency and all those banks in Europe don't have their vaults full of Rubles! They will act before falling victim to the next Oil empire. Europe's advantage is gold and they must have a dollar that keeps trade up. Re-valuing gold will accomplish the long-term goals without causing the world to come to a standstill. They can use gold to by the excess dollars in the world thus supporting the dollar and their trade. Oil, will find all currencies inadequate for use in their markets and will lean towards gold.

Buy gold and hold it. If TPTB are successful with revaluing gold fast enough � days or overnight � then the world will keep right on ticking and economic panic will be contained.

Nice little article of yours on increased gold allocation in portfolios. Some here must be socking a little more away on this recent price pullback. It looks tonight that some of that "quiet money" is putting a nice quiet rally together so far, up about $7 over last Friday's close. Night all.

http://www.usagold.com/cpmforum/archives/420066/default.htmlIn nearly a decade of posting my various gold/economic insights in forms every which way but loose, I think it's accurate to say I've never in sum total acheived the level of community service that you've just now tapped out on your keyboard.

May you live to be a thousand years, good Sir.

R.

-You seem to spinning the line of A,FOA,Aristotle,Aragorn,Miner49er, Belgian,TC straight forward.Recently you called for a Big Traders announcement-now read the Telegraph article "Russia leading global 'stealth demand' for gold" (ChrisPowells post): "The world's big money brigade is snapping up gold bullion at eight times the rate originally thought, according to a report by UBS, the world's biggest gold trader."

I was a bit surprised by the Russian Ruble Oil trading-it was always said that theres not enough Float yet in the euro to trade in oil.Now the Ruble has?Either they will print the difference as you suggested or its just plain common sense that trading domestic goods (oil) in domestic currency is an inherently balanced and appropriate approach.In the multipolar world I can see oil traded initially in $,euro,ruble and for the first smaller OPEC oil states euro as well-a gradual approach.If in the end all trade oil in euro'so then.Its just that none is forced to by a currency hegemony.

-"Gold will be let run only if the euro is firmly on its foot" or so said PandaGold.Maybe the now officially more solid economy in Europe was the final puzzle.Btw. didn't PandaGold "predict" this NYSE/EURONEXT merger in ~2002 on GE?Though sure he said Nasdaq will be the board.Maybe pandergold (just teasing man!) comes back?

-Removal of the limits-I do not know what it will mean for paper Gold,but I do know in FreeGold,limits are contradictory.Ergo,a step forward.

On the trail,I see a K2 like climb ahead..

I very much enjoyed your post & the thought that went into
it.Any changes to Comex have to be taken seriously & the removal of limit protection is NOT to help minnows! I do not use futures & so do not have a full understanding BUT I do like to know enough to help protect precious investments.

A recent series of articles at Financial Sense by Antal E. Fekete is I believe of relevance to your post-- especially to your fears of a savage knockdown in the Gold price.If you have not read them I suspect you would enjoy -- if you have then what do you say about his point that the short sellers are NOT STUPID -nor do they want to Kill the goose?

SNIP -- (From "Bull in Bears Skin")

"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.

It is easy to predict what will happen in such a situation. The longs are sitting ducks and the shorts keep preying on them. They raid them periodically so that, after the shake-out, they can pick up gold and silver dropped by weak hands. Not only do they buy back what they have sold short as bait; they pick up a lot more. It is a wolf in sheep's skin or, if you like, a bull in bear's skin. The name of the game is to mislead the public and induce it to give up monetary metals for a pottage of lentils. I am not putting this forth as a thesis. It can never be proved or disproved. It is merely a hypothesis more plausible than the one suggesting that the shorts are as stupid as they are suicidal."


I'd be interested in your thoughts on the good Professor's articles -- perhaps it does mesh in with yours?


"Bull in Bears Skin"
http://www.financialsense.com/editorials/fekete/2006/0504.html

"Ultracrepidarian Musings"
http://www.financialsense.com/editorials/fekete/2006/0511.html

"Monetary vs. Non-Monetary Commodities"
http://www.financialsense.com/editorials/fekete/2006/0525.html

"The Last Contango In Washington"
http://www.financialsense.com/editorials/fekete/2006/0604.html

I wouldn't like to read too much into a story for gold from the removal, by the Comex, of up and down trading limits on all commodities.

Remember that it is not just limits on gold trading that are in question here. The announcement applies also to copper, zinc, nickel, you name it. Each of these markets would dwarf those of gold and silver and each has shown a comparable degree of speculation, supply and demand dynamics, and associated volatility. I doubt that the NYMEX had gold alone in its mind when it decided, for whatever reason, to remove volatility limits.

Add to this that Comex is not the only, or even the principal, means of price discovery. I suspect the vast majority of most commodities are sold under supply contracts, like coal or iron ore. I do not know the relative sizes, but I would be surprised if the spot and futures markets accounted for more than a modest fraction of all such contracts. (Others on this forum may have a better feel for the relative scales involved.) I would expect, however, in a market constrained by tight supply (of any commodity) that the spot market is the harbinger of forward prices, be they higher (as when supply is tight) or lower (as when supply becomes plentiful).

In the present commodities market (be it for gold or other metals), supply is mostly tight and the spot market is signalling higher future prices in just about everything...and this signal, specultive corrections like we are presumeably seeing at present notwithstanding , is going to be the trend for quite a while. But no one can be sure. Witness China's reluctance to accept the 19% price increase in iron ore brokered by Japan and Europe with the three big ore producers CVRD, Rio Tinto and BHP/Billiton. China threatend to buy its iron ore on the spot market, sending a clear signal that they suspect that prices of iron ore may have peaked. (As it turns out, China does not have a strong bargaining position because of the reltively poor efficiency of its steel manufacturers.)

Speculative corrections in such remarkable bull markets as we are seeing at present are likely to be quite brutal. I can understand that, in what is fundamentally a "structural" bull market, underpinned by genuine supply/demand dynamics for the long-term, that Comex may well wish to "flush out" large speculative plays by removing any semblance of advantage or protection that is offered by limit-up and limit-down rules. (Removal of a little "moral hazzard", if you like.) The markets are structurally strong. Genuine dealers will go into the market to buy and sell by hook or by crook...they have to. It's the speculative traders who are attempting to make big windfalls in this environment and it is probably they who Comex is targetting with the limit removals...to my way of thinking.

Volatility, going forward, is likely to be exacerbated by liquidity considerations. How the CBs of Europe, Japan, China and the US cope with the unfolding liquidity issue is going to have a much greater impact on what assets go up or down in price and by how much, to my mind, than any speculative plays or limit rearrangements on the Comex.

FWIW

:-)

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_lynn&sid=aGS6lvr8ipiwBy Matthew Lynn
Bloomberg News Service
Monday, June 5, 2006

Forget "The Da Vinci Code." If you want to get to grips with a real conspiracy, take a look at all the Goldman Sachs Group Inc. staffers taking over important economic positions around the world.

The U.S. Treasury, the Bank of Italy, and the Bank of England have all recently poached key policy makers from the world's most profitable securities firm.

While no one would dispute that New York-based Goldman Sachs is a money-making machine full of alpha-brains, it isn't healthy for so many decision-makers to be drawn from one source.

It is hard to ignore the trend for appointing Goldman employees to big government-appointed jobs. In the information technology business, they used say, "No one ever got fired for buying IBM." In politics right now, the motto seems to be, "No one ever got fired for hiring Goldman Sachs."

U.S. President George W. Bush has just appointed Goldman Sachs Chief Executive Officer Henry Paulson as his new Treasury secretary, one of the most powerful economic jobs in the world.

In January, Goldman Sachs Managing Director Mario Draghi became the new governor of the Bank of Italy. In Britain, David Walton, who was chief European economist for Goldman in London, last year joined the Bank of England's Monetary Policy Committee, which sets U.K. interest rates. In Canada, Mark Carney, formerly managing director in Goldman's Toronto office, is now a senior official in that country's Finance Ministry.

It's not just economic jobs, either. Gavyn Davies went from Goldman to become chairman of the British Broadcasting Corp. for a few years. When someone was needed to run London's preparations for the 2012 Olympics, where did they turn? Goldman of course. Paul Deighton, a chief operating officer at the securities firm, was appointed in December. When politicians need a job filled, it seems they just shout at their secretaries: "Get me the Goldman phone directory."

... Goldman advisers

The traffic goes in other directions as well. Among the firm's advisers are three former European Union commissioners: Mario Monti, Peter Sutherland, and Karel van Miert.

"Goldman is plugged into the powers that be in the United States," said Patrick McGurn, executive vice president at the Rockville, Maryland-based Institutional Shareholder Services. "There are going to be areas where the interests of the Treasury Department and the U.S. and Goldman intersect. On balance, it's got to be a plus for Goldman, especially outside the U.S."

The polite word for that is "network." The impolite word is "cronyism."

In many ways, the desire to hire Goldman people is completely understandable. In recent years, Goldman has proved itself a formidable organization. Its profits are strong. It constantly reinvents itself. It has talent in abundance. Plenty of former Goldman staffers have done well in government. Robert Rubin, the Treasury secretary to U.S. President Bill Clinton was probably the most spectacular example.

... Four Issues

Still, there are four issues that are worth thinking about.

First, it is starting to look like a bandwagon. Politicians will appoint a Goldman employee because they know the decision will get them great press. Some of the firm's success will rub off on them. Yet just as International Business Machines Corp. wasn't always the right choice for your technology department, Goldman isn't necessarily the best source of candidates for a government job. The risk is that better talent is overlooked.

Next, Goldman Sachs managers are likely to have a world view dominated by trends in financial markets. In the last decade, that might well have been right. The economy was grappling with globalization and market liberalization. Yet the next 10 years may be a period in which asset- and commodity-price inflation are the main focus. That would require policy makers who weren't groomed on a trading floor -- and you won't find them at Goldman.

... Set of Preconceptions

Third, the concentration of power is starting to look unhealthy. A clan of former senior Goldman staffers is now in a position to help steer the dollar, the euro and the pound. There needn't be anything sinister about that -- though financial conspiracy theorists could have a field day with some of the connections. The issue is that they are likely to have a uniform set of preconceptions and prejudices. In any area of endeavor, it is healthy to have a wide diversity of views. Global monetary policy is no exception.

Lastly, there may be the potential for conflicts of interest. For example, policy makers might need to think whether oil speculation has to be brought under control. And Goldman is a participant in that trade. Would a former Goldman manager hammer one of his old firm's most profitable lines of business? And would they form an objective view on whether hedge and buyout funds are amassing too much influence? Maybe not.

... Damage to Reputation

Goldman may not benefit from the recent appointments. Rubin presided over an era of exceptional economic strength, but Paulson won't be so lucky with the U.S.'s record budget and current-account deficits. Draghi will have to deal with an Italian economy still in a shambles, and Walton is helping set interest rates after the United Kingdom boom has passed.

If the Goldman staffers mess up, the reputation of the firm they came from may be damaged.

Politicians should call a moratorium. At the very least, the next time they have a big job to fill they could consider candidates from Morgan Stanley or UBS AG. Or perhaps someone who isn't an investment banker at all.

--------

Matthew Lynn is a columnist for Bloomberg News Service.

Simply superb, Sir !

http://en.rian.ru/russia/20060605/49057532.htmlRussia going also on a Nickel reserve standard.For making many Nickels?

Druid: Thanks. This one needs to go in the HoF archive.

Druid: Thanks. This one needs to go in the HoF archive.

The article quoted below, "Bull in Bear's Skin" mentions "huge physical gold and silver hoards"...

Don't know if it's true or not, but it's stated in one of those 9/11 conspiracy videos that there was $167 Billion worth of gold bars under WTC1 and only $200 Million was recovered. If so, would seem like someone is hoarding a little gold somewhere. Is this an example of some of these hoarders? It's sure not the little guys like us with our stash that can be contained in a safe deposit box!

In the article about Goldman Sachs, it refers to how these investment banker guys don't know much about "asset- or commodity-price inflation." I'm wondering if we are seeing commodity price inflation right now, or do you think that's referring to when the POG is way up there in the thousands?

Druid: My apologies for the double post, Compu. acting possessed.

http://seattlepi.nwsource.com/local/6420AP_OR_Allstate_Earthquakes_1st_Ld_Writethru.htmlsnip:

PORTLAND, Ore. -- Allstate Insurance says it is dropping earthquake insurance to most of its 407,000 quake customers nationwide as a part of a larger move to reduce exposure to catastrophic losses.

Allstate spokesman Mike Siemienas in Chicago said four states require the company to offer earthquake coverage, but the company is in various stages of talks with regulators there.

He said the states are Kentucky, Connecticut, Rhode Island and Florida.

Allstate regional spokeswoman Caitlin Gorand, in Bothell, Wash., said the company has not written new earthquake insurance since March 6 and announced Friday that existing earthquake policies will not be renewed.

-Goldilox

Allstate's been reading the web bots?

I suspect the lifting of limits on Comex contracts is a comptitive business decision by Comex. The last thing Comex would want is to become irrelevant. Many of these commodities are traded around the clock around the world. If a commodity changed in price drastically during overnight (overseas) trading, and if Comex limits prevented the Comex price from keeping up with the world market, then the Comex would instantly be rendered irrelevant.

Comex absoluteley wants to keep players in their game, and it doesn't want those players to take their business to other exchanges.

@ specie-man,

Added to Dan Norcini's comments, I think this supposition makes good sense.

I personally have a very meager budget for purchasing precious metals for personal possession. My wife has a good-sized IRA which is held in precious metals by Sterling Trust in a Delaware depository. We bought contracts on Comex and took delivery. I figured that the way to go is to put our retirement money into something that millions of other baby boomers DIDN'T have their money invested in. That meant precious metals and not stocks or bonds. How many people have physical palladium in their IRA - one in 100,000 ? We have been sent pictures and serial numbers of the actual bars allocated to our IRA account (held in segregated storage).

Anyway, there are advantages and disadvantages to such an IRA.

Advantages:
The bullion is stored away from home in a secure location, so residential burglary is not a concern.
Income is tax deferred.
At time of sale, we can sell it on Comex and deliver - the cost (commissions) involved with doing so are relatively low.

Disadvantages:
The bullion is not in our personal possession.
Due to the sizes of the bars (one 100 oz gold, two 100 oz palladium, five 1000 oz silver), at time of sale it will be all 100 (or 1000) ounces or nothing - no dividing into smaller lots.

If there were no tax penalties for early withdrawal, we'd have the bars delivered to us.

My question about IRA PMs is:

Do you have to sell it at 59 1/2+ and cash out, or can you you then take delivery directly from the trustee?

I would envision walking into the trustee's office and demanding my gold.

I think there is a a big difference between the two.!

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

If you haven't read the Sprott Asset Management report "Investment Implications of an Abrupt Climate Change," block off however long a 55-page report takes to digest and read it as soon as possible.

Not that you'll agree with everything in the report. One reader, for example, shares this:
"I confess to having read only the Executive Summary thus far but feel obliged to point out that Sprott's assertion that nuclear power is a way to reduce greenhouse emissions is incorrect. While it is true that nuclear plants don't put out any CO2 once they are up and running, the construction process and mining and refining of uranium consume vast amounts of fossil fuels (diesel fuel, making Portland cement, decommissioning, etc.). Not a few analysts have shown that, when you take into consideration all the fossil fuel subsidies that make nuclear power possible, you end up putting at least as much CO2 into the atmosphere as you save by making electricity with nuclear."
I know it's easy to pass off dire warnings about shortages, climate change, and pending earthquakes when you read about such forecasts generated by new technology that you don't understand (e.g. the web bot project over at www.halfpasthuman.com ). But when a respected group of financial deep-thinkers at Sprott comes to parallel thinking on SCGCC (sudden, catastrophic global climate change), I would suggest you take time to read it.

Life on this rock's really pressurizing - and the heat is on.

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

I'm discovering that UrbanSurvival's popularity has apparently landed it on some "banned IP lists." Here's another reader report:
"Hey George,

I saw that you were listed as entertainment and not financial by websense. As a frequent reader, I was killing some time at Heathrow in March, and decided to use the coin operated internet there. Well your site was one of the first I tried to access and guess what? Your site was not accessible because of "offensive content". I was however able to get to safehaven, Lew Rockwell, Daily reckoning, etc. But your site and several others that contain both financial news and "conspiracy theory" conjecture were deemed offensive by "them", just to let you know, keep up the good work, as has been stated previously, your site is the best 5min read on the web."

Truth hurts?

-Goldilox

Too much disclosure and analysis can certainly "concern" TPTB. As the Mel Gibson movie "Conspiracy Theory" suggests, even the wildest extrapolations "get it right" sometimes, and definitely get the attention of the disinformation "specialists".

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

We've been warning our subscribers (to www.peoplenomics.com ) since March that the world's JIT economy was setting up the world for a potential "JIT collapse". I posted that March article a few weeks back here on the free site, and if you haven't read it, click here to do so.

Now, there are two reasons for bringing this up. First is the link between JIT collapse and the emerging "Shortages" meme in the chart above. But second is to bring your attention to a new book dealing precisely with this issue. Pertinent quote from a recent CIO Magazine review:

"Corporations have created a global production system so complex, tightly geared and leveraged that a breakdown anywhere can mean a breakdown everywhere, warns Barry C Lynn, author of End of the Line, The Rise and Coming Fall of the Global Corporation. "
It's going on my reading list...

-Goldilox

One last reference from George this morning. Having been involved in the technology of JIT for most of my career, including the internet B2B and B2C movements, this is a very interesting caviat to globalism. Think globally, act locally!

Thanks, you old-timers, for the words of encouragement, but I'd hate to see the HoF cluttered with that jumble of a thought. It's just a scribble that gives a glimpse of my half paranoid world. Keep in mind that unlike others that post (or have posted) on this site, I do not have any formal education with regards to economics, politics or big business. I am but a lowly ant that looks up at the world around me in a quest to see if there exists a big picture. If you'd asked me a year ago about any of the topics discussed in this forum I wouldn't have had much of a clue. Ask me a year from now, and I'll probably give you a different answer based on a broader foundation.

Everyday I give thanks to the old-timers that continue to post in this forum. If it wasn't for the commitment that all of you share on a daily basis, I would be living in my own Mogambo bunker of impenetrable steel. I am not and I do not plan too.


Sundeck, I have come to believe that anytime a significant rule change comes along and the public is fed a line that is contrary to the intuitive logic of it all, it is something that must be evaluated and risk must be reassessed. It is true that limits have been removed from all commodities, that might even be what MK was referring to when he mentioned double digit inflation. But I am more suspicious with regards to a weeding out of the speculators as seen in Natural Gas this last winter. Last winter the big inflation fears (if you talked to anyone on the street) was how were they going to heat their house? Anyone reading the news saw that speculators were jumping all over NG making it go parabolic and then, well, we all saw that some big bank was given the ok to participate in that market. What happened? Oh yeah, sure, the price came down. But what was the bigger picture? All that concern about heating houses vanished. It's simply gone. What happened here? To me, somehow "inflation expectations" were reduced. If there was a plan to it, it worked like a charm!

Broaden this out a little. If those that can print unlimited quantities of currency are able to balance trade against speculators commodities can be made to remain at or near the production costs. This has been evident in the gold market for many, many years. What if those that need to keep "inflation expectations" low must enter a broad range of commodities in order to remove speculation? What then?

Knallgold, The words recorded here from the posters that you mention are very powerful and extremely insightful. The more I follow, the more it appears that the gold trail is well marketed. I am pleasantly surprised each time I go back into the archives and find another nugget.

I would also be surprised if Russia finds anywhere near the amount of gold that they want in the time frame that they have available to them. I believe that they will find their gold from their own mines and through trading oil. But, this could all change if the Ruble gets a foot hold in the international scene much like the dollar. Can you imagine a "Strong Ruble" policy?

I agree that we will most likely find commodities trading in more local currencies as time goes on, but I have reservations that we'll find oil trading in Euros in any public way. Those in the US and, it now appears, that those in Russia are willing to print for reserves, but how will that help OPEC countries? They want what is not printed. Will they force Europe to print? That does not provide the answer.

What did PandaGold mean? How firm is the statement � don't trade oil in Euros because there are not enough of them to go around? When I look at the Euro, I see a strong coalition that has acted deliberately with its gold reserves and has stood strong amongst world pressures to print. It's as if they have been waiting for world wide acceptance. I believe they have found confidence and the economic actively shows that. The desire by markets to trade in the Euro is the clearest sign.

What if, overnight, someone came onto the world stage and offered oil for gold in the manor that Another spoke? For instance, $50k worth of oil for one ounce of gold. Would this cause a run on all commodities? Would this trigger hyper-inflation? Would this make a silver investor roll over and hide under their doorstops? I wonder. The more I think about it, the more it makes sense from an �inflation expectations� point of view and as a way to establish gold as the means by which you trade internationally.

PRITCHO, Thanks, I will make time to read these articles.

Specie-man, the next step for the Comex is to change the physical delivery process. As long as the world sees this market as a paper play it will not be used in the coming Freegold environment. The Comex will have to make it so someone like myself can buy a few contracts with full confidence that I will get my metal. If that doesn't happen, the Comex will go out of business.

As I understand it, all IRA contributions are "pre-tax".
That means that any money withdrawn from an IRA is treated as ordinary income (it is subject to income tax at the rate of your tax bracket). Any money withdrawn from an IRA before age 59-1/2 is also subject to an additional 10% penalty off the top.

You do NOT have to make any withdrawals from your IRA at age 59-1/2. It can stay in there longer if you wish.

In our case, when my wife reaches age 59-1/2, we could have the bars delivered to us. We would not have to pay the 10% penalty. But we would have to pay income tax on the withdrawal - based upon the market value of the metals at time of withdrawal. In other words, if we took delivery of $200,000 worth of bars from our IRA, we'd have to report $200,000 of extra income for that year and pay the associated income tax. The trust company might even be required to withold the estimated amount of income tax on the bars at time of withdrawal. In that case, we'd have to come up with about $60,000 or sell one of the bars before taking delivery.

http://www.usagold.com/analysis/doldrums.htmlWhile most conventional shoppers appreciate when stores offer bargain days, many gold investors stand in contrast. For reasons known only to themselves many of them tend to fuss and fume on the sidelines during the bargain days only to come out later en masse to chase after higher prices.

Go figure.

The accompanying report was a collaborative effort by a few of us here at USAGOLD-Centennial headquarters to help you see your way clear to a decisive and prudent course of action for gold acquisition during the traditional summer doldrums of June and July.

Click the URL above for a chart that is very easy on the eyes!

(There you'll also find access to the newly-launched June Buyers' Group!)

R.

Specie-Man--I heartily concur. I've been trying to figure out the significance of the change in limits, too. Like with everyting, I think it all boils down to follow the money. They're a profit-seeking enterprise as well, and to not be seen as on top of things, in today's 24-hour, fast-paced market, would quickly put them out of business. In the larger scheme of things, it's not really a drastic change, but it's a foreshadowing of the volatility of the road ahead.

"Ask me a year from now, and I'll probably give you a different answer based on a broader foundation."


Bravo. That is PRECISELY the singular thing that makes certain folks, like yourself, such valuable posters -- a combination of flexible, open-mindedness that is coupled with a voracious appetite to gather and digest new info.

R.

http://www.chron.com/disp/story.mpl/editorial/outlook/3923939.htmlSee pages 49 and 50 for a discussion of the "Inflationary Environment" and its effect on gold.

That said, I remain a Doubting Thomas along the lines of what Robert Bradley has to say in the attached link.

http://www.usagold.com/gold/special/liberty20.htmlA special opportunity in $20 Liberties!

@ Thoreauly,

Global Warming itself is fairly indisputable, but as it is also occurring on the other ten planets simultaneously, those who attribute it specifically to hydro-carbon emission have some more "splaining" to do.

I'm often amazed at how scientists and especially social scientists are conscientiously able to remove events from larger systems and pinpoint their pet causes.

http://www.usagold.com/analysis/doldrums.html



R.

Specie-man (and others):

I'm still debating whether or not I convert my non-PM IRA's to ones like Sterling's or just cash out what I've got and pay the 10% penalty, then buy my own metals and not worry about the pre-tax benefits, assuming the price of the metal will be going up quite a bit before I'm ready to retire in 10 years or so.

I'm wondering if I go the non-IRA route and hold my own "retirement account" in physical metal, when I sell it, am I obligated to pay income tax on the gain over what I paid for it? Am I on the honor system for that? I don't think anyone knows where I bought it and for how much, do they? (My dealer makes a little receipt, but I don't think he sends that in to Uncle Sam.)

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

June 5 (from DowJones) -- Speculative buying returned to the New York precious-metals complex Monday as the dollar sagged, oil rose and worries about Iran's nuclear program continued, traders and analysts said.

COMEX August gold contracts gained $7.70 to $648.70. "The market is up on euro/dollar and oil," said a floor trader.

"Other than that, it's very, very quiet." Monday was the first day of trading after Nymex late last week announced it was eliminating daily price-fluctuation limits. Ironically, the $5.70 pit-session range for the day in August gold was the narrowest since April 13.

Shortly after gold closed, the euro was up to $1.2958 from $1.2918 late Friday. July crude had gained 67 cents to $73 a barrel and had peaked at $73.84.

The gains in crude oil came after Iran's supreme religious leader, Ayatolla Ali Khamenei, Sunday warned that any energy shipments from the Gulf region would be disrupted if Iran came under attack from the U.S.

He maintained Iran's right to produce nuclear fuel, which has much of the Western world worried about possible production of nuclear weapons.

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

I think this is the beginning of a dollar death spiral where attempts to control inflation by raising interest rates slows the economy further leading to a lower dollar leading to higher inflation overall. American manufacturing and high-tech services have been gutted and truly independent economists like Dr. Paul Craig Roberts(founder of supply-side economics under Reagan) have stated that now at no exhange rate can the United States balance its trade since the manufacturing and tradable service sector has been critically depleted. Thus, the the lower dollar will not help to balance the trade deficit at all but could lead to a death spiral of increasing inflation, higher interest rates, and a collapsing currency.

The following quote from the below attached article sums it up:
>"Slowing growth and rising inflation, aka stagflation, is >one of the worst combinations for a currency in that it >undermines overall asset attractiveness," Dolan said. "This >means that further hawkish rate rhetoric is unlikely to >benefit the U.S. dollar and will slowly come to be seen as >an outright dollar negative."

I would be interested in any opposing views and supporting evidence to the contrary. Thanks.


-------------SNIP------------------------
Dollar rises vs. yen, flat vs. euro low after Bernanke
E-mail | Print | RSS Feed | Disable live quotes
By Wanfeng Zhou, MarketWatch
Last Update: 3:12 PM ET Jun 5, 2006

NEW YORK (MarketWatch) -- The dollar rose against the yen and was little changed versus the euro Monday, after hawkish comments from Federal Reserve Ben Bernanke stoked expectations the Fed will raise interest rates later this month.
The U.S. currency recovered from a 13-month low against the euro touched earlier in the session on speculation that the European Central Bank will raise rates more aggressively than expected.
"Bernanke's surprisingly hawkish comments and concern about inflation signals that we'll still see a quarter point hike at the end of this month," said Kathy Lien, chief strategist at FXCM. "For the time being, he is still discounting the weakness in recent data by citing strength elsewhere."
In New York trading, the euro was at $1.2916, compared with $1.2918 late Friday, after rising as high as $1.2979, the highest level since May 5, 2005. The dollar changed hands at 112.11 yen, compared with 111.65 yen. The euro was at 144.77 yen from 144.35 yen.
The British pound was fetching $1.8737 against $1.8733. The dollar traded at 1.2066 Swiss francs compared with 1.2137 francs. See live currency prices.
Brian Dolan, director of Research at Gain Capital, pointed out that while Bernanke's comments are highly suggestive of him "leaning toward another rate hike," his observations that the economy is slowing suggests "additional rate hikes will be dollar-negative."
"Slowing growth and rising inflation, aka stagflation, is one of the worst combinations for a currency in that it undermines overall asset attractiveness," Dolan said. "This means that further hawkish rate rhetoric is unlikely to benefit the U.S. dollar and will slowly come to be seen as an outright dollar negative."
Bernanke lifts up dollar
Although the anticipated slowdown in growth is underway, financial markets should not question the inflation-fighting credentials of the Federal Reserve, Fed chief Ben Bernanke said Monday.
"There is a strong consensus" among FOMC members to keep inflation low, Bernanke told an international banking forum here.
Recent core inflation readings "have been higher in recent months" and "has reached a level that, if sustained, would be at or above the upper end of the range that many economists, including myself, would consider consistent with price stability and the promotion of maximum long-run growth," Bernanke said.
These core readings "are unwelcome developments," he said.
"Therefore, the FOMC will be vigilant to ensure that the recent pattern of elevated monthly core inflation readings is not sustained," Bernanke said. See full story.
Earlier, the dollar showed little reaction to a report that showed nonmanufacturing sectors of the U.S. economy expanded at a slower pace during May.
The ISM nonmanufacturing index fell to 60.1% from 63.0% in April, the Institute for Supply Management said Monday. Economists were looking for the index to fall to 60.5%. Inflation pressures continued to mount. The price index surged to 77.5% from 70.5% in the previous month.
ECB rate outlook
The euro was supported by speculation that the ECB will raise rates by 50 basis points rather than previously expected 25 basis points at its monthly meeting announcement on Thursday.
The recent run of strong economic data out of the euro-zone "has convinced many players that ECB will risk the potential of even greater appreciation in the euro/dollar in order to contain the rapidly expanding inflationary pressures in the 12-member region," Boris Schlossberg, senior currency strategist at FXCM said.
Interest rate in the euro-zone currently stands at 2.5%.
Euro at 6-week high vs. yen
Meanwhile, the euro rose to a six-week high against the yen Monday following news that Yoshiaki Murakami, Japan's most prominent fund manager and shareholder activist, was arrested for allegedly violating securities laws.
At a press conference earlier in the day, Murakami admitted he engaged in insider trading, but said he was not aware he was violating the law at the time.
On Friday, Japanese media reported that Murakami was under investigation by Tokyo prosecutors. He is suspected of acquiring a large stake in radio operator Nippon Broadcasting System after being tipped off about an upcoming takeover bid by internet retailer Livedoor. End of Story


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

Sir MK, I see that you have returned from your vacation and hope you had a mavelous time away.

There is a question before you on the floor concerning the MTM practice of the euro-zone banks.

I would be delighted to hear your thoughts on this.

In addition to the question posed in 144562, is/was this designed only to offset losses of a declining/collapsing US$ (I gleaned this from the writings on the gold trail) or, does it serve dual purpose in allowing expansion of credit within the euro-zone without necessitating the profligate printing of "currency"?

Or, is there a

...(A)nother explanation?

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=10Every time the USDX reaches 84, "benefactors" pounce out of the woodwork to prop it up.

I think they believe Sinclair's suggestion that revisiting the 81 region would spell major trouble.

Boo-Cat is glaring at me as I type this title. I hope he can't read.

I perceive a connection between the recent announcement that limits on daily changes in commodities pricing have been removed on COMEX and the situation evolving at LME where many (smaller) players are not able to meet their obligations.

In the formative days when the COMEX limit rules were set-up, the common form of communication was by telegraph/telephone and calculators (other than the slide rule) were not yet invented. The limits benefited the exchange and gave them time to tally the action of the day without straining the credibility of their holdings backing the "trade". These days with the incredible number crunching power of computers and virtually real time market status available, a sliding margin rate anchored to volatility may be more efficient in generating fees for the exchange.

I am envisioning the lawyers of the LME members protesting increased margins on the basis that they are not necessary with daily trading limits in place. COMEX can read the writing on the wall as well as anyone.

The timing is too serendiptous.

http://www.nymex.com/media/delivery.pdfWhile PoG gratuitiously dipped today to give credence to the Buck uptick, we find our Deliveries have swelled by 99,000 equivalent Oz's of Au for a June total of (gimme that trumpet Gandalf) TA TA TAAAA 3,150,400 Oz ...or 100 TONS +or-.
Because of the opacity of all things Gold we're given to free-range speculation and it has occurred to me that perhaps REAL men ARE shopping for Gold at Comex ...Ari's insistance to the contrary notwithstanding.
If we hark back to June '05 and recall the 20K call options which (or most of them) morphed into a similar number of Aug deliveries ...and the subsequent Sept all-currency PoG explosion, we might well be in for a similar event.
At the time I felt the EU WAG 2A Gold had something to do with it, this time is no different ...it seems 67T of Euro Gold is being replenished via Comex ....IMHO.

I sure as hell can wait 'till July for a stellar PoG move, the risk of a "Deer-in-the-Headlights ..Wil-E-Coyote ..Shirley Bassey, I, I who have Nothing" Moment/Event looms larger by the minute though.

http://streettracksgoldshares.com/us/value/gb_value_usa.php#2GLD shows an increase of 4.02 tonnes today. Looks like ants rather then gi-ants.

02 Jun 2006 351.51
05 Jun 2006 355.53

I am amused with the content of this forum.

Non the less I will be purchasing some of the gold our host recommends tomorrow irregardless of any big swings in the POG.

Summer will shine a little brighter with a few of these in my hands....pre-1933 uncirculated United States $20 Liberty gold
pieces.

There is something great about having this right with me and in hand. Who better to look after mine than....ME!!

Happy Summer 06-06-06~

BUY BUY

http://news.ft.com/cms/s/9286fa74-f4a1-11da-86f6-0000779e2340.htmlBy John Dizard
Financial Times, London
Monday, June 5, 2006

For all the fireworks in the gold price last month, including a 25-year high, the metal that drives men mad ended down by slightly less than 2 percent from the end of April. To me and some of the more sober chart watchers, the bell has been rung. Last month's highs ($728 on the June Comex contract on May 12) probably won't be exceeded for a year or so. The hyperbolic frenzy that seized the metals people has to be worked off.

That doesn't mean the long-term bull market in gold -- what the technicians call the "secular" trend -- is over. That's a multi-decade trend, and this bull market really only started in 1999; about the time of the International Monetary Fund meetings in September and October of that year. The four-figure dollar numbers that are now only a gleam in the gold bugs' eyes could well be hit. But just not yet.

The uptrend in gold was a byproduct of simultaneously strong economies in the developed and the emerging economies, and the commodities price rises that followed. The commodities price increases formed by real-world activity were then levered up by investment managers looking for one more asset play ... just one more before the next carried interest was calculated.

It may not entirely be a coincidence that the cyclical gold peak was just past when Hank Paulson was appointed U.S. treasury secretary. This, one can be sure, was not the president's idea. There is a range of opinions of Mr. Paulson, but nobody thinks of him as only another front man, which is what the political world was expecting. Someone -- or, rather, a lot of people -- grimly informed the White House that it was time to get serious. Forget the cheerleaders.

A fiscally more conservative, militarily less adventurous, monetarily tight world is not conducive to a higher gold price, and, for now, that is what we're probably going to get.

How can we be sure this isn't a long-term peak for gold?

Well, the public really didn't get as caught up in this gold frenzy as it did in the dot-com stock boom, or anywhere near as involved as it did in real estate speculation.

For example, take the reception that John Hathaway, the manager of the Tocqueville Gold Fund, had at the Money Show in Las Vegas this month. Hathaway's fund was up more than 45 percent when he gave his pitch to a roomful of investors at the show on May 16. The fund's assets under management had risen to more than $1 billion. It was, Hathaway recalls, somewhat painful. "I had 50 people or so in the room, which could have held four times that number. We'd been given one of the smaller rooms. It had emptied out after the previous speaker." And this was at his all-time high point.

Actually, to someone with a long-term interest in gold, that was a good sign. Clearly, there are a lot of potential buyers left to be found out there, which can't be said, for example, about Phoenix or Las Vegas real estate. As Hathaway says: "At least we know that this time, it wasn't the public" pushing up prices. "It was the momentum guys and the trend players. After Las Vegas I flew to Geneva to see potential clients for our offshore fund. They were better than the (American) retail (investors) in Las Vegas, but not much better. It was a very hard sell."

If this were a long-term peak in gold, Hathaway would have at least $50 billion in his fund. He would have had investors throwing their room keys at him on the stage.

Martin Pring of the eponymous technical analysis firm is fairly certain that May's price action in gold means that "for all intents and purposes the game is over for now. There could be a sharp downside and then a trading range, or we could work off (the overexcitement) with a slow Chinese torture. I think $490 is the logical retracement level. When it gets there, I'll start thinking
about what the new secular highs will be.

"For me the proof that we'd passed a top was the story in a weekly financial newspaper about gold going to $8,000 an ounce."

The man interviewed in that story is James Turk, author of "The Coming Collapse of the Dollar" and founder of Goldmoney.com. I had a chance to talk to Mr. Turk last week when he passed through New York. He's much lower-key in person than in his press releases, appearing more like the banker he once was rather than what you think of when you hear the word "goldbug."

It's hard to pinpoint the difference between someone who is just bullish about gold and a goldbug, since both share a high level of scepticism about most countries' monetary policy and the markets' present valuation of financial assets.

The most significant difference would be the goldbugs' firm conviction that the gold price has been manipulated by a cabal of Western governments, gold dealers, and bankers.

I've heard and read their arguments and I don't buy it. But Jim Turk does. He and his confreres believe that through the 1990s and up to the present time, Western governments have used the gold leasing market, along with central bank gold sales, to push the price below where it should be by all rights. As he says: "Manipulation of the gold price is done to maintain the illusion that the dollar is worthy of being the world's reserve currency."

Mr. Turk and the other goldbugs have an alternative reserve currency in mind, of course.

You don't, however, need to believe in the resurrection of the gold standard to conclude that gold is a very useful investment -- or at least savings -- medium.

There are too many overleveraged financial markets in the important currencies, and the prices of these currencies need to be marked down to meet people's ability to support them with real income. That doesn't mean timing isn't still very important. You probably have $100- or $150-worth of correction to go before you should go back into gold. And I'll be examining one of the goldbugs' theories about the Clinton administration and gold market manipulation in a future column.

http://groups.yahoo.com/group/gata/message/3933Latest GATA dispatch.


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

gata-subscribe@yahoogroups.com

Nice thing about the gold bull is you get to do everything wrong and still show a profit.....Sloppy entry, no problem.....Buy at each peak, wait a couple months.....average down, works every time........Buy all the dips, one of 'em will be an exact bottom......Money management? ...just keep buying....Diversification, that means eagles and koalas and leafs to go with your gold mines......Tax advantages? ...never sell anything.......just keep buying, who needs charts and idiot waves and fibbo-nutty numbers. Want to no how the $USD butt wipes are doing? Just turn your gold charts upside down. In 2010 one ounce of gold will buy you one unit of dow......
Blackbeard | 06.05.06 - 11:40 pm | #

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

I have posed this question several times over the years and nobody ever want to answer it. When gold reaches its final peak (which it will do, as surely as night follows day) are you going to retain your gold and watch your capital gradually get eaten away?

It seems to me that most folks on this forum seem to think of gold as something almost of a mystical quality. Come into the real world..............its just a piece of metal, albeit rarer than most metals.

Can some of you tell us your perceived strategy when you think gold is declining into a long deep bear market?

Take a look at the 1980 gold chart. At the peak I remember gurus saying its going to $3000. Look what happened. Are you prepared for the endgame.

Buying is easy but knowing when to get out is much much harder.

I don't profess to be clever but I got out of most of my positions in gold just recently when the price was $711.
The reason was that my charts said that a pull back was overdue. It happened about a week later. Now I am buying back gold sixty dollars cheaper than I sold it for.

Let us know you thoughts on this most important subject.

@Golden Lionheart #145038

Ahhh...yes, Sir Golden Lionheart, pertinent questions in all. Here are a few comments.

Firstly, let me suggest that you choose a different title to "peak gold". Peak gold suggests an analogy with "peak oil" which is an altogether different concept from what you are proposing here; which is really the ability to detect and profit from significant peaks and troughs in the price of gold. What you are suggesting is really the gold-market equivalent of buying the dips and selling the peaks in the share market.

1. "When gold reaches its final peak (which it will do, as surely as night follows day) are you going to retain your gold and watch your capital gradually get eaten away?"

Comment: It is impossible to know when a "final" peak is occurring. There are various strategies that may be applied, which depend upon one's philosophy in owning gold in the first place. Some people may wish to hold gold in perpetuity (wealth insurance), while others may choose the gold market in which to trade for short-term monetary gain. As a median stance, one may choose to trade in and out of a portion of ones gold positions, if one feels that they can make favourable buy/sell decisions, while retaining a portion of their positions in the knowledge that those retained positions will always represent permanent value. The person who does this must be aware that "bells don't ring at the top and bottom of the market". From my experience, having tried this a bit, I am usually left biting my lip when I am forced to buy back in at a point higher than where I sold - not always, but frequently.

2. "It seems to me that most folks on this forum seem to think of gold as something almost of a mystical quality. Come into the real world..............its just a piece of metal, albeit rarer than most metals."

Comment: Sure. I know, and YOU know that it is just a bit of metal, but what about all those other people who treat it with mystique? A characteristic of people in general, and men in particular, is that they get hung up on strange things: big houses, "fine" wine, high-heeled shoes, cosmetics, fast cars, religious beliefs, worthless women, chivalry, obscure art-works, honour, dignity, quack medicines, "big pharma" medicines, etc, etc...and even gold! Actually, when you look back through history at the "ligitimate" monetary/wealth role played by gold, it takes on a relatively sane persona when compared with the other bunch of crazy desires and claptrap with which men feed their desires and clutter their lives... It is precisely because OTHER PEOPLE treat gold with fascination and respect that it makes good sense to hold gold for wealth preservation - a bit like a van Gogh painting or a Penny Black stamp - and always has...

3. "Can some of you tell us your perceived strategy when you think gold is declining into a long deep bear market?

Take a look at the 1980 gold chart. At the peak I remember gurus saying its going to $3000. Look what happened. Are you prepared for the endgame."

Comment: You are right, I agree, that for a person wishing to profit monetarily from gold investments, then they should sell before the onset of the "long deep bear market"...assuming they can sense when it is beginning...which they may not be able to do. But really, the thing is there is no "end-game" with gold...until the last bunch of delusional people exit the Earth and leave it to the cockroaches. If one wishes to get rich through buying and selling assets, I suggest that there are many other markets in which ones efforts would be more greatly rewarded. People should better treat gold as a Rembrandt painting...to hold forever, or at least until a very major liquidation is desired or is essential.

4. "Buying is easy but knowing when to get out is much much harder."

Comment: Agreed. But the serious gold investor probably never intends to liquidate until they either have to, or are in the process of a major life transition.

5. "I don't profess to be clever but I got out of most of my positions in gold just recently when the price was $711. The reason was that my charts said that a pull back was overdue. It happened about a week later. Now I am buying back gold sixty dollars cheaper than I sold it for."

Comment: Well done! But do you KNOW whether gold is going to go up from here, or down another $60 and plateau at $570 for another five years? These kinds of decisions are very personal and are the domain of the individual, based upon their investment/wealth philosophy. There are no "sure things" on life's race-course and "one pays one's money and takes one's chances"...

Take care, Sir Golden Lionheart...good health, good trading and...good night!

:-)

Nicely said.

@ Golden Lionheart,

Sinclair has discussed this topic many times on his jsmineset. A stroll thru his archives should bring it up.

Sundeck offered some excellent thoughts on this but I would like to add the following:
You mention "When gold reaches its final peak (which it will do, as surely as night follows day) are you going to retain your gold and watch your capital gradually get eaten away?"
However, I did not see a reference what the measure of "peak" would be. The $? I hope you have not decided to put greater faith in the $ or any fiat as anything but a short-term parking place for your capital. Keep in mind the $ has never stopped its long term decline vs. all things real.

This statement also begs the question what is your definition of "capital"? If your definition is the $ or any other fiat then rest assured that over the long term your capital will tend to shrink faster while out of gold than when invested in it. For instance, our host is selling $20 gold coins for 37 times face value. Do you expect to pick them up at face in the future? Not likely. More likely they will go to 100+ times face.

You seem to have a short term traders mentality. Most of us gold bugs think in terms of decades. If you trade gold please keep a core holding. There is a very real chance of an overnight "correction" to the upside.

I buy gold expecting never to sell it but rather to spend (some of) it when it's fully re-monetized in the aftermath of the most massive fraud in human history.

And I'm talking years, not decades.

Thank you all for your input. I am now a wiser man. I think you all could see where I am coming from in this. I am an aged citizen who thinks six months is long term.

These prices are beautiful for picking up more. Can't get fiat fast enough to transform into hard assets.

When the short term looks gloomy like today, I take the Wizard's advice and look at his favorite chart (although as the rise has been so great I feel a percentage chart is more appropriate than a linear one, now).

Two things :- First, the outlook is bearish :^[ Secondly, we are soon going to see if the long term uptrend is still the one drawn in starting mid-2005, or a new, higher one with four points - 424.8, 460.0, 544.78 & 620.01. Time will tell - either this is a good place for a bounce, or there is more pain ahead.

C!

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PLPADANRBO[PA][D][F1!3!1.0!!2!20]⪯f=GGot distracted.

I wrote this before reading all the other responses. It appears that I look at the problem the same way, but through a different colored glass:

I will converse about your most important subject. If you revisit my previous contest posting, you will see that the �preservation of capital� subject is the difference between getting rich or staying wealthy. It is prudent to work out a preservation strategy that you are comfortable with. Diversification, foresight and education can help. It looks like this is the nature of your question.

The one thing that tickles me is your conviction with regards to gold reaching its �final peak�. It seems that you firm on your belief that there is a point in time where gold will peak (in price) and it will never pass that again. If you think about it from a US dollar point of view, you're probably focused on the price peak 20+ years ago and the subsequent actions in price.

On the flip side (most people don't think upside down), the US Dollar went through a crises 20 years ago where people weren't willing to accept as they had willingly done years earlier. People saw the structure of the dollar falling apart and they migrated towards a currency that they thought would be free of government manipulation. They turned their back towards the government and its dollar as a store or wealth and minimized their dollar carry trade exposure. But, what happened? If you look back, you'll find that the value of the dollar fell a little faster during that time but it didn't go to zero. Looking back a little further, you'll see that in the US, since the US started taxing its citizens through inflation, the purchasing power of the dollar has been steadily falling. Sometimes, this fall is faster then others.

Now, if we consider gold as just another currency and if we look at it really hard, we might find that the one thing that gold has that currencies don't is that gold's inflation tax has historically been 1-2% per year (forever). Which would you hold a currency that is running at 9% inflation tax or gold that is running at a 2% inflation tax? To me, it's obvious which currency is better if (and only if) I want �cash� on hand.

Now think about how governments work and think about how the debt based system works. Money must be created for people to service their interest payments. Both of these things force the function of fiat currencies AND require a fully functional printing press. Currency must be created, and, as it turns out, that creation process is much higher then the creation (mining) of new gold. Even if you were to bring all the gold out of all the vaults around the world in an attempt to lower the price, it would only, in the long run, make gold the currency of choice because it would be so widely available.

So, where is my �night and day� in all of this? My take on it is that we will surely have taxation through currency inflation as long as governments and banking exist. Knowing that these two elements of society have been around forever, leads me to believe that there will always be devaluation in currencies that will support gold.

With this thinking in mind, I tend to lean towards � after the next blow-off top for gold, relative to us dollars, the lows (averages) that follow will have more buying power then the highs (averages) of today. I build this confidence from the difference in the two inflation taxation numbers. Thus today, the act of saving (averaging in over time) reduces my tax burden. Tomorrow (post blow-off), I will spend my savings (average out over time) as I see things of value that I am interested in buying. If history repeats itself, I may find that investing in businesses will put me ahead of the curve as we all look for the next bubble (thanks to the business cycle driven by the banking system).

So, will I watch my capital get slowly eaten away? Yes, probably to a certain degree. And do I think there is an end to this game? No. As long as we have a functioning society, currency taxation will be higher then gold taxation.

June Buyers' Group

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After gold makes an important top, I would shift into paper; namely bonds and stocks. MK refers to an old Swiss formula in which 30% of assets are held in gold. Reducing gold to 30% at the end of the bull looks like a good idea. Historically, hard asset and paper asset cycles last about 15 to 20 years, therefore, we should be at least nine years away from a major gold top, assuming that the current hard asset cycle started at 2000.

Since we are in a bull market, I would never liquidate all of my position. There is always the danger of losing my position in case I make a judgement error and the correction never materializes. I would not want gold go to the moon without me. Although Jim Sinclair trades 1/3 of his position he has recommended ordinary mortals to stop trading above 520. Legendary speculator Jesse Livermore describes how his trading style evolved as he matured. In his final style, he would base his decisions on general economic conditions, and he would buy and hold during the full length of the bull market. Be right and sit tight, is his motto. Richard Russell enters a bull market incrementally, and utilizes corrections to add into his position, never selling. To summarize, I would never sell all of my position in a bull market. It is dangerous.

Some people in this forum have hinted about the possibilities that could exist, when gold makes its secular top. High, for example 15% lease rates, at the end of bull market would do the trick. Leasing gold at 15% for 7 years, I would cash 105% of my gold (15*7=105) and retain my gold. Why should the lease rates be so high at the end of the bull run? Manipulation by big holders of gold, is my answer. Gold mining output is falling as bull market progresses, therefore, this scenario may not be too extreme.

...assuming Gold can still be leased theh :-)

Yes, the final paragraph is somewhat extreme. However, I am puzzled by the falling of gold mining output as the general public participates to the bull market.

Great post.

How many fiat currencies have we had in the US, plenty.

To illustrate your point of evaporating puchasing power, all one needs to do is go to the Fed. Reserves own website an see that $1 when they took over in 1913 is worth about 4 cents.

Or look at the Continental where they went from worth $1 in gold in 1775 and by 1779 they were worth 1 penny in gold.

It is all a matter of time and how fast the money is created. Looking at the last M3 report is a very scary sight.

How could it be that there is a 20 year bear cycle in gold while currencies are inflated at 8+% / year? I would think that it would be a robust economy and strong demand for the currency. If the difference is 2% inflation in gold and 8% inflation in currency with an economy that absorbs enough currency so that the extra 6% finds function, then we should have a stable price of gold and a non-inflationary price environment.

Unfortunately, during this last 20 years, all 6% of the extra currency did NOT find function in the economy, but rather found function in chasing bubbles - like the stock market and the housing market. If the stock market continues to lay flat and the housing market levels off, were will this extra currency find function? Is there a bubble waiting to receive the excess? If so, where?

If the excess is consumed, will we get across the board price increases or will we get a price increase that is focused and narrow?

Freegold has many advantages. If the old timers will not post, I will continue to share my discovery as I do my best to track the path.

@ ge,

"After gold makes an important top, I would shift into paper; namely bonds and stocks."

That assumes that the gold top is at a point where there are still "trustable" paper assets to be had.

IF gold really goes "to the Moon", it will possibly be an expression of loss of faith in many if not all paper assets.

"Caviat Emptor", "et tu, Brute?", or one of those Latin expressions . . .

http://www.321energy.com/editorials/engdahl/engdahl060506.htmlBy F. William Engdahl, author of �A Century of War: Anglo-American Oil Politics and the New World Order,� from Pluto Press Ltd.

June 5th, 2006


Curiously and quietly the United States is being out-flanked in its now-obvious strategy of controlling major oil and energy sources of the Persian Gulf, Central Asia Caspian Basin, Africa and beyond.

The US's global energy control strategy, it's now clear to most, was the actual reason for the highly costly regime change in Iraq, euphemistically dubbed �democracy� by Washington. George W. Bush restated his democracy mantra as recently as May 28 at the West Point military graduating ceremony where he declared that America's safety depends on an aggressive push for democracy, especially in the Middle East. �This is only the beginning,� Bush said. �The message has spread from Damascus to Tehran that the future belongs to freedom, and we will not rest until the promise of liberty reaches every people in every nation.�

If the trend of recent events continues, it won't be Bush-style democracy that is spreading, but rather, Russian and Chinese influence over major oil and gas energy supplies.

The quest for energy control has informed Washington's support for high-risk �color revolutions� in Georgia, Ukraine, Uzbekistan, Belarus and Kyrgystan in recent months. It lies behind US activity in the Western Africa Gulf of Guinea states, as well as in Sudan, source of 7% of China oil import. It lies behind US policy vis-�-vis Hugo Chavez� Venezuela and Evo Morales� Bolivia.

In recent months, however, this strategy of global energy dominance, a strategic US priority, has shown signs of producing just the opposite: a kind of �coalition of the unwilling,� states who increasingly see no other prospect, despite traditional animosities, but to cooperate to oppose what they see as a US push to control it all, their energy future security.

Some in Washington are beginning to realize they might have been too clever by about half, as is evident in recent public statements to both China and Russia, two nations whose cooperation in some form is essential to the success of the global US energy project.

Offending both China and Russia

Contrary to advice from older China hands, including former Secretary of State Henry Kissinger, architect of the Nixon 1972 opening to China, the White House denied visiting Chinese President Hu Jintao the honor of a full state dinner when he visited in April, serving instead a short lunch. Hu was publicly humiliated by a well-known Falun Gong heckler at the White House press conference and by other obvious humiliations. In other words, the White House welcomed Hu with a diplomatic slap in the face.

At the same time, Vice President Dick Cheney slapped Russia's Putin, with the most open attack on its internal human rights policy as well as its energy policy in a speech in the Baltic state of Lithuania in early May. There, Cheney declared of Russia, �the government has unfairly and improperly restricted the rights of her people.� He accused Russia of energy �intimidation and blackmail.� Some days later, Secretary of State Condoleezza Rice reiterated that Russia should be �pressed� on democratic reforms. Rice also slapped China in the face in March during a trip to Southeast Asia, calling China a �negative force� in Asia.

Curiously, Washington has repeatedly accused China of �not playing by the rules,� in terms of its oil politics, declaring that China is guilty of �seeking to control energy at the source,� as though that had not been US energy policy for the past century or so.

The significance of taking aim simultaneously at both Russia and China, the two Eurasian giants, the one the largest investor in US Treasury securities, the other the world's second most developed military nuclear power, reflects the realization in Washington that all may not be as seamless in the quest for global domination as originally promised by various strategists in and around the Bush Administration.


SCO takes on new weight

On June 15, member nations of the Shanghai Co-operation Organization, led by China and Russia, will reportedly invite observer, Iran, to full membership. That meeting will be held in Shanghai. Even if full membership is postponed as has been mooted, the fact remains that Russia and China both want to seal closer cooperation with Iran in Eurasian energy cooperation.

The Shanghai Cooperation Organization, SCO, was founded in June 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Its stated goal was to facilitate �cooperation in political affairs, economy and trade, scientific-technical, cultural, and educational spheres as well as in energy, transportation, tourism, and environment protection fields.� Recently, however, the SCO is beginning to look like an energy-financial bloc in central Asia consciously being developed to serve as a counter-pole to US hegemony. In recent months their members have taken several potentially strategic steps to distance themselves from US dependence, both in energy as well as monetary dependence. A look at the map indicates the potential of an expanded SCO.



Druid: Informative read.

http://business.guardian.co.uk/story/0,,1790965,00.htmlSNIPS
The hottest debate in the financial world now is whether the price of "things" - or commodities - is a bubble to match the excesses of the dotcom years.
The hottest debate in the financial world now is whether the price of "things" - or commodities - is a bubble to match the excesses of the dotcom years.
+
"Looking back at previous bull markets in commodities, the shortest has lasted 15 years and the longest has lasted 23 years," says Rogers. "This one started in early 1999, so if it's going to last 18 years or so, we are a third of the way. That's not a prediction, I'm just pointing out what history would indicate: that this bull market will end some time between 2014 and 2022."

MOSCOW, May 10 (RIA Novosti) - Russian President Vladimir Putin called Wednesday for work on making the national currency convertible to be completed, oil and gas to be traded in rubles on a domestic exchange, and an innovation-based economy

MOSCOW, June 5 (RIA Novosti) - Russia could use energy as a diplomatic weapon rather than to achieve foreign-policy objectives but rejects the idea that a new cold war has started, a senior parliamentarian told a daily Monday.

S. PETERSBURG, June 6 (RIA Novosti) - Russia's Defense Minister Tuesday denied media reports that Russia was carrying out work at Syrian ports with the aim of transferring its Black Sea Fleet to the Mideast country.

http://en.wikipedia.org/wiki/Cold_War
The Cold War was the protracted geopolitical, ideological, and economic struggle that emerged after World War II between the global superpowers of the Soviet Union and the United States, supported by their alliance partners. It lasted from about 1947 to the period leading to the dissolution of the Soviet Union on December 25, 1991

==

Bernanke says inflation is coming and gold goes down

Russia refuses to use energy traded in rubles as a weapon.

Interesting times!

You might be aware that I've recently had some posts and conversations in which I've expressed my expectation that certain central banks of the world (those that anticipate using rising gold prices to compensate for falling dollar value) have a very tricky public relations challenge ahead of them.

That is, they must begin to groom the public sentiment such that their citizens would be inclined to coolly witness an unprecedented upward march in goldprice without having it internalized in their minds into higher inflation expectations, which would then translate into a more difficult task for the central bankers to meet their goal of price stability for all other items in the wider (non-gold) portion of the economy.

I say it's a tricky PR challenge because these banks respect gold, and they know that their citizens are best served by owing a fair share of it. They must therefore walk a delicate line, suggesting that rising gold price is not necessarily the same steadfast INDICATOR of inflation as it has been historically, while at the same time not implying that gold has lost any of its useful value as a wealth preserver.

Further, they dare not suggest publicly the positive reason to explain gold's non-inflationary rise over the past five years because that would cause too many people to rush headlong into gold at the risk of disrupting the important reallocation phase by which the CBs structurally facilitate their upcoming reserve transition.

With regard to the CBs' price-stability policy implementation and managing the public's all-important expectations of inflation for their own currency, it would likely be impossible for them to succeed long against the steady headwinds of ongoing goldprice increases making headline news day after day and month after month.

However, at such time that the central banks have reached that point where the structural foundation of their reserves have been adequately realigned (and/or future commitments solidly assured), a very sudden "all-at-once" revaluation of gold as suggested in your msg#: 145014 yesterday would, in my view, almost certainly be the easiest (and therfore most likely) PR scenario for the CBs to engineer for themselves to cope with.

Such a singular dramatic shift, which immediately and obviously affected the price of gold as an ISOLATED item, would go a long way toward helping the world's CBs mitigate any potential spillover into public crisis of confidence in their own currencies and economies as might otherwise be expected from a price runup that alternatively occurred over a longer duration.

Obviously, the big issue for the CBs who don't already have their prerequisite 10-15% gold tangibly in place is for them to assess how reliable their commitments (receivables) are. But when those are esteemed satisfactory, it seems most likely to me that people will just suddenly find themselves waking up one day to witness a bold new gold price reality -- valued according to its new use as the PRIMARY reserve.

R.

RESPONSES SUCH AS YOURS SUGGEST TO ME THE BEST COURSE IS TO SIT SILENTLY AND LEARN. HOWEVER, I WOULD LIKE TO POINT OUT THAT THE PRIMARY MOTIVATION FOR OWNING GOLD IS DEFENSIVE (THIS FACT IS AXIOMATIC TO GOLDBUGS) BUT IT FUNCTIONS TO INSULATE ONE FROM TPTB THAT WOULD ,IN SOME FORM, CLIP HIS COIN(S). FOR 5,000 YEARS GOLD HAS SERVED IN THIS ROLE AND UNTIL THERE IS A COMPLETE CHANGE IN HUMAN NATURE OR "UNRESTRICTED 100 PERCENT REDEMPTION" IS THE LAW OF THE LAND,COMPLETE LIQUIDATION OF ONES GOLD WOULD,IMHO,BE PREMATURE.. P.S. MY SECOND CAREER HAS BEEN SPENT WORKING WITH DEPRESSED AND ANXIOUS PATIENTS. I HAVE FOUND,FOR ME,GOLD DOES HAVE AMAZING MYSTIC QUALITIES. FOR EXAMPLE, RUBBING A GOLD COIN BRISKLY TWICE A DAY CURES VARIOUS FORMS OF DEPRESSION AND ANXIETY AND HAS A CALMING EFFECT ON THE INDIVIDUAL. THANKS TO MK AND ALL THE GREAT MINDS ON THIS FORUM.

What shall the next monetary regime look like? Our Russian friends do not want their central bank to be taxed by US Fed inflation; however, they want to tax their own people by Russian CB inflation. This is also true for European and Chinese central banks. I begin to sense a trend here. The balance of power in the world has changed and this will be reflected in re-structuring of the international monetary regime.

At the national level, however, the state is gaining power while individuals are losing it. Therefore, no one talks about gold coin circulation. It shall not be permitted. May be this is what Sinclair has in his mind while talking about "authoritarian free enterprise".

Your postings have time and again feed my curiosity. My ignorance has opened my imagination to new possibilities.

I am currently leaning towards the idea that a functioning economy is the thing that absolutely must be maintained � above all else. Trade must happen. Society must not fall apart. If so, you know the end result.

Then, look at the actions of the central banks over the last few years, they have been acquiring gold. Like you say, they have been doing this in private markets rather then public markets. They also have not stood up for anything other then to oppose being used as a new world reserve currency (except Russia). At the same time, they have done everything in their power to use paper money to support paper money. It's a paper play at keeping balance solely at managing advantages against the other paper plays. Fractions of a percent come into play here, but balance is maintained (and jockeyed for).

Assume for a second that you wake up tomorrow and find gold 100x more expensive then it is today. Would people stop using paper? Would any economy fall apart? I seriously doubt it. People will go about business just like the day before. The managers have all the paper that they need to serve as lenders of last resort and they are experts at countering plays of their trade partners. If panic were to happen, each country would immediately announce their support of Freegold in their economy in order to cement convertibility (into gold). People would be stunned, but the emotion of it all would be well contained.

If this process is engineered properly, the hundreds of billions on reserve around the world will turn into hundreds of trillions. This windfall will empower �management� to stabilize absolutely everything else with a combination of paper as they forgive their buddy corporations and ultimately with the gold that trades within their boarders. The PR move here is to simply show people that it's a windfall rather then a global currency fall. The absolute most important part though is that trillions on reserve will mean that if inflation expectations start to rise, the banks will have all the currency that they need to fight it locally AND they will have all the gold value they need to provide support to any loss of confidence on the international currency exchange. The ability to continue to fight inflation expectations is critical to the plan.

A long drawn out parabolic ascension of the gold price relative to US dollars will most likely lead to a breakdown in confidence in paper. Sure, we can have a breakdown in different markets, but there must not be a breakdown in trust of paper currencies. Paper is the tool for control. Paper is essential for the functioning of economies.

I will go out on a limb here to say that I believe paper will be valued in gold rather then gold being valued in paper. Gold will be the measuring stick by which economies determine how to build trade partnerships and a measure by which people value currency in different locations. Gold will also reduce inflation taxation across boarders to help enhance trade.

How do I see gold getting revalued in this manor? Oil asking for it. Oil being cornered into it.

Then again, I have a wild imagination and a vested interest in seeing a gold revaluation. As much as I love silver, gold is on reserve. The more I look into the structural problems, the more ways I see how a high gold price can help rather then hamper the global situation. I'm a glass half full thinker.

@ ge,

Maybe this is what Sinclair has in his mind while talking about "authoritarian free enterprise"

I believe what he is talking about is a system of cronyism, where the appearance of "free markets" is overshadowed by the control exercised by major campaign supporters.

Halliburton comes to mind. Bid on a contract? Not only would that require more planning resources, but it would also entail accounting for how the money is spent - not in "crony-istic plans", and certainly not conducive to the kinds of "slush fund" and contraband deals brought to light in Contra-gate and "Confessions of n Economic Hit Man."

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
Bonds caught a bid today providing a rare (lately) double in the US Currency patch ...there seems to be a "waiting-game" going on here? Waiting for sub-10K Dow? PoG, with another 400 contracts worth slated for delivery, HAS TO reach for 4 digits this Month imo ...or 5!

http://quotes.ino.com/chart/?s=NYMEX_CL.N06Gold trades virtually around the clock. Does oil? The sources that I know about only track nymex trade between the hours of something like 9-4 (US eastern time). Is there a source that tracks oil around the clock? Thanks.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060606:MTFH91060_2006-06-06_15-51-33_N06421282&type=comktNews&rpc=44NEW YORK, June 6 (Reuters) - The Federal Reserve said on Tuesday that it bought coupons, adding $1.206 billion in permanent reserves to the banking system.

...maturity dates ranging from November 15, 2010 to August 15, 2014.

Earlier, the Fed added $5.25 billion in temporary reserves to the banking system through two-day system repurchase agreements.

Fed funds traded at 5 percent, the Fed's target for the benchmark overnight lending rate, at the time of the operations.

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

As I mentioned a week ago, since late April the Fed has put itself into a tidy little near-weekly routine of outright purchases (monetization) of Treasuries.

All the more reason to own gold.

R.

Good posts recently Sir ...I'm sure someone more qualified than I will comment on your request but here goes anyway: -

Nymex MAY have access trading (virtually round-the-clock) on their various Oil contracts, this may be a source of determination however, Oil is generally traded on several Bourses, Nymex, IPE and Dubai? Because of the different gradings of the many various types Calculated Crudes: Arab Berri, Arab Light, Arab Medium, Arab Heavy, BCF 17, BCF 22, BCF 24, Basrah Light, Brent, Cano Limon, Cabinda, Cusiana, Escalante, Isthmus, Kuwait, LLS, Mars, Maya, Merey, Mesa, Olmeca, Rabi Blend, Soyo, Statfjord, Troll, WTI, WTS ...coupled with transport complications, it is nigh on impossible to identify a generic PoOil. The various bourses will tend to run in lockstep however and GENERALLY a $2 drop in Brent traded on the IPE overnight will translate as a $2 drop in WTI on the Nymex in the morning.

Hope this helps.

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

June 6 (from DowJones, Reuters) -- Comments on inflation from Federal Reserve Chief Ben Bernanke and a more conciliatory tone from Iran on its nuclear program combined to send gold and other precious metals sharply lower in New York Tuesday, traders and analysts said.

A resurgent greenback and a sudden drop in the Dow Jones industrial average to its lowest since March spooked some market players into liquidating positions in metals markets to minimize investment risk, traders said.

"It is the dollar, and that's strengthened a little bit here, and equities are under pressure and that's a big force right now. All that's put gold under pressure," said a source at a precious metals refiner.

COMEX August gold futures lost $14 to $634.70.

Traders commented that much of the declines occurred in after-hours trading late Monday after Bernanke, in remarks to the International Monetary Conference in Washington, said core inflation readings in the last few months have been "at or above the upper end of the range that many economists, including myself, would consider consistent with price stability."

A couple of traders described the activity as subdued, considering the large price declines. One pointed out that much of the weakness had already occurred late Monday afternoon, when Bernanke spoke. "It's basically moving on yesterday's news - expectations for higher interest rates," he said.

Crude's reversal also played a role in the metals' retreat, said a trader. Iran's supreme religious leader had suggested over the weekend that the country would disrupt energy shipments from the Gulf region if the U.S. were to attack in the ongoing dispute over Iran's nuclear program. This had lifted crude and supported gold Monday. "Crude fell a dollar on the opening (this morning) on a more conciliatory tone from Iran," said a trader.

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

http://www.btimes.com.my/Current_News/BT/Wednesday/Corporate/20060606221846/Article/June 7 2006

LONDON: US financial giant Citigroup said yesterday it was raising its 2007 price forecast for spot gold to $700 an ounce from the previous $560 it made in January.

Citigroup said in a special report that the recent fall from 26-year highs ($730) was a healthy correction after a 50 per cent rise in just six months since November 2005.

"Profit taking after an exceptionally strong run, deferred signs of a traditionally weak quarter, and weak fabrication demand in times of declining investment off-take appear to have led to this latest correction."

"Nonetheless, we remain positive on gold and expect its upward trend to continue over the next two years."

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

If their previous call of $560 is now being modified to $700, what's to say they've accomplished anything more astute this time around than throwing a dart with eyes wide open instead of eyes tightly shut?

R.

Right now, the $US is down against most currencies, but the POG is down against basically all currencies. Gold has been getting hammered against all currencies since the recent downturn started. I believe Bill Murphy is correct: This is a major attack against gold orchestrated by the US government.

http://www.newsmax.com/archives/articles/2006/6/6/151138.shtml?s=lhBy Kenneth R. Timmerman
Newsmax.com
Wednesday, June 7, 2006

WASHINGTON -- Iranians are going for the gold -- at least until someone else cuts them off.

To forestall an effort by the West to seize Iranian assets in Europe, the Iranian leadership decided last fall to begin a massive, secret repatriation of its international currency reserves, according to Central Bank of Iran documents.

The documents were obtained by an Iranian opposition group and shared with Newsmax.

The documents detail eight shipments in chartered jumbo jets from Zurich's Kloten airport. The shipments, from October through late November, brought 250 tons of gold bullion from the vaults of Swiss banks to Tehran.

The gold was purchased by Bank Markazi (the Central Bank of Iran) from Credit Suisse in Zurich, the documents showed.

Three of the eight flights attracted the attention of amateur aircraft spotters, because the planes were painted in the distinctive livery of Iran Air, which rarely flies into Zurich.

The spotters noted a 747-200 at the airport on Oct. 24, 2005, and an Airbus A-300 that made two rotations, on Nov. 14 and Nov. 23. They provided that information to Jetstream, a glossy, German-language monthly published in Zurich.

Other chartered aircraft handled five additional rotations, before word of the shipments leaked out. Each plane transported between 28-35 tons of gold, although the 747-200, initially designed as a freighter, could have taken as much as 100 tons of cargo, according to Boeing.

Iran's leadership wanted to purchase 700 tons of gold, according to the Organization of the People's Fedaii Guerillas of Iran (OPFGI), a communist opposition group that obtained the Central Bank documents.

However, their secret effort to convert Iran's foreign currency holdings into gold appears to have stopped when word leaked out earlier this year.

The gold is now being held in the vaults of the Bank Markazi in Tehran, the group said.

A Credit Suisse spokesman, Andres Luther, told Newsmax by phone from Zurich that it was bank policy not to comment on its clients. However, if the bank had shipped gold to Iran last autumn, "I can assure you that we fulfilled all the reporting requirements the state demands of us."

Credit Suisse, Switzerland's second largest bank, announced on Jan. 23 that it would no longer accept new business in Iran or Syria. Mr. Luther said the bank's decision was not in response to U.S. pressure, as previously reported.

"We made this decision on our own after looking at developments in the region and assessing the increased economic risks for our bank and for our clients of doing business in Iran," he said.

The asset repatriation plan was set into motion just weeks after former Revolutionary Guards officer Mahmoud Ahmadinejad took over as president of the Islamic Republic of Iran last August.

The decision was made during a strategic planning session of top regime leaders in Tehran, who were examining Iran's options in the nuclear face-off with the West.

The meeting was chaired by Supreme Leader ayatollah Ali Khamenei, and included top intelligence officials, strategists and former president Ali-Akbar Hashemi-Rafsanjani, the so-called "moderate" that Ahmadinejad beat in the presidential run-off election in the summer.

According to minutes of the meeting, obtained by the OPFGI, the regime leaders concluded that the Bush administration had been weakened by the war in Iraq, and needed Iran's help if it wanted to withdraw from Iraq.

They also concluded that the decision of Prime Minister Ariel Sharon to leave the Likud party and create a new center-left coalition had weakened Israel.

Iran's leaders surveyed their own allies around the world -- in particular, terrorist groups -- and felt confident in their ability to inflict severe pain on the United States and Israel, if necessary.

"The minutes mentioned, by name, Lebanon's Hezbollah, Hamas, Palestinian Islamic Jihad, as well as Ansar al Islam, Jeish Mohammad, Jeish al Mehdi, and the Sepah al-Badr as Islamic Republic allies," an OPFGI spokesman told Newsmax.

U.S. news accounts refer to "Jeish al Mehdi" as the "Mehdi Army," the milita controlled by renegade Shiite cleric Muqtada al-Sadr. The Badr Army (or Badr Brigade) is controlled by the Iraqi Dawa party.

Both militias receive extensive support from Iran.

The minutes also mentioned as Iranian allies Saudi Shiite organizations, and Muslim radicals in Afghanistan and Thailand, the OPFGI said.

After making this world tour, the Iranian leadership determined that it had little to gain from continuing a dialog with the European Union over its disputed nuclear programs.
"They felt that Europe was less important than before, and that the Europeans would be unable to impose any real pain" on Iran should the regime break off dialog, an OPFGI spokesman told Newsmax by phone from Europe.

Shortly afterwards, in early September, the International Atomic Energy Agency found new evidence that Iran had received uranium enrichment equipment from the black market of Pakistani scientist A.Q. Khan, and the confrontation between Iran and the international community over its nuclear program began in earnest.

As a backstop, the leaders decided they should begin to disperse and repatriate the liquid assets they held overseas, in the unlikely event the international community decided to impose economic sanctions on Iran for its nuclear intransigence.

In addition to giving the orders to convert foreign currency holdings to gold and to repatriate them from Switzerland, the leaders also gave orders to Iran's central bankers to move cash accounts from Europe into Arab and Russian banks, which they felt would be less immune to Western pressure, according to the minutes.

The asset relocation plan became public on Jan. 20, just one day after French President Jacques Chirac threatened to use French nuclear weapons against Iran should Tehran launch a major terrorist attack.

Central Bank governor Ebrahim Sheibani announced on Jan. 21 that his government had started to shift Iran's overseas holdings from Europe to countries in southeast Asia.

Commenting on Sheibani's announcement, a State Department spokesman said the Iranian move was "a sign of Tehran's growing isolation" over its nuclear program, and was an attempt to protect its assets should the United Nations impose sanctions on Iran.

Jeffrey Christian, managing director of CPM Group, which tracks the flow and pricing of gold, told Newsmax that the reports of 250 tons of gold repatriated to Iran late last year "make sense."

"There has been a tremendous amount of gold going into Iran over the past eight months," he said. "Some of it belongs to the Central Bank, but part is to satisfy private investment demand."

Since the first quarter of 2003, he added, "we've seen a broad range of Middle Easterners buying gold for storage outside the Middle East, the United States, Europe, or Japan. More people have bought gold over the past five years than in the entire history of mankind."

The main repositories of these new gold findings, Christian said, were Australian, Singapore, Malaysia, and Thailand.

The Fedaii organization also alleged that in a separate scheme, pro-Iranian Shiites in Iraq looted the Iraqi Central Bank and one of Saddam Hussein's palaces in the immediate aftermath of the 2003 war, and made off with 200 tons of Swiss-stamped gold bullion.

The Iraqi gold was remelted in Iran, cast into automobile bumpers, and covered with chrome. Iranian agents drove the cars with the gold bumpers into Pakistan and Azerbaijan, where they sold the gold to brokers at a 15 percent discount, the group said.

"Sales of this gold are ongoing," sources at the OPFGI said.

http://www.forbes.com/beltway/2006/06/01/paulson-tax-loophole-cx_jh_0602paultax.htmlBy Jessica Holzer
Forbes
Friday, June 2, 2006

WASHINGTON -- For Henry Paulson Jr., a Goldman-sized tax loophole awaits his pleasure.

High-flying business executives almost always endure financial sacrifice when they make a detour into public service. Paulson is no different: The Goldman Sachs boss will see his annual paycheck shrink from last year's $38 million to a paltry $183,500 once he takes over the job of Treasury secretary.

But don't shed too many tears for Paulson. He has amassed quite a fortune--a roughly $700 million equity stake in Wall Street's premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

Technically, the tax kicks in once these replacement assets are sold, using the purchase price of the original assets as the cost basis, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. But why sell when you can avoid the tax altogether?

"The idea is never to sell," says Robert Willens, the top tax and accounting analyst at Lehman Brothers. "If you're able to hold onto the replacement assets until your demise, you never have to pay it."

The tax break was designed to ensure that the wealthy are not deterred from taking posts in government because they fear a big tax hit. But it amounts to a significant perk of public office.

Paulson's huge equity stake in Goldman served him well as he flitted around the globe singing the firm's praises to potential clients and investors. It was hard evidence of his faith in Goldman's continued success. But once he is gone from the bank, such a giant concentration of assets could be somewhat of an albatross for Paulson, who, at 60, is surely considering the tax consequences of diversifying his fortune.

It is not a stretch to suppose that, at the margin, the chance to unwind his stake in Goldman Sachs tax-free may have had an influence on his decision to take the Treasury job. After all, if he were to completely divest himself without any tax relief, he would be staring at a tax bill of well over $100 million, Willens says.

Paulson need only obtain a "certificate of divestiture" from the Office of Government Ethics to sell off his 3.23 million Goldman shares, worth about $484 million, tax-free.

But he may not escape paying taxes on the sale of the rest of his Goldman holdings, which are made up of restricted stock and options, depending on whether he received them as part of his pay package. Proceeds from the sale of assets received as compensation would be treated as ordinary income rather than a capital gain and thus would not qualify for the tax break.

Plenty of wealthy public servants, including Defense Secretary Donald Rumsfeld and former Secretary of State Colin Powell, have taken advantage of the tax break since it was introduced in 1989 under the administration of President George H.W. Bush. Deputy Chief of Staff Karl Rove has obtained a certificate of divestiture for stock sales in 23 companies since he joined the administration.

To get the tax relief, it must be deemed "reasonably necessary" for a public official to divest his shares, or a congressional committee must require the asset sale, according to section 1043 of the tax code.

Paulson should have no trouble passing this test: A large stake in a global financial firm would seem a clear conflict of interest with the duties of Treasury secretary, which include ensuring the smooth financing of the current account deficit and helping to manage financial crises.

Even a stake in an industrial company is enough to raise eyebrows nowadays. Outgoing Treasury Secretary John Snow, the former chairman of CSX Corporation, dumped more than $20 million worth of his former company's stock to avoid the appearance of a conflict of interest. And Snow's predecessor, Paul O'Neill, the former chairman of Alcoa, was dogged by criticism of his $100 million stake in the aluminum giant until he finally unloaded it. That's still small potatoes compared with Paulson's nest egg.

It is always possible that Paulson could follow in the footsteps of fellow Goldman alumnus Robert Rubin and avoid divesting his Goldman stake by placing it in a blind trust. But even the former Treasury secretary, who was the richest member of the Clinton administration, made ample use of the tax break, diversifying other portions of his fortune.

Poor Gov. Jon Corzine of New Jersey, who launched a successful bid for the U.S. Senate after Paulson shoved him aside to become the top dog at Goldman, wasn't so lucky. While serving on the Senate banking committee, he was pressured to sell off his $300 million stake in the investment bank. But alas, the tax perk is only available to members of the executive branch.

http://bigpicture.typepad.com/comments/2006/06/when_statistica.htmlGood read.

Perfect. Like buying micro beer, different flavors for different tastes. That explains the lack of 24 hour graphs like gold. You've provided a clear answer for a fuzzy question. Thanks.

http://www.financialexpress.com/fe_full_story.php?content_id=129715Double-Counting of Gold by Central Banks
May Have Aided the Price Suppression

By Sangita Shah
Financial Express, Mumbai
Tuesday, June 6, 2006

The International Monetary Fund (IMF) apparently directed member central banks to double-count their gold when it had been leased or swapped or otherwise had left a central bank's vault or possession.

Such a provision for the central banks may have led to the gold price suppression that lasted between 1989-2001, after which the price started moving up.

Gold hit a 26-year high of $732 an ounce on May 12. Gold has dropped 11% since then. Gold has not yet been able to cross the high of $830 mark it hit in 1988.

The central bank of the United States in particular has been seen as the primary mover in suppressing the gold price by lending the gold for trading without accounting for it. However, there have been no concrete proofs in this regard.

The paper "Treatment of Gold Swaps and Gold Deposits (Loans)" written by Hidetoshi Takeda of the IMF's Statistics Department and published in April acknowledges at length the potential for double-counting central bank gold under current IMF rules and suggests rules to prevent it.

The research paper commissioned by the IMF appears to confirm the U.S.-based Gold Anti-Trust Action (GATA) Committee's longstanding complaint that the IMF has had been active on this front.

Responding to the research paper, GATA consultant Andrew Hepburn, who discovered the double-counting of leased and swapped gold at several IMF-member central banks, remarked that even in arranging to correct the gold deposit books of its members, the IMF still would allow them to be less than forthright.

Mr. Hepburn noted IMF guidelines maintaining that "to qualify as reserve assets, gold deposits must be available upon demand to the monetary authorities." But, Mr. Hepburn added, central banks have lent so much gold to suppress its price and make it less competitive as a currency that their gold loans now far exceed annual gold mine
production, and so the loaned gold cannot practically be
repaid "upon demand." Recovering the central banks' loaned gold without exploding the gold market would take years.

In any case, the IMF's acknowledgement of the double-counting of loaned or swapped central bank gold is more evidence of central bank intervention in the gold market, Chris Powell, secretary/treasurer of GATA, said in his dispatch.

http://www.usagold.com/analysis/doldrums.html

PR wise,it would be best to make it after it is confirmed the Gold Bull is over.So I take comfort in the recent FT article.

We can only speculate by what means it could happen,Flatliner suggests oil bidding for Gold.I would guess a carefully worded statement by the CB's-if the recent public info from ECB circles about leveraged hedge funds posing a big risk on the financial system was a preparation?I mean removing a generally perceived risk will be seen as good,for example eliminating all leverage on Gold.Just a raw thought.

As for the timing-several requisites are coming together,the slingshot is being loaded again,if the past parabole is an indication then the next one will be BOAH!'seasonality this fall,a susrprise move for most (as the GoldBull is over-see above),plus the wavers say the next one up is the (biggest) C (but I'm no expert).Golds Biorythmus in a perfect condition.

Again to cite PandaGold: "most well be caught napping when the big one hits".

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=If you take the time to fiddle with the various timeframes on the accompanying comparison Chart you will conclude that, over the last 18mth's PoG has been in lockstep with the Dollar for approx 2 MTH's.
We do NOT have an inverse Gold/Dollar thing going on anymore period!
The current weakness is, to my way of thinking, a healthy pull-back prior to an all-currency run-up and is part and parcel of the freemarket Freegold move so often discussed hereabouts.
Lets watch.

Great promo below guys ...shouldn't the Green arrow in 2006 be pointing to 12:15 instead of 2pm though ;-)

http://www.ecb.int/press/pr/wfs/2006/html/fs060606.en.htmlSounds like when I buy 1/10 coins for finetuning.

The -12million,is that a net figure,or alternatively is the buying by a non WAG bank?

"In the week ending 2 June 2006, the decrease of EUR 12 million in gold and gold receivables (asset item 1) reflected the selling of gold by one Eurosystem central bank (consistent with the Central Bank Gold Agreement of 27 September 2004) and the purchase of gold coins by another Eurosystem central bank."

http://www.moneyweek.com/file/13563/where-should-you-put-your-money-as-the-carry-trade-ends.html...apparently a fairly delicate situation...worth a read and a think.

:-)

http://www.moneyweek.com/file/13562/how-high-would-gold-rise-under-a-new-gold-standard.htmlAnother worth-a-read from Paul van Eeden...

:-)

Hmmm. If van Eeden's right and we can only look forward to a doubling, at best, of the current gold price, then what need would TPTB have to suppress it? Couldn't they manage an orderly climb to, say, $1,200 and let the world transition back to a gold-backed franctional reserve system? All fiat would be devalued by 50% of so, but that would essentially be that, no?

Or would history merely repeat itself as fractional reserve once again ran amok and inflation once again became the order of the day?

Even so, couldn't TPTB buy a lot of time by going this route?

I have my thoughts but would like to weigh them against those of the forum.

The gold price is supposed to be at $2,100.00 and some change, just with inflation adjustment from the old highs of $850.00.

One could infer, a double is overlooking quite a bit of inflation. Everything can go up in price except the barometer. I'll take that suit of clothes for these here 20 ounces of au!

Alex

This is just a preposterous thought that comes to mind, there appear to be many people who would take great delight if all bubble gum machines were refitted to accept a one ounce au coin to operate a penny gum-ball machine. The world is upside down and somewhat screwy that gold even has to fight back from these levels.

If things were "right," the price of gold would shoot over night to the $2,000.00 level to make up for past supression and CB sales (what have you - GATA, et.al.)

To bring it to these levels is absurd in my mind, but, here we are. It can only be looked at as a buying opportunity for both au & ag.

Just a simple thought.

Alex

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

The corporate mind controllers of corpgov working through CONgress (you don't think CONgress gets all that bling for nothing, do you?) have a chance as early this Friday to steal the internet from the people. You might get off your butt and make a few calls and send some emails...or does fascism and corporate totalitarianism sound like something you'd like to live under? Freedom won't be free once the corporate revenue hacks start taxing speed - look for pay email to follow and then full up licensing.

I'd offer that we're in Depression 2 and just like the FCC was "invented" to regulate radio in the 1930's Depression, we look for an Internet Commerce Commission to show up about any minute now, as the evidence mounts that the tech bubble burst of 1929 was our modern-day 1929.

-Goldilox

My first thought was that this as too far afield, until I rethought it in terms of both gubmint revenue and information control. Two birds with one stone, so to speak, in a rapidly deteriorating socio-economic environment.

When I got home from the supermarket last night, I discovered that a card with the following text had been placed in my bag :-

Redeem your coins for CASH !
Bring your jar, bag or bucket of loose coins to xxxxxx and pour it into our self-service coin center. You'll get an instant receipt for the total (less 8% service charge), which you redeem at Customer Service. It's fast and easy cash !

C! Maybe I'm missing something but -
1/ I thought coins WERE cash.
2/ 8% for what service ?
3/ 1cent pieces are now worth either 2.5c or 0.9c approx (as of a couple of weeks ago) and the nickel costs more than 5c to produce.
4/ The redemption is either in electronic or paper form (Hey, I'm tempted to put in, say, 10 1c pieces just to see how they make change !)

This looks like an example of Gresham's Law to me - bad money driving out the good. Anybody else seen this kind of thing ?

C!

At $1000/oz., the Chinese Central Bank could by the stash that the US claims to have 3 times over, each and every year.

Your conclusion is right. Called my commodities friends this morning @ 620 for an order. Up or down I am buying as much as I can until I a priced out of the market.

@ Clink,

Available at most supermarkets.

Someone has a strong campaign inititated to collect the more valuable coins for paper and charge the customer for doing it. Must have been a banker in his previous life.

@ Clink,

I'll bet he would "happily" trade you $50 face value minus a "service charge" for your Gold Eagles, as well. HA HA!

Just for giggles, I stopped by a pawn shop downtown the day that gold hit $550 a couple months ago, and asked for their buy price on Krugs, holding a tube in my hand.

He told me $500 - I said, "Good Day!"

Weird ! I know we all like to look at the shiny, to fondle it perhaps or even clink it (but not so hard you leave marks !) but isn't taking them walkies a bit extreme ? LOL!

From what I gather, the people most interested in getting "dead" small change back into circulation would be in the US Treasury.

I didn't know that machines like this were in common operation. (I live a simple, sheltered life - I earn the money and my wife spends it - so I don't get to supermarkets except on my way home when I remember that I forgot to put more beer in the refrigerator.

C!

Clink--
Your supermarket has some nerve to charge for being able to collect pennies (pre-1982) to then sell for a meltdown profit!

Commerce Bank at least doesn't charge for this opportunity, as you can bring in your change to their machine and get full redemption.

@ Clink,

Supermarket shopping is one of life's great "pleasures', especially with "member" and bulk pricing and all the other confusing amenities they have added. to the experience.

The most important thing is to pick the proper time of day - after the crowds, but before the meat an deli counters close!

As for "Walkies", that particular tube was slated for some unexpected major expenses, as cash flow was miserable that month. Rest assured I got a much better return than offered by the pawn broker.

Certain Hall of Famers and one Trail Guide laid out the message a long time ago. Now we have certain proof. With the confirmation, much has been left on the table -- much more needs to be said, and, if you look, has already been said. A friend of mine in the inner reaches of the mega trade gold system mentioned to me recently that "this whole market is all about Iran." And he wasn't talking about the tensions over uranium enrichment by itself. There is an explosive situation developing behind the scenes with gold. Iran is a marker, a fractal, a template, a warning.

But of what?

This could be a fresh wind beneath the wings of the gold market at some flex point down the road. More some other time.

@ MK,

Really astute observation, especially when te caviat that it is NOT about enrichment is added.

Iran is the last remaining major proponent of the Islamic Gold Dinar, with Iraq under the US $ jackboot and Indonesia and Malaysia still digging out from under tsunami damage.

What Iran represents is the ability of any lesser players to dissent from US$ hegemony. Even Chavez and the South American populists are not so brash (in action, at least) as to suggest the US $ is toast, but the Islamic Gold Dinar flaunt FIAT collapse right in the globalists' faces.

While the oil pundits often remind us that Saudi Arabia is still the leading oil producer, others (in the Simmons mold) remind us that the extraction methods employed in Saudi Arabia (water and steam injection) could accelerate their production EOL (end of life) estimates dramatically.

If BB or anyone else could locate any reliable estimates of the proliferance of EOL accelerating technologies used in Venezuela and Iran, a better estimate of Saudi Arabia's continuing OPEC leadershp could be assessed.

Russia, while not an OPEC member plays a significant role, as well, especially with their proximity to hotly contested Caspian sources.

And we should not leave out China's interest in China Sea reserves, especially since half literally the US Navy has been standing guard over them since 2004.

Oil is still the most necessary resource for industrialization, as all other energy sources play a not-close "second fiddle" to the monetary interests of TPTB.

A Trail Guide once laid out that MTM for CB goldreserves is the key...

Is that also your opinion ?

@A fresh wind beneath our wings

Some of us clearly have no bait on the hook with no chance of catching anything worthwhile. When MK goes fishing, he sets the hook, plays the sport, but makes you guess at the size of the price and then commits to reeling it in at some later time.

Put yourself in Iran's position and think as if you're playing a chess game that your very life depends on. At least half the pieces have been cleared from the board leaving very few options remaining.

Will a country that has little direct exposure to the empire pay the emperors taxes or not? Every other country watches with quite awe not wanting to get caught up in a firestorm while haven already stocked up for the winter.

Remember, the revocation of security means oil will bid for gold. Watch the security issue, IMHO, that is the next move.

http://www.federalreserve.gov/releases/bulletin/0406assets.htmHow does the US deal with a "New Deal" in global monetary and financial restructuring? The first thing I looked at was what financial cards does the US hold. A visit to the Fed Reserve site says not much in the way of foreign currencies and Special Drawing Rights ($54 billion). This is less than one month's trade balance deficit, and puts the US down in the ranks of the least developed nations. There is an entry for $11.044 billion in gold shown at $42.22 per ounce that works out to be 261.6 million ounces of gold. If this stuff is really still there the Fed has about 1 ounce per citizen. Even at today's price it would only be worth $162 billion, about 2.5 month's current trade deficit. If much of this gold has been leased/swapped/sold then the US Fed is really naked.

Assuming the best, ie., that the Fed still has all the gold, then the US should want that stash to be upgraded by several orders of magnitude so as to be able to redeem the trillions of $ that are held at home and abroad and still retain a significant stash of gold. Any number less than $10,000 per ounce wouldn't get the job done. Of course we could mortgage New York City and get a little more time to play the game.

The $ is toast. Most everyone (who can add and is not part of the $ fan club) knows it and is scrambling to buy into the new chips, gold. The US casino is going broke and its markers are tanking. Get yourself some new gold chips and stay in the game.

In the end the US will call their fiat markers and revalue their gold markers. This is likely to happen quickly. Be prepared!

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-06-07T194044Z_01_N07183197_RTRIDST_0_ECONOMY-GREENSPAN-ENERGY-UPDATE-3.XMLThe new frankly spoken Greenspan speaks out on petroleum...

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

June 7 (from MarketWatch) -- Gold futures closed at a seven-week low Wednesday, as the dollar continued higher on expectations of a June rate increase and hopes for a break in the diplomatic impasse over Iran's nuclear program.

The COMEX August gold contract closed down $2.10 at $632.60, its lowest finish since April 24.

On Tuesday, the front-month gold contract closed down $14, continuing the selloff sparked by comments from Federal Reserve Chairman Ben Bernanke on rising inflationary pressure. Bernanke's remarks were viewed as a signal of further rate rises, sending the dollar higher against its major rivals. The trend held Wednesday.

Peter Grandich, editor of the Grandich Letter, suggested that investors may want to seize recent weak metals prices as a buying opportunity.

"Most of my technical indicators have now returned to the bullish side or are at least no longer very bearish," Grandich said. "Reward now equals or surpasses risk, going forward $50 lower and up to $500 higher is worth risking being aggressively long again."

Kevin Kerr, editor of Global Resources Trader, a newsletter published by MarketWatch, said he also thinks the recent weakness will not last long.

"The residual effects of Mr. Bernanke's not-so-subtle hints are putting gold in a position to test lower levels even from here, but that may be very short-lived," Kerr said.

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

With all the talk about gold IRA's and the uncertainty in the whole world, I decided to get the gold in my IRA out of the governments eyes and in to mine.
So I made all the preparations and even faxed in the request to take possession of 2/3 and was going to sell 1/3 to pay the taxes. I forgot to ask what the "fair market price" was for the gold I would be getting, so I called back and they said there last mark to market price was on May 13th........?? That would mean I would be paying taxes on gold at $725+ spread and be selling gold at $621. Obviously I put a stop to it, and told them to let me know when the "fair market price" was fair.
My best talent is poor timing!

http://streettracksgoldshares.com/us/value/gb_value_usa.php#205 Jun 2006 355.53
06 Jun 2006 355.53
07 Jun 2006 355.53

It would seem, sheople are waiting.

Rap: Do you suppose that in a month in the future that gold goes from, say: $625 to $700, that you will be told that their last mark to market for taxes was $625 (that's what you'll be taxed on) but they will sell it and your proceeds will be $700/per? Ha! Right. At that point the mark to market will probably be on the day you're selling at the higher price--not a look back number! Thanks for the heads up. Sounds like a maximum tax plan on exiting these programs. Best of luck.

A couple of messages earlier today referenced $850/oz. gold in 1980 and how that would be eithout over $2100 adjusted to today's dollars.

While I'm as ready as the next guy to see gold go much higher than it is today, I like to be careful about using the $850 figure.

Here's why: if you look at where the price was just one week before and then one week after the January day it hit $850, in both cases it's the lower 600's! It was just $850 for one day.

I'm not sure what the point of that benchmark is. Wouldn't it be better to talk about what $600 then would be in today's dollars instead?

Good point on $600 gold ...... I have heard the case made for $450 .. to $30,000 ...... rarely is your case made.. $1,500 range is good !

Using the $2100 figure as the inflation adjsuted eqivalent of $850, $600 computes out to $1575, but that is using "hedonically modified" inflation factors.

I wonder how that relates to Sinclair's $1650?

Mining costs are up.

Inflation is going forward.

Economies slowing and worried.

Stocks are down.

The dollar is fragile and getting more so.

Investors are panicked.

TRILLIONS AND RISING INDEBTEDNESS.

Population Soars

Plagues and Pandemics.

Countries distrust each other.

Wars and no end insight.

DID I MENTION INFLATION?

A loaf of bread 3 bucks.

SO NOW WHAT? Wait for GOLD to plummet for a DEAL?

I do not see many more DEALS in the very near FUTURE!

http://www.freebuck.com/world.shtmlA wee bit of a headwind in Stockville wot? With already some Zombies loose in Asia today and Dow futures suggesting rot continueum, it seems like a perfect day for a Limit-Up Gold move ...or 2 Limit-Ups ...or pick your own!

http://www.freebuck.com/world.shtmlA wee bit of a headwind in Stockville wot? With already some Zombies loose in Asia today and Dow futures suggesting rot continueum, it seems like a perfect day for a Limit-Up Gold move ...or 2 Limit-Ups ...or pick your own!

Below is a post of Scarab from the other castle,it probably summarizes this probably very well.

But I'd like to make a clarification first on 968's repeated "MTM for CB Goldreserves is the key" as I myself have played it down before as just a irrelevant bookkeeping issue.While the latter is true if viewed isolated,we all agree on that the Trail is all about the road to FreeGold so we should put this into Another perspective.

I do see the "Gold MTM" as a flag put up by the CB's "here,we are in the pro-Gold coalition and its our ultimate goal to bring Gold back into the financial architecture,to let it play its proper role as anchor and the only true wealth asset and we will treat it wisely!".Of course they won't say "we go to the Gold Wealth Standard!" as this would cause the instant explosion in price.Yes,MTM is merely a sign,like those occasional (in Switzerland Golden) metalplates reassuring you're still on the right trail.MTM your Gold does nowhere make FreeGold,but FreeGold needs necessarily the Gold MTM.

It helps you to keep on walking and be assured not to being lost.Its hard to see any trail at all here as there are no footsteps in sight,but you can stand inmidst a giants footstep and overlook it.Of course the details of the walk to the peak are still printed by those far ahead.Yes, there are many trees,flowers and swamps on the sides,its not fata morganas,but its secondary.Surely,it explains for example why the paperGold price has risen so fast at this stage in time'so here is Scarabs post on one of these political happenings:

"Good points. As to your question of why isn't the gold price continuing to rise... I noted in earlier reading that the Iranians have temporarily backed off on their current purchases since their buying was uncovered.

The timing of their pullback from buying heavily alongside the London Metals Exchange on the brink of implosion seems to have coincided with the US escalation in anti-Iranian rhetoric.

Coincidence? I think not .

The anti-nuclear/Iran rhetoric never really had me convinced, nor has anything that emanates from DC in the past 6 years. Anything that spews through standard media channels must always be crossed examined or at least second guessed with some healthy skepticism.

In this particular recent scenario, the nuclear projects in Iran just happen to have been running in parallel with the establishment of the new Oil bourse and this is what I think it was all about.

The Iraqi's were also talking of establishing a similar market trading in Euro's just prior to the US invasion. And in that case it was WMD's, so this is the same script all over again. I am kind of amazed at the shallowness and lack of subtlety in the propaganda, as the script was practically identical.

Therefore, I consider it quite likely that the Iranian issue was all about the $ and Oil.

Something that also supports my thinking is the fact that the recent talks actually include the US providing the Iranians with certain nuclear technologies!! So again, we have to look a little more carefully to understand what has really been going on.

My take on this is that the Iranian buying was driving the Gold price up, or at least one of the major drivers on this rally. The US were and always have been more concerned about the Oil and the $ and the recent 'talks' are being driven by the need to maintain relative stability in the markets.

Alongside all of this, the LME, Iran and the escalation thereof we had the IMF coming in to save the shorts bacon, buy selling some of their gold into the market timing perfectly with the recent POG peak.

Furthermore, there has also been recent publicity exposing the double-counting of gold reserves and the inability to cover the leasing and swapping in any kind of short-term time frame.

To summarize. The lid has been blown on the gold price rigging scams. Iran as a single nation was able to force the system to the brink of imposion, and the US was willing to go to war over the matter.

Despite years of "strong dollar" rhetoric, the PTB are extremely concerned about the US$, and they know it is in jeapordy. Every time a scenario arises that threatens an untimely demise of the US$ the talk of war begins immediately.

Iran is just one nation, Russia is establishing its Rouble based markets as we speak, and China is considering quadroupling its gold reserves.

Those two nations are not such easy pushovers, and they also have the potential to damage the $ every bit if not more so than any middle-eastern nation."

http://www.upi.com/Energy/view.php?StoryID=20060605-121956-6188rIn $?Let the $ take the flow?And then bid for Gold?



"Iranian Oil Bourse nearly ready to open

TEHRAN, June 5 (UPI) -- The Iranian Oil Bourse is in its final stages, Iran's Fars news agency reported Monday.

According to the Fars report, the board of directors of the International Bourse Co., which is charged with establishing the bourse, will review the final draft of the articles of association of the Iranian bourse this week.

The International Bourse Co. was registered last month, with an initial capital of $2,000, and is charged with setting up the Iranian Oil Bourse on Kish Island. The IBC is owned by the National Iranian Oil Co., which has an 80 percent stake, and by with Kish Free Zone Organization and the Mostaz'afan and Janbazan Foundation, each of which hold 10 percent stakes.

Once the IBC finalize the draft, the articles of association will be sent to the body in charge of securities for review.

The bourse will be established in phases; following discussions of the first phase, rules and bylaws involving the establishment, running, equipping and opening of the bourse will be negotiated."

Druid: It might be a leap but I would guess that Venezuela, Bolovia, Brazil and, oh yes, Argentina are buying very discretely.

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B9163C77B%2D19E9%2D4860%2D82FA%2D53DD56C1A519%7D&siteid=bigcharts&dist=newssnip:

NEW YORK (MarketWatch) -- Gold futures tumbled $10 an ounce early Thursday as the dollar rallied on continued rate hike expectations and news of the death of Abu Musab al-Zarqawi, the leader of al-Qaida in Iraq, in a Baghdad air strike.

The announcement by Iraqi Prime Minister Nouri al-Maliki sent oil futures below $70 a barrel and sent the dollar higher. But the greenback really took off following less hawkish than expected comments from European Central Bank President Jean-Claude Trichet.


-Goldilox

Like the death of a media-hyped civil war leader is gonna slow the flow of 1st world weapons to ANY of their "regular customers". Come on, "Sell them Hell, Ollie" hisself is on-site directing both the sales and the media response! Remember, it required a George I Presidential Pardon to keep his "Wal-Mart of illicit weapons and drugs" from becoming front-page Congessional testimony 20 years ago.

Sure, Ollie is in Iraq "only as a CNN correspondent"! Yeh, uh-huh. And Halliburton is there to build bridges and schools. How dumb they trust us to be.

Sorry, I ain't buyin' this particular spin. In a country experiencing the chaos of full-blown occupation, there are hundreds of "Hydra heads" regrown when one is cut off. This has NOTHING to do with PoG, no matter how deperate they are for the sheeple to believe it.

TPTB are getting VERY desperate for "excuses" recently.

All while George Ure gives us the following caviat from a remake of old Byrds' lyrics:

To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven

A vote to be bought, a vote to sell
A vote to miss, voters to hell
A good plan to kill, a crime to hide
A time to laugh, a jury to lie to

To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven

A time to suck up, a time to pretend
A time to sell out, a time for cash
A time to lie in the end
A time for cover stories together


To every crook - spin, spin, spin
There is a season - spin, spin, spin
And a vote for every purpose under heaven


From: www.urbansurvival.com

Druid: Nikkei down over 16% in the last two months. European equities under immense selling pressure. The CB's must be winning the interest rate battle that the hedgies bet against. In a word "brutal".

I think the Fed is realizing the crap is about to hit the fan in a matter of months and they will have a hard time staying clean. :)

1. Massive Offshoring of American Jobs and decimation of
America's industry and high tech services has destroyed the rich American consumer base:
Kohn says "at a time of rapid change in the U.S. and global economies."

2. Derivatives, dangerous mortgage financing with adjustable rate mortgages that will cause massive stock market collapses and a housing colapse.
Article says "He also said financial innovations posed a challenge to efforts to maintain sound banking and financial systems.."


----------------------------------
Kohn: The Fed faces many challenges
Fed governor and vice chairman nominee Donald Kohn told a Senate committee that the Fed faces a challenge keeping inflation in control at a time of rapid change in the economy.
June 8, 2006: 10:23 AM EDT

WASHINGTON (Reuters) - Federal Reserve Board Governor Donald Kohn said on Thursday rapid economic change posed a big challenge to the Fed in its efforts to keep inflation under wraps and employment strong.

In testimony prepared for the Senate Banking Committee at a hearing on his nomination to be vice chairman at the U.S. central bank, Kohn did not delve into the outlook for the U.S. economy or interest-rate policy.

He said he was honored to have been tapped by President George W. Bush for a four-year term as the Fed's No. 2 and said he thought his "long and wide experience" at the central bank allowed him to make a valuable contribution.

"The Federal Reserve faces considerable challenges today in meeting the responsibilities you have given us," Kohn told the panel. He said the challenges extended to the Fed's efforts to foster price stability and maximum employment "at a time of rapid change in the U.S. and global economies."

He also said financial innovations posed a challenge to efforts to maintain sound banking and financial systems, as well as to protect and educate consumers
------------------------------------

At this stage,if you make Gold that cheap in all currencies,I'm beginning to wonder!

http://www.usagold.com/analysis/doldrums.htmlThe aggressive sellers in the gold market today seem to be reacting in celebration of the termination of al Qaeda's top leader in Iraq, Abu Musab al-Zarqawi.

Even the Swiss franc took a beating today.

Apparently they deem that everything that was previously weighing on the dollar's utility and international desirability as a reserve asset (U.S. govt and trade deficits) is now fixed, and that the future strength of the dollar is assured.

We should be sure to kindly say to them, "Thanks for being so singularly near-sighted and naive -- we all appreciate your personal contribution to gold's "summer doldrum" opportunities (see link, charts) for the rest of us."

R.

Better dust off those DOW 10K hats. Looks like they're about to be recycled once again.

DOW 2000 = 10200 = 42 oz gold (pre-911)
DOW 2005 = 10200 = 23 oz gold (July 2005, gold at $440)
DOW 2006 = 10800 = 17 oz gold (May peak, gold at $730 was 15:1)

My, what a solid economic "recovery" the FED and banksters are delivering.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060608:MTFH46754_2006-06-08_15-29-27_L08183718&type=comktNews&rpc=44ST PETERSBURG, Russia, June 8 (Reuters) - The Russian central bank said on Thursday it had cut the share of dollars in its reserves to 50 percent and announced a pause in its efforts to curb inflation by allowing the rouble to rise.

Central bank chairman Sergei Ignatyev said Russia now held 40 percent of its $247 billion gold and forex reserves -- the world's fourth-largest -- in euros with the rest in sterling and yen.

The new structure is more in line with the proposed currency allocation of Russia's $71.5 billion budget stabilisation fund, which is kept in roubles but will soon be converted into 45 percent U.S. dollars, 45 percent euros and 10 percent sterling.

[Randy note: Recall my previous post on this... that the stabilization fund will skim this pile of foreign currency from atop the reserve holdings of the Russian central bank, notably leaving the CB with all of its gold in-place (which since January of this year is now marked-to-market!) to do the future heavy lifting.]

Russian gold and forex reserves have grown by 36 percent so far this year.

"We should probably not expect any more surprises from the central bank before the end of summer," said Raiffeisen Bank dealer Artyom Fedorko.

[hmmm...]

A global sell-off in emerging markets wiped over a third off Russia's RTS stock index in May...

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

Does Russia like it's new MTM paradigm? In March's reporting, its 390 tonnes provided $6.88 billion in value on the asset side of its balance sheet.

As of its latest June reporting, the same quantity of gold is now providing over $7.89 billion of the reserve value.

Those CBs who have gold along with an understanding of the latent potential residing in the MTM paradigm certainly have their primary eye on the economic stability of their OWN currency, and they're happy to know that the value of the (reserve) dollar is becoming less and less a concern to them.

MTM "freegold" is an empowerment to put your focus on your own affairs.

R.

NEW YORK, June 8 (Reuters) - The New York Stock Exchange said on Thursday that it instituted trading curbs at 11:31 a.m. after U.S. stocks plunged, with traders worried about rising global interest rates and inflation.

The NYSE Composite Index was down 2 percent to 163 points at 11:42 a.m...

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

While we have trading collars on stocks, there is new trading freedom (no limits)for gold.

Looking into the future, one shall emerge brighter (and shinier) than the other.

R.

http://www.resourceinvestor.com/pebble.asp?relid=204948 Jun 2006 --

...This discussion will outline seven factors that underlie our bullish gold price outlook for 2006 and 2007. There are several bearish factors of a short-term nature that should however also be mentioned.

My "bullish" arguments are...

1. The dollar must decline further

2. Dollar reserves are "excessive"

3. Gold is "cheap"

4. Monetary reflation is coming

5. Supply is limited

6. Demand developments are "revolutionary"

7. The geopolitical environment favors gold


...the U.S. trade balance certainly suggests that the dollar is overvalued. The balance has mushroomed to nearly $800 billion (12-month running total) in February. The implication is that the dollar's exchange value is uncompetitive at its level of recent years.

...Asian central banks now hold a collective $2400 billion in foreign exchange reserves. This level is "excessive" according to many observers including some central bankers! Asian central banks only hold 1932 tonnes of gold however, meaning only about 1.5% of their total reserves is in gold. Many observers and analysts have suggested that some of these dollar reserves should be diversified into gold.

Indeed, were China and Japan to adopt the ECB's 15% rule for gold reserves then China would have to buy 6890 tonnes of gold and Japan 6850 tonnes of gold. (These tonnages vary with the precise price of gold and the level of foreign exchange reserves.) I think these Asian central banks should purchase the gold the CBGA signatories want to sell; it would represent no more than a "petty cash" outlay to these banks!

OPEC is another "natural" buyer of gold! OPEC needs to diversify its surplus "Petro-dollars". OPEC current account balances are in huge surplus again on the back of higher oil prices. The last time OPEC had significant "Petro-Dollar" surpluses, in 1980, gold spiked to an all time high...

To bring its gold reserves up to 15% of total reserves OPEC would need to purchase some 50 million ounces, which is equal to $33bn, or about 480 million barrels of oil. This would not appear to be a terrible hardship now that OPEC's FX reserves exceed $200 billion again.

^---(see url for Martin's full commentary)---^

R.

http://business.iafrica.com/news/511880.htm8 Jun 2006 -- The spot price of gold on Thursday traded near to its six-week low of $616.15 a troy ounce, achieved on Wednesday.

"As we move closer to half-year end, most of the financial institutions are squaring their books and taking profits. The market is very quiet," a European trader said.

Gold rose 'too fast'

"Going into the European summer, gold is likely to trade between $605/oz and $650/oz. The up trend in gold is not broken and the consolidation in gold is good as the metal rose too fast, too quick," he added.

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

If he's got the trading range right ($605-650), we're now at the bargain end of it. As our report shows, June and July have been a prime time to buy. All it takes is a little exercise of independent resolve to separate yourself from the herd mentality being reflected in the typical mid-year price sag.

Why not call USAGOLD-Centennial today... TOLL FREE 1-800-869-5115

R.

http://yahoo.reuters.com/business/newsArticle.aspx?type=ousiv&storyid=2006-06-08T183048Z_01_N08393952_RTRUKOC_0_US-MINERALS-SUMMIT-PRICES.xml&WTmodLoc=HybArt-R3-MostViewedBiz-3NEW YORK (Reuters) - Some of the froth has been blown off the top of the gold market, but that has not rattled the big producers...

"We're living in very different times," Newmont Mining Corp.'s Chief Executive Wayne Murdy told the Reuters Global Mining and Steel Summit in New York this week.

"We think there's still a long way left in this run."

Bobby Godsell, the chief executive of the world's No. 3 gold producer, AngloGold Ashanti Ltd. said think that gold is going to hold its ground as an alternative store of value for institutions. ... It would seem to me that a prudent person would continue to make a bet on gold for part of their wealth."

The head of Kinross Gold Corp. also says this market "feels a little different this time."

"It feels like there's some stronger legs under the buy side."

"Despite the recent correction we are firmly of the belief that the secular upward trend remains in place. It is quite clear that at the current moment there is a technical correction going on," Ian Cockerill, Goldfields' chief executive, told the summit.

"I think it may go dramatically past $800 but I don't think it's going to go below $500 for a long long time," Goldcorp Inc.'s chief executive, Ian Telfe said at the summit.

Although some gold executives were reticent about saying how high gold prices would go, they agreed that bullion was unlikely to fall to $253 an ounce, a level reached in the summer of 1999 in New York.

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

It is patently ridiculous to bring up the $253 price level. The might as well be talking about the old $20.67 price level of the early 1900's.

Speaking of which, have you looked into the June Buyers' Group?

R.

http://yahoo.reuters.com/business/newsArticle.aspx?type=ousiv&storyid=2006-06-08T183048Z_01_N08393952_RTRUKOC_0_US-MINERALS-SUMMIT-PRICES.xml&WTmodLoc=HybArt-R3-MostViewedBiz-3NEW YORK (Reuters) - Some of the froth has been blown off the top of the gold market, but that has not rattled the big producers...

"We're living in very different times," Newmont Mining Corp.'s Chief Executive Wayne Murdy told the Reuters Global Mining and Steel Summit in New York this week.

"We think there's still a long way left in this run."

Bobby Godsell, the chief executive of the world's No. 3 gold producer, AngloGold Ashanti Ltd. said think that gold is going to hold its ground as an alternative store of value for institutions. ... It would seem to me that a prudent person would continue to make a bet on gold for part of their wealth."

The head of Kinross Gold Corp. also says this market "feels a little different this time."

"It feels like there's some stronger legs under the buy side."

"Despite the recent correction we are firmly of the belief that the secular upward trend remains in place. It is quite clear that at the current moment there is a technical correction going on," Ian Cockerill, Goldfields' chief executive, told the summit.

"I think it may go dramatically past $800 but I don't think it's going to go below $500 for a long long time," Goldcorp Inc.'s chief executive, Ian Telfe said at the summit.

Although some gold executives were reticent about saying how high gold prices would go, they agreed that bullion was unlikely to fall to $253 an ounce, a level reached in the summer of 1999 in New York.

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

It is patently ridiculous to bring up the $253 price level. The might as well be talking about the old $20.67 price level of the early 1900's.

Speaking of which, have you looked into the June Buyers' Group?

R.

June Buyers' Group

Uncirculated $20 Liberties at amazing prices!

Call and Save
1-800-869-5115 (Ext. 100)

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 "President's Working Commitee" is working overtime today, with 165 point recovery in the DOW and multiple gaps up in the USDX.

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

June 8 (from MarketWatch) -- Gold futures closed at an eight-week low Thursday as the dollar rallied on continued expectations that the Federal Reserve will raise interest rates and on news of the death of Abu Musab al-Zarqawi, the leader of al-Qaida in Iraq. Al-Zarqawi's death in a Baghdad-area air strike sent oil futures below $70 a barrel and gave the dollar an early boost.

But the greenback was further helped by a sharp selloff in Asian markets overnight, as well as by comments from European Central Bank President Jean-Claude Trichet that turned out less hawkish than expected.

COMEX August gold futures gave up $18.80 at $613.80, marking its lowest finish since April 13 as losses extended into a fourth day.

Kevin Kerr, trader and editor of Global Resources Trader, a newsletter published by MarketWatch, said the market's initial reaction to the al-Zarqawi news may be short-lived.

The news "seems to have sent a message that oil production in Iraq may increase and that the death also somehow is good for the dollar," he said. "As we have seen in the past though, if anything the killing may lead to more attacks and even worse violence, having exactly the opposite effect." The Jordanian-born al-Zarqawi is alleged to be the mastermind behind much of the violence in the country, including suicide bombings, kidnappings and beheadings.

"I think the elation on the news this morning is short-sighted and that it may only lead to another event similar to what we saw in London last July and in turn, could send the dollar reeling and gold back up toward $700," said Kerr.

Terrorists staged a series of deadly attacks on public transit in London last summer.

Kitco's investment products analyst Jon Nadler, agreed. "The current gold sell-off is not only a possible misreading of future outcomes (arising out of this killing), but also a sign that traders (read funds) are focusing strictly on the news of the day and that 'profit myopia' may have set in," he said.

Gold's decline has also come amid a sharp increase in expectations the Federal Reserve will continue to raise interest rates, following a series of hawkish comments from Chairman Ben Bernanke and other senior officials. His Monday remarks have pushed the dollar higher for the past three sessions and upset stocks and commodity markets.

Adding to the pressure, the European Central Bank, South Korea and India all raised interest rates on Thursday, while Turkey raised its benchmark rate on Wednesday.

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

http://www.financialsense.com/fsu/editorials/merk/2006/0608.html

"IOn May 30, 2006, Henry "Hank" Paulson was nominated to succeed John Snow as Treasury Secretary. During John Snow's reign the dollar lost 18% versus the euro and 46% when measured against the price of gold.(*) Can and will Paulson stop or reverse the fall of the dollar?

Paulson is the outgoing Chairman and CEO of Goldman Sachs. Paulson has a trading background; the investment bank's trading unit has become its most profitable division under his leadership. Paulson is known as someone who does not let himself be pushed around; whereas Snow and his predecessor Paul O�Neill had little authority, except to promote the Administration's policies, it is widely expected that Paulson has only accepted the job after being promised that he will be an active participant in shaping policies.

Most commentators believe that convincing Paulson to accept the nomination has been one of the best moves of the Administration. Is it enough to cure the deficits? Let us examine how Paulson could influence a couple of key parameters that put the dollar most at risk. We focus on the current account deficit, which amounted to over $800 billion, or about 7% of Gross Domestic Product (GDP) in 2005; foreigners need to finance the current account deficit by buying more than 2 billion dollars worth of US denominated assets every single day (please also see our recent discussion on The Current Account Deficit Matters). Key ways to alleviate the pressure on the current account deficit include increasing domestic savings, lowering domestic consumption, increasing foreign consumption or increasing foreign investments in the US."


Druid: Good read. Interesting background and a perfect fit. Here's Druid's take. We're well past the mundane flat earth mid 20th century solutions of trying to somehow correct these tremendous imbalances with tax and spending cuts etc...and the varsity level team knows this. Enter Paulson with his trading background. Yes, like GM, GE and every other company which has strayed away from what they intially intended to produce and sell, they eventually saw the light and evolved into defacto hedge funds, so to has the Uncle.

Now when you view it from this perspective, an 800 billion dollar trade deficit isn't so menacing after all, compared to the TRILLIONS out in the various markets to be had. Now if I were a part of the team, I would be doing a lot of sub-contracting out to make sure our team had the proper marching orders. The difficulty here would be, once the you haul in the booty, where does one house a rather huge number and what kind of spin are we going to come up with to correlate with slowly paying down the trade deficit to make it appear like the physical economy is really improving. Yes, it's a tall order, but one I'm sure our new Treasury Sect. is up too. Savvy?

TO: Druid

In your previous post if I understand it correctly the Federal Reserve since it is a private bank will trade in the market in various stocks, bonds, derivatives, etc in order to "take" part of the trillions of dollars already out there in the financial system currently owned by other banks, hedge funds etc and then use this money to pay down the federal budget and trade deficits? Hmmm. If that is the case then I believe it would be a very risky strategy. That would be like the LTCM hedge fund blowup before where they potentially owed trilions of dollars if they hadn't been bailed out with Fed help. If the Fed looses big on a bet then they will have to print perhaps trillions more dollars to the winners potentially igniting hyperinflation. However, if they generally win all their bets the federal deficits might become manageable for a time but since no real growth would be happening in America deflation would result. I remember a french bank releasing an investment recommendation saying that the U.S. economy would be on the borderline between deflation and hyperinflation. At first I didn't understand how you could be on the borderline between deflation and hyperinflation because these are opposites. I think now I am closer to understanding this conclusion.

http://www.usagold.com/analysis/doldrums.htmlWith the exception of 2004 (with the dollar repatriation act), the gold price trend since 2000 is unmistakeable. Every the end year price appreciation over the summer price increases, last year being more than 20% increase from the summer price. Therefore I will predict this year will hold true, and will be a plus 30% increase by the end of year, which would take gold to approx $900. Sit tight!

June Buyers' Group

[Only 70 COINS REMAIN in this Discount Offer!]

Uncirculated $20 Liberties at amazing prices!

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1-800-869-5115 (Ext. 100)

http://framehosting.dowjonesnews.com/sample/samplestory.asp?StoryID=2006060816560000&Take=1June 08, Dow Jones Newswires

12:28 (Dow Jones) A broker in the S&P futures pit says he doesn't want to "step in front of this falling knife," describing the continuing equity free fall...

12:50 (Dow Jones) There's no price concession before the 10-year T-note auction, scheduled at the top of the hour. Many times, prices move lower to generate buying interest. This time, "demand for quality" could help the sale, but buyers will have to buy the notes at their highs, a market source says...

12:23 (Dow Jones) Shares of Peruvian copper miner Southern Copper (PCU) in NY sharply lower following a downgrade by Citigroup to hold from buy. PCU down 7.6% to $74.58. The downgrade was due to strikes in parent company Grupo Mexico mines and a move towards heightened risk aversion...

12:14 (Dow Jones) Emerging markets shares in NY widen losses as day progresses, feeling the pinch from heightened concerns about interest-rate increases following a string of hikes by central banks in several countries...

11:54 (Dow Jones) Brazil's benchmark Ibovespa stocks index falls sharply in early afternoon trading, extending early losses. Worldwide concerns blamed on rising interest rates after India, South Africa, South Korea and Denmark raise rates...

11:50 (Dow Jones) Speculative selling has left gold on the defensive in Comex trading, a dealer says. Catalysts include a stronger dollar and weaker crude oil... [Small wonder. Open positions in paper gold does little to facilitate risk avoidance]

11:31 (Dow Jones) The decline in U.S. stocks has been far deeper than what would be expected on a normal pullback, Morgan Stanley says. Holding the May lows is important, and any break of the 1247 level on the S&P 500 "would likely cause acceleration toward the lower border of the SPX's intermediate-term trend channel (SPX-1230) with further support at 1209-1219," firm writes. S&P broke through 1240 decisively after 11 a.m., and is indeed heading lower...

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

So much papery buzz, and so little docking space available at the ultimate tangible safe harbor.

Unfortunately, for peace of mind you can't call ahead for reservations (as those, too, are merely promises on paper). To be sure, the physical gold market works on the egalitarian principle of "first come, first served".

R.

Trying to keep up with all the great discussions here, and I see the term "MTM" quite often, but no one has defined it.

What does that stand for?

Also, I'm interested in knowing more about "freegold"... what's that all about? Is there an archived discussion about it or a pointer elsewhere that I could read to learn what that means?

Thank you!

Mark-to-Market is the accounting practice in which an asset's book value is periodically readjusted to remain in line with actual market value.

The US Treasury (and Fed System) holds/monetizes all of its gold at an anachronistic book value of $42/ounce --effectively frozen in time back in the early 1970's.

By contrast, the ECB on a quarterly basis revalues its reserve assets based on the prevailing "fair" market price of the day.

And on the topic of "fair" market value (i.e., the pricing mechanism) there have been reams of discussion here at the Forum and on The Gold Trail regarding the current derivative-based mechanism versus what would truly be deemed fair or proper.

For a world-class education, treat yourself to a weekend of rigorous reading at The Gold Trail (see links atop this page) and at the Hall of Fame (see link to the far right of the "Post a New Message" link).

Be sure to share your thoughts as you progress through the pages.

R.

I forgot to tie into my response the meaning of "freegold". That was the term coined by FOA/TrailGuide in response to Aristotle's pricing discussions and consequential repudiation of any fixed monetary gold standard. Freegold is the paradigm in which the national monetary authorities (the way ahead is being spearheaded by Euroland, but anyone can implement the practice just as Russia has since January 2006) recognize that naturally rising gold can be their powerful ally, and upon adopting MTM accounting, their official vested interest now becomes counter to the adversarial pricing mechanism being delivered by the commercial bullion banking system.

It shouldn't take too much thought to conclude how this ultimately will shake out. After a brief period of digging in their heels and fighting for their lives. the commercial banks will realize how exposed they are from the vulnerabilities of their bullion banking divisions without the CB's standing ever-ready to backstop their liquidity gaps.

Newfound freedom from the old practice of papering over the pricing mechanism is the meaning behind "freegold" -- emphasis on fair value determined by a physical-based markerplace.

Randy

Anyone:
Is the 24 hour spot gold chart influenced by paper gold transactions, or does it reflect strictly physical gold transactions?

http://www.freebuck.com/today.shtmlIt becomes apparent, even to those of us who don't see every move the market makes as manipulation, that the Invisible Hand was surely afoot today.

The downdraft in Gold is taking it's toll on Bug enthusiasm ...don't fret Bugs, 100+ Tons of Comex Gold for delivery guarantees fireworks by month end imo.

I'd like to offer my take if I may, FWIW: -

Spot is determined by ...and exclusively by, Paper Trading.
The Black Line is a derivative of either Comex Futures trading or LBMA or Tocom etc.
The London "FIX" (am/pm) was a credible benchmarking tool until it was revealed LBMA Paper/Physical ratios were in the region of 98/2.
This works OK as long as you and I can ring MK and secure a Physical Gold order based on Spot ...and we can!
I don't have the experience of fronting up to an LBMA member and demanding 10Tons at Spot.
Somehow, I don't think I'd be as warmly received as I would procuring 10 Oz's from USAGold CPM.

Physical Gold in Quantity only becomes a problem when it leaves the System. Whilst it's churning around "in" the system it matters not (generally) who's name is on it as the "possessor" makes the rules ...not the nominal owner.
It might be said that our recently experienced all-currency PoG run-up was a reaction to the Iranian relocation and current price action is an attempted return to the Dollar/Gold status-quo ...I don't think so though.


Hope this helps.

This works OK as long as you and I can ring MK and secure a Physical Gold order based on Spot ...and "TODAY" we can! (implying that TOMORROW wa may not be able to)

If I could add to Topaz's humble statement, as long as physical gold can be acquired with the use of futures, futures will set the price of gold. Even if physical is completely withheld from the futures market, the market will continue to set the price as long as there are speculators in the field. Even if the speculators leave, the Fed has a vested interest in making the dollar strong giving them incentive to play both buyer and seller.

The conclusion that I've come to is that the future markets will set the price until there is a public demand for gold from a giant or collection of giants. That will only happen in a crisis.

When it comes to satifying the need for metal in industrial plating or jewelry fabrication, there is no faking it -- no way to satisfy the demand without a corresponding impact upon the available supply of real metal.

However, when the driving motive for the having of gold is to serve a more financial purpose, such as protecting oneself against the loss of purchasing power that routinely afflicts the world's conventional monetary units (pesos, lira, dollars, euro, yen), the bullion banking sector of the financial system has been fiendishly clever at devising a myriad selection of derivative (paper) products to offer instead. Gold futures and options, unallocated gold deposit accounts (gold pools), and gold ETFs being prime among them. Mining shares, too, play a role in diverting some of the less focused demand.

As a result, there are many multiples of "tonnage" (in the unlimited form of paper supply) that acts as a price suppressant due to its very existance. Otherwise, much of this financially-oriented demand would have no other recourse but to make their impact felt (along with the industrialists and jewelers) through their corresponding demand upon the limited supply of real metal.

Bottom line: by and large, the market price for gold has been made artificially low as a result of artificial supply to feed into the financially-motivated demand. Unfortunately for those being duped by paper gold equivalents, they are getting no more than they are paying for; this would be revealed clearly in the time of a financial shock.

But fortunately for those of us who are not so easily duped and brushed aside, when we buy our physical gold coins and bullion in the prevailing environment, we are getting the FULL benefits of real gold AT THE SAME LOW PRICE LEVELS as being dictated by the market in inferior, artificial paper gold.

Buy with understanding, and buy confidently.

R.

Hmm.... big sale! Just in time for graduation presents!!! And given the silliness that passes for economic education, you might include a book like "creature from jekyll island" or something in that line, Kiyosake's rich dad poor dad is a bit more modern, (over-emphasis on real-estate but it was published in late 99 so cant complain...)

When the price goes up the investors get giddy.
When the price goes down the SHOPPERS get giddy.

Topaz
Thank you for the information. That was my belief. I needed confirmation and I thank you for it.

Now, such being the case, what the paper market may be doing is supplying the Russian and Chinese (as well as other central banks, financial institutions as well as individuals) with an opportunity to purchase physical gold at bargain basement prices.

If such knowledgeable persons such as James Turk are correct, and there is a shortage of available gold, with the billions of surplus dollars in such countries reserves, and their stated desire to substantially increase their reserves, I do not believe it would be too far fetched to come to the conclusion that a highly unexpected event could shock and confuse the markets. The event would manifest itself in that, as the price of gold drops, suddenly there is no more physical gold available to fill commercial users orders. At the same time it is learned that the above mentioned central banks have substantially increased their gold reserves. Those individuals who had figured on cashing their gold stocks, at some point, to buy physical, find that they have waited a day too long.

Western central banks, in view of the the Russian and Chinese overtures, would be stupid to sell their gold.
I wouldn't be surprised if they canceled the Washington agreement in favor of holding on to whatever they have left, some time soon...

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

June 9 (from Reuters) -- U.S. gold futures settled lower on Friday, giving up the strong gains that held for much of the session as profit takers bailed out late, wary of carrying yellow metal positions over the weekend, traders said. With gold sentiment split and getting pulled by disparate factors, traders said some players who may like gold over the longer term, fear getting hit in the near term.

"It was profit taking, but part of if it is because of the perceived weakness in gold right now. There's a lot of split on sentiment. So, I think a lot of people don't want to go home long over a weekend," a dealer said.

COMEX August gold futures settled $1.0 lower at $612.80.

It recovered from steep losses on Thursday to trade with strong gains throughout most of Friday's session, only to fall from its highs as the day was wrapping up. It traded in a range from $608 to $622 per ounce.

"(Higher) oil helped gold earlier. Gold is still an international commodity. We believe the dollar is weak relatively and world economies are weak and so we are going to see a lot of investing going into the world gold market," a New York bullion dealer said.

He said his gold desk looks for support to hold at $600 an ounce, followed by a return to higher prices.

"Gold is where people will go for a safe-haven play. There is a lot of depth to the gold market right now," he said.

Higher oil prices had already inspired buying overnight. Oil rose above $71 a barrel on Friday as violance continued in Iraq, dashing hopes that the death of a top al Qaeda leader would turn the tide for the country's struggling oil industry.

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

http://www.voanews.com/english/Africa/Zimbabwe/2006-06-09-voa53.cfmConsumer inflation in Zimbabwe over the past 12 months hit 1,193% in May, said the country's Central Statistical Office on Friday, following 1,042% in April. Zimbabwe continued to have the highest current level of inflation in the world.

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

This as much as anything points to the reason physical gold is the world's paramount savings vehicle. The purchasing power of paper alternatives can evaporate in the blink of a bad administration.

R.

Topaz,

Sensory adaptation is the tendency of sensory receptor cells to become less sensitive when they are stimulated repeatedly by a tumbling Price of Gold (POG) amid market fundamentals which say the POG should be rising.

Sensory adaptation keeps the body from reacting to normal background stimuli.

It is this effect which allows us to wear clothes without being constantly aware of them.

Caratract is an opacity which develops in the crystalline lens of the eye or in its envelop.

Cataract seems to be a problem whereby the lens cannot focus because it cannot change its shape.

Do we realists, aka goldbugs, bend our lenses in Another way than normal people?

Are we waiting for the cataract surgery to display to others what will happen?

http://www.medi-learn.de/extern/augenklinik/grauerstar.htm
Zu Beginn der Operation wird die vordere Linsenkapsel eingeschnitten und mit der Pinzette aus dem Auge gezogen. Anschlie�end werden Kern und Rinde der Linse entfernt, so da� nur die intakte hintere Linsenkapsel und seitliche Teile der vorderen zur�ckbleiben. Sie formen einen nach vorne offenen schlaffen "Kapselsack". Jetzt kann der Operateur die Kunstlinse einsetzen und ihre B�gel im Kapselsack verankern. Die Intraokular-Linse hat somit ihren sicheren Halt in der hinteren Augenkammer.

Google translates as follows:
At the beginning of the operation the front lens cap is cut and pulled with the tweezers from the eye. Subsequently, core and crust of the lens are removed, so that only the intact rear lens cap and lateral parts of the front stay. They form a forward open flabby "cap bag". Now the operating surgeon can use the art lens and embody their handles in the cap bag. The Intraokular lens has thus its safe stop in the rear eye chamber.

Are we safely sitting in the golden eye chamber, watching?

Pythagoras compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for TRUTH.
http://www.uofaweb.ualberta.ca/philosophy/nav04.cfm?nav04=38830&nav03=12617&nav02=12335&nav01=12326

The spectator also needs cataract-free eyes to see the TRUTH.

Anyone knows whether in order to "insert" the artificial lens, the ophthalmologist goes under the cornea inside the pupil behind the iris? Or is there away to reach the invisible parts of the eye, i.e. the lens, through the back? Through one of eye chambers?

-Despite getting low attention,the Takeda/IMF paper on double Gold (counting) standards could signal that the IMF is making thoughts about FreeGold.They should.

-the recent Gold selloff:either it can be explained as usual (seasonality etc) or'some big player decided to pull $ support,paperGold market being a $ derivative?!Russia comes to mind with its Ruble trading platforms.The fed is now heavily supporting the $ exchange rate,as stipulated by FOA.

-Iran probably did a stealth attack on the US and the $ (intentionally or not) by blowing up the paperGold market?Well,they have been the bad guy anyway so only maximised its profit.

-we could have seen the highs in paperGold,the engine ran too long in the red,the motor is now broken.Hello 350 for the shorts protection (with no physical available)

-this brings me to the last point,this could serve as starter for weekend thoughts by the big brainers here.
The US will sell part of its Gold,Randy and others have mentioned it.Now that we have a Goldmann in the trashury...of course it will signal the endgame and might therefore again postponed.My questions would go towards at what prices will they sell,before or after the revaluation?Keeping the game going or profiting the max?

Nice sunny summer weather here in Europe,finally.Nice weekend.

Spotlight-
The scenario you described is pretty well the way I see this resolving itself.
Seems to me either we go PoG sky high and keep a functioning Paper System (a-la Randy etal) ...or a market develops where they discover exactly what it is they're price-discovering, namely bits of paper with "Gold" written on them.
TIH,
Ah, Golden Truth ...at best subjective eh?
We surely are at risk of being compared to the Opus-dei Monk of DaVinci Code fame vis a vis the Garden variety Catholic ...as were the flat-earthers and round-earthers so percieved by the "earthers" no doubt.
...and when finally deemed to be Round, I'd say most of the masses (earthers) could've cared less.
It may also be so with FreeGold imo.

Let's pretend for a moment that Iran did perform a stealth monetary attack by taking delivery of the rumored 100 tonnes. But if we do, it would be prudent to also speculate, or simply contemplate, was there tonnes of gold in Iraq a few years ago? Could the weapons of mass destruction take a golden form? Wasn't there rumors that there was unrecoverable gold after 9/11? Sense I'm pretending for a minute here, it seems to me that if there is a will, there is a way into any golden vault. But more importantly, there still are lots of large sources of gold in the world that are not in Fort Knox.

Could the rumored hoarding of Iran trigger the endgame, or transition, to Freegold? I would doubt it. Why? Because it appears to me, that there are two many large collections of gold hoarded into well known locations and the concept of double leasing is tolerated by the general public. One would have to wonder why Buffet sold his Silver when he has said time and again that the dollar is falling. His actions don't make sense unless the rules that he has to play by changed, thus changing his perception of value.

I believe that there have been many old timers that have come and gone from this forum based on the realization that there are an infinite number of possibilities available for those that control the supply of gold, and only one for the gold bug. To those in control, they have a store of gold and an unlimited supply if they keep the balance. They have access to all sources, the have contracts backed by law and they can change the rules at any time. To Goldbugs, there is only one path and that is one of education. As long as the general populous of the world are willing to take the promise of gold as having more value then actual gold, the system will continue just like it is for many years to come.

Gold supply could dry up or the wait could go to months, but as long as 99% of all transitions chase paper and as long as the rules prevent Big Traders from participating in public markets, order will be maintained and well see just what we've been seeing.

Freegold is not only a change in the monetary system where economies are built upon an asset class rather then the printing press (and the lender of last resort), but a philosophical change in every person on a daily basis. We will know that it is here when gold is treated as a currency by the average person and all currencies are compared against it rather then the US Dollar.

At one point in the past, countries pegged their currencies on gold. Unfortunately, time and again, government policies forced the printing of currency that invalidated the peg exposing it as fraud to all playing the game. Today, currencies are pegged to the US Dollar. The problem here is that the supply (gold) is unlimited. The process is maintained through confidence and nothing more. When confidence is lost in the US Dollar, what will all other countries peg their currency too? Another printable currency? I think not and support for this idea can be found by looking at the reserve currency in any central bank. Will all these other countries stop printing currency? No! That is the roll of the central bank for a government. Will those on top be harmed? No. They will continue to run the corporations and tax the people. Will economies crash? No, currencies can be printed to keep them going.

Is the endgame at hand? Say, the end of the month as contracts expire? Or in a couple months if Iran has snatched up the physical? I do not believe so. The endgame only happens when the Freegold philosophies are common knowledge and people wake up to the fact that it's a currency free from the taxation burdens of paper currencies.

I completely agree that until many more "wake up" and try to turn to "real" assets that the magicians will continue to conduct their tricks and come up with new ones when the old ones do not work as well.

When I tell people that I care about how the monetary and banking system works, or have them read a book like, "The Creature from Jekyll Island", they are shocked at first but then they actually choose to go back to sleep and say that if they continue to think about it, the subject will drive them crazy.

Strange, kinda like the guy in the original Matrix that actually wanted to be re-implanted into the system.

@ Flatliner,

As Iraq was a strong leader of the Islamic Gold Dinar movement, one would think they had substantial holdings of gold available for coinage, but certainly nothing has surfaced beyond the "truck rumors" we saw immediately after the invasion (misdirection?). If there was any such thing as "investigative Journalists, one would think that some were on the sniff for this story.

When the tsunami hit Indonesia (another strong IGD proponent), the largest US Navy task force EVER ASSEMBLED was ready and waiting on the leeward side of the islands, and had been positioned rather hastily over the previous six months. Sailors in San Diego, Alameda, and Bremerton were grumbling all over the Internet and local press outlets about the loss of their R&R after returning from Persian Gulf duty.

Now we hear, off-handedly, that Iran may be rebuilding its gold reserves, and might have upset the COMIX apple cart in the process.

Even Sinclair has completely stopped talking about the Islamic Gold Dinar, and he was one of those flagging its international importance a couple years ago.

I'm sure that NeoCon anti-conspiracy mouthpieces will cry "coincidence", but don't they replay that tired song at every occasion they possibly can?

It sure worked for the 911 Airline puts. Someone with advance knowledge made a bundle off the corpses in New York, and NO ONE DARES question it outside the realm of "kooks and crazies". The "official" answer is that 100x put volume is "within normal fluctuation".


Hmmmm . . . vedy interesting!

http://www.gold-eagle.com/editorials_05/silberman060806.html@Druid - Federal Reserve Question
TO: Druid

In your previous post if I understand it correctly the Federal Reserve since it is a private bank will trade in the market in various stocks, bonds, derivatives, etc in order to "take" part of the trillions of dollars already out there in the financial system currently owned by other banks, hedge funds etc and then use this money to pay down the federal budget and trade deficits? Hmmm. If that is the case then I believe it would be a very risky strategy. That would be like the LTCM hedge fund blowup before where they potentially owed trilions of dollars if they hadn't been bailed out with Fed help. If the Fed looses big on a bet then they will have to print perhaps trillions more dollars to the winners potentially igniting hyperinflation. However, if they generally win all their bets the federal deficits might become manageable for a time but since no real growth would be happening in America deflation would result. I remember a french bank releasing an investment recommendation saying that the U.S. economy would be on the borderline between deflation and hyperinflation. At first I didn't understand how you could be on the borderline between deflation and hyperinflation because these are opposites. I think now I am closer to understanding this conclusion.



Druid: Armageddon, my apologies for not responding back sooner, very busy these days.

I don't think that the Fed will be directly active in the various markets other then their usual daily mechanications inherit in the job. They don't have to be. This task can very easily be farmed out to certain players within the banking and financial brotherhood. No, the Fed will choreograph this dance with the street and Treas. (welcome aboard Paulson) dancing to the tune. More importantly then managing expectations, the Fed must create PERCEPTION which feeds into managing expectations.

This perception entails creating a picture that suggests that the Fed be in control in regards to keeping inflation in check. This is the incredible tricky part because physical goods inflation (think oil, gas, gold etc.) is beginning to show up in such a way that it's almost becoming a joke when Fed reps., or any of the team players, go before a camera espousing that inflation is in check or, better yet, non-existent. Along with perception the Fed can't lose CREDIBILITY. If the Fed loses credibility, then expectations and perceptions begin to disintegrate as quickly as point and click. Savvy?

I am of the opinion that, at this point in time, the Fed has been backed into a corner by bond speculators and hedge funds. Consequently, they have no choice but to come out swinging as it appears that this type of "money" has been and is continuing to converge into the commodity sector. It's this type of INFLATION that must be dealt with in know uncertain terms, otherwise Joe six-pack wakes up in a very big way. This type of awakening creates a whole host of other problems that the Fed doesn't need to deal with at this point in time.

Enter the picture to squash this commodity inflation menace, a HUGE partner in the brotherhood, the Bank of Japan (BOJ). Now these guys would make the Physics folks proud with what they have done to their currency in terms of printing and lending. Unbeknownst to yours truly, this "Yen Carry Trade" has been in place for a very long time (possibly a decade or more) making it a structural component part of International world finance. Well, it appears that it is coming to end by means of a coordinated act by various Central Banks in raising interest rates thus tightening interest rate differentials across various boarders. This coordinated act is wreaking havoc in many markets throughout the world almost conjuring up a deflationary spiral of sorts while at the same time imploding various hedge funds (quite possibly creating and unwanted momentum). Now, if I were a Pirate of sorts and needed some loot to shore up the home finances, I would take this opportunity at this point in time, to take a little from CAC-40; DAX; FTSE; Nikkei and various other opportunities, make the appropriate conversions and bring the loot home to keep feeding into the perception creating process.

Check out the read, I think you'll enjoy it.


The Yen Carry Trade is DOOMED!

New B of A program rounds up debit card purchases and transfers the change to your savings account.

Should really tick off service employees that already work for minimum wage plus gartuitiy.

First salvo in the "round up to the nearest dollar" movement.

http://www.commondreams.org/cgi-bin/print.cgi?file=/views06/0610-21.htmWilliam Greider, author of "Secrets of the Temple: How the Federal Reserve Runs the Country", presents a big picture view of current economic conditions in the U.S.A.

Sorry, but I don't follow the logic were Iran would ever want to perform a stealth monetary attack on the US by selling 100 tonnes of gold.

This type of action is what I would expect from an ally, not an enemy.

Why? Last April alone, the dollar lost around 7% of its value, and another 3% early last month. Several articles attributed this drop to Bernanke's remark to Bambi when he stated to her that the dollar could significantly drop in valve, with little effect on the US's markets. After his remarks, the dollar started dropping, big time. But then, in the middle of May, the dollar started going up, and POG & POS started dropping like rocks.

Most forum reads are aware of the PPT and their behind-the-scenes-interventions.

It appears that "someone" is intervening. There is a lot of talk about being the market being over bought, profit taking, etc., but the result is that the value of the dollar seems to be stabilizing around its mid-May value.

Given the current situation of the dollar, if Iran dumped 100 tonnes of gold on the market, they would be basically helping the US by pushing the POG down and increasing the value of the dollar. This does not make sense. Why would Iran want to help Bush & Co. build support for the dollar when they are considering nuking them? Talk of Iran completing a stealth attack is probably, at best, just more spin.

My "guess" is that the POG is dropping because the big boys on the block are taking their profits. They have all of the inside information AND THEY HAVE the full support of the world's central bankers, who will do anything to maintain the stability of their fiat currencies. One can imagine that the US Treasury & Federal Reserve giving blank checks, (via repurchase agreements), to the different brokerage houses to stabilize the dollar. What else can a central banker do?

In addition, as foolish as it may be, like it or not, the dollar is the world trade unit and there is no other option. In one of the articles I read recently, Warren Buffet was basically saying that at this time, there is no alternative to the dollar. World trade requires huge amounts of currency, everywhere. At this time, there is no other currency available in amounts to displace the dollar. So, the dollar might bounce around in value, but for the near future, there is no other currency that can replace it.

Beside the quantity requirements of a world trade unit, not everyone wants their currency to become the world trade unit. Another recent article I read quoted some European central bankers saying they didn't want their euro to become the world's trade unit as it would then become over-value d and subsequently undermine their export opportunities, like it has in the US.

I think Bush & Co. are taking advantage of the dollar's economic Catch 22. However, the deficit spending and the growing current account deficit are clearly creating problems illustrated by how destabilized the worlds stock markets have become of late. The question is how long can the world's central bankers keep the world's economic infrastructure afloat.

Get ready, for when this economic house of cards falls, you better have a pile of gold safely hidden, for the bad times will have arrived.

The Bear

I believe the thought was that Iran has been PURCHASING tons of gold from Switzerland. I don't think Iran wants to sell any gold at this point. Anyone else?

Kind regards,
Alex

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

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=M&z=610x300&d=medium&b=LINE&st=Just packed Daughter off to link up with Son at the World Cup in Germany ...hopefully peace and harmony will reign supreme and Australia can bring home the Bacon.

My absolute "favourite" Chart is this Dollar/Gold comparison Chart. I'd encourage everyone to re-jig the parameters for an alignment at the start of '05. (base rate stays the same)
The trends are unmistakeable. Reasons for same ...? Could 100Tons Iranian off-take cause the 18mth contra rally from Jan '05?. Are we going to suffer an 18mth reversal of same to get the lines back together? NO ...and NO imo.

Four digits by July ..Go Gold ...Go Socceroos!!

I've been meaning to thank you for several really thought-provoking articles that you have brought to the Forum over the past few months. Today's Greider one just pushed me over the edge - Thank You !!
C!

http://www.thirdworldtraveler.com/Greider/William_Greider.html@ Clink!

You are welcome, some of Greider's other articles are referenced above.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/06/11/cngate11.xml&menuId=242&sSheet=/money/2006/06/11/ixcitytop.html
Finance ministers from the Group of Eight nations yesterday (Saturday) sought to reassure investors after the recent falls on global stock -markets, saying they remained bullish about their countries' growth prospects.
+
The US treasury secretary, John Snow, said: "We see no major crises, no major economies in recession, we see strong growth and inflation well contained, interest rates are at the low end of their historic level and [there is] rising prosperity. . . That's a commendable set of results."

The Invisible Hand: No crisis, Mr Snow?

http://news.bbc.co.uk/2/hi/south_asia/5058102.stm
Indian shares have fallen by more than 25% over the past month after hitting a record high of 12,612 points.

http://business.timesonline.co.uk/article/0,,8209-2220027,00.html
G8 finance ministers, meeting in St Petersburg, have expressed their concern about the impact of high oil prices.

http://news.bbc.co.uk/2/hi/europe/5066318.stm
The ministers also underlined the need for the diversification of sources to ensure future energy security.
They called on more transparency and greater investment, so that energy supplies and prices could become more predictable.
Concerns were raised last winter about Russia's dominance of the European energy market after Moscow turned off gas supplies to Ukraine.
+
Other issues which dominated the agenda were rising INFLATION and widening global imbalances, particularly in trade.

Gah ! Now I'll never get to bed !
C!

As TIH reported from the G8 :-

"They called on more transparency and greater investment, so that energy supplies and prices could become more predictable."

C! Sounds like some investment in renewable energy sources would go a long way towards this, as opposed to the decidedly risky expenditure of the invasion of oil-rich countries...

I wasn't aware that Greider was so far to the left, or is it the right, it's confusing when both communists and fascists advocate the same government control over the means of production. In this case I guess because Greider will still allow some private "ownership" of profits he would be considered more of the fascist type. But the Nation magazine is thought to be most far left. Very confusing.

I wonder who would want to invest their hard earned capital with such controls and restrictions (perhaps government could guarantee a profit?), and who other than governments could afford what they make. What Greider fails to comprehend is that the U.S. is no longer a wealthy country, but a debtor living on borrowed time in squanderville. But Greider wants more big government solutions and programs, to protect us from all those big corporations....and not a word about those "progressive" planners at the central banks who make the money, set it's price and run the show.

I wish it was just a show and I could just get up and walk out. It's deeply depressing to think that so many educated people still don't get it and look to the same poison that got us here. Liberty is not possible if people look to the government to guarantee life's necessities. Choose.

http://en.rian.ru/business/20060608/49196647.htmlSNIP
MOSCOW, June 8 (RIA Novosti) - The Russian Trading System, the country's premier stock market, starts Thursday trading in ruble-settled contracts for gold, oil and oil products, the RTS said.
==
Some will never learn!

OK, I should have read the BBC article before that last post. The sentence before said :-

The ministers also underlined the need for the diversification of sources to ensure future energy security.

End snip.
But there was something just after on which made me laugh :-

Concerns were raised last winter about Russia's dominance of the European energy market after Moscow turned off gas supplies to Ukraine.

Russia now rivals Saudi Arabia as the world's largest energy exporter, but the disagreements with Ukraine last year caused international concern about relying on it as an energy supplier.

Western nations say Russia should open up its own energy resources and pipelines because more transparency and more competition will ensure cheaper, stable supplies.

Russia says it is a reliable partner and wants to buy energy distribution networks in Europe.

End snip.

So Europe is concerned about placing too much reliance on Russia as an energy source - and the alternative is ?

So as a solution, they want to be able to buy part of the energy infrastructure in Russia, so that Russia (the nation) can't unilaterally cut off the gas supply to Europe. Hmm, I'm sure that Vladimir would be cool with that. So just to show how trusting we all are, how about letting Russia buy some crucial infrastructure in Europe ? Priced in euros, of course. (or barrels, or M cu ft)

The statement that all is still well is sounding a little shrill in my ears.

C!

While not disagreeing with what you say, I would still have to encorage anyone who a/ realizes that the system as it exists at the moment is broken and b/ suggests alternatives. The problem, I fear, is that the status quo is going to continue so long (in complacency) that the situation is going to be well past any point of reasonable discussion before signs of irrevocable breakdown appear. In other words, the exigencies of an emergency are going to lead to hasty, but long-lasting, decisions.
An example of this would be the two major revolutions of the 18th century - the French and American. The French one happened very quickly, and led to an unstable outcome (France is now in the 5th Republic). The American one was much more measured in time - amazingly so by modern standards - and has led to a much more stable system.
So what chances of a stable outcome if there is revolution in the age of the Internet ?
C!

http://www.itp.net/business/features/details.php?id=4530&category= Sunday, 11 June 2006
SNIP
"We still really want to increase our relationships with Europe and with the whole world, even America," [former Iranian president Mohammed Khatamsays] says. "If they change their foreign policy towards Iran, if America can accept and admit the truth and the truth of Iran and the truth of the region, the path to solving our problems will be reopened.

"But I regret that the American method of diplomacy, to find enemies, has created a great barrier to communication between Iran and the US and between the US and the region."

I am quite surprised by the acceptance of the Greider article on this forum. I usually find myself one of the more leftward leaners here, and I thought his article smacked of even more state welfare programs.

Whatever happened to the smaller gubmint advocates?

If the problem has evolved by corporations over-feeding at the gub-mint trough, more gub-mint spending isn't likely to solve much of anything, IMHO.

I guess I am becomong more libertarian in my old age.

Reading the Greider article posted earlier got me thinking about whether a "goldbug" is typically a conservative or a liberal. Or is it possible to be either--in other words, does the knowledge that precious metals are the wisest haven for one's wealth cut across ideological lines? Just wondering what some of you think about this...

I expect that the current financial system will collapse as credit and money continue to expand towards infinity at all costs. The next revolution will likely be a planned event, one that will continue the trend of increased government power over the individual. We'll probably get shiny new "progressive" debit cards instead of soup lines, maybe just a RFD chip in the shoulder. Probably a progressive national health care program too (free aspirin) and progressive housing loans for all those who went belly up after extracting all their home equity for new SUVs, exotic travel, and the good life.

People will probably be shocked at their drop in living standards and governments will want to shift the blame. Greedy Corporations, especially those that drill for oil are usually good for a few kicks, but any will do. New rules of behavior imposed by government would be very useful to hold as a club over any company with profits that could be better invested in political campaigns and cronies.

My point is that it is most likely that any revolution will simply be a jump to another, higher level of government control. Perhaps a feudal system is the highest sustainable existence the average human is capable of and republics are a rare and temporary exception found mostly in frontier areas temporarily beyond the control of our masters and caretakers.

The only solution is to reduce the size and power of government, and abolish the FED. No more money monopolies and cartels. Greider seems to think that Hayek was wrong because Reagan was President for a few years and the trend turned towards free markets. Government never shrank. Just got bigger. The new Republicrats in control since 2000 inherited a bubble economy starting to implode if not juiced on more easy credit and money, so they did. They call it Financial Capitalism now that industry is about gone. I think it has become more like a criminal enterprise, with the big money banks in charge of the looting and shakedowns and the politicians and media just fronts. A real life Soprano gang, except they all hate gold, or so they say.

Gold as money or as a store of wealth does not seem to have meaning in societies lacking private property rights. I suppose that a communally orientated individual (is this an oxymoron?) could want to hold gold if he lacked confidence in the system or the ideal system was some ways off. Or perhaps gold used as personal jewelry would be permissible in the more liberal of the progressives organizations, like perhaps the World Gold Council.

http://www.nypost.com/seven/06082006/business/67140.htmBy John Crudele
New York Post
Thursday, June 8, 2006

Quick, somebody tell soon-to-be Treasury Secretary Hank Paulson about the other part of his job: being a member of the Plunge Protection Team.

What is that? It's something that Wall Street is gonna need if the stock market continues to be freaky.

But this is a story that's best told in chronological order.

Back during a stock market crisis in 1989, a guy named Robert Heller -- who had just left the Federal Reserve Board -- suggested that the government rig the stock market in times of dire emergency.

Yep! He didn't use the word "rig" but that's what he meant.

Proposed as an op-ed in The Wall Street Journal, it's a seminal argument that says when a crisis occurs on Wall Street, "instead of flooding the entire economy with liquidity, and thereby increasing the danger of inflation, the Fed could support the stock market directly by buying market averages in the futures market, thus stabilizing the market as a whole."

Had Heller been any other schmoe who writes op-ed pieces for the Journal this would have been long forgotten. But he had served for three years as a governor at the Fed and this proposal had the look of a trial balloon since stocks had just fallen sharply on Oct. 13, 1989, and memories of the 1987 crash were still fresh.

Over the next few years people like me (meaning those who watch the financial world with a critical eye rather than a blind one) suspected that Heller's plan was indeed in effect. Whenever the stock market was in trouble someone seemed to ride to the rescue.

Often it was a Wall Street firm that seemed more courageous than fiscally responsible. Often it appeared to be Goldman Sachs, which just happens to be where Paulson and former Clinton Treasury Secretary Robert Rubin worked.

Did the U.S. Treasury actually have an allocation of money to carry out what Heller had suggested -- that is, throwing fresh investment cash in front of a falling market until it stopped declining? For a while I thought something called the Exchange Stabilization Fund --
which actually exists at the U.S. Treasury but is meant for currency stability -- was the slush fund used for this venture.

I was told by people who claimed to know that this part of the theory wasn't so.

There was no way to prove that these surreptitious government intrusions into the stock market were actually occurring. In fact, just mentioning these possibilities got a person branded as a conspiracy nut.

This country, the critics would say, never interferes with its free capital markets. Sure, there's intervention in the currency markets. And, yes, the Federal Reserve does manipulate the bond market and interest rates through word and deed.

But never, ever would such action be taken at the core of
capitalism -- the equity markets, which for better or worse must operate without interference.

That's the way the standoff stayed until 1997 when -- at the height of the Last of the Great Bubbles -- someone in government decided it wanted the world to know that there was someone actually paying attention in case Wall Street could not handle its own problems.

The Working Group on Financial Markets -- affectionately known as the Plunge Protection Team -- suddenly came out of the closet.

Today -- with the stock market acting skittish again -- the future Treasury secretary should get ready to go to bat for PPTeam as soon as possible.

(Tuesday: How the Plunge Protection Team got exposed and my first-hand run in with the riggers.)

--------

John Crudele is business columnist for the New York Post.

5p PT Saturday, June 10, 2006

Dear Friend of GATA and Gold:

Barron's today published an exchange between Stuart
Thomas, managing director of World Gold Trust
Services, manager of the streetTRACKS Gold Shares
fund, and GATA consultant and GoldMoney founder
James Turk over the security of exchange-traded funds
in gold. That exchange is appended here, along with
the full text of the response Turk provided to Barron's,
which, as you'll see, was greatly shortened.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

From Barron's
Saturday, June 10, 2006

James Turk asserts that exchange-traded funds, streetTRACKS Gold Shares in particular, "don't audit the gold to prove it really exists."

Turk's statement has absolutely no basis in fact. He has repeatedly made this spurious claim and one has to question his motive for doing so. The truth is that the gold is held in allocated form, which means specific numbered physical gold bars registered in the name of the trust held within the accounts of the custodian, HSBC.

The Securities and Exchange Commission and the Sarbanes-Oxley Law require management to assess and report on the effectiveness of internal controls. Our auditors are required to report on our representations.

Our internal controls and outside audit processes include an independent physical count of the gold, which takes place twice a year. The trust employs BSI Inspectorate, an independent firm, to count the gold and provide certificates of the count. The trust employed Ernst & Young to review and test these physical count procedures as part of their obligations under Sarbanes-Oxley.

In connection with its assignment, E&Y visited the vault to test audit controls and procedures and to observe the physical count in October 2005.

Our independent registered public accounting firm, Deloitte & Touche, rendered unqualified opinions on the internal controls for financial reporting and on the financial statements. Its auditing procedures included physical observation of the gold held at our custodian, plus confirmations from our custodian and BSI
Inspectorate of its existence.

Stuart Thomas, Managing Director
World Gold Trust Services
New York City

* * *

James Turk's reply as published by Barron's: The prospectus discloses "gold may be held by one or more subcustodians. ... the Custodian and the Trustee do not require any direct or indirect subcustodians to be insured or bonded. ... neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians. ... [and] the Trustee may have no right to visit the premises of any subcustodian." Neither Stuart Thomas nor the fund's
10K disclose the weight of gold stored in subcustodians, which presumably could be all of the trust's gold.

* * *

James Turk's full reply to Barron's: Mr. Thomas states that "E&Y visited the vault" and that there was "a physical observation of the gold held at our custodian," as if only one vault were involved.

However, the prospectus discloses that in addition to gold stored with the Custodian, "gold may be held by one or more subcustodians," "the Custodian and the Trustee do not require any direct or indirect subcustodians to be insured or bonded," "neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians," and "gold held by the Custodian's currently selected
subcustodians and by subcustodians of subcustodians may be held in vaults located in England or in other locations."

It is noteworthy that the 10K records the principal asset of the fund as "Investment in Gold" and not simply "gold." I point out this distinction because auditors are responsible for verifying that assets exist. If the asset were recorded as "gold," the auditor would need to inspect the vault of the subcustodians to prove the gold there really exists. But the prospectus discloses: "The Trustee
may have no right to visit the premises of any subcustodian for the purposes of examining the Trust's gold or any records maintained by the subcustodian, and no subcustodian will be obligated to cooperate in any review the Trustee may wish to conduct of the facilities,
procedures, records or creditworthiness of such subcustodian."

Neither Mr. Thomas nor the fund's 10K discloses the weight of gold stored in the subcustodians, which presumably could be all of the Trust's gold.

Regarding the auditor's "obligations under Sarbanes-Oxley," the prospectus does not represent that the gold, whether in the Custodian or subcustodians, is audited or verified by an independent third-party to prove that it exists. Thus, it is reasonable to expect that the auditor would provide an unqualified opinion.

Lastly, though Mr. Thomas questions my motive, it is clear and straightforward. I wish to use my significant experience in this area to highlight the risks one incurs by buying paper representations of gold rather than gold itself.

Respectfully,

James Turk

@ Max Rabbit,

"Perhaps a feudal system is the highest sustainable existence the average human is capable of and republics are a rare and temporary exception found mostly in frontier areas temporarily beyond the control of our masters and caretakers."

The abdication of control to "caretakers" has never amounted to more than pure slavery. While touted as "benevolent dictatorship", or some other euphemism by those who reap the benefits as the "in crowd", it always seems to require ever greater rates of resource consumption to prop up the "puppet masters", and it is never particularly productive for those who aren't in the top layers of the pyramid schemes.

Evolution of human society beyond slavery has been one of the goals of civilization for the last few hundred years, and hopefully it won't be abandoned so easily as I infer from your post.

Jim McCanney often says, and I tend to agree, that we are suffering through a failed genetic experiment if we cannot unharness ourselves from the yoke of those whose best answer to resource issues is constant war to "cull the herd" and prop up the feudalists. At this point in our civilization, better than half of our productive capacity is directly designed to kill ourselves off in the glorification of mass murder. Our heroes are those who operate the most successful weapons of mass destruction, or perform the best in circuses of distraction, and our "lunatic fringe" are those who try to convince others a society based completely on warfare is suicidal.

Even our $17B a year "civilian" space program spends only peanuts on real space research and reserves most of its budget for satellites to either control or kill!

But we did get Tang, that awful tasting artificial orange-flavored drink that the even the best consumer market spin couldn't convince us to drink twice.

Gold has retained a popular value for millenia based on the fact that "caretakers" cannot be trusted, and physical holdings have historically outlived their fiscal treachery for many. Power corrupts, and absolute power corrupts absolutely.

Individual gold and individual rights are the only hope that remains for anyone not "lucky enough" to be born into "the right family".

Guantanamo suicides 'acts of war'
http://news.bbc.co.uk/2/hi/americas/5068606.stm
SNIP
The suicides of three detainees at the US base at Guantanamo Bay, Cuba, amount to acts of war, the US military says.
The camp commander said the two Saudis and a Yemeni were "committed" and had killed themselves in "an act of asymmetric warfare waged against us"

==

How can lone individuals commit acts of war? Wars are waged by societies/governments.

If the camp commander killed himself would that be an act of asymmetric warfare waged against the detainees?


The BBC continues
SNIP
The suicides have sparked a chorus of protest from human rights groups including Amnesty International, which repeated demands for the camp to be closed.
William Goodman from the New York-based Center for Constitutional Rights told AFP news agency the men were "heroes for those of us who believe in basic American values of justice, fairness and democracy".
Mr Goodman, whose organisation represents some 300 detainees, said the government had denied them that.
Ken Roth, head of Human Rights Watch in New York, told the BBC the men had probably been driven by despair.
"These people are despairing because they are being held lawlessly," he said.
"There's no end in sight. They're not being brought before any independent judges. They're not being charged and convicted for any crime."


Two Ayn Rand quotes

http://home.earthlink.net/~rdmadden/webdocs/Rand_on_War.html
Wars are the second greatest evil that human societies can perpetrate. (The first is dictatorship, the enslavement of their own citizens, which is the cause of wars..)

http://www.freedomkeys.com/faithandforce.htm
There is only one fundamental alternative in the universe : existence or nonexistence - and it pertains to a single class of entities - to living organisms. Matter is indestructible, it changes in form, but it cannot cease to exist. It is only a living organism that faces a constant alternative : the issue of life or death. Life is a process of self-sustaining and self-generated action. If an organism fails in that action, it dies; its chemical elements remain, but its life goes out of existence. It is only the concept of 'Life' that makes the concept of 'Value' possible. It is only to a living entity that things can be good or evil.

==

What's so evil about the suicides?

I found the article snipped in
The Invisible Hand (6/10/06; 22:45:23MT - usagold.com msg#: 145171)
Amerika denies the Truth - so, APOCALYPSE NEXT!
http://www.itp.net/business/features/details.php?id=4530&category=
before I heard about Washington's interpretation of the suicides,
but Khatami was saying that Washington is trying to find enemies

What was freedom again?

Rand again:
http://www.libertystory.net/LSTHINKRAND.htm
"What is the basic, the essential, the crucial principle that differentiates freedom from slavery? It is the principle of voluntary action versus physical coercion or compulsion...The issue is not slavery for a 'good' cause versus slavery for a 'bad' cause; the issue is not dictatorship by a 'good' gang versus dictatorship by a 'bad; gang. The issue is freedom versus dictatorship."

http://www.dissidentvoice.org/June06/Rajiva06.htmHanky Panky at the Counting House
SNIPS
What the deal with Bush's new honcho at the Treasury?
+
It means that the chicken coop is directly in the paws not just of any egg-sucking fox but a Bengal tiger in its prime. Really, why not invite the Cali drug cartel to run the DEA while we're at it?
+
The story goes that Paulson was reluctant to leave his lucrative post for government service.
+
HANK�S PRANKS -- NUMBER ONE
According to the official spin, Paulson has been brought in -- as a Wall Street heavy -- to loan some gravitas to the uphill task of chatting up the dollar.sending the traditional financial safe-haven -- gold -- to heights last seen in the �70s.
+
HANK�S PRANKS -- NUMBER TWO
The unofficial theory is naturally a lot juicier, although described by even sworn enemies of paper currency as conspiratorial. Still, it's managed to rear its head in the Wall Street Journal, so it can't be all wet. Here is what widely respected libertarian Congressman Ron Paul had to say on Feb 14, 2002:

While the Treasury denies it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, operating through the Exchange-Stabilization Fund and in cooperation with major banks and the International Monetary Fund, have been interfering in the gold market with the goal of lowering the price of gold. [�]
GATA has also produced evidence that American officials are involved in gold transactions. Alan Greenspan himself referred to the federal government's power to manipulate the price of gold at hearings before the House Banking Committee and the Senate Agricultural Committee in July, 1998: "Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where CENTRAL BANKS STAND READY TO LEASE GOLD IN INCREASING QUANTITIES SHOULD THE PRICE RISE.
[Emphasis added] ( Speech of Congressman Ron Paul, U.S. House of Representatives, February 14, 2002, www.house.gov/paul )

HOW BAD IS THE SITUATION?
[A]s of June 2000, J.P. Morgan reported nearly $30 billion of gold derivatives and Chase Manhattan Corp., although merged with J.P. Morgan, still reported separately in 2000 that it had $35 billion in gold derivatives. Analysts agree that the derivatives have exploded at this bank and that both positions are enormous relative to the capital of the bank and the size of the gold market.

It gets worse. J.P. Morgan's total derivatives position reportedly now stands at nearly $29 trillion, or three times the U.S. annual gross domestic product. Wall Street insiders speculate that if the gold market were to rise, Morgan Chase could be in serious financial difficulty because of its "short positions" in gold. In other words, if the price of gold were to increase substantially, Morgan Chase and other bullion banks that are highly leveraged in gold would have trouble covering their liabilities. ("All That Glitters Is Not Gold," Kelly Patricia O'Meara, Insight Magazine, March 4, 2000.)

That was 2000. This is 2006.

So long as gold remains a mere relic . . . a yellow reminder of what used to be money . . . no harm done. Unless something absurd happens, that is. Something absurd like, say, gold doubling to $573 an ounce inside 5 years. If that happened, then the �carry trade� of borrowing gold to invest in paper could become a very expensive way to bankrupt the entire global financial system. ("How Central Banks Have Kept Gold Down," Adrian Ash, Money Week, February 9, 2006.)

This spring gold hit over $700. And that's why the hanky-panky is likely to begin in earnest now.

==
Sorry if this been posted before.

http://www.jsmineset.com/Sinclair has a new piece on his site that frankly I am only partially following.

Will someone please interpret this ? If he is correct, it will be quite the call.

TIA

Harry vs the Volcano
SNIP
Gold is going to $1650.
==
I thought gold was going to $30,000.

I would disagree with this statement: "As long as the general populous of the world are willing to take the promise of gold as having more value then actual gold, the system will continue just like it is for many years to come. "

The general populous,the sheeple never lead!When all Big Traders are saturated with Gold (note the recent almost eerie silence about Gold sales or purchases!),they'll let Gold free.And the sheeple will buy like crazy on this call,fueling further the rise.

You are right though,the anti Gold control game could be continued a lot longer.Aristotle once revealed the motivations why they wouldn't,it would be a systemic risk.Something they will avoid at all costs (survival instinct).One proof might be that the transition has been engineered so gradual up to now.But the final "snap" draws nearer.

"The central banks are now totally out of the closet. Their plan is crystal clear but the central banks simply lack the ammunition to oppose the hedge funds in the market place."

Well,a simple 3 word statement could bring them back in: "Gold is Free!" (smile)

I read Greider's "Secrets of the Temple" not long after it came out and just now pulled it off my shelf. From the conclusion:

"Money was like the sacred totem in a primitive culture, a mysterious object that efficiently expressed the larger social reality. In the American culture formed by democratic capitalism, money WAS the sacred totem. The common faith shared by Americans was secular rationalism and the social order was defined by the scientific abstractions surrounding money. Yet religious mystery was still required -- priests and ritual, sacred secrets that sustained belief. ... If the secrets of the temple were revealed, the money mystery would dissolve and people would have to look upon these things directly. ... The mystery was necessary, therefore, to sustain social faith. Knowledge was disturbing. No knowing the secrets was reassuring. If American were afraid to look inside the temple, it was because they feared to see the truth about themselves."

That Greider could succumb to that fear with nothing less than a socialist manifesto I find astounding. But be that as it may, "Secrets of the Temple" was invaluable in a journey that led me to an understanding of money on the one hand, the state on the other, and the inverse relationship between the two -- i.e., state power depends on the destruction of money -- as Greenspan's "Gold and Economic Freedom" so well attests.

Thus to be pro-money is to be anti-state, pure and simple. And because this is fundemental to the Austrian School of Economics, it is also fundamental to libertarianism (Misean, Rothbardian, Rockwellian), which transcends the statist (left-right) continuum the way synthesis transcends thesis and antithesis.

But insofar as political battles are fought exclusively along the statist continuum, such that the choice is between welfare socialism and social nationalism, transcendence can only come via the self-destruction of the continuum, which is inevitable at some point, the only question being when.

http://www.gold-eagle.com/editorials_05/tanashian061006.htmlThey may think they may killed the commodities "bubble", but like Dr. Franknstein, the monster you (the central banks) create (liquidity) will only come back to haunt you and kill you...the end of paper as we know it...and it's good...and it's only right and fitting to be done in by your own evil machinations.

It's also called "creative destruction". You create and it destroys you--that is, the $7 Trillion hedge fund monster.

What's the deal with the new honcho at Treasury? It's spelled d-e-s-p-e-r-a-t-i-o-n.

The so-called left-right continuum is to me largely an attempt to divert thought from the true continuum, freedom to serfdom to slavery. The confusion is largely a tactic of the statists to prevent any acknowledment that there is another model, individual liberty. The State is everything. Some go so far as to claim individuals exist only in their own imagination, as a form of mental disorder. There are some really twisted and power hungry "caregivers" out there. At least Ghengis Khan was honest about it, and I hear he liked gold.

http://www.thirdworldtraveler.com/Authors/QuotationsToMakeUSThink.htmlSnippets;

We were not born critical of existing society. There was a moment in our lives (or a month, or a year) when certain facts appeared before us, startled us, and then caused us to question beliefs that were strongly fixed in our consciousness-embedded there by years of family prejudices, orthodox schooling, imbibing of newspapers, radio, and television." Howard Zinn

To criticize one's country is to do it a service .... Criticism, in short, is more than a right; it is an act of patriotism-a higher form of patriotism, I believe, than the familiar rituals and national adulation." J. William Fulbright, American senator

The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, (Banks and financial corporations stand at the pinnacle of corporate power) and the growth of corporate propaganda as a means of protecting corporate power against democracy."
Alex Carey

The American press, with a very few exceptions:, is a kept press. Kept by the big corporations the way a whore is kept by a rich man."
Theodore Dreiser, American writer

Humanity's most valuable assets have been the non-conformists. Were it not for the nonconformists, he who refuses to be satisfied to go along with the continuance of things as they are, and insists upon attempting to find new ways of bettering things, the world would have known little progress indeed."
Josiah Gitt American editor

All democracies turn into dictatorships - but not by coup. The people give their democracy to a dictator, whether it's Julius Caesar or Napoleon or Adolf Hitler. Ultimately, the general population goes along with the idea... That's the issue that I've been exploring: How did the Republic turn into the Empire ... and how does a democracy become a dictatorship?
Star Wars fimmaker George Lucas, at Cannes film festival 2005

"To understand free speech means freedom to speak what others do not like and even cannot stand to hear? ... Tolerating what you like is hardly a major achievement. Hitler tolerated what he liked. So did Stalin. Idi Amin did too. So did Genghis Khan, the Shah, and Henry Kissinger. Free speech only becomes an issue when someone says what others don't want to hear."
Michael Albert

I see the left-right continuum as the serfdom/slavery continuum, as it is statist from one end to the other and thus anti-money and individual freedom. And insofar as the end of politics, properly speaking, is individual freedom, the politics of the left-right continuum is always and everywhere a perversion of the political process -- a vast and futile rearranging of deck chairs wherein the few captain the ship even as their lifeboats, and theirs alone, stand at the ready.

There are dinghies, though, for those who know where to find them -- who know, that is, that nothing floats better on a sea of trouble than real money.

Gold is unsinkable.

Re: Left-right continuum

Not sure I really see it as a continuum. A conservative's view of the individual vs. a liberal's to me seem very distinct and separate.

But I'm not sure if those who see gold as a real haven and protector of wealth are inherently going to be leaning more toward the left or right political spectrum. It would be interesting if it's really irrelevant what ideology one has and that enlightened conservatives and liberals alike share a common view on money problems and how gold will outlast all paper.

The timing gives it away. TPTB did the put down at the opportune time, so as to maximize their artillery, knowing that summer is the doldrums for gold. Why waste bullets?

Similary, as Sinclair has opined, the snychronization of the CB actions illustrates the collusion among TPTB.

These targeted and concerted actions must mean that they know the end of the game is near, and the $7 trillion monster has now entered the house of cards, torch in hand. Like Dr. Frankenstein, their efforts are DOOMED.

I haven't been tuned in to the world some of you here have probably been acquainted with for years. The arguments many of you have made for the "end of paper" are most persuasive and I'm in agreement with what the facts seem to point out: that it's just a matter of time before it all comes crashing down and gold is king.

But what I'd be interested in hearing from others is how long have these views been espoused? If 20 years ago the Internet had been what it is today, would I have found people saying the same things they say now about gold? And then comes 1/21/80. Gold hits $850 and then rapidly falls back to its $600 range, never to go much above that until a month ago.

Is it *possible* that if we're all still around 20 years from NOW, we could still be talking about how the "end of paper" is just around the corner?

Appreciate whatever anyone has to offer on this...

http://www.lewrockwell.com/orig/garris3.html
It's a whole new ballgame, as the Information Age is, on account of this fact, the Emancipation Age.

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

My previous definition of right and left are somewhat "tongue in cheek" as I've spent most of my years at University where everything was politically correct....or gone like Lawrence Summers at Harvard. To them right is defined not as individual liberty and free speech but as military dictators suppressing the masses. Individual responsibility and limited government are never discussed (archaic thought). To them it is obvious that the only choices are between how best to redistribute the resources; for the greedy rich elite (right) or long suffering masses (left). Yes, the majority of Professors in the Humanities really are that simple minded. The market just doesn't seem to redistribute goods the way they'd like, especially to themselves. Rather than confront the real issue of to what degree the power of the State should be used to confiscate and redistribute resources they just assume that markets must be managed to overcome the greed, class and race bigotry, sexism, and other nasties that everyone (except themselves) seems to possess. Instead of "Professor" perhaps we need to start addressing these often $100,000 plus University faculty and administrators as "Your Holiness" and pray they lighten up on the inquisition, and maybe just pretty please lower the tuition a little?

@ MaxRabbit.

Maybe that's why Zappa said, "go the library if you want EDUCATION".

Science, medicine, history, humanities . . . have they all been ruined by a weenie "peer review" system eschewing independent thought and awarding PhD's to parrots and puppets of the PhD examinating committee?

Not unlike the FDA drug review committees of doctors who are shareholders in the big Pharma company under review.

You want gubmit research money? Shut up and toe the line!

You want corp research money? Sign over ownership of all your ideas, whether they develop them or not.

You're damned if you do and damned if you don't.

Progress? Not if it' possibly threatens the hold of the "controllers".

At some point we've developed the concept that those who risk "capital" are somehow risking more (and 'deserve' more reward) than those who risk their entire lives, be it in mining, research, industry, or even military conquest.

That is the basic definition of "corporate statism".

http://www.nytimes.com/2006/06/11/business/worldbusiness/11chinacoal.html?pagewanted=1&_r=1&th&emc=thAll those inexpensive manufactures from China are more costly than they seem...some not-so-cheery reading from the NYT.

:-)

I have the majority of my investments wrapped up in gold and silver for all the same reasons that most of you here have invested in precious metals. I fully understand that nothing goes straight up and corrections are not only normal and healthy, but...

It seems the USA gov., JP Morgan, Goldman Sachs, the Bank for International Settlements, the IMF, BOE, the FED RES, the media and even the largest gold company Barrick Gold are all working together to hold down the POG. If this is the case, and I certainly believe that it is, why do we even bother investing our savings in physical gold and silver or gold and silver stocks? Please don't tell me that these guys are running out of gold to use against us because I find that hard to swallow. Surely I don't have to tell any of you how simple it is for those powerful groups to manipulate gold and stocks as we have seen how easy it has been this past week. What's to stop these SOBs from breaking the spirit of all the longs by hammering POG indefinatly? I mean really...do you think the FEDs printing presses can't supply enough cash for their intentions or the BOE, IMF and others really don't have enough gold to flood the market? We could spend hours discussing the countless ways that these guys can manipulate the POG. Is there anything that can end this BS? Do we really have to wait until the end of the world as we know it?

If I may butt in,
It occurs to me the thread you're discussing goes right to the heart of the matter in that those who draw most succor from this current Fiat system ie: Academia, Judicial, Political and Big Bank/Corp, are least able to concieve of the disjointedness such a system inevitably creates.
The World simply becomes one increasing cess-pool of "Thinkers" nurtured by Fiat all pondering how to best prolong the party ...without realisation.
An alternative system, based on anything which might render "intellect" subservient (Like say the notional Labour to extract an Oz of Au) is simply never on their radar ...until one day it all goes to Hell.

Physical gold has been one of the best investments over each of the last 5 years. And I really only intended it as an insurance policy, not a retirement program or a get rich quick scheme. Enjoy life, the future may not be all that rosy.

MK (6/11/06; 20:12:11MT - usagold.com msg#: 145200)
"Candies for gold" -- Iran's Ahmadindejad

I came across this reference in my weekend reading. It caught my attention, not so much because of the reference to gold -- something which always catches my attention -- but because of the differences between our culture and theirs. I am talking about Iran and its president, Mahmoud Ahmadindejad. And I am talking about Europe and the United States.

What Ahmadindejad was talking about was the negotiations between Iran, the United States and Europe on exchanging uranium enrichment for a laundry list of benefits offered by the West. He likened it to exchanging "candies for gold," according to the New York Times report titled "Iran resumes uranium enrichment work" (Elaine Sciolono). No one doubts that the reference contained some fairly heavy disdain -- a mindset the markets are sure to translate to action come Monday AM. After all, the markets now think that everything is going along very well between the antagonists.

In reading the article, I considered whether or not Ahmadinedejad would have entertained exchanging uranium enrichment for U.S. Treasuries. The quote, as such, represents a state of mind -- a difference in cultures. It also reveals a blip most Americans and Europeans haven't even registered on their radar screens.

Candies for gold?

Candies for U.S. Treasuries?

As always the difference between the two is in the eye of the beholder.

What is going in Iran is a template. Ahmadinedejad's response is one to which we might become accustomed because this most likely does not represent an end, but a beginning. In the current confrontational context between nation states from one end of the globe to the other, which nation state on earth would surrender its perceived right to develop the bomb? Ahmadinedejad no doubt sees it as god-given right. I can hear it now. As long as Israel has it, we must have it. As long as India has it, we must have it. As long as Russia has it, we must have it. As long as Taiwan has it, we must have it. And so on.

And the world looks to the United States to be the policeman, a role its citizenship increasingly sees as against its best interest -- if not utterly futile.

What's next?

If Iran will not exchange its "gold" for "candies", who will? And why should that even be a consideration? Once again, the concept of intractable, implacable enemies dominates the thinking on both sides -- without respect to which side any of us should be on. This is something none of us can put in the win column.

In the current context, with oil as the bargaining chip, which economy is immune should the West choose the tough course of action? The Americans?
The British? The continental European? The Chinese? Japanese? The Gulf?

Sure the U.S. government and Europe will romance the public with the discussion of negotiations, but the ultimate question gets down to where we, in the West, draw the line. And if we draw it here -- and perhaps we should -- the world will understand the difference between gold and candies.

------

By the way, one wonders if the comment on gold comes out of the blue, or from a new understanding having to do with Iran's recent repatriation of gold from Switzerland.

CoolSlug Wrote:
"We could spend hours discussing the countless ways that these guys can manipulate the POG. Is there anything that can end this BS? Do we really have to wait until the end of the world as we know it?"

Maybe. But I think that day is going to come sometime this year.

I have 3 reasons to hold on to all your gold
1. Middle East War (Possible Nuclear War) and potential terrorist reprisals (possible Nuclear/Dirty Bomb) on American soil
2. Huge international economic imbalances with America's economy being hollowed out in terms of jobs and companies involved in internationally tradable goods and services. IBM has just moved or is planning to move most of their engineering, design, and research facilities to India. America has nothing to sell the rest of the world to support the value of the dollar.
3. Bird Flu Pandemic - Most recently 7 out of 8 people in the same family in Indonesia died from bird flu from human to human transmission.

Any one of the above is enough to justify the ownership of gold. Especially physical gold coins located in my home. My attitude is if I get vaporized by a nuke then my gold should go with me I don't want the government to have any of it.

I have heard many analysts say that Bush wants to attack Iran sometime before October this year. The huge economic imbalances are starting to destabalize the economy. Chris Laird, from the Prudent Squirrel has written that the dollar and the "dollar system" will collapse in 2006. Also, the spread of bird flu could turn to spread easily from human to human at any time.

@Coolslug

You might be interested to know that J P Morgans, in their various guises, are taking 8 to 10 % stakes in Australian gold mines and in emerging gold producers This is done with on market purchases in a quite open way.

Read into that what you will.

Thanks for your reply Armageddon. Those reasons that you gave for holding on to gold are very valid and not unlikely events. But your reasons are the type that qualify as reasons to have gold as an insurance policy for an end of the world as we know it scenario. I am with you 100% on your reasoning but I am thinking more along the lines of gold as an investment. I believe investing in precious metals is a high risk and I don't mind the risk if I thought there was at least a level playing field. Lately though I find it hard to believe that the USA gov., JP Morgan, Goldman Sachs, the Bank for International Settlements, the IMF, BOE, the FED RES, the media and even the largest gold company Barrick Gold can't keep a lid on the POG. This is what is troubling me.

I'm happy to hear that your "insurance policy" has turned out to be a good investment. Unfortunately, not all of us got in five years ago and I think that many here have more at stake than just insurance policies. I believe that POG should presently be way over $2000 but people in high places keep it wherever they want. The manipulation is a proven fact and I doubt anyone here will argue with that. What I would like to know is what makes anyone believe that anything will change except for an end of the world as we know it scenario. I agree that physical gold and silver are a must for insurance purposes. I am beyond just insurance plans though. I have been hoping to make a killing with my gold and silver investments. The fundamentals told me gold was a screaming buy. Dirt cheap at any price under four digits. Is that so unusual for someone who frequents these sites?

If indeed the prices are being kept unnaturally low by your roll-call of players, then by your reasoning it would also stand that you were able to buy more of it for your purchase price than you otherwise should have been able to.

Therefore, you should either consider giving some of your excess metal back as a show of good faith; or else, if you continue to keep more of that metal than would have been gotten from a more proper exchange rate, then the way I see it, you really have no grounds for complaint.

To be sure, the game can be played at this low level (many ounces for little cash) or else we can all play it at a higher level (few ounces for much cash).

Those of us with an eye for value will choose gold over paper cash at whatever the level of play. And those of us with an understanding of sustainability will eagerly continue to pile in at the low level of play, knowing, at a minimum, that there will be a quantum leap one day with respect to the necessary level of the play.

An additional consideration is that as there is a growing coalition of central bankers that are mindful of the benefits of MTM freegold reserve paradigm, we shouldn't have to settle for a new game at that aforementioned 'minimum' of a quantum leap. Because, in fact, the 'game' will have been TERMINATED. Gold markets will be unrestrained, turning the tables and effectively setting the price on the currencies of the world instead of the other way around.

Again, on the basis of a manipulated price I deem that you have received way too much gold for your money. Please send most of it back!!!

R.

Ahh.. I see your point that gold as an "investment" might seem as a high risk based on past performance much of which involved the world's central banks and the Federal reserve in market manipulation. Because of continuing market manipulation and an unstable world economy the price of gold may spike into the thousands and swing wildly, at least this is what I have read on many gold sites adding to gold's "high risk". Hmm. Perhaps you need to diversify your assets to take some profits from your gold side and move them to the dollar or Euro side for balance if you can't sleep at night with most of your portfolio in gold?

Well, from my perspective I think the world economy as well as the dollar and the dollar based trading system are in for a BIG crisis. There is not going to be a Plaza Accord II with China where China will raise the value of its currency to help to correct the American trade imbalance like Japan did previously in Plaza Accord I. The trade deficit this time is not going to correct.

I guess investing in gold is like watching an inflating balloon with water expand and pop. You will only get wet once the ballon expands to its limit and pops, not before. However, when it does pop you will be drenched. We might not see $2,000 per ounce gold till the balloon pops and the BIG crisis is fully in view for everyone to see.

Author: Jim Sinclair



The History of the Cost of Money, Action of the US Dollar, Inflation and Precious Metals: 1968 to 1980 First Quarter

Dear CIGAs,

Let's get historical facts down cold and out on the Internet concerning the relation between interest rates, the US dollar, inflation and gold. The only way that people who are gold-phobic might listen is when they see pictures.


The first charts are produced by Topline Investment Graphic and are must haves for the serious investor and trader. They can be ordered from basically the first day of the series right up to yesterday. Then number to call is 303-440-0167. I have no business relationship with them outside of being a client paying full price.

Let's first take another look at interest rates from 1968 until the first quarter of 1980. Simply stated, interest rates rose in a ballistic manner to levels today unthinkable.

http://www.jsmineset.com/cwsimages/inventory/49151_Charts090606-001.jpg

http://www.jsmineset.com/cwsimages/inventory/49152_Charts090606-002.jpg

Now that it is clearly demonstrated that interest rates rose violently in the big Gold Bull market of 1968 to 1980 first quarter, let's look at the currency picture in 1970 to early 1980 terms. Keep firmly in mind the US dollar is the inverse to what I am showing you here.





The two top currency vehicles to take a position against the US dollar were the Dmark and the Swissy. That means if you had a bull run in the Swissy and Dmark you had a bear drop in the US dollar.

Note as interest rates boomed in the US the US dollar literally dropped dead.

There are no mitigating circumstances outside of lack of experience that support a strong dollar as a product of higher interest rates being the means of a dollar trend setter when all other fundamental dollar supports are going south hard. With the triple deficits setting records, interest rates will NOT support a bullish or even neutral dollar trend. In the final analysis history supports the position that it is the fundamentals, not yield that creates a long term trend in a currency.

An example is if a company was on the brink of bankruptcy on a balance sheet basis, but found a banker in a lunatic asylum to lend it money. This borrowed money was then used to pay an increased dividend. Do you really think with the investment world knowing this company was in chapter 11 based on significant balance sheet problems that they would rush in to buy the shares? Some numnuts might, but that impact would be extremely short term and would not under any circumstances reverse the bear market in that company.

A currency is always the common share of the country it represents.

Similarly a currency of a country with triple deficits with those deficits having a foundation in granite and a product lacking the introduction of policies with historical ability to correct these deficits will decline sharply as interest rates soar. This is a pillar of a major bull gold market, not a factor that opposes a major rise in the gold price

http://www.jsmineset.com/cwsimages/inventory/49155_Charts090606-005.jpg

Finally we will address the use of increased interest rates, even increased geometrically and the impact on inflation. Single digit and early teen percent increase in the cost of money has NO impact on inflation and may in fact help accelerate it as a cost factor.

http://www.jsmineset.com/cwsimages/inventory/49157_Charts090606-007.jpg

This Is Reality

What you see here is fact. There are no mitigating factors today that can skew what you have reviewed. The historical view you have just seen will repeat now and into 2011.

What you reviewed makes me feel I am being too conservative on my expectations for gold.

Now post this on every web site and chat board you can find. No need to give any credit for where it came from, just post it everywhere on the planet. Maybe a picture will penetrate their thick heads. Maybe they will then realize we have just experienced our first market charade of major proportions by the US fed in concert with other central banks in a stealth attempt break inflationary expectations.

You cannot break inflationary psychology unless you introduce policies that have that ability historically validated.

The cost of money now compared to the size of the Bernanke Helicopter Drop of international liquidity means that rates will have to exceed the level of 1980 in order to have any impact. That is a long time ahead, a much greater increase in the price of gold and many adventures from now.

http://www.jsmineset.com/ARhome.asp?VAfg=1&RQ=EDL,1&AR_T=1&GID=&linkid=3672&T_ARID=3741&cTID=0&cCat=&cSubCat=

Mining costs are up.

Inflation is going forward.

Economies slowing and worried.

Stocks are down.

The dollar is fragile and getting more so.

Investors are panicked.

TRILLIONS AND RISING INDEBTEDNESS.

Population Soars

Plagues and Pandemics.

Countries distrust each other.

Wars and no end insight.

DID I MENTION INFLATION?

A loaf of bread 3 bucks.

SO NOW WHAT? Wait for GOLD to plummet for a DEAL?

I do not see many more DEALS in the very near FUTURE!

With all this going on I see only one sure bet and that is on Gold!

Buy now before it's to late. So I better act on my OWN words.

http://www.usagold.com/cpmforum/archives/11200211/default.html@Golden Lionheart #145204, coolslug et al.,

The recent fall in gold price from over $700 to around $600 (with the possibility of further downside) should not come as a surprise to anyone. Other metals are going through a similar "correction" with possibly more to go...especially if investors become weak-kneed about the US debt-levels and the state of the US and global economies, not to mention "inflation", etc...

Corrections of comparable magnitude (~15%) are the rule rather than the exception in bull-runs of pretty-well every asset imaginable. The magnitudes of the swings in gold and silver are not unusual and are well within the variations expected from "normal" speculative activity...no need to suppose any nefarious deeds from J P Morgan and other supposed/probable shorts...

That said, there is little doubt that there are significant short positions out there in gold...LARGE positions that are quite painful to the holders, becoming more so, and for which it is unlikely that settlement can be made without considerable pain.

However, assuming that the players who took on these (postulated) large short positions in gold in the first place were not complete trading idiots, it is likely that substantial hedges may have been entered into at the beginning, or built progressively over time as the writing on the wall regarding rising price-of-gold became ever clearer. (It is also likely that long-term, flexible repayment periods would have been part of the lease contracts; such as we know to be the case for Barrick.)

Golden Lionheart's post reminded me of a posting that I made several years ago on this forum on this issue (see link).

Sundeck (11/11/02; 22:24:47MT - usagold.com msg#: 89369)

Gold shorts can in fact hedge potential losses from a rising gold price by investing in selected emerging gold producers. The reason is that the share price of emerging producers (especially marginal producers with large reserves/resources) is highly leveraged to a rising gold price, so long as production costs do not rise too dramatically with the gold-price.

Given that it would have been unclear several years ago whether the price of gold was going to maintain an upward march, it is unlikeley that most of the major shorts were early buyers of gold stocks...if they had been, and price-of-gold kept falling, then while they may have profited on their gold borrowings (short trades) they almost certainly would have lost on their share holdings as share prices declined in parallel with the gold price. However, once the rise in gold-price became confirmed, the shorts would have HAD to cover, or hedge, their positions by one means or another...

Could this be the reason we see J P Morgan buying into one (or some) of the most significant new gold producers in Australia (and probably elsewhere around the world)???

Note that once sizeable share positions have been built, the game changes and it is then IN THE INTERESTS of the shorts to see the price of gold rise!!! Over time, they can re-acquire gold (open-market purchases and off-take agreements), and deliver it back to the lessors (central banks), using profits from their gold stocks.

.........

One more point. We know that there are some BIG players out there anxious to enlarge their gold holdings. Imagine there are half a dozen or more (Russia, China, Argentina, Iran, any number of hedge-funds, who knows?). Given that there have been clear enunciations from these players about the shakey US-dollar and of their gold-buying intentions, then open competition to buy (physical!!) will eventually emerge in earnest. Thus as the gold-price falls...and falls...and falls, it is going to become more and more tempting for one or other of these players to re-enter the market. Once one does, they all will and the price will likely rise and rise...at which time all the other assorted players (Joe Sixpack, Sandra Shoestring...and even Sundeck) are likely to add to their holdings as well...and we will be away on our next bull-run...

Not a certainty, granted. But the portents remain unchanged, in my view...

FWI and DYODD

:-)

http://news.ninemsn.com.au/article.aspx?id=106121Meanwhile, Lord Browne, CEO of "Beyond Petroleum" is being outwardly reassuring to the markets on the price of oil (POO).

Do you think he is genuine?? or is he trying to placate rather uneasy world equity/finance/bond/commodity markets??

(No relation to Geordie, is he? Oh...perhaps not..he has an "e" appended to his surname...sounds sort-of, well, more "distinguished".)


Snip:

"...
Oil prices could drop to about $US40 ($A53.96) a barrel in the medium term as new supplies are found, and might fall even further in the long term, according to the chief executive of BP.

However, Lord Browne cautioned that "we cannot really expect that prices will drop back sharply in the short term," in an interview published in the German weekly Der Spiegel.
..."

Sundeck: Mmmm..."we cannot really expect that prices will drop back sharply in the short term"... In other words, keep your hopes up me hearties, and don't go doing anything stupid that is likely to rattle the markets and the global economy...

And if it never happens - and oil stays at a recalcitrant $70 or more?...well everyone will have forgotten Lord Browne's prognostication by then, but neither will they have have spooked the markets in the meantime... Mission accomplished!

(Wasn't Steve Forbes also talking about $35-40 oil back in August last year?? Looks like the big boys are taking it in turns to calm the waters...)

;-)

http://quotes.ino.com/chart/?s=NYBOT_DX&v=wUh...oh! Looks like the dollar may be in a minor upswing...

Probably a good way to calm equity and bond markets...given that foreigners hold a LOT of US bonds and equities.

With the dollar strengthening against other major currencies, there is less urgency for foreigners to liquidate their US holdings and repatriate their dollar-takings to their home currencies... One way to attempt to put the hold on a demoralised Down-Jones index...which, of late, is looking very determined to take a bath?

It is probably not in anyone's interest to have either the Dollar or the Dow descend too rapidly...steady as she goes.

I'd dearly like to be a "fly on the wall" of the PPT's bunker at times like these...

:-)

If someone doesn't issue a press release about it, is there any way to determine when someone (or some entity) has purchased or dumped a large amount of gold?

Warren Buffet said a month ago that his co. owns no more silver. Was that discernible to anyone before his statement? Selling 130 million oz. of silver all at once would certainly have an effect on the POS, would it not? If not all at once, then it must have been sold over a period of time.

How do we novice watchers (or *this* novice anyway) determine that dumping or big buying is going on? Can we only make reasonable guesses by reading the tea leaves in the news?

Having gone to the city walk platz in Kaiserslautern for lunch, I had hoped to catch a bit more of the "Fever". Instead I encountered pandemonium as I walked into a sea of green and yellow, kangaroos, flags, and an occasional platypus. Great fun!
The Socceroos here in K-Town Germany have brought great weather and know how to enjoy themselves �

Go gold and ��.

Game on mate!

There had been no rain for some weeks and the rumblings of thunder in the distance was welcomed.The Army of the Goldbugs was still gathering, overflowing into the countryside. The dark clouds gathered and flashes of light lit the underbelly of the approaching storm. Still waiting at the Castle Gate, Sir Slingshot noticed a group of Knights standing at the place where once the Goldbug Army lay siege to this very castle. The sky began to darken and the first drops of rain fell down on the dry earth. "An omen?", he thought.
Gandalf closed the book with such a force that it startled Tobias. Tobias grabbed the iron cage and watched as the wizard stood up and paced about the room. Then suddenly left leaving the door open.
The wizard made his way to the Council Chamber finding Sir M.K. there.
"What have you learned from the creature?" asked Sir M.K. "We must set him free",answered Gandalf.
" What in heaven for!" said Sir M.K.
Gandalf began to explain. His name is Tobias he said. Sir M.K. recognized the name. He was not sent to kill,only to convey a message. A strong one at that. A power to change our friends completely. Hammerton was to be an example to all who rebel and draw the rest into battle on his own terms. We have already started our preparations and are soon to march. A long march and they will be prepared for us. Tobias will be more helpful if we let him go.
"How many people were at Hammerton?" asked Sir M.K.
"Maybe 10,000 or more", answered Gandalf.
"All now like, Tobias" said Sir M.K.
The claps of thunder grew louder and the room darkened.
Slingshot----------<>

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

http://business.iafrica.com/worldnews/517072.htmsnip:

After the radical plunge in world markets, leading commodities expert Jim Rogers made the remark in this week's Barron's that Fed governor Ben Bernanke was an 'amateur'.

It seems the press internationally is blaming Bernanke for the problems, which this week saw South Africa lose over six percent (the worst single day's fall since the IT bust), Brazil lose 3.5 percent, China 5.3 percent and Japan almost two percent.

Much of the weakness set in after Bernanke gave mixed remarks about the US economy, with most investors expecting rates to rise.

'Bernanke has no knowledge of markets'

Rogers said in Barron's: "[Ben Bernanke] is an amateur with no knowledge of markets whose academic work revolved around how nations could avoid depressions by printing money."

Rogers believes the excess liquidity is placing pressure on Dow stocks and the dollar, but that the commodities boom is going to be bigger than the last one, lasting until at least 2014.

"Add to that [American consumption] 1.3 billion Chinese and 1.1 billion Indians � all walled off from the global economy during the last commodities boom � joining the global scrum for natural resources... it's delusional to deny that competition for commodities will continue to heat up as a result of China's pell-mell rush from a peasant economy to economic giant," he said.

The Fed lifted rates a 16th consecutive time at its May 10 monetary policy meeting, leaving the federal funds rate at five percent. The policy statement issued at the time was a disappointment to investors because it didn't hint at a pause in rate tightening. And this week Bernanke said core inflation had reached a level that, if sustained, would be at or above the upper end of the range that many economists, including himself, would consider consistent with price stability.

Since then the Nasdaq has fallen seven percent, the Dow nearly six percent and the S&P is down close to five percent.

All eyes will therefore be on the Fed this month for another potential rise.

Traders boosted bets the Fed will lift rates at a 17th straight policy meeting when officials gather on June 28 and 29. Interest-rate futures show traders are pricing in an 80 percent chance the Fed will lift rates to 5.25 percent, up from 48 percent on June 2.

-Goldilox

My bets are with Jimmy, who along with is partner Soros, rode the British pound down its "waterfall" event.

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-06-12T155620Z_01_BAN257352_RTRIDST_0_OZABS-MARKETS-GOLD-LBMA-20060612.XMLLONDON (Reuters) - Gold and silver bars with physical defects or poor markings may not be accepted as good delivery metals under the London Bullion Market Association rules, the industry body said.

The association maintains lists of refiners who meet its requirements for assaying standards and bar quality and whose bars are acceptable in the London market as Good Delivery. The list facilitates global distribution and acceptability of gold and silver on technical grounds.

"The LBMA has noted that in the past year, an increasing number of gold and silver bars have been reappearing in the market after having been held for many years in vaults," the statement said.

In particular, bars which are not stamped with the original refiner's assay mark and fineness will no longer be acceptable as 'good delivery'.

The receiving vault manager might refuse to accept the bars and would discuss with the customer whether they should be returned or upgraded, the association said.

"In some cases, members of the LBMA may be able to assist in the disposal of such bars by finding industrial consumers for whom the above mentioned defects are relatively unimportant."

If the bars were produced by LBMA's good delivery list of refiners, the association would expect them to upgrade bars to make them acceptable as per the rules.

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

Gold in the form of bars can be a very tricky item on the secondary market. That is, once they leave a reliable chain of custody (from refinery to bank vault) their original pedigree of weight and fineness may be compromised by unscrupulous intermediate handlers.

This isn't exactly "new" news, so I'd say the primary reason the LBMA is bringing this blurb to the media is to try to foster a wider sentiment that people ought to leave their gold on account in the LBMA vaults rather than asking for withdrawals.

Certainly, that's an unacceptible proposition. The way to avoid this hassle for most gold investors is to choose your gold in the form of untamperable coins.

Call USAGOLD-Centennial today.

R.

http://www.gold.org/value/news/article/4137/08 June, 2006 -- The Russian stock market will begin trading gold from today, according to reports in the Russian media.

The Russian Trading System, purporting to be the premier exchange in the region, will begin trading in gold, oil and oil products from today (June 8th).

Igor Artemyev, head of the Federal Antimonopoly Service, told Itar Tass earlier this year exchanges offered "an excellent way of developing competition and effecting a normal de-monopolisation of the market".

He argued that "a much greater transparency" would follow on from the exchanges.

One-month contracts on the RTS involving the commodities will be traded, with the minimal margin set for gold at five per cent and for oil and related products at ten per cent.

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

Hard to tell from this description, but it sounds more like a mechanism to ante up for bet on the price rather than a means to procure metal.

R.

@coolslug

I have finally come up with a good answer to your question about what is going to stop the gold manipulators at the Fed, IMF, BOE, etc from keeping the price of gold down. The answer is George W. Bush and the Necons in his administration. The Necons and Bush are a powerfull force that will push gold through the roof in the near future because of their foreign policies. Please see the following article from Dr. Paul Craig Roberts who served in the Reagan administration as Assistant Secretary of the Treasury.


---------------------------------------
June 11, 2006
Neocon Plot To Nuke Iran Invites Catastrophe

By Paul Craig Roberts

John Bolton, a notorious neocon warmonger who could not be confirmed as America's ambassador to the UN by even the compliant and corrupt US Senate, got the job as a recess appointment. He is using the platform to push America into war with Iran.

Bolton told the Financial Times (June 9) that the Bush Regime has no intention of reaching an agreement with Iran. Time is running out for diplomacy, Bolton told the Financial Times. Iran has a short time remaining in which it can give up its right under the non- proliferation treaty to enrich uranium for nuclear energy or be attacked. Bolton said that US security guarantees for Iran "were not on the table."

There is no evidence that Iran has a nuclear weapons program. Every physicist knows that the enrichment requirement for weapons is many times greater than for nuclear energy and that Iran can barely achieve the latter. Despite the facts, Bolton told the Financial Times: "They've [Iran] got both feet on the accelerator, which is why we have a sense of urgency. Each day that goes by gives Iran more time to continue to perfect its efforts for mass production."[Bolton rejects �grand bargain� with Iran, By Daniel Dombey, June 9 2006]

Bolton is lying through his teeth. Bush Regime lies about Iraqi weapons of mass destruction and propagandistic references to mushroom clouds convinced the befuddled American public to accept an illegal invasion of Iraq. The same collection of neocon war criminals is again deceiving the American public about Iran.

In his remarks to the Financial Times, Bolton shows himself to be extremely disturbed by the prospect that the diplomatic efforts of Europe, Russia, and China could undermine the Bush Regime's plan to attack Iran. Bolton is doing everything possible to make certain that there is no diplomatic solution.

To help undermine any prospect for peace in the Middle East, Israeli gunboats shelled a public beach and killed or wounded 50 Palestinians. This was done in order to provoke Hamas into abandoning the long-established cease-fire that Hamas had imposed in the interest of negotiating a Palestinian settlement.

The Israeli government succeeded, and now there will a resurgence of "Hamas terrorism" that Bolton and his neocon compatriots can use to build a frightening spectacle of Muslim terrorism.

The Bush/Olmert axis-of-evil have made it clear that "we don't want no stinking peace."

Writing in Antiwar.com (June 10), University of California Professor Jorge Hirsch explains the tripwire that the Bush Regime has laid for Iran in order to have an excuse to launch an attack on that country. Just as the Bush Regime planned to attack Iraq and then orchestrated a case based on lies, the Bush Regime has already planned to attack Iran. Only this time nuclear weapons will be used.

Nuking Iran is an essential part of the attack plan. The US lacks the necessary conventional military force to invade and occupy Iran, but the use of nuclear weapons against Iran has a wider purpose. The neocons are determined not to have any more embarrassments, such as the Iraqi insurgency. By nuking Iran they intend to send a wider message that the US will use every means at its disposal to ensure its hegemony. The neocons believe that the use of nukes will convince Arabs and the wider world that there is no recourse to accepting America's will.

The neoconservatives could not care less about public opinion. Neocons are contemptuous of the American people. Leo Strauss taught neocons that it was their duty to deceive the clueless American people in order to implement their agenda of global domination. The neocons believe that they have a perfect right, even the obligation, to manipulate the public through propaganda and black ops in order to create acceptance and support for their wars of aggression.

Neocons are the epitome of evil, and they have succumbed to hubris. Like Hitler when he attacked the Soviet Union, neocons believe that their manipulative skills and use of military power will carry the day for their agenda. Hitler's hubris doomed Germany to destruction. What price will America pay for neocon hubris?

When the neocon Nazis nuke Iran it will revive memories in Japan and break the US-Japanese alliance. Japan owns enough US Treasury bonds to be able to destroy both the US dollar and the market for Washington's endless red ink. Russia, China, India, and even our European lackeys will have it forcefully brought home to them that the US is an out-of-control rogue nation. They will unify against us. Most likely our bought and paid for puppets in the Middle East will fall, and Islamic leaders will gain Pakistan's nuclear weapons. Al Qaeda will gain tens of millions of recruits.

Francis Fukuyama's phrase, "the end of history", takes on new meaning.
----------------------------------------

@coolslug

Also, you can say that George W. Bush and his neocon administration is a good reason to "invest" in gold. Bush is president and his policies will help destroy the value of the dollar and the dollar based system. His policies and the ideology of the Necons are well known so this is not investing for an "emergency" that may or may not happen. Bush is in office now and his policies are in effect now for certain.

http://www.nypost.com/business/ripoff_redux_at_refcofx_business_zachery_kouwe.htmHEADLINE: RIPOFF REDUX AT REFCOFX

June 12, 2006 -- Thousands of individual investors, whose accounts have been frozen since trading giant Refco filed for bankruptcy, are outraged at the latest attempt by creditors of the scandal-tarred company to take their cash.

The 17,000 customers, who have accounts at Refco's foreign currency trading unit, RefcoFX, have been unable to withdraw their money since last October when ex-CEO Phillip Bennett was indicted for stealing $430 million and plunging the company into bankruptcy.

Although their accounts were frozen, Refco allowed the customers to continue trading - with the funds in their frozen accounts...

Refco has now told its customers that any profits or losses they had from trading after the bankruptcy would be netted against the amount in their accounts pre-bankruptcy - meaning any profits they made could go down the tubes.

..."I never imagined in my wildest dreams that they could simply shut me down and keep my money," Gail Butler, who has $50,000 in a frozen account and has been trading since the bankruptcy.

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

Some people will continue to insist that it can't or won't happen to their own paper positions. Time will tell. How much of your life's wealth are you willing to let perpetually ride on a paper pony?

Then here comes the rain, turning the track into mud, and your pony into paste.

Choose gold.

R.

Titan: "Is it *possible* that if we're all still around 20 years from NOW, we could still be talking about how the "end of paper" is just around the corner?"

Titan, Absolutely � I believe that it is possible. But, what might startle some, is that I believe it is most probable. You see, I do not believe there will ever be an end of paper. Paper, as I'm defining it, is government currency issued through a central bank in a way that provides the government functional �money� through inflation of the supply. This is an affective tax source that has been used many times throughout history successfully and unsuccessfully. It is a deceptive tax and harms more those that hold paper then those that hold assets. Overall, paper currencies will be mandated and supported by declaring taxes must be paid in that currency. As long as we maintain civil societies, we will have some type of easy to use paper currency.

What is interesting to me in your posting is that "that it's just a matter of time before it[paper] all comes crashing down and gold is king." I welcome feedback, but have reservations that gold will ever really be �king.� Queen maybe, but Royal Prince in waiting is more like it. The idea that I'm always coming back too is � if a central bank can print an unlimited amount of currency, they could buy all the �free� gold in the world if they really wanted too. It's just a matter of spending more then a few hours shopping. But, if you're reading the forum, you know that a number of central banks are scrambling to acquire a golden reserve. Why? It's all a matter of global confidence in the printable currency. As long as people are willing to use, hold and save currency, there is no need for gold. It just gets locked up in a vault somewhere and everyone pretends that it's super-valuable. Right now, the US Dollar is king and the king is collecting taxes worldwide.

The context of your question though eludes to the fact that if the end of paper happens, gold will take over and it will be much more expensive in order for it to balance the worlds assets like paper does today. The problem is that paper never completely dies, it's just re-dyed and re-circulated. Take all the economies that have hyper-inflated their debts away. Are they using gold as their principle currency? No. They have another form a paper.

No, gold has a role to play that will always be secondary to the printing press. Thus, paper will always be floated as the working solution for a local economy.

The interesting part that gives me hope with regards to a stronger role for gold in the near future is that the current US Dollar system collects taxes from every holder world wide. Every other country in the world wants to collect it's own inflation tax thus US Dollars must be returned to the US � or �burnt� (like what Europe is doing with it's dollar reserve). If the world is successful in preventing inflation taxation exported from the US, there will no longer be a single world reserve currency.

Then what happens? How do you settle deficits without war? This is where gold shines! Gold is an asset and not a product of a printing press. This makes gold nice as a measuring stick by which goods can be counted. Any country will take payment of deficits in gold and any time. Do you think China would turn down an offer from the US to buy down its dept with say, 1,000 tonnes of gold? No. They would welcome it with open arms. It would be (absolutely) the most welcomed payment for the debt. But, gold is TO valuable to trade for debt! The actions are clear on a world scale. Countries choose to hyper-inflate their debt away rather they attempt to use gold. Countries have refused to openly trade gold as a means for payment for many years and it's not because it's not valuable enough, it's because it's to valuable in its role at supporting the printing press.

The real excitement for gold will happen as all countries reject the US dollar as reserve and exercise fully their right to taxation through inflation. Central banks will hold only enough gold to force confidence in their currency. This is way I say over and over again that it is the little guy, over time, that will find the most benefit from gold and, if there are enough little guys, they will force a revaluation.

Meanwhile, as I've said before, things will keep going the way that they are going. Every country in the world is working to keep the US economy going while working their way out from under the taxes. If we hit a breaking point, it will most likely be because the US acted violently on the world scene. Look out for this. Here, we could find a sudden break from accepting US dollars rather then a gradual one. All the while, every printing press in the world will be running at full tilt. 10-20-30% yearly rise in the price of gold is virtually guaranteed for the rest of your life! The internet will spread the word with regards to savings. All savings should be stored in gold. When this philosophy hits critical mass in the western world, gold will find royal status amongst common folk.

@Armageddon,

While I am certainly no fan of NeoCon policies, a closer look at the debt and inflationary growth since 1913 shows a fairly consistent hyperbolic curve, with growth originating in seemingly linear fashion.

All the misinfo about "parabolic" growth is simply omitting the early part of the function in an attempt to fit a shorter-term prognosis.

While previous admins talked a different talk, the overall "inflate to infinity - walk" has been a tempo since the advent of the FED, with nary a blip in the 90 years of its "progress". Even Reagan, with his talk of smaller Federal government, fed the military-industrial corp-gov trough with a vengence.

This is why gold is the "insurance policy" against the latter stages of hyperinflation, when whatever new financial pyramid scheme is mandated in the "transition". Left-over paper is usually discounted heavily (not worth a Continental) , while solid assets "shine" by virtue of popular demand.

Of course the banksters will "prop up" their pyramid schemes as long as humanly possible, as they are busily "skimming the cream" all the meanwhile.

http://www.usagold.com/gold/special/liberty20.htmlJust a final word of congratulations to all those who acted soon enough to secure their part in the latest buyers' group -- the offering of which has completely sold through.

Now obviously, $20 Liberty coins do indeed remain obtainable at market in this standard investment item -- for which Centennial's brokers will continue to offer competitive pricing. The only change is that the depth of the buyers' group pricing discount for these coins has now been exhausted along with our original allotment.

Call for other opportunities, and stay tuned to USAGOLD.

R.

Randy,

I already choose coins over bars, so can't argue with the point of the article you referred us to. But should there be concern in the future, when gold has doubled or tripled, about counterfeiters making gold-plated Eagles that are hard to distinguish from the real thing?

Maybe it's not really possible, but if gold does reach $1650 an oz., or $3000, I'm sure there will be those trying to copy the coins we're buying now. Heck, there are counterfeiters of mere $100 bills (and probably less).

As you gain more hands-on experience with the various gold coins, your concerns will probably subside. It will be particularly difficult for a counterfeit to get the various parameters all right at the same time.

Not only would the have to match the coin's specific gravity (think density -- it's distinct weight at the right size) which is not easily done by using the cheaper and lighter base metals, they would also have to ensure that their unusually heavy metallic alloy also suceeded in emitting gold's distinctive bright chime upon receiving a gentle tap to its edge.

But if it comes to it, I'm sure there will be a booming industry among those who are able to authenticate and encapsulate the items along with a serial number entered into a secure database.

R.

@ flatliner

Thanks for your reply to my question. I'm learning so much from this forum, and appreciate the well thought-out replies one inevitably gets when a question is posted here!

Think I'll buy me s'more Au & Ag tomorrow while prices are still down! :-)

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

June 12 (from MarketWatch) -- Gold futures fell Monday to mark a five-session losing streak and close at a two-month low with U.S. inflation data due this week expected to support the case for the Federal Reserve to continue raising interest rates.

The gold market shows a weak tone as traders "await the publication of a key series of health readings on the state of the U.S. economy," said Kitco's Jon Nadler, an investment products analyst. The likelihood of a "sub-$600 dip this week remains very much in place, and some nerves may be tested before Friday rolls around," he warned.

For now, support for gold will likely be strong around $600, with technical support between $585-$578 "likely to hold, barring any extremely bearish news," James Moore, an analyst at TheBullionDesk, said in a note to clients Monday.

Gold for August delivery closed down $1.50 at $611.30 after falling as low as $605 in electronic trading. Those are its weakest intraday and closing levels since April 13.

Julian Phillips, an analyst at GoldForecaster.com believes that the gold market is "in the process of completing its consolidation process." But "there is still room for another dip to below $600, as buyers stand quietly on the sidelines waiting for the right price," he said.

He points out that "the fall from the peak gold price of late, has been the dominance of the funds as sellers," and "they have lowered their net speculative positions to close to the lows of the past few years, leading us to believe the selling will soon be exhausted."

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

http://www.321gold.com/editorials/gnazzo/gnazzo061206.htmlInteresting read, with references to earlier works by the same author.
Snippets:
By the use of Honest Money - Gold that knows no tarnish, depletion, or change. It remains steadfast - irresolute in the face of all danger: the sovereign of sovereigns that knows not defeat.

The US Dollar bill is nothing more than a tax coupon voucher - a debt instrument that forces the victim to use a monetary system that chains him to a life of perpetual debt servitude.

Present day Federal Reserve Notes are paper fiat debt-money. They are essentially the same as credit and hence debt. Since the founding of the Fed in 1913, our currency has lost 95% of its purchasing power.

http://www.mcelwee.net/html/densities_of_various_materials.html@ Titan,

Deal with reputable dealers, and ripoffs should be a non-issue, as they know a good coin when they see and feel it, and most will guarantee their product.

Gold is denser than most every other metal, so a plated coin will be substantially lighter than pure gold. Only Tungsten, Uranium, Plutonium, Platinum, and Iridium are similar densities.

Were someone to make "counterfeit" coins of pure gold, only the minting is counterfeit, the gold is still real, so the loss is minimal.

If I wanted to hear the garbage you put in your posts I would go there. The worst is you believe it. Give us a break no more lunitic aricles from the LEFTout. White Hills

Navel jelly, muriatic acid and diluted phosphoric acid are all good for removing rust. Caution: These preparations are extremely strong. Make sure your timing is right. Don't leave these preparations on any longer then is necessary.

Get rid of rust in hard to reach corners with a gasket scraper (found in the auto department).
An electric hand grinder with a conical stone removes dime-size rust spots without damaging the surrounding paint. Use it carefully to avoid penetrating the metal.


To prevent rust in weep holes, probe them with a small screwdriver or a wire coat hanger to unclog them.

Best Wishes

Nikkei down 2.3%, All Ords down almost 2%, Hang Seng down about 1.4%...Mr Market continues his black funk...

:-(

Thanks, Goldilox. I thought there would be a good explanation! I don't know the chemistry that well, but I've felt a gold coin or two and guess those who deal in them all the time would know right off the bat if something supposed to be pure (or 90%) gold ISN'T.

(So I wonder which articles here are considered by White Hills to be lunatic/left. I've concluded that things here aren't so much left or right, as maybe just generally libertarian.)

Sorry, I was refering to one of Armagedden posts Msg#145222. White Hills

Is there not a "Terror Premium" on oil because of increased terrorism in Iraq that helps to support the gold price in part because of Bush's policies?

In looking at the article by Dr Paul Craig Roberts that you were referring to I guess the term "Evil" in referring to the Neocons is based on opinion and subjective. However, I believe his basic analysis is correct. Regardless of what true intentions "Good, Evil, or in between" Bush has for war with Iran I think there is a good chance this war with happen.
Roberts is not a liberal or left leaning at all. His past articles on economics have been accurate and have pointed out economic trends ahead of mainstream news magazines.

Also, it is an interesting thing that most conservative talk shows that generally support Bush have major advertisers that sell GOLD.

@ White Hills,

Of course, we who have studied history beyond the current admin know that the main thing wrong with A's post is that the NeoCons aren't smart enough to take the blame for this stuff. They're just continuing the "inflate to infinity, and charge it to the WAR credit card" mantra handed to them by a few generations of predecessors and bankster controllers, because they really don't have the power to "fix" it.

Why else would Greenspan have to completely abdicate his earlier libertarian thinking to join the bankster club?

Why would Eisenhower wait until his term was over before warning about the military-industrial complex?

Could it be that it's just not kosher to criticize the arms/drugs/intelligence ATM machine when one is slopping at the trough? That's the same "allegiance" that cripples CONgress and the admin today.

When over half our GDP is devoted to destruction, then destruction is what we'll get. The Bible says it very simply: "What ye sow, ye shall reap."

Gold is the insurance that best prepares one for "radical changes", no matter what flavors they present, and "change" is definitely in the wind.

I understand that the debasement of the dollar started long before the Necons and the Bush administration. My point was that the foreign policy agenda of an unrestricted "War on Terror" Bush style was a major contributor to America's financial problems.

@ A,

Major contributor, or public mask?

The problems of debt growth are systemic, so profligate spending is inevitable, be it on war, social programs, or bon-bons. ANd so are the resultant "bubbles".

From an alternate perspective, it is also the glue that holds the pyramid scheme together. As long as the sheeple buy the Cowboys' "Guns and butter" story, unlimited spending will continue unabated. But actually, serious fiscal analyses have shown evidence that it is so far beyond any semblance of "control", that removing the latest borrowing excuse would do no more than open the curtain that hides the "Wizards".

If you download and watch the "Money Masters" video posted in the archives on Feb 17th, the pattern is well defined. The MM cannot let us stop warring until they have attained their NWO, and absolute power, or their debt game collapses. Unfortunately, while I agree with the MM video's definition of the problem, I am not as convinced by the solutions they offer.

One thing for sure - never questioning authority because it is "unpatriotic" to do so, is a sure fire way to lose a free society to pure statism, as was so vividly demonstrated in the 1930s. Power corrupts, and absolute power corrupts absolutely!

Coo-eee Cobber from downunder!
Was that good or what?
First Goal EVER in World Cup ...first WIN ever in WC.
10 odd thousand screaming Ozzie fans in K-Town, not one arrest!
The A-Team (Australia) now take on the B-Team (Brazil) in Munich.
Funny really, I'd say 95% of those Aussie supporters at the match had never attended a Soccer Game before in their lives. Soccer isn't really a mainstream sport here.

Go 'Roos!!

You picked a nice place for a posting I'd say Calidor, Good luck to you mate ;-)

Actually live in Kaiserslautern Mate.

The fans from Oz celebrated in fine fashion .... loud and proud. Even if the Aussie calling is swimming and surfing, the Socceroos posted a great win and celebration. I am now a Roos fan!

All the best to the Land Down Under.

http://www.page88.co.za/cr/emergingmkt.shtmlKnock-on effect with the metals ... The combined Emerging Market Equity Funds tracked by EPFR had outflows of $1.48 billion in the week ending June 7. However, nearly a third of these outflows were due to redemptions from a single fund that offers only quarterly redemptions. The outflows bring total outflows in the past three weeks to $8.36 billion. It is the most outflows from EM equity funds in any three week period in absolute US dollar terms since EPFR began tracking fund flows in 1995. But as a percentage of total assets the outflows are still not as strong as the investor redemptions in May 2004...

http://www.futuresource.com/charts/micro.jsp?s=GC1%21&s=DX1%21&s=TYXY&s=CL1%21&s=&s=&s=&s=&p=D&v=15&b=LINE&d=LOWI'm annoyed with myself for not factoring it in before but we can easily see the culprit impacting PoG here. Why of course it's Bonds!
How did we miss it? We credited the market with less nouce than it actually has in that it is discounting PaperGold relative to Paper Bonds as a liquid mid-term hold.
Can we still expect a reversal in PoG whilst Bonds drive inexorably higher under the weight of a tanking SM?

YOU BETTER BELIEVE IT!

Welcome aboard the Roo Train Calidor!

MTM your Gold to the paperGoldmarket is obviously not a good idea :-)

http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-06-12T155620Z_01_BAN257352_RTRIDST_0_OZABS-MARKETS-GOLD-LBMA-20060612.XMLsnip:

LONDON (Reuters) - Gold and silver bars with physical defects or poor markings may not be accepted as good delivery metals under the London Bullion Market Association rules, the industry body said.

The association maintains lists of refiners who meet its requirements for assaying standards and bar quality and whose bars are acceptable in the London market as Good Delivery. The list facilitates global distribution and acceptability of gold and silver on technical grounds.

"The LBMA has noted that in the past year, an increasing number of gold and silver bars have been reappearing in the market after having been held for many years in vaults," the statement said.

In particular, bars which are not stamped with the original refiner's assay mark and fineness will no longer be acceptable as 'good delivery'.

The receiving vault manager might refuse to accept the bars and would discuss with the customer whether they should be returned or upgraded, the association said.

"In some cases, members of the LBMA may be able to assist in the disposal of such bars by finding industrial consumers for whom the above mentioned defects are relatively unimportant."

If the bars were produced by LBMA's good delivery list of refiners, the association would expect them to upgrade bars to make them acceptable as per the rules.

If needed, the association might set up a panel of inspectors to give an opinion on batches of bars whose acceptability was in doubt, the statement said.

Was there something you didn't like about the version posted yesterday afternoon?

R.

http://www.usagold.com/analysis/doldrums.html

First of all I would like to restate for White Hills that while I agree with Dr. Paul Craig Roberts that a war with Iran is likely maybe even a nuclear war the term "Evil" used to describe the Neocons is subjective and depends on your opinion ,that I recognize.

Golilox brings up another good point saying that there are also forces working behind the scenes to shape world events which I believe is true. I will try to download the Money Masters video sometime in the future. I assume it covers the Federal Reserve?

Howwever, Bush is still the president of the United States and is constitutionally responsible for his actions. Legally, he is the chief executive and his foreign policies in Iraq, and Iran I believe will hasten any economic crisis America will have.

I recently read in an article from Peter Granditch that said gold may trade as low as $575-600 before heading back up. I guess we are about to test his prediction. :)

Judging by those summer doldrum charts,POG should rise more than the average 12% as this would bring us only to 644$ (assuming 575 is a bottom).But except in 2001,POG always made a new high after the summer slump.TC might have been right with his post recently on the "compressed replay" and that the next 3 years will be the most "interesting".

Though one might think the paperGoldmarket is choking heavily now,respectively that the current agreement to have a smooth and clean chart without disruptions is coming to an end.Not sure a new is high is in the (paper)carts,altough we've heard the 1000$/oz number becoming less lunatic.Randy,whats your take?

http://www.usagold.com/webads/gold-coins.jpgThis just in...

Congressional politicians say they no longer care about reelection,

say they are willing to sacrifice their careers to take unpopular economy-crushing measure and raise tax rates to 87%,

say they will honor our indebted obligations to pensioners and foreigners come hell or high water,

say the future dollars to be received by bond holders will be "strong enough to buy whatever they want in America",

but also say they advise against actually buying anything with those strong dollars, saying that the greenback itself will make them richer beyond their wildest dreams,

say they instead encourage dollars to be reinvested in U.S bonds to earn even more via interest, touting a virtuous cycle.

The cycle continues.

Or not.


Choose actual WEALTH over DEBT -- choose tangibles (gold for liquidity) over paper IOUs.

R.

@A,

While MM covers the FED, it is more pointedly focused on the larger international banking interests that are always "forgiven" for sponsoring and profiting from both sides of every conflict, and seem to be immune to any "Trading with Enemy" acts. It goes back to the French and American revolutions.

Set aside about three hours to digest it, as it comes in two 90 minute WinMedia videos.

For the links, go to Feb 17th, Forum archive msg#: 141736

I have but one thing to say:

KACHING! Clink Clink! Back up the wagon. (BEEP! BEEP! BEEP!) KLAXXON! BUy BUy Buy@#!

http://www.gold.org/value/stats/statistics/images/monthly_dollar.gifTesting the horizontal neckline at 500, after decisively breaking it, would not be unusual. Co-incidentally, the 50% retracement area from 2001 lows to recent highs is about at 490. This is not a trading advice, but random thoughts while sitting on my position. The rapidity of this move is a warning shot against trading. Price can move upwards/downwards with such a velocity that exposed skins may be burned.

For some reason they have removed the limits.Maybe we are closer than we thought...

http://www.mosnews.com/money/2006/06/13/newworldorder.shtmlCreated: 13.06.2006 15:25 MSK (GMT +3), Updated: 15:25 MSK, 7 hours 4 minutes ago

MosNews

Russian Deputy Prime Minister Dmitry Medvedev, who is often viewed as one of President Putin's possible successors, said on Tuesday, June 13, that the modern world needs a new stable financial system, in which there will be no dominating currencies. Medvedev was speaking at the 10th Economic forum in St. Petersburg.

At present, dramatic fluctuations of the exchange rates of world currencies put in jeopardy not only the economies of individual countries, but also the world order in general, Medvedev said. In his opinion, the situation cannot remain like that forever. New leaders of world development with their new, stable currencies are coming to the limelight, which will inevitably bring about changes in the financial system too, Medvedev continued. "This is for the coming generations to decide whether or not a new international currency will be created," he said, quoted by the Itar-Tass agency.

The Russian official did not rule out a possibility of the Russian ruble becoming such currency. "Along with the growth of the demand for rubles, our currency could be one of the reserve currencies," Medvedev said.
---------------------------------------------------------------------------------------------------------------------
Townie, any thoughts ???

Gold--100 oz pit only (comex) aug.2006

Beginning May, volume
moved up to over 1,000,000
of above 100 oz aug.2006

Towards the end of May,
passed the peak of 730/oz.,
volume jumped to a high of
8,000,000/a day. At that
point the oz. was at $670.-
670 x 100 = 67,000
67,000 x 8,000,000 =
536 billion dollars.
Am I missing something?

Since then, daily volume
meanders between 4-6 mil.
and down we go. Who could
possibly counter-trend it?

Why would they be afraid of
gold and silver etf's?
Creating billions is a
matter of sticking just one
middle finger into one
computer keyboard and then
pressing: enter. :-) OvS

Druid: Given the down day in the equity markets in Europe and Japan, our markets are holding up rather well, comparatively speaking. It must be a flight to quality perception that the PPT is working on.

http://www.futuresource.com/charts/charts.jsp?s=GCQ06&o=&a=D&z=610x300&d=medium&b=bar&st=Hmm let's see, about $40/oz x 100 oz/contract. OUCH! Stick to the real stuff.

Sir Armageddon, It is not that I totally disagree with Dr. Paul Craig Robert on some of his points. It is the way he frames his statements that I disagree with. So much for that. I do however agree with your statement in Msg#145203 6/11/06 " America has nothing to sell the rest of the world to support the value of the dollar". When I read your post it reminded me of a quote made on this forum years ago." Industry is always destroyed at the point of wealth creation" The author of that statement slips my mind and so I thought I would try a Yahoo search. I believe the quote itself is an economic axiom. Surprise! USA GOLD was the only hit that I received. I went to the page in the Archives and found it Msg# 114123 dtd 12/25/03.Surprise!I I found that I had written the post and that I was quoting MYSELF! This was all in an effort to emphasize your statement The orginal author described a economic cycle that in the end would go back to its starting point after the wealth creation stopped Maybe some of the old timers on this forum will remember the author. I have looked before and couldn't find the msg he posted. White Hills

Is today *really* a down day for gold?

For $10,609.37 you could have bought the DOW on May 13, 2000. Today you would have $10.706.37 of inflation-riddled dollars for your trouble.

On the other hand, $10,609.37 of gold purchased on May 13, 2000 would have a dollar value of about $21,660 today.

Choose gold. Hold gold. Don't worry. Be happy.

-Survivor

Thanks for your recent series of good posts over the past week. Hiking up the Trail has given you a good view and a clear head to take it all in.

You've made an assute observation that marking ones tangible gold assets to the market price of PAPERgold is not a good idea. During the reign under which wild and woolly derivatives factor prominently in setting the price for the metal, the physical asset will not appear to demonstrate the steady performance that is expected of it day in and day out -- instead, as reflected in its pricing behavior, it will have the same wreckless characteristics of its leveraged derivatives along with the panicky moodswings of the paper pushers. Reserve asset holdings in the form of physical gold (instead of derivative alternatives) would therefore only prove itself uniquely meritorious at such fateful time as the credit and derivative markets collapsed into default.

Valued arbitrarily at just $42/oz, it is apparent that the U.S. Fed/Treasury system holds its 8,000 tonnes expressly as an ultimate mitigation against a final calamity in paper. In the meanwhile, the U.S. rides high around the world on the prevailing illusion that dollars, appearing more stable than derivatives, may be reasonably held by everyone else as an alternative to gold, thereby giving Uncle Sam an unduly large audience to support his ongoing debts via the bond market.

ANOTHER system, of the type on which the ECB-euro system was modelled, recognizes that gold need not sit for its whole tenure underutilized until that final fateful paper/derivatives crisis calls it into action. By not simply using the frozen U.S. price, and instead regularly acknowledging the evolving market price of gold through time, they have established a framework by which the gold among their reserve assets can do some of the heavy financial pulling simply by nature of its steady capital appreciation as expressed in terms of the domestic politically-inflated currency.

We currently exist, however, in a world in which the banks of the mark-to-market model have yet to decisively dethrone or discredit the derivatives-based pricing of their key (politically neutral(!!), confer Russian desire) asset as a means to fully implement the stability benefits of their reserve architecture and the accounting thereof.

Getting back around to answering Knallgold's question, as an outsider it is not for me to say how close the MTM system now has brought itself to the very brink of where cooperation (with the U.S.-dominated system) ends, being the point where the axe shall fall to bridge the gap for progressive movement forward. As we've severally discussed this with FOA, the rational expectation is for the derivatives market to perhaps initially enjoy a burst of naive exuberance to the upside, but then likely fail in a collapse to the downside as players realize that their paper could only ever be merely exposed as being a faulty means to an unobtainable end. The tangible wealth of physical gold was always the stealthy accumulation of the big players who dictate the terms of the game that everyone else eventually plays, several steps behind.

To be sure, the biggest players use (often SIMULTANEOUSLY) the PAPER markets for shorting (no fear, paper NEVER goes "to the moon") while exercising their longs in the PHYSICAL market to take command of the full benefits of actual ownership, and let the devil take the hindmost.

Could the market in gold derivatives see new highs in the cards? Sure -- there's a lot of naive money just waiting in line for its turn to be sheared, the price to be paid for a lack of insight or wisdom while attending the School of Hard Knocks. The definitive answer, however, I believe comes back to the point about where we have now arrived on the financial landscape with respect to international cooperation. If we are at the brink, gold derivatives will continue an officially preordained meltdown even as unfulfilled buyers chase their bids ever higher for metal on a physical market suddenly bereft of supply.

So, are we still in a cooperative environment? If we are, then us little folks will still have time to seek delivery of metal at derivative prices, an our smalltime success may encourage our neighbors to try to make up for lost time in another ill-advised chase for the derivatives. If cooperation has run its full course, the MTM architecture will be unveiled of its full potential as gold is suddenly revalued according to its physical stature, peerless among its papery reserve bedfellows. We would have to make do with what little metal we already have.

If a person woke up tomorrow morning to a news report announcing COMEX August gold futures down to $200, what would he think?

If he woke up the next morning and the contract was trading at only $30, THEN what would he think?

Throwing "good" money toward the purchase of a bad contract has rarely been a prudent means to increase your wealth, as the low price usually reflects the fact that you can't squeeze blood from a turnip -- you can't get gold from an out-of-favor (unsupported) derivative.

Please forgive the many typos.

R.

White Hills, I believe that it was ORO that made the statement; Industry is destroyed at the point of MONEY creation (wording from my memory). I think that this was based on the efforts of (Robert?) Triffin (spelling), Fed chair (?) about 1960. Who did not put the idea in such stark language.

I had made the same search some time ago. Hope it helps
-- Not an old timer, yet.

Funny, that was true of Spain, circa 1510. So much money entering the country there was no need to produce locally. Lots of stuff was imported. Good for industry elsewhere, bad for industry locally.

Anyone know when the new Gold Indian head/Buffalo coin from the United States Mint is to become available for purchase?
I have read somewhere it was supposed to be available in June sometime. Anyone have any updates? Thanks.

TownCrier, well said. There will come a point where those holding physical will not want to part with their gold because the price will be too low!

When I look at my hoard, it still looks as valuable as the first time I set my eyes on it. Like holding a house free and clear, there is confidence knowing that the asset is held and in a safe place where it's beauty goes beyond the current market price. Like a heavy security blanket, past dollars have purchased a sense of well being that no paper contract could provide. I look forward to lightening the load of those that only associate the paper price to their metal.

Today, GLD posted no change to their hoard.

09 Jun 2006 355.53
12 Jun 2006 355.53
13 Jun 2006 355.53

There may be huge liquidity with contracts with those that trade in short time frames, but those that *believe* they are long by holding GLD have not given up hope yet. When these ants start to exit, the shorts will eat this physical up! At least, if I were a big trader looking to rob the vault, this would be my target. I would liquidate the paper market to drive the price down, buy up GLD shares and then swap them for gold. At least, I would have fun trying.

Question: If you buy a car for its function, is it less valuable to you if you find that minutes after driving off the lot the dealer starts selling them for 5% less? One would suspect that if the price drops low enough, you'd buy a second car - if you had the need.

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

June 13 (from Reuters, MarketWatch) -- Investors' aversion to risk and a desire for liquidity were weighing on many financial markets on Tuesday, analysts said. "We saw risk aversion coming out through the equities markets and spilling over into commodities," said a precious metals trader in London.

Gold futures tumbled more than 7% Tuesday to tally a six-session loss of almost $83 an ounce as crude prices fell to a two-month low and the dollar continued to strengthen on expectations U.S. interest rates are headed higher -- sapping demand for the precious metal. COMEX August gold contracts traded as low as $565.50 before closing at $566.80, down $44.50, or 7.3%, for the session -- intraday and closing levels it hasn't seen since March 23.

Despite the severe losses Tuesday, Peter Grandich, editor of the Grandich Letter, said he believes "the current correction is going to end up [as] the last great buying opportunity in what ... remains the greatest secular bull market in gold's history."

He points out that the risk in gold prices is $25-$50 lower ,while the reward is $200-$500 to the upside.

Overall, "the mindset right now is that gold is not quite through consolidating and so many traders burned by the recent moves in the yellow metal will stand aside and let the bloodletting finish," said Kevin Kerr, editor of Global Resources Trader, a newsletter of MarketWatch, the publisher of this report.

The market needs to experience a "rallying level event" that would persuade short sellers to cover their positions and re-energize the rest of the market, said Kerr. Such an event could be a worsening of relations with Iran, such as a complete breakdown of talks on its nuclear research, or an actual terror attack as retaliation for the death last week of Abu Musab al-Zarqawi, the leader of al-Qaida in Iraq, he said.

But "the ultimate factor is what the Fed does," at its meeting on June 29, he said. "If they do raise rates then much of that will be factored in already. If they don't end up raising rates, things could turn around fast and really throw the market for a loop," he said.

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

" One would suspect that if the price drops low enough, you'd buy a second car - if you had the need."

When it comes to gold, I think it is only the rarest sort of folks who have the strength of character and inner resolve and wisdom to find enjoyment in an unexpected bargain instead of falling into the conventional pattern of the masses who bemoan and agitate over the perceived opportunity cost (knowable only in 20/20 hindsight) of facing an uncertain future and consolidating the tenuous purchasing power of their dollars into a goodly about of wealth any sooner than hindsight reveals was both necessary and opportune.

Apparently the masses do overlookor fail to contemplate the very real problems involved in any attempts to actually implement a "crowded exit" strategy with any wide degree of success.

The phonelines will ring, but there will be no manpower (or gold) available to answer their frantic calls seeking outlet for their imprudently hoarded fistfuls of failing cash.

R.

Let me throw out an analysis of the recent week's gold action that might offer a little solace in what many might see as a bleak last few weeks. Consider if you will how you might have felt about gold if the price wouldn't have stopped in the $725 area. Let's for a moment think of what it might have been like if gold would have blown past the $725 mark and kept on going-- $750. . .$825 and beyond. . .

Would you have trusted a market that acted like that -- a market that never took pause, never consolidated, never provided a buying opportunity? I know I'm addressing a more sophisticated group here, but seriously what would you have thought if this market moved without a good, solid correction?

Most of us who post and read here have been around long enough in the markets to know that that sort of thing is bad for a market. It simply builds a scenario that resolves itself at some point in chaos and destruction -- perhaps never to recover. . .

Think now of what it means to buy gold at $560 in a cycle that has already seen a $725 interim high.

Now you know why I see this market action as a blessing in disguise. Here's an opportunity for the under-invested, the long term accumulator and the bargain shopper to buy with a renewed level of confidence.

The phones started ringing again today -- the referrals coming in. (It's been quiet of late except for last week's $20 gold piece special which took us all by surprise -- firm and clients alike (sold out in less than a week). The talk again is of six figure commitments. The big investor is back.

The summer doldrums don't really bother me. In fact, I've learned to use them to my advantage, i.e., today I bought a nice tranche of pre-1933 Mex 50 pesos for my personal account. What the heck, gold firm owners can utilize the doldrums just like anyone else. . .By the way there's still a few from that group still available for those with an interest.

Nothing has really changed despite the market psychoses of the past few days. . . and if a sudden rash of useless .25% interest rate increases in various economies is enough to cause all this volatility, then so be it. Oil is up six to seven times over the last few years and the central banks answer with .25% increases meant to put a lid on market psychology -- not the inflation rate. . .not really.

For policy to be truly understood by the investor, it must be put into a context. How many of you really believe the various central banks which have raised interest rates did it to contain inflation? If you do, you don't understand the politics of central banking. In reality, they did it to contain inflationary expectations. If they really wanted to contain inflation, they would have done what Volcker did in the early 1980s -- decisively put the interest rate above the inflation rate and provide the fixed income investor with a REAL rate of return.

We don't have that now. As I said, nothing's changed -- except the price of gold has gotten better.

http://www.nymex.com/media/delivery.pdfAs our own form of Chinese Water Torture continues, it pays to keep many thoughts in perspective. One of the most glaring contra-indicators to the current falling market is Comex June Deliveries.
At 3 THREE times the average and over 100Tons, there's NO WAY this Sword of Damocles isn't going to have a positive impact on PoG ...or default in the process.
Of the 100Tons, I simply won't believe that a large percentage of same isn't destined to be re-cobbled, badged and branded as "good-delivery" and squirrelled of to parts unknown.
A setback for the moment but opening the door to 4 digit PoG sooner rather than later imo.

Wow! What a correction. You may say it is not to bad from $725 to $560 for just one coin. BUT, if you have a FEW a substantial amount sticks in your mind like a needle in your eye. Well they had to save the DOLLAR. At the coin shop the word was BUY, BUY, and BUY More. The public is stuck on gas prices. Not a word on the stock market or cost of groceries. Just gas prices.
Expect violent price corrections and upswings. Just part of the game.
You did not come this far to get scared and sell, Did you?
Slingshot---------<>

http://www.freebuck.com/bonds.shtmlThe current curve makes it's June '05 counterpart look almost benign eh?
The log-Jam @ 5% on the 10Yr has finally broken through and the 30 should now squeak through without too much resistance.
Rates up or rates down that is the question?

Clearly we've got a market v management tug-o-war going on ...the market via the 3mo and 1yr are looking for higher Bond prices whilst mgt are keen to pump the Inflation Boogieman a while longer with the 6mo and 2yr.

IMO, Ben will begin his own particular version of Death of a Thousand Cuts before month end.

I wonder if Goldman Sachs got something in return for Paulson, something that helped them close out some more gold shorts? Paulson gets paid close to nothing as Treasury Secretary, comparatively speaking, so maybe he gets his reward later and moves to another country.

It's interesting that so many central banks got together for a coordinated round of rate hikes. Individual puny little quarter point rate hikes are nothing, but if everybody gets together and does it all at once you've got impact, of the psychological kind. Reminds me of saying used by some University and Government Administrators, that "Perception is the reality." This has a kind of temporary truth, until of course reality bites back and changes the perception.

June 22, $875 each. According to Coin World.

MK, You (all) have the most interesting vantage point along the trail. Six figure purchases, to me, still fall into the category of ants. In their case, rather then one coin, one vote, they carry 200 or 300 votes. A thousand would make an ant with conviction, but nothing more then an ant, maybe a tiger ant, amongst the larger colony.

Not only am I intrigued with your posting, but I am once again encouraged. As you well know, gold is a metal of many facets. Not only does one hold gold during a bull market for capital appreciation and not only does one hold gold as defense against the destruction of savings, but one holds gold as a statement of lack of confidence. These �big investors� do not make their decisions lightly. If they see a solid future for stocks, or economic expansion, there is no why they would lock up their capital in a currency that is blatantly managed by paper. When they move into physical gold, it will not be a two month or six month hold. It is a commitment to change and a realization that they will have to start all over again in a few years. They will not be sellers until the economic system is stable enough for business once again.

Please, keep us informed. Personally, I like more ants in the hive. Tiger ants are like solders, their sting will be felt. And, I'm sure, that if they are lining up at your door, they are lining up everywhere! It will not be long before you get a new round of registrations in your forum and a slew of posters asking what MTM and Freegold mean! Ah, it will be fun to welcome them.

Taking the approximate price lows and highs over the last five years, and the recent pullback, in a selection of metals shows:

Copper: Peak 6.3 times its low, pullback 24%
Nickel: Peak 4.7 times its low, pullback 16%
Zinc: Peak 5.7 times its low, pullback 21%
Silver: Peak 3.5 times its low, pullback 34%
Gold: Peak 2.7 times its low, pullback 25%

Qualitatively, these trends are very similar.

Quantitatively, gold and silver have appreciated more slowly than base metals and silver's pullback, in particular, has been more brutal than the others.


FWIW

:-)

The Silver showing better performance than Gold arguments collapsed here clearly.If they even have been.When Silver was at~5-6$/oz. 7 years ago,I paid 300sFr. per kilo bar.A bad price,a bad bank and including VAT but a reality.It went to maybe 600/kg,now back to 380sFr.,hardly a plus if said bank again would charge VAT.

A local coin dealer told me that he didn't even change pricing of the Silver Pandas etc in the recent runup,only on the Bullion coins.

Silver is just not so a great investment for the normal guy like me.I only hold it for aesthetic reasons.

Regarding the gold Indian Head coin

Anyone out there think this proof version is a good investment?
I think I read somewhere that this Indian head/ Buffalo design is very popular and a silver commemorative coin from the U.S. mint sold out quickly previously. However, I think this coin will be available in non-proof cheaper format also.


From CoinWOrld
-----------------
Proof version to cost $875; top mintage of 300,000

Proof versions of the long-awaited 2006-W American Buffalo .9999 fine gold $50 coins, with a limited mintage of 300,000 coins, were scheduled to go on sale by the United States Mint on June 22 at a price of $875.

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

So this horse walks into a bar, sits down and doesn't say a word.

The 'keep comes over, "Why the long face?"

.
.
.
.
.
.
.
.
.
Looks likes we may have found a bit of support just over $540......thank goodness. Was getting a little knarly there.

Hope the bleeding has stopped. Back over $600 soon I bet.

Heard folks talking on another forum that G8, getting set to meet mid-July in Saint Petersburg, may be huffing and puffing pre-meeting. Might be time to blow the house of cards down post-meeting?

Have a golden day.

I remember Volcker saying,
if there was one thing that
could have been managed
differently (late 1970's and
early 1980's) it was the
price of gold. It should have
been contained.
Are they now showing us that
this time around they won't
tolerate another price explo-
tion?

In these turbulent times why
would I invest in gold and
silver?
Markets are manipulated, more
then ever, but I believe that
gold and silver will decline
the least in real worth com-
paired with any other category.
The trick, as always is to find
a job or trade or idea and get
more than you need and invest
in something you don't have to
sit up all night and worry
about it.
Go create and build and use all
your energy doing so.
God bless America, where more
than anywhere else in this world
it is easier to do this. In
most countries not only are all
markets controlled, but all
opportunities are controlled as
well. Amen. OvS

http://money.cnn.com/2006/06/12/magazines/fortune/china_fortune/index.htmChina goes from red to gray
An aging population, an underfunded pension system, and half-a-billion workers who aren't covered could be a drag on economic growth.

By Robert C. Pozen, FORTUNE
June 13, 2006: 7:32 AM EDT
(FORTUNE Magazine) - If you thought the U.S. had a looming pension crisis, consider the situation in China, where the population is growing older at an even faster pace and more than half-a-billion rural and urban workers don't participate in state-run social security schemes.

Because China generally limits each family to one child, the percentage of its population that is working will peak by 2010 and the ratio of workers to retirees will decline dramatically, from six to one in 2000 to two to one in 2040. But China has not had time to build up enough assets in public or private plans to finance retirement benefits. And it is saddled with unfunded pensions from the pre-reform era, when industrial workers enjoyed a cradle-to-grave security system.
...
In short, China must grow rich before it grows too old. While the Chinese government has introduced some programs to meet this challenge, it is not yet clear whether they will provide adequate retirement benefits to most Chinese workers.

Flatliner � All around the world, cheap social programs established many years ago are now getting out of balance. There are only two options in a case like this 1) the government prints money to fulfill the obligations or 2) the back out of the obligations effectively lowering the standard of living for all. The first option causes a devaluation of the currency, the second option causes a slow down in the economy. The question for all of us that live outside China, will the Chinese people place their trust in their government or in themselves (and store their savings in gold)?

http://www.mosnews.com/money/2006/06/13/newworldorder.shtmlRussian Official Urges New World Financial System Without Dominating Currencies
Created: 13.06.2006 15:25 MSK (GMT +3), Updated: 15:25 MSK
MosNews
Russian Deputy Prime Minister Dmitry Medvedev, who is often viewed as one of President Putin's possible successors, said on Tuesday, June 13, that the modern world needs a new stable financial system, in which there will be no dominating currencies. Medvedev was speaking at the 10th Economic forum in St. Petersburg.

At present, dramatic fluctuations of the exchange rates of world currencies put in jeopardy not only the economies of individual countries, but also the world order in general, Medvedev said. In his opinion, the situation cannot remain like that forever. New leaders of world development with their new, stable currencies are coming to the limelight, which will inevitably bring about changes in the financial system too, Medvedev continued. "This is for the coming generations to decide whether or not a new international currency will be created," he said, quoted by the Itar-Tass agency.

The Russian official did not rule out a possibility of the Russian ruble becoming such currency. "Along with the growth of the demand for rubles, our currency could be one of the reserve currencies," Medvedev said.

Flatliner � Ah yes. This is just we need. I wonder what they are hinting at with regards to stability? The printing press? Or something else? We all know which currency Russia is diversifying into right now and its supply is not influenced by the printing press.

http://www.mosnews.com/money/2006/06/14/kudrinpetrodollars.shtmlSNIP :
We are increasing state expenditures by using petrodollars," Kudrin said, quoted by RIA Novosti "Increasing state expenditures with petrodollars means increasing inflation and strengthening the ruble. These are two things that we should not allow."
----------------------------------------------------------------------------------------------------------------------
Flatliner, any thoughts ?

http://www.usagold.com/analysis/dow-jones-summer.htmlJim Hawe of Dow Jones Newswires picked up on our summer doldrum study and subsequently interviewed our founder, Michael Kosares, for a Tokyo release of a nice article for Dow Jones International.

Here is a copy of the article, which you'll also find appended to the bottom of our 'doldrum' commentary.

R.
==========================================

INTERVIEW: Summer Doldrums Offer Best Chance To Buy Gold
By Jim Hawe
Of DOW JONES NEWSWIRES
Dow Jones International News
(c) 2006 Dow Jones & Company, Inc.
June 14, 2006

TOKYO (Dow Jones)--Along with surfboard wax and sunscreen, you just might want to add a few Krugerrands to your early summer shopping list as June and July will present the best opportunity to buy gold for the rest of this year, according to one industry insider.

"We usually get a price decline or at least a stabilization in the gold price beginning with a 'June swoon' that allows the investor to purchase below the average for that particular year," said Michael Kosares, president and CEO of Denver-based precious metals firm Centennial Precious Metals.

"Summertime has proven to be the best time to buy gold."

During a typical year, gold trading volumes fall considerably in June and July in what market watchers dub the "summer doldrums".

"People simply go on vacation both mentally and physically. That applies both to investors and professional investment advisors," said Kosares, who authored the book "The ABCs of Gold Investing".

The investment business in general tends to fall into a lull during the summer months and gold is no exception. These doldrums run from June until the middle of August when the jewelry industry begins gearing up for demand linked to various year-end festivals and celebrations around the world.

Usually around mid-August investors also start thinking about shaping up their portfolios, which contributes to a late summer lift in investment interest.

"It's like someone throws a switch and everything returns to normal," said Kosares, who has been spotting gold market trends for more than 30 years.

Looking at price movements since 2001, the first year of the current gold bull market, Kosares noticed that any purchase of gold made during the months of June and July resulted in a profit come Christmas time.

"Purchases made during the summer doldrums were up by an average of 12% by the year-end holidays, according to our study," he said.

And these gains have generally gotten bigger each year. According to Kosares' study, the price of gold at the end of 2001 was up 2.8% from the summer doldrums period, but this increased to 9.5% in 2002, 17.7% in 2003, 10.2% in 2004 and a whopping 20% in 2005.

"Over the last four years, you could have picked up the phone at any time between bouts of chasing the wily trout or that little white ball and purchased a winning gold position," he said.

Autumn Bounce Could Put Gold Back Over $700

So what kind of autumn gold bounce can be expected this year? Kosares said if the current gold correction bottoms in the $600/oz area, the yellow metal could end the year around $675 based on the average 12% gain over the summer doldrums period seen over the past five years.

However, if the 20% gain seen in 2005 can be repeated in 2006, gold price could be around $720 come New Years. Gold was trading at $606.85/oz Monday morning in Asia.

But Kosares is even more optimistic and thinks there is a good chance gold will top its 26 year-high of $725 hit in early May and make a run at $760, if not higher, by year's end.

"This summer could potentially be the best buy opportunity since the current bull market began," he said.

That could mean investors who sock away some gold now may have more to show for their summer of 2006 than just a nice tan.


-By Jim Hawe, Dow Jones Newswires; 813-5255-2950
==========================================

And I will try to keep them short. Russia, as best as I can read it, is playing the Euro system off the dollar system to its advantage in both cases. On one side, they MTM their gold reserves and on the other, they are on a path to create international demand for their currency. If confidence is lost in the dollar, a currency that has been a safe haven for Russian citizens, it is in the best interest for the Russian economy to establish international support through selling commodities for rubles on a world wide scale. This will give strength to their currency. But, at the same time, if the demand internationally is too strong they will be forced to fire up the printing press to fill the demand. If they do not, demand for the Ruble we create a situation where no one will be able to afford exports from Russia. It's all a great balancing act. They will be forced to print enough to satisfy the oil (commodities) trade in Rubles so as to not strengthen the exchange rate.

Either way you look at it, Russian actions will change the dynamics of the world currency situation. 968, what the guy in the article you point to is missing is that if the Ruble is successfully expanded into the world scene and is fully convertible into oil (energy), the state will enjoy taxation outside it's boarders in the same form as the US � Ruble will(can be used) to by foreign property. What is not said in the article that I posted is that is seems that this guy is saying that Russia stands ready to let the world decide on the next international reserve currency. Keep in mind that Russia owns gold and follows the MTM concept. Thus, Russia is offering two choices. With one, you pay taxes to Russia and Russians that hold foreign currencies will continue to pay foreign taxes. With the other, no one pays taxes.

But, these are just thoughts. I've already deposited my vote.

http://www.bis.org/speeches/sp050218.htmDid you ever read the Sleeper speech ?

http://www.futuresource.com/charts/charts.jsp?s=GC&o=100/DX&a=D&z=610x300&d=LOW&b=LINE&st=
What a sad and sorry state PoG finds itself in at present ...underperforming the other currencies which, in turn are underperforming Big Bad Buck.

Those who watch closely however will be heartened by the chart similarity to the Sept '05 set-up which saw a BEAUTIFUL Grand Crossover of these two lines. (Buck and Gold rising in unison)

Being a stickler for neatness I'd prefer the cross-over take place on the 26th June but hey! I'm not THAT picky!

http://www.miningmx.com/gold_silver/541260.htmA South African gold exploration CEO said yesterday, "If the gold price drops below $550/oz, the bull trend would be reversed."

What do you all think? Does a bull become a bear just like that?

I tend to look at what's going on as an intermediate correction. Just because those who can manipulate the market are doing so doesn't convince me that the overall trend has been reversed.

http://www.platts.com/Metals/News/8486704.xml?sub=Metals&p=Metals/News&?undefined&undefinedHEADLINE: Gold still a safe haven asset despite plunge -- Japanese analyts

Tokyo (Platts)--14Jun2006

Commodity market analysts in Tokyo said the nature of gold as a safe haven asset has not changed despite its sharp fall in prices this week from $600/oz on Monday to $546/oz Wednesday.

Tatsuo Kageyama, analyst at Kanetsu Asset Management, attributed the global weakness in stock prices has urged the shift of investment money from "risky asset" to "safer asset" such as US dollars and government bonds.

Kageyama, however, added that gold remains as a hedge against geopolitical and economic uncertainties.

"The long term market conditions have not changed," he said, adding that when gold prices recover, it will regain its profile as a safe haven asset.

Kaname Gokan, commodity strategist at Okato Shoji, said gold may be hitting the bottom.

"The recent price fall, is not tragic. There has been no major catastrophe. There is only profit-taking," Gokan said.

Gokan noted gold started trading at $520/oz this year. The prices have only returned to the January price levels...

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

Will we see bylines eminating from New York, Chicago or Los Angeles for articles like this and the Kosares interview?

The world turns (is cautiously being led) to gold, and Americans will be the last to know because it comes at the expense (i.e. termination) of U.S. dollar hegemony which is particularly enjoyed by the U.S. government.

R.

http://streettracksgoldshares.com/us/value/gb_value_usa.php#2Titan, You can quote me � if the ants are buying, the bull continues.

GLD shows the ants are buying.

13 Jun 2006 355.53
14 Jun 2006 358.62

MK's comments from yesterday indicate that value can be found in gold today.

Manipulating the market is one thing, but getting the correct affect through these actions is another thing that is not so easy to do. Support for the current system requires gold to trade at production costs. If the price drops below, no gold will be available to fill demand. If the price goes above, it will trigger investment demand that would overwhelm the system.

A question: if you were to bet on a nickel standing on edge, would you place your bet that it would stand upright forever? Or would you place your bet that it will eventually fall? The current economic system is like this nickel standing on edge.

At a limit of 300,000 units and a price of $875 for the proof version I think I will pass on the Proof and maybe get the bullion version of the coin. Although the proof is considered a "collector's" coin by the government thus adding to the confiscation protection element, the price is well above the spot price of gold right now at $560 that the bullion version of this coin will sell at. Also, the mintage limit I believe is too high. The American 2006 gold eagle limit is around 12,000 I think. In my opinion the proof version of the new Indian head gold coin is too much for the amount of gold content, too many are going to be minted, and another bullion version of this coin will sell around spot price and the only thing different is the bullion coin will not have a shiny mirrorlike background. Furthermore, I don't think the proof version will appreciate in value faster than the bullion version.

Am I wrong? Comments are welcome. :)

http://www.safehaven.com/article-5351.htm"Recent signals that a concerted tightening campaign by the big-3 central banks and smaller mid-tier banks is underway have spooked the commodity and stock markets around the globe since May 11th. There is a growing realization that higher interest rates are on the horizon to combat gold and the "Commodity Super Cycle", even at the expense of slower economic growth and sharply lower stock markets."

See link for complete article. One has to wonder, how slow and how low (how Pyrrhic) will it have to get before "victory" is declared. A trillion here and a trillion there and pretty soon we're talking real money.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060614:MTFH30708_2006-06-14_16-09-55_N14210743&type=comktNews&rpc=44NEW YORK, June 14 (Reuters) - Central banks are planning to diversify foreign exchange reserves away from U.S. government debt into higher-yielding assets, including mortgage bonds, through 2007, according to a UBS Securities survey.

Almost all of the 90 central banks polled by the unit of the world's biggest wealth manager now have the authority to spend reserves on bonds other than Treasury debt, the poll found. Just 3 percent said they only invest in Treasuries, down from 31 percent four years ago...

Rising trade surpluses with the United States have filled foreign central bank coffers with dollars. Inverstor concerns that central banks will begin to look outside U.S. borders for investments were reinforced slightly, with 18 percent of the banks planning to cut dollar assets outright, the poll said.

Fourteen percent will increase assets denominated in the U.S. currency, it said.

About $2.7 trillion of the $4.3 trillion in foreign exchange reserves are in dollar assets. The percentage should remain constant this year, the analysts said.

"With the large build-up in reserves over the past decade, far more than is required to meet liquidity needs, central banks have become increasingly focused on maximizing the long-term return, while controlling risk," the analysts said.

Twenty-one percent of the banks said they would boost purchases of the securities backed by monthly payments on U.S. home loans. Sixteen percent said they would buy more agency debt; 14 percent plan to purchase asset-backed securities; 12 percent intend to buy covered bonds, or European debt secured by mortgages; and 8 percent said they want more gold and Treasury inflation-indexed securities.

Corporate bonds and stocks rounded out planned central bank portfolio additions at 5 percent and 4 percent...

In addition to Asia, UBS also said it expects "big reserve accumulation" in the oil-exporting countries...

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

Within that giant haystack, the golden needle is easily overlooked. Almost makes you wonder why they bothered to feature it in the headline.

Omitted from this survey is the percentage of central banks who are not planning on adding more tonnage, but are nevertheless secretly counting on having an increase in the value of their existing holdings. (MTM "free gold") The euro system of banks would immediately factor among those now silent ranks, whereas the central banks in Russia and China (depending on how candidly they responded to the survey) would count among the 8 percent seen here confessing intentions for more tonnage, too.

R.

http://www.safehaven.com/article-5364.htmSitting as we are, almost $170 down from the top it is silly to worry about another 10% drop from here (from 560 to 504). Either you are willing to push the buy button or you are not. And of course it all seems so confusing when you are in the middle of it!

Here's my suggestion, divide that stack of fiat bills in half, ring up the castle or go to the local coin shop (it was really sleepy in there, nobody around), and push the shiny yellow button marked Kaching!

That way you can raid the vault again later with your remaining FRN when those $450 POG prices roll around... which they probably wont... but if we all knew for sure we'd ALL be billionaires... which is absurd of course.

http://www.safehaven.com/article-5362.htmBother! wrong link!

Snippit:
-- If you are panicking about the swoon in gold lately, then I pity you, because I know that you have not achieved True Mogambo Enlightenment (TME), and thus I further I know that you will be, to your dismay, repeating my again course next year. And while I may be seeing your happy little face again next term, we will obviously not be seeing Jim Otis, aka The Optimist, who demonstrates flawless TME when he addresses the "near certainty that inflation and world tensions will continue to get worse, so an opportunity to buy silver and gold at temporarily reduced prices is truly wonderful and positive news."

And the reason that he has the apt moniker "The Optimist" is that he hedges his bet about inflation with the phrase "near certainty" about price inflation, hoping for, I suppose, a chance that a miracle of some kind will occur.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=CF7C37F9-3048-5296-A2E4B87F74921B3AFN Arena News - June 14 2006

"The current correction is going to end up [as] the last great buying opportunity in what�remains the greatest secular bull market in gold's history." --Peter Grandich, Grandich Letter (as reported by TheStreet.com)

...Ironically it is inflation fears driving this metal market correction. But gold is a hedge against inflation, isn't it? Yes, but when quoted in US dollar terms there is a conundrum. If the Fed raises rates to combat inflation then the US dollar rises and, by definition, US dollar[priced] gold falls. Hence it is the Fed, not inflation, driving the metals down, and only through words and not (yet) actions.

"The mindset right now is that gold is not quite through consolidating and so many traders burned by the recent moves in the yellow metal will stand aside and let the blood-letting finish" believes Kevin Kerr, editor of Global Resources Trader (as reported by MarketWatch). What he means is that no one � just no one � has been stepping into the breach to buy gold until the panickers are out.

...suggests Kerr, if the Fed raises rates then that's what everyone expects anyway. But if it doesn't? The turnaround would likely be spectacular.

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

Ok. Fine. That's all well and good in a touchy feely traditional economics and market-observation sort of way, but I'd rather stand on a foundation of actual substance, such as the content (and implications) things such as the Sleeper commentary that 968 so patiently keeps offering forth for eventual assimilation into people's understanding.

R,

http://news.silverseek.com/TedButler/1150143488.phpLarge concentration of short position.

http://www.ameinfo.com/88792.htmlThis article is putting the dollar decline and shift into gold right out front for Arabs in the the Dubia markets.

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

June 14 (from MarketWatch) -- Gold futures closed lower Wednesday -- failing to hold earlier gains despite weakness in the U.S. dollar, to tally a seven-session loss of more than $82 an ounce.

Gold's slight decline Wednesday came even though the dollar fell against the euro and yen. Traders viewed hotter-than-expected core inflation data as not strong enough to extend the dollar's recent rally.

Gold traders are "awaiting a confirmation that gold is able to part ways with commodities and reassert its role as a liquid, capital-preserving, trans-national currency," said Jon Nadler, an investment products analyst at bullion dealers Kitco.

"Until such a de-coupling takes place, or until gold stops being so dangerously close to its 200-day moving average the prudent buyers may stand aside, leaving the floor open to seasoned pros who live for their daily adrenaline rush," he said.

The COMEX August gold contract fell 30 cents to close at $566.50, reversing course late in the session to retreat from an intraday high of $575.50.

"Despite what one may hear and feel, gold's role as the ultimate currency to hold and safe-haven status didn't end on June 13, 2006," said Peter Grandich, editor of the Grandich Letter.

"Every single major fundamental factor that has supported its secular bull market run remains intact."

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

Yes. A couple times now. I'm curious why you pointed me to it. Is there an asset play or risk that is not obvious for central banks? Maybe TownCrier will elaborate? In any case, I stand ready to learn, from you most wise old-timers, the intricacies of the Sleeper article.

The significance of dear Robert's speech is that, unlike the formal treaty-based structural elements that provide the foundation of the euro currency system while remaining sufficiently couched in legislative esoterica (and therefore beyond the reach of the general public), his speech provides an accessible soundbite from a TOP source (he made this speech within one month of his retirement as head of the BIS's Banking Dept) regarding the (best practice) principle of MTM use of gold reserves.

And you're a sharp enough cookie that I'd be wasting my time under the pretense of trying to tell you anything more, as I can tell from your very pointed question that you're already WAY ahead of the game and are simply making a clever play on my generosity... (rather than doing all this typing yourself).

Now, the million dollar question is: Is anybody else reading this, and do they appreciate Robert's retirement gift for those of us "with eyes to see"?

R.

I'm kind of surprised there hasn't been more chat here about members loading up on gold the last couple of days. This should be a most opportune time to buy--if you believe prices are much lower than where they're headed. I'm curious if people here are changing their view of what's to come. (I doubt that's the case because the ideas I've seen discussed here the last month or so indicate to me more deeply-held beliefs than what might come out of a superficial reading of the news and the markets.)

Maybe people are just away and not as active here as before summer hit.

I am still of the opinion that it's a good time to buy, and am doing that on my own. But I'm interested in reading any views that hold things are turning around and previous estimates of where we're going need to be really revised, like 180 degrees. I'm pretty committed to holding for the long term, but it's nice to know what other people believe.

@ Flatliner, TC,

Robert's retirement speech, like Ike's, will go over the head of many, who only want to listen to the "current players". They totally miss the significance of someone who is leaving the game giving them a "hint".

Most times, a lame duck can speak much more freely than someone who still needs to build "policial capital".

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

I am buying. I am on a budget with my PM purchases. I plan as you to hold long term and build a sizeable store of gold in the next 20-30 years. Right now I dollar cost average by spending a certain amount each month on gold. Picked up some Austrailian Kangaroos this morning.

Probably won't buy again for a month.

Its human nature to be excited at the tops, when gold was climbing each day. Its hard to be excited when your gold is measured in fewer dollars.

Yet the most critical part of investing is accumulating gold when the prices are low. Some people need to stick to a fixed purchasing program, buying so much every month so they get in at the lows as well as the highs. Some people are able to time things and buy in just at the right time.

None of the reasons to own gold have changed. The government is still debasing the currency. Inflation is still increasing. The trade deficit is still there, and the dollar is still poised to decline. The government is still running a huge deficit. And consumers are still spending wildly.

Its suprising to me that gold declined as much as it did. Usually gold acts as a hedge against inflation, and market instability. The large decline might have been due to excess speculation by gold holders that were very short time speculators that dropped their positions as soon as a decline started to occur. Others say hedge funds had to sell to cover margin calls due to stock losses. Selling copper due to a slowdown in the economy might make sense, but the gold stocks sold off as well.

This is really an excellent time to buy some larger long term positions. I had been trying to buy in since about $490, and gold never corrected. Now I can get more at a very reasonable price. The market is so oversold that the risk is much lower.

However, I expect that we will not start to see a new bull advance until September, so there is no rush.

I've got a bit of dry powder I'll commit to a burial today in fact.
We can take heart that the old Comex limits didn't enter the equation on this pull-back and can look forward to blowing through old Limit-up moves as the price recovers. At this stage, the Market is now viewing the PDM as suspect and a mindset of Physical/Paper will emerge imo.

On a practical note, as this pull-back took hold, I regretfully came to the conclusion that my lifelong dream of acquiring the Chrysler Building in NY as the Jewel in the Crown of a vast International property portfolio... built on the back of $30,000 Gold, started to unravel. ...curse you FOA! ;-)
So, rather than reverting to self-flagellation to lift my spirits off the Floor, I took a test-drive in a Chrysler 300C...
...and it worked a treat!
My commitment to Bullion today might then have been substantially more had I not been tempted to down-size my Chrysler acquisition. (I might be needing a deposit)

So would this week's price drops likely not have happened as they did pre-removal of the limits?

http://www.financial.de/newsroom/devisen/68549.htmlUnfortenately in German. Maybe Knallgold can provide us a good translation ?

FXdirektBank, 15.06.2006, 13:49 Uhr. Die spanische Zentralbank hat heute best�tigt, im vergangenen Jahr 66 Tonnen Gold verkauft zu haben. Die Verk�ufe standen in Einklang mit der �bereinkunft der europ�ischen Zentralbanken �ber die kontrollierte Aufl�sung von Goldreserven f�r die f�nf Jahre ab September 2004. Die Goldverk�ufe h�tten sich aber nicht in das laufende Jahr hinein erstreckt, hie� es weiter. Der Goldpreis hat sich am Donnerstag von seinem j�ngsten Kursverfall ein wenig erholen k�nnen und legt um 3% gegen�ber dem Vortag zu; gegen 13:45 Uhr CET wird die Feinunze mit 571,70 USD gehandelt. (vz/FXdirekt)
----------------------------------------------------------------------------------------------------------------------
The re-distribution continues...

Quelle: FXdirektBank

I have been contemplating the idea of digging for GOLD in my back yard.
I live in a rich mineral deposit area and gee it would be great to "strike it rich".
The idea came to me when I read about a man in California who dug
a 60 foot trench (hole) in his great quest for gold. To me this continues to point out that everyone wants the shinny metal. Gold has always had the ability to carry a mystique,mystery and tremendous value.

The notion of digging up ones yard to find the stuff provides yet another extreme example. Now, if he only had the data to prove his theory. Even with all the current data that should press gold forward, it still took a dive on what seems to be the trend during a summer season. Please continue with any logical predictions and information. To me is all seems rather "vain".

Buy Buy :-)

Unless you have or apply for mineral rights, any gold found is unlikely to be yours. When we 'own' property, all it generally means is that we have the right to perch a house on it and then pay taxes for the priviledge. When you check the title, you will most likely find that mineral rights, etc, are not included.

In fact, there are horror stories out there about folks who end up with someone else's mining operation on "their" acreage because they found too late the mineral rights belong to (or were granted after the fact to) someone else.

-Survivor

I think Dr. Bernanke's speech today was as good an advertisement for owning gold as one is ever likely to get. He admitted that higher prices, due to energy supply/demand factors, are inescapable. Yet he made it clear he thinks the economy can adjust to the generally higher inflation which is implied. He also explained why the trade deficit threatens the American economy long-run. And he explained why the U.S. economy is unprepared for the kind of transfer spending the baby boom generation will require in the years ahead.

I didn't hear anything in the Chairman's speech to indicate the genuine change in policy which markets have lately been fearing. Nor do I see any possible solution to this convergeance of challenges which does not include ever more money creation as time goes on. This is exactly how we got here in the first place, of course. Greenspan kept printing dollars, always justifying his actions by citing the offset of productivity growth. I guess Bernanke will do the same. Then, when prices rise for basic commodities, as they have in the recent past, we will simply chalk it up to how vibrant the economy is.

Mr. Bernanke's speech today gave gold buyers the all-clear, as far as I'm concerned. Too bad for those who bailed out so recently.

http://us.f527.mail.yahoo.com/ym/ShowFolder?YY=68773∈c=25ℴ=down&sort=date&pos=0&view=a&head=b&box=InboxQuick Cash May Not Be Enough for Hamas

By Amy Teibel
Associated Press
Thursday, June 15, 2006

The Palestinians' Hamas-led government, nearly
bankrupted by international sanctions, has resorted to
bringing in cash in suitcases to help keep itself
afloat. But given the government's crushing debt, a
scolding from European border monitors and Israeli
concerns the money could be used for violence, the
tactic could fizzle out fast.

Twice this week, Palestinian Cabinet ministers
returned to the impoverished Gaza Strip at the border
crossing with Egypt with millions of dollars stuffed
in their luggage.

Information Minister Youssef Rizka said he brought in
$2 million Thursday. Foreign Minister Mahmoud Zahar
trumped him a day earlier, delivering $20 million.
Lower-level officials have delivered about $1 million
in recent weeks.

The money was turned over to the government, most
likely for long-overdue salaries to civil servants,
officials said.

"It's not our fate to surrender and to give up to this
siege," said government spokesman Ghazi Hamad.

For all the bravura, the money barely puts a dent in
the hundreds of millions of dollars Western powers and
Israel have cut off to pressure Hamas to disarm
militants and end its call for Israel's destruction.

The dryup of international funding has rendered the
cash-starved Palestinian government unable, since
February, to pay employees who support one-third of
the Palestinian population.

The Cabinet's cash couriers are providing a
much-needed fix. But with government expenses totaling
$160 million a month, the money can stretch only so
far.

The cash coming in from the crossing could "ease the
situation for a month or two, but it is not the best
way" to run the government, conceded Ahmed Youssef, a
political adviser to Prime Minister Ismail Haniyeh of
Hamas.

Youssef would not say how much money Hamas hoped to
bring in through the passage.

President Mahmoud Abbas, a moderate from the rival
Fatah movement, has asked Hamas to endorse a proposal
that implicitly recognizes Israel. Abbas believes a
common political front would help lift the
international sanctions.

Hamas hasn't buckled under, despite growing hardship
that has provoked sometimes violent protests. Instead,
it has turned to the Muslim world for help.

Rizka returned to Gaza on Thursday from a trip to
Qatar, Saudi Arabia and Egypt. Zahar came back after
visiting Indonesia, Malaysia, Brunei, China, Pakistan,
Iran, Syria and Egypt. In both cases, the money came
from private donations and Islamic charities, Hamas
officials said.

The big bucks, though, would have to come from Arab
governments, which have promised $660 million in aid
this year. If history is any judge, they may not
deliver.

Arab governments have shortchanged the Palestinians on
past pledges, and have offered little help offsetting
the Western and Israeli boycott. They are under U.S.
pressure to turn off the taps to Hamas, and in many
cases, are reluctant to fund a group that is part of a
global Islamic movement they view as a threat.

Hamas says Arab and Muslim states have deposited more
than $60 million into an Arab League account in Egypt.
But international banks have refused to allow the
group to transfer money electronically to Palestinian
territories, fearing sanctions from the U.S., which
labels Hamas a terror group.

Another question is whether Western powers will let
Hamas continue ferrying in money through the Rafah
border crossing.

After Israel withdrew from Gaza last year, the U.S.
brokered a deal giving Palestinians control over
Rafah, under the observation of European Union
monitors. Using the border to circumvent Western
sanctions might not sit well with Washington or
European capitals.

Palestinian lawmaker Saeb Erekat said the monitoring
mission sent a letter warning that bringing money
through Rafah violated the border agreement.

"I hope that this will not be the way to facilitate
the closure of the Rafah terminal," Erekat said.

Julio De La Guardia, a spokesman for the monitors,
confirmed a letter had been sent to the Palestinians
but did not divulge the contents.

A Western diplomat said it was too soon to say whether
the cross-border cash flow violated anti-terrorism
laws. He spoke on condition of anonymity because the
matter is still being debated.

The officials who brought in the money said it would
go to the Palestinian treasury. But as VIPs, ministers
do not have to submit their bags for inspection,
raising the possibility that other funds are being
smuggled in to finance violent activities against
Israel or clashes with Abbas' Fatah group.

"The amount of money being brought in by cash is not
enough to run the PA (Palestinian Authority)
government. But unfortunately, it's enough to keep a
terrorist infrastructure very much alive," said Israel
Foreign Ministry spokesman Mark Reg.

"We have raised our concerns with the relevant
parties," he said, but wouldn't disclose their
reactions.

As a former lurker for several months I would just like to thank all the posters on this forum. I do not kid myself that understand everything, but I do my best. As you can tell from the name I am a simple computer geek at a silver mine. I realize this primarily a gold forum but have a question about silver. I own Ag and Au but notice that some of my silver bars are tarnished. Can I use silver polish on these without harming their resale value.

TIA

Keep up the great posts!!

I think I read somewhere that toning can actually improve the resale value of a silver coin depending on exactly what it looks like and what people are willing to pay for a silver coin toned in a certain way.

Always good to see your posts, and to benefit from your experience. I hope all is well with you.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060615:MTFH60776_2006-06-15_16-48-22_N15368931&type=comktNews&rpc=44NEW YORK, June 15 (Reuters) - Foreign exchange trading volume on State Street's FX Connect platform and Chicago Mercantile Exchange currency futures and options posted record highs recently, both institutions said in statements.

Financial service provider State Street said on Thursday trade on its multi-bank electronic FX Connect trading system exceeded $99 billion in a single day recently. Less than a year ago, in July last year, trading volume was just breaking through $40 billion.

Meanwhile, the Chicago Mercantile Exchange said in a statement earlier this week that foreign exchange futures and options on futures set a new record volume of 896,416 contracts on Tuesday.

This represented more than $102 billion in notional value...

In May, CME foreign exchange average daily volume hit a record 501,000 contracts with notional value of $63.5 billion, up 69 percent from a year ago, CME said.

The records come amid increasingly volatile price movements in foreign exchange markets as investors focus on rising global interest rates and signs of advancing price pressures in the United States.

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

If each new trading day flirted with record volume, we could just assume it to be a natural sign or consequence of ongoing currency creation. But because the forex numbers are so much larger than a mere year ago, we have to conclude that there is a change in the air -- a lot more money is ill-content to remain in its current denomination.

How long before these unsettled billions begin to discover gold?

R.

My experience in the past with antique silver was to polish with Silvo polish or some of the cotton wad type products. No abrasives please, which can be found on some more industrial polishes. Silver over time will attain a patina over centuries of care which can not be duplicated.

As far as silver bars I don't think you would effect the value but coins I think are another story.

To prevent tarnishing avoid handling with bear hands because of acid residue. Keep silver in an air tight environment to avoid exposure to oxygen which is the main culprit of tarnish.

A little trick I used was to wax my silver with a fine furniture polish to prevent oxidation.

Thanks for the response. I have found references saying not to clean coins, as you have stated. I was wondering specifically about 100oz bars. Perhaps our hosts would have some input on the matter.

Thanks again, and have a golden day!

Thank you as well for your input I will look for some!

@AG-Geek

For silver bars I don't think toning adds to its value since most people don't collect silver bars. Although silver bars in general probably cost less per ounce than silver coins such as American Silver Eagles, Eagles have some collector value and also are backed by the U.S. mint for purity and silver content. Silver Bars, depending on the maker and who you try to eventually sell it to may want an assay or chemical test of its purity.

For me, I like Silver Eagles or Chinese Silver Pandas for their collector value, trustworthy silver content, and ease of sale to other parties. I also have some other silver coins from major governments like canada, and australia with the amount of silver printed right on the coin to verify the silver content.

Hello: I haven't posted lately, due to checking coins, prices,and buying what we all congregate hear to write about...Gold.

A month ago, I too was giddy with the run-up to the seven hundreds in the price of gold. Only one thing that I lamented: I probably wouldn't be buying anymore of my favorite coin, the Saint Gaudens $20 dollar gold piece, as prices had soared close to $1000 on many. As the price of gold had moved over $550 only a couple of months before, I had contented myself in buying the older--less expensive--and less popular, Liberty styles.

As with most others here, I hated to see the price of gold move again lower in such a short term violent manner...But, as we see pointed out in other posts here today and in the past few weeks, the fundamentals of the dollar, debt, long-term liabilities, and trends have not been altered. Only the herd has moved on temporarily to graze in other areas.

We can not predict the short term moves in these markets; the pod of whales will control that. We can have confidence however, in the longer term fundamentals that bring us all together here. For me, this sharp and deep correction has afforded the opportunity again, possibly for the final time, to acquire the $20 Saints. Over the past couple of weeks, I have managed to purchase about a dozen more at prices that range from about $630 to $730.
Many have been fairly limited mintage's: 11-d, 11-s, 14-s, 14-d, 15-s, and then the more common 22,23,24,25,26,28.

We see gold moving higher the past couple of days. Will it continue? I don't know. I just urge anyone with fiat dollars available and waiting to buy gold...don't wait too long. 2010 is just around the corner.

http://www.federalreserve.gov/boarddocs/speeches/2006/20060615/default.htmHere are a few words by Fed Boardmember Randall Kroszner about one of your favorite subjects -- the inflation tax one experiences when holding a nation's currency.

"Financial innovations make it easier for citizens to move their assets out of the local currency should their government resort to an inflation tax."

"The specific channels by which financial innovations could have affected competition among currencies are many..."

"Electronic trading and payments technologies enabled investors and banks to shift assets quickly away from currencies prone to inflation and related risks."

"Financial innovations such as credit card networks and money market mutual funds allow households and firms to minimize their holdings of cash and central bank reserves, thus shrinking the base of the inflation tax."

"Increased circulation of banknotes in dollars or other hard currencies enable citizens to conduct transactions without holding inflationary currency. Data published on the Federal Reserve's website show a dramatic increase in the fraction of U.S. Federal Reserve notes that are estimated to be held in foreign countries. The fraction of U.S. Federal Reserve notes held abroad rose from under 20 percent in 1980 to almost 50 percent in the late 1990s."

"Given these innovations, a government that pressures a central bank to pursue an inflationary policy gets much less benefit for each unit increase in inflation because people can more easily switch out of the local currency. In other words, the inflation tax becomes much more difficult and costly to levy because citizens can more easily avoid the tax by using an alternative money."

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

And this final comment especially rings true in terms of ones savings; should they choose the gold alternative, they can avoid the inflation tax of each and every nation... except for the inflation tax that the bullion banking fraternity are still allowed to levy through the creation of paper gold.

Fortunately, however, a group of central bankers have developed a reserve structure by which they, too, are among the ranks becoming keen to avoid falling victim to this sort of taxation upon their reserves (CB "savings") and happily can take measures to rein it in in due course.

R.

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

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

THURSDAY Market Excerpts

June 15 (from DowJonoes) -- Gold and the rest of the New York precious-metals complex took part in a broad rally in the commodities Thursday, in particular aided by stronger crude and equities and a softer dollar, traders and analysts said. COMEX August gold contracts settled up $3.80 to $570.30.

A number of market watchers characterized recent weakness in the metals, followed by Thursday's bounce, to a general move in assets that extended to other commodities and equities.

"It's like a flock of birds," quipped one trader. "They turn left, and then turn right. They're all moving together. It's like somebody pulled a trigger on stocks, currencies and commodities."

Peter Schiff, president of Euro Pacific Capital, suggested the recent decline in gold prices "created one of the best buying opportunities" since bull market began. "First and foremost, the recent decline was not a gold decline, it was not a metals' decline or even a commodities decline," he said.

"It was an across-the-board pullback among asset classes, from commodities, to emerging markets, to the Dow Jones (Industrial Average), regardless of their individual investment merits.

"The commonality was that the drops seemed to be proportionate to prior advances, and that the assets were widely held by leveraged speculators."

Schiff characterized this as a "liquidity event" so that gold's decline had little to do with fundamentals.

"With so many speculators stampeding for the exits at the same time, it is only natural that prices would collapse," said Schiff.

"However, once such selling pressure is exhausted, gold's fundamentals will reassert themselves, likely resulting in a spectacular rise.

"Having been badly burned, speculators will likely stay clear of the market until gold forms another base above $700 per ounce.

"The biggest trade yet to be unwound is the massive long position in the U.S. dollar. The fact that a broad-based pullback has already begun in other asset classes means the dollar could be next.

"Such an event would be extremely bullish for gold, meaning the recent decline in its price could ironically lay the foundation for its biggest advance."

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

http://www.financialsense.com/fsu/editorials/schiff/2006/0615.htmlOnce after the tuesday mess and again on wednesday.

And yes, sir Titan, the forum is quiet during these corrections, (it is an indicator of sorts). And although I have every expectation of new highs in POG by yuletide, given the size of the recent move, we might be "blessed" with a slightly longer consolidation season. And there are far more interesting things to do on a midsummer's eve, (though picking through a stack of double eagles would be nice- or counting stars.)

cuio nin mellon.

http://www.msnbc.msn.com/id/12287957/I did a search for : credit cards merchant fees too high

From one article

City to pass along credit fees
Residents to foot bill for transactions; city to save $500,000
By Lowell Brown / Staff Writer

Denton residents soon will have to pay for the convenience of using credit cards for city services.

Starting as early as Sept. 1, residents who use a credit card to pay their municipal court, city tax or utility bills will have to pay the related "convenience fee." The city currently absorbs credit card transaction fees, but a recent spike in activity has made the cost of doing so too high, officials said.

"We're going to accommodate the citizens as much as possible to allow them to use their credit card," said Diana Ortiz, the city's chief financial officer. "However, it's going to be at a convenience fee cost to them."

...

There are non-disclosure rules I hear regarding most of these fees (that is, the merchant isn't supposed to tell the customer about the fees). But apparently governments may do as they please. Regardless, credit may be liquid, but it is not without cost- a cost spread over all consumers, (even the ones paying in FRN!)

Digging of Gold. My son in California called me with the same story. According to him the man bought a metal detector and was testing it in his front yard. He got a hit and began digging, no gold. Tried again a hit and he dug some more ,no gold. He ended up digging a 3ft dia hole 60 ft deep. At one point he was using day laborers who he would lower into the hole, by ropes tied around their ankles, with a 5 gal bucket. No gold but the County of Riverside will not let him fill it in until he gets the ok from City Enginers.

Where I live in Arizona I go out about once every two or three weeks and dig for gold on claims owned by a prospecting club. If I dig all day it is possible to get two or three grams on a good day. I ALWAYS get gold even on a bad day. It is all around here, the problem is to find where mother nature has concentrated it in amounts big enough to bother with.
As the price of gold goes higher I can see the time when I may be out there a lot more. There are about 31 grams in a Troy ounce ,at POG $700.00 per ounce that is 22.00 per gram. If POG goes as high as I think it is there will be a lot of people out here digging. During the Great Depression this area had a lot of miners out there digging. May happen again. White Hills P.S. anybody that wants to go digging for gold let me know. We always get gold!

I got kinda busy the last two days with a new trade show I am working on, but I noticed tonight that PoG is $40 higher than yesterday's low of $545.

Now what was that about "volatility"?

I noticed a hint of skepticism not long ago when someone suggested that $50-100 swings were in our near future.

How many doubters are left now?

This is shaping up to be quite the "ride"!

http://en.wikipedia.org/wiki/Sterling_silver@Ag-geek et al.,

On just about any question these days, it is often worth a visit to Wikipedia. Here is a link that may be of interest to you regarding many aspects of silver (and sterling silver in particular).

Cheers

:-)

Isn't it interesting to see the city feeling the pain of a paltry 3% bite out of their service bills being paid by CC?

I wonder if they even pause to appreciate the pain we civilians feel with every purchase that carries with it their locally imposed sales taxes often at 7% or higher.

I doubt they'll ever feel sufficiently sympathetic to try to rein in spending and reduce those taxes to something much smaller and less painful.

R.

http://jessel.100megsfree3.com/Gold.jpgIt must come as a source of GREAT disappointment to Mgt Titan that the old trading stops ($70 swing) would never have entered the equation in this current beat-up.
Whilstever the market is prone to wall-of-worry type paper trading on the up, I don't think we'll see $70 days at this level ...you never know though.

Topaz - thanks for the insight on the bond impact and now on to the 'Roos.

There are more than a few of us who enjoyed the Socceroos and the quite civil pandemonium they brought to Kaiserslautern. My wife and her work collegues got accustomed to the camper park adjacent to their building. Last night I talked to a beer Frau who was at the epicenter of the Bier Garten and she said how great everyone was and wished they'd return.

I'm looking forward to the USA match on Saturday.

So I'm thinking .... the Aussie match in Munich on Sunday evening .... a 3 hour drive from here ..... hmmmm

(To paraphrase) A Roo's gotta do - what a ROO'S GOTTA DO !!!

Basically,the Spanish CB confirmed today that they sold 66t last year (within WAG2).They emphasized the sale was completed last year'so no sales this year.

snip:

Are You on Drugs?
I took the time to do a more detailed study of the parallel between the current market "slant" and the earlier crashes. I figure I owed it to subscribers to be a little more diligent than this morning's "quickie squint" as a few days of trading. Now that I look, I don't like what I see - and I sort of understand at some visceral level, why Igor and Cliff at www.halfpasthuman.com may be looking at some really horrific stuff to come.

So, even if we close today at 11,025, guess what? It would be equivalent to October 8th of 1929. History rhymes!

Goldilox

In yesterday's "Penny Dreadful", George has a nice comparative graph overlaying 1929, 1987, and 2006. If his correlation holds, the rational behind Gentle Ben's three-a-week TV appearances becomes more readily apparent.

Perhaps he's not auditioning for "American Idol", but then again, maybe a guest spot on "Lost"?

Somebody tell me at what point does gold get off the inflation ride? Inflation obviously is higher than reported, but if things continue on due course, when does gold change direction from this scenario?

I am a new investor as of last year and have read a ga-zillion articles outlining this, but still have not come to understand this point.

Thanks -

Hi Troll, I must not be seeing the same gold vs inflation articles that you're seeing. What do you mean when you say "� gold get off the inflation ride?" And, what do you mean by "� gold change direction�"? If someone else understands this and is willing to share a few more words I would love to see them.

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Sorry -

Basically - Inflation should eventually push gold UP UP UP right? The correction I just saw was due in part to inflation indicators that will cause the fed to "try" to put the brakes on with higher interest rates - which short term cause Commodities to fizzle a bit -

When - historically speaking - (like France's 1795 inflation stage - does Gold spike?

I am a newby - just trying to figure out when Gold rises and falls based on other economic readings.

In other words: Why did Gold fall when inflation scares occurred?

http://www.mineweb.net/columns/american_notes/550881.htmRENO--(Mineweb.com) President George W. Bush Thursday signed the Mine Improvement and New Emergency Response (MINER) Act into law.

During a signing ceremony, Bush noted that "events in recent months have reminded us that mining is dangerous work. ...This year alone, accidents have taken the lives of 33 miners in our country. Just last month, five miners were killed in a mine explosion in Harlan County, Kentucky."

"We honor the memory of all lost miners today. ...We make this promise to American miners and their families: We will do everything possible to prevent mine accidents and make sure you are able to return safely to your loved ones," Bush declared.

"American miners work hard every day to support their families and support this country. It's hard work," Bush said. "You deserve the best training, the best equipment and safeguards that we can provide to protect the lives. And this good legislation I am signing today is an important part of honoring that commitment."

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

Mining has arguably now become safer... and more expensive.

R.

I am new to researching money and banking systems to:

The market for gold is not a "free" market. There are certain things that influence price in what seems to be the wrong direction if we were in a "free" market. For example, there are discussions here and other places about how central banks manipulate the gold price by putting it out of their vaults and into the supply but not taking it off of there balance sheets as an asset. There is also a paper market for gold, so these contracts are bought and sold and there is actually not any physical gold moved at the time but it effects the market price.

Gold has retained purchasing power for generations while many world paper fiat currencies have failed. So in theory as there is inflation in the money supply then it takes more fiat money to buy the same quanity of an item. This should be reflected in the gold price as it is in other things you by. But governments and banks have a huge vested interest in being able to create fiat money out of nothing by running a printing press or typing numbers into a computer to increase supply. Since gold has a long history as money, and is an asset, rather than a note/debt, the banks will do anything they can to keep the publics confidence in the money they are printing. They used this money to pay for things that are not affordable through the normal collection of taxes. As they print more dollars your dollars lose value and therefore it is a hidden tax that most people do not consider like the other taxes we pay.

If you are in the US there is a great book called the history of money and banking in the united states:

http://www.amazon.com/gp/product/0945466331/sr=8-1/qid=1150481005/ref=sr_1_1/102-1825257-3597734?%5Fencoding=UTF8

and this is a good book to (The Creature from Jekyll Island):

http://www.amazon.com/gp/product/0912986212/qid=1150481045/sr=1-1/ref=sr_1_1/102-1825257-3597734?s=books&v=glance&n=283155

In that last book it details the accounting scheme used to increase the money supply.

This is a great question � "Why did Gold fall when inflation scares occurred?" The only help that I would be willing to offer for this one is: draw conclusions based on actions not on words. The only way I've been able to make sense of things is to NOT start with the press releases in any common media, but start on a foundation of cause and effect. What if the fall we saw in the price of gold was only short term speculators taking profits to cover loses in the stock market? What buyers all went to town in January kicking the price and the momentum drove it to that high? What if someone somewhere sold a cubic tonne of paper (in a very short time frame) just to trigger stop loss action?

Now, I like to �try� to take a level headed approach to inflation. If inflation is pushing the price up and liquidity in the paper markets is pushing the price down, where will it balance out? Logic has it that the balance will be found around a price that keeps miners in business. If the price goes lower, physical supply dries up. If physical supply dries up, a panic will occur spiking the price. But, as long as paper determines the price of gold, extra paper sold into the market will trump the gold that trades there. Thus, the price will come down. So, my simple point of view says that inflation provides a floor to the price of gold. If it costs 100% more today then, say, 2 years ago, to manufacture gold, then the price will find a floor possibly double two years ago.

The fun part is demand. If demand rises, the price of gold seems to react by climbing above the cost of production. This causes rides. I would say that it was fundamental to the last run. But, the managers seem to have succeeded in reducing the frenzy. Investors that I know are selling paper believing that gold is once again dead. But, physical demand has only grown. Those that look beyond the gold is dead headlines see that there is still demand and that demand is growing. Like a publicly traded stocks that has VERY few shares outstanding, the daily moves will be much greater. A continuing rise in demand, and the reduction of supply, work together to squeeze the metal available to trade. This will most likely add to the volatility � and great fun for all of us.

How does the fed fit into all of this? They will do anything in their power to maintain the monopoly of the US Dollar. Gold stands as an alternative currency that can rightfully take the dollar's place in international trade, but that will only happen if enough people choose to make it so � or if it's called out by those that oppose the dollar.

Thus, to me, inflation in the system that has been around for many, many years provides the floor of support on the low end. People's expectations provide the jumps off the floor. All the while, the floor is rising with the newly printed FRN's in circulation.

The decline recently witnessed in the commodities in general and gold in particular had less to do with the threat of rising interest rates then politically motivated action to rescue some "friends of the central banks" in US and London from their frightfully large underwater short positions in the metals. The threats of rate rises, may be the cause of the mayhem in international markets, is not necessarily a factor in the drop of dollar gold futures. People in powerful places (with access to billions of US$) do not usually borrow US$ to take long positions on COMEX. The powerful buyers were lately, Russian/Chinese and lately Iranian all with large stocks of Surplus US$ from Oil sales or trade that they wished to liquidate before the dollar slide set in.

The only explanation is that the large buyers supporting the elevated but still cheap US$ price of gold have been told to back off until their friends have been allowed to close their shorts at a more favorable level. I remember as the price was rising to $575 the first time that someone of note had mentioned that if the price went above $575 the commercial shorts would be in serious trouble. Apparently western political will still has sufficient power or unknown leverage to have the large buyers back off. Could it be that these same trading houses have sufficient positions in foreign stock markets to use threat of or actual liquidation of these positions to gain the capital to close their gold short positions??? Did such a thing begin to happen (Japan -4% and others) that caused the large buyers to back off so that the international market carnage would not be so bad??? Certainly the US market would not be sold off to cover while they are trying to make a case for the US markets to be a safe haven and create dollar demand.

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7B4D43990F%2DE64C%2D4D03%2DBBA6%2D4357DFC5BEFA%7D&link=&keyword=goldNEW YORK (MarketWatch) -- Remember playing with childhood friends and something didn't work out the way you wanted? What was the clarion call? Do over! That's exactly what commodities buyers are getting the chance to do right now; one big, adult-sized do over.

The recent selloff in the commodity markets brought the bulls stampeding back.

Commodities such as gold, silver, oil, and natural gas have all been correcting. Signaling that this was a correction and not a new bear market is that volume on the way down did not indicate new selling, but rather, more short covering was taking place. This means that investors going long were being forced to cover their positions but were not willing to short the market. This is a bullish signal.

Bears in gold and commodities generally had a lot of ammo to back up their sentiment -- but that may be fading fast. The metals and oil were at all time highs, other commodities were at lifetime highs, so it was natural that they would see some selling and profit taking. This is normal and seasoned traders know it.

The thing about bear markets is that they usually do damage quickly while a bull market can take a very long time to get going. That was the case with this recent price action, that's all.

Now things are changing. Some markets are moving faster to the upside than others...

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

"Do over!"

That reminds me of the comment I made to MK earlier this week with regard to this pricing consolidation. I remarked that, due to gold's rapid run-up, a lot of people have been left on the sidelines with the sentiment that they have missed the boat.

Well, here's one of those happy circumstances where the boat has made a brief unlooked for return to the dock. Now the question is, how many of these early boat missers will seize upon this second change?

Judging by the various incoming calls, some of them will, but mostly it's the well-seasoned gold-buying professionals who are busy "making hay" this summer while the sun shines.

Love the mixed metaphors.

R.

Flatliner and Henry

Thanks for the pointers. So basically we are waiting for the following: (Correct me if I'm wrong please)

-Japan, China, Euro, Middle East to make the move on dumping the paper US$ that they fear will be worthless.

-Shots in Iran (?)

- US Citizens to no longer believe the US$ has a future and then react to that with public sentiment


All or some of this causing the dollar to collapse and correct - which will screw many nations. Seems that other countries are in a pickle of sorts - worthless money that, if dumped, will cause Americans to not buy their crap anymore. Lose Lose situation at hand - tons of people trying to keep things trickling along.

When does our national debt come into play? How long can we print and pay for it without consequence?

You guys all seem to be quite knowledgeable. I bought a substantial investment again this week - I believe, but don't fully understand what you folks do.

Teach this Troll please!

and Scott -

Thanks - I am in the US and will get one or both of those books this weekend!

Druid: Henri, great post. Could have the broad equity sell off worldwide provided the justification to remove the trading limits in commodities so that some of these large shorts could begin extricating themselves from their losing positions? Me thinks, yes.

Consider also investing time on the "Gold Trail � Thoughts" pointed to by the link at the top of the page. Set aside a weekend, take an open mind, and reflect on happenings of the page 8 years while you view these previous posters comments. If you have not read it, you may find it some of the most insightful information posted for those thinking outside the box.

With regards to your summary, I do not believe Japan, China, Euro, Middle East will dump paper for fear that it will be useless. All these economies will buy gold knowing that it will fill the roll of the next world reserve. They are not scared of worthless paper. Paper is required to keep their economies going. They will balance against paper to keep goods flowing at all costs.

Loss of security in the Middle East means Oil will bit for Gold.

To the US citizen, dollar is king. They all believe it so much that they are willing to hold it as it's international exchange falls. They simply do not understand and do not care. Those that live outside the US understand what it means when a currency falls (hyper-inflation). To those in the US, they think inflation is a good thing.

The Lose-Lose situation I believe is closer to the point here. The more you learn about gold, the more you might see that gold makes up for a number of the flaws in the current system. Read about debt-based currency systems and you will discover that governments are forced to print money � or forced to inflate the money supply. In the long run, this means that the baseline for the price of goods will forever go up. As long as we have a debt based system, the cost for manufacturing gold will always go up.

Welcome to the forum. We all look forward to learning from you.

Thanks - I am excited to learn this stuff. It has pressed on my mind for some time now.

I just read a great article that in essence said that inflation only affects gold's upside if money made in bonds cannot keep up with the cost of good sold. That helped me. So inflation isn't really a major issue otherwise.

Some of you guys are sure at a great level of understanding on this stuff.

Another question - Printing money to pay debts - what scenarios cause us to stop? It seems that we could continue this game - and now that it is not going to be reported G8 - does it take a hyperinflation scenario to stop this?

In France - 1795 - hyperinflation ensued all within a matter of months. It was a quick hit. Crazy.

Talk more about this if you don't mind.

Usually we would say that inflation fears and fears in general would push POG up, but the last month has shown a new tendency.
When the market started down in a roll of selling, most people and institutions became liquid. Even though dollar would still go down, where gold normally would be going up as a result, everything else went down too including gold. The mass mentality is to become liquid into cash.
We know how gold is supposed to act in markets and that FIAT is the wrong play, but the masses don't care. When they see crash, they sell GLD, CEF, mining...everything the same as they convert to cash. The large numbers of sellers selling everything pushes everything down, and there is no safe haven in a crash, not even gold and silver.

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

June 16 (from DowJonoes) -- Comex gold futures shrugged off steady gains in the U.S. dollar to end higher on Friday at the New York Mercantile Exchange while market players argue whether a temporary bottom in the market has been set after Tuesday's wild sell-off.

The benchmark August gold contract settled $11.40 higher at $581.70.

At the open the yellow metal eyed the moves of the greenback but soon buyers moved in amid thin trading conditions to take gold higher. August got as high as $583 an ounce during the day session.

Some choppiness was seen late in the session and the yellow metal came in danger of heading into negative territory, but at the close gold climbed back near session highs.

"Gold finished the week off on a plus note," said Bill O'Neill, a managing partner at LOGIC Advisors.

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

What websites do you guys recommend for seeing what is happening behind the market hype / general consumer news regarding commmodities.

I want to know the inside scoop as fast as many of you guys do!

More than chalking this behavior up to simple stupidity, I think more than anything this is a sign that that masses are hip deep in debt.

The person that on net is in the black -- that is truly a man of wealth instead of debt -- does not share this same bewildering behavior of preference for digits/paper in times of uncertainty or crisis.

Much of the financial system is a towering network of debt and obligations atop other debt and obligation. The man of wealth will use it to his advantage, sure, but only to a point. He does not build his house on a foundation of shifting sands -- of easily defaultable debt/paper.

R.

Do I detect a bit of
sarcasm in your postings?


Definition of an inter-
net Troll:

designs intentially to
annoy & antagonize the
existing members or
disrupts the flow of
discussion...

So far so good, but
we'll see...Cheers.OvS

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20060616:MTFH87550_2006-06-16_16-33-21_N16219871&type=comktNews&rpc=44CARACAS, Venezuela, June 16 (Reuters) - Venezuela plans to take over all inactive mining areas to form new joint ventures with a state majority stake and state-backed small mining groups foreseen under a mine law reform, Mining Minister Victor Alvarez said on Friday.

"The areas that are inactive are going to be recuperated and rescued by the Venezuelan state," Alvarez told reporters outside the Congress where he handed over the proposed reforms to lawmakers.

Chavez said his government would no longer authorize new mining concessions and ordered a review of the industry, sparking market jitters as investors fretted over foreign gold miners such as Crystallex.

Mining will be carried out through operating contracts with the state mining company, though joint ventures where the state has majority control and through small mine operations such as cooperatives, according to a draft of the law reforms.

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

State control of inactive mines is just a short step away from controlling the active ventures, too.

As a shareholder, does your company have risk exposure to resources that might one day be deemed nationally strategic assets?

So as not to be a sitting duck, choose your gold in-hand, not in-ground.

R.